The European Council of Finance Ministers (ECOFIN) has adopted the two European Directives to expand the market in unit trusts and UCITS (Undertakings for Collective Investments in Transferable Securities).
Internal Market Commissioner, Frits Bolkestein, commented: “The final adoption by the Council of the two UCITS Directives is a fillip to the €3.5 trillion investment fund business and a real confidence boost towards accomplishing our goal of an integrated capital and financial services market by 2005. Funds will now be able to use modern investment techniques, and stimulate the cross-border growth potential with the passport regime, whilst investors will be able to rely on enhanced investor protection standards.”
The directives 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 over-the-counter (OTC) 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.
Christa Randzio-Plath, chair of the European Parliament’s Committee on Economic and Monetary Affairs (EMAC), welcomed the adoption of the UCITS Directives by ECOFIN
“The adoption of these two directives constitutes significant progress in implementing the Financial Services Action Plan. The adoption of the directives by ECOFIN was possible largely because the European Parliament adopted such limited amendments to the texts in its second reading. This success demonstrates again that the European Parliament continues to work quickly and constructively with the Commission and the Council.”

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