EUROPE – MEPs have voted in favour of the two Council Common positions to expand the European market in unit trusts and UCITS (Undertakings for Collective Investments in Transferable Securities ) as reported on IPE-Newsline on October 11.

The common positions take the form of two amendments to the existing 1985 directive and are based on home country supervision. The types of investment are specified, with “OTC” (over-the-counter) derivatives included for the first time and new rules on the management of funds - designed to achieve what will be a balance between investor protection and investment freedom.

During the debate, which took place last night (October 23), Commissioner Frits Bolkestein said that he accepted the amendments in a spirit of compromise and that the legislation was broadly accepted by the financial services industry.

However, the amendment relating to a ‘call back’ procedure was withdrawn, since the issue, as applied to financial legislation, will be taken up at a later point in time.

A further proposal calls for the alignment of the review period for capital requirement with the three-year general review.

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