UCITS are recognised in many jurisdictions outside of the EU owing to their harmonised rules and reputation for robust investor protection and transparency features. Over 70 jurisdictions worldwide currently accept Irish UCITS as suitable for distribution into their domestic markets. However, in order to benefit from the UCITS passport, UCITS are subject to detailed investment restrictions, diversification and borrowing limits, minimum capitalisation and substance requirements.
UCITS are widely used by retail, institutional and alternative promoters and are increasingly being structured to complement existing alternative mangers’ offshore/onshore flagship funds of. Recent developments in the UCITS Eligible Directive and UCITS IV have only enhanced the flexibility and appeal of the product.
UCITS structure and benefits:
• As harmonised fund products, once established and authorised in one EU Member State UCITS can be sold cross-border to investors in other EU Member States without requirement for additional authorisation
• The “UCITS passport” – this distribution facility enables promoters to create a single EU product rather than having to establish on a jurisdiction by jurisdiction basis