European Parliament legislative resolution on the proposal for a European Parliament and Council directive amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view to regulating management companies and simplified prospectuses (COM(1998) 451 — C4-0465/1998 — 1998/0242(COD))
C 339/228 Official Journal of the European Communities EN 29. 11. 2000 Thursday 17 February 2000 II. Proposal for a European Parliament and Council directive amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities (UCITS) with a view to regulating management companies and simplified prospectuses (COM(1998) 451 + C4-0465/1998 + 1998/0242(COD)) The proposal was amended as follows: TEXT PROPOSED BY THE COMMISSION (1) AMENDMENTS BY PARLIAMENT (Amendment 22) Recital 15a (new) (15a) Whereas a codification of the Community legisla- tion relating to UCITS will have to be prepared immedi- ately after the adoption of the modifications to Directive 85/611/EEC contained in this Directive; (Amendment 23) ARTICLE 1(1) Article 1a(2) (Directive 85/611/EEC) 2. management company shall mean any company the regu- lar business of which is the management of unit trusts/ common funds and of investment companies (collective portfolio management); 2. management company shall mean any company the regu- lar business of which is the management of the assets of unit trusts/common funds and of investment companies (collective portfolio management) including the activities mentioned in Annex II; (Amendment 24) ARTICLE 1(3) Article 5(4a) (new) (Directive 85/611/EEC) 4a. The competent authorities shall not grant authorisa- tion, or shall withdraw authorisation from a UCITS, where factors such as the content of programmes of operations, the geographical distribution or the activities actually carried on indicate clearly that the entity has opted for the legal system of one Member State for the purpose of evading the stricter standards in force in another Member State within the territory of which it intends to carry on or does carry on the greater part of its activities. (Amendment 41/rev. ) ARTICLE 1(3) Article 5a(1), first two indents (Directive 85/611/EEC) 2 it has sufficient initial capital of the following amount: (a) if it is authorised to manage only unit trusts/common funds and investment companies, € 50 000; (1) OJ C 272, 1. 9. 1998, p. 7. 2 it has initial capital of at least € 150 000. In addition, it shall maintain certain capital requirements that are at least equivalent to the higher of the following amounts: (a) an amount of capital to be determined in accor- dance with the rules laid down in Directive 93/6/ EEC, having regard to the nature of the services provided; 29. 11. 2000 EN Official Journal of the European Communities C 339/229 TEXT PROPOSED BY THE COMMISSION Thursday 17 February 2000 AMENDMENTS BY PARLIAMENT (b) its authorisation covers also the discretionary portfolio if management service mentioned in Article 5(3), first indent, in addition to the capital mentioned in the previous letter (a), an amount of capital to be determined in accordance with the rules laid down in Article 3, paragraphs 1 and 2 of Directive 93/6/EEC (1) having regard to the nature of the service in question; (b) an amount of capital to be determined by apply- ing the following scale to the total amount of the assets managed: + 0,1 % up to € 1 000 million managed; + € 1 million plus 0,02 % of assets managed in excess of € 1 000 million, subject to a ceiling of € 10 million. the persons who effectively direct the business of a management company are of sufficiently good repute and are sufficiently experienced also in relation to the type of UCITS managed by the management company. The direction of a management com- pany’s business must be decided by at least two persons meeting these conditions; (1) OJ L 141, 11. 6. 1993, p. 1. (Amendment 35) ARTICLE 1(3) Article 5a(3) (Directive 85/611/EEC) 3. An applicant shall be informed, within six months of the submission of a complete application, whether or not authori- sation has been granted. Reasons shall be given whenever an authorisation is refused. 3. An applicant shall be informed, within six months of the submission of a complete application, whether or not authori- sation has been granted. Reasons shall be given whenever an authorisation is refused. After authorisation has been refused in one Member State, it may not be applied for in another Member State. The parallel submission of appli- cations in more than one Member State shall not be per- mitted. (Amendment 25) ARTICLE 1(3) Article 5f(1), 2nd subparagraph (Directive 85/611/EEC) In particular, the competent authorities of the home Member State having regard also to the nature of the UCITS managed by a management company, shall require that each such com- pany has sound administrative and accounting procedures, control and safeguard arrangements for electronic data proces- sing and adequate internal control mechanisms ensuring, inter alia, that the assets of the unit trusts/common funds or of the investment companies managed by the management company are invested according to the fund rules or the instruments of incorporation and the legal provisions in force. In particular, the competent authorities of the home Member State, having regard also to the nature of the UCITS managed by a management company, shall require that each such com- pany has sound administrative and accounting procedures, control and safeguard arrangements for electronic data proces- sing and adequate internal control mechanisms ensuring, inter alia, that each transaction involving the fund may be reconstructed according to its origin, the parties to it, its nature, and the time and place at which it was effected and that the assets of the unit trusts/common funds or of the investment companies managed by the management company are invested according to the fund rules or the instruments of incorporation and the legal provisions in force. (Amendment 26) ARTICLE 1(3) Article 5f(2), 2nd subparagraph (new) (Directive 85/611/EEC) The competent authorities of the home Member State may, irrespective of a prior approval from the client of a management company, approve the activities of the man- agement company referred to in the above three indents provided that the provisions of Article 10(2) are complied with. C 339/230 Official Journal of the European Communities EN 29. 11. 2000 Thursday 17 February 2000 TEXT PROPOSED BY THE COMMISSION AMENDMENTS BY PARLIAMENT (Amendment 27) ARTICLE 1(3) Article 5g(1) and (2), introduction and 1st and 2nd indents (Directive 85/611/EEC) 1. When a Member State permits a management company to delegate to third parties, on the basis of specific mandates and for the purpose of a more efficient conduct of the company’ s business, to carry out on its behalf one or more of the functions included in the activity of collective portfolio management mentioned in Annex II, each mandate must be submitted to the competent authorities for prior approval. The competent authorities of 1. the home Member State may permit management companies to delegate spe- cific investment decisions that are subject in accordance with investment-allocation criteria periodically laid down by the management companies. to prudential supervision, to intermediaries The competent authorities shall approve the mandate 2. only after having verified the compliance with the following pre-conditions: The competent authorities shall approve the mandate 2. only after having verified the compliance with all the following pre-conditions: 2 the mandate shall not prevent the effectiveness of supervi- 2 the mandate shall not prevent the effectiveness of supervi- sion over the management company, sion over the management company, 2 in order to prevent conflicts of interest, the mandate shall not be given to the depository and to persons having qualifying holdings in the management company’ s or the depositary’ s capital or to any other person whose interests may conflict with those of the management company or the unit-holders, 2 where the mandate is given to a third-country inter- mediary, cooperation between the prudential supervi- sory authorities must be ensured regarding the dele- gating party and the party delegated to act, + the mandate shall not be given to the depositary, (Amendment 28) ARTICLE 1(3) Article 6a(4) (Directive 85/611/EEC) Before the branch of a management company com- 4. mences business, the competent authorities of the host Member State shall, within two months of receiving the information referred to in paragraph 2, prepare for the supervision of the management company and, indicate the condi- tions, including the rules mentioned in Articles 44 and 45 in force in the host Member State and the rules of conduct to be respected in the case of provision of the portfolio management service mentioned in Article 5(3), under which, in the interest of the general good, that business must be carried on in the host Member State. if necessary, Before the branch of a management company com- 4. mences business, the competent authorities of the host Member State shall, within two months of receiving the information referred to in paragraph 2, prepare for the supervision of the management company and, indicate the condi- tions, including the rules mentioned in Articles 44 and 45 in force in the host Member State and the rules of conduct to be respected in the case of provision of the portfolio management service mentioned in Article 5(3) and of investment advisory services and custody, under which, in the interest of the gen- eral good, that business must be carried on in the host Member State. if necessary, (Amendment 29) ARTICLE 1(6) Article 28(1) (Directive 85/611/EEC) 1. Both the simplified and the full prospectuses must include the information necessary for investors to be able to make an informed judgement of the investment proposed to them. 1. Both the simplified and the full prospectuses must include the information necessary for investors to be able to make an informed judgement of the investment proposed to them and, in particular, of the risks attached thereto. 29. 11. 2000 EN Official Journal of the European Communities C 339/231 TEXT PROPOSED BY THE COMMISSION Thursday 17 February 2000 AMENDMENTS BY PARLIAMENT (Amendment 30) ARTICLE 1(6) Article 28 (1), 2nd subparagraph (new) (Directive 85/611/EEC) The prospectuses must also include a clear and easily the fund’s risk profile understandable explanation of (independent of whether or not derivatives are used and independent of the type of securities invested in). (Amendment 31) ARTICLE 1(7) Article 29(2a) (new) (Directive 85/611/EEC) The provisions on rules of conduct to be observed 2a. in connection with the sale of shares for investment pur- poses and on information concerning safeguard systems set out in Articles 11 and 12 of the ISD shall apply mutatis mutandis. (Amendment 32) ANNEX I, ‘Investment information’, 5th indent (new) (Directive 85/611/EEC) + a brief assessment of the fund’s risk profile. European Parliament legislative resolution on the proposal for a European Parliament and Council directive amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securi- ties (UCITS) with a view to regulating management companies and simplified prospectuses (COM(1998) 451 + C4-0465/1998 + 1998/0242(COD)) (Codecision procedure: first reading) The European Parliament, 2 having regard to the Commission proposal to the European Parliament and the Council (COM(1998) 451) (1), 2 having regard to Article 251(2) of the EC Treaty and Article 47(2) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C4-0465/1998), 2 having regard to Rule 67 of its Rules of Procedure, 2 having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of the Committee on Legal Affairs and the Internal Market (A5-0025/2000), 1. Approves the Commission proposal as amended; Asks to be consulted again should the Commission intend to amend its proposal substantially or 2. replace it with another text; 3. Instructs its President to forward its position to the Council and Commission. (1) OJ C 272, 1. 9. 1998, p. 7