UCITS – 1985 – 2004

The Single Market for Investment Funds

When the original Undertakings for Collective Investment in Transferable Securities (UCITS) Directive was adopted in December 1985, Jacques Delors’ idea of a “single market” had only just emerged and the “Single European Act” with the now all too familiar “1992 objectives” had yet to be endorsed. This is why, from today’s perspective, the Directive’s fairly unambitious aim to approximate conditions of competition and to ensure more effective and more uniform investor protection was easily attained. Also, when the discussion on a modernisation of the Directive started in late 1991, nobody considered achieving a single market for investment funds – the intention simply being to modernise the Directive and to include as yet nonharmonised products. Only when the Commission published its “Strategic Programme” in 1993 did the discussion on a single market for financial services really get off the ground. A further significant step forward came in 1999, when the modification of the UCITS Directive became part of the Financial Services Action Plan. This in turn “forced” the Council to advance its discussions over UCITS, which had been locked in stalemate for several years because of very different opinions on issues such as the use of derivatives, funds of funds, index funds or the passport for the depositary. Nevertheless, the basic elements of the Directive are today as undisputed and modern as they were some 20 years ago:

o Comprehensive information for investors;

o Effective supervision of the fund and its manager;

o Meaningful diversification in tradable and liquid instruments;

o Separation of management and segregation of assets

These principles have made UCITS as we know them, that is an efficient savings instrument combined with a high level of investor protection. The new Directive has left these principles untouched and has even gone so far as to reinforce them. While broadening investment opportunities, for example through a wider use of derivatives, the new Directive strengthened risk-spreading rules and improved investor protection with the introduction of a simplified prospectus. While allowing new activities such as discretionary asset management, regulation of the management company too was strengthened, for example through capital requirements and rules on delegation. Despite all this, ten months after its final application date the Directive does not yet really work. A number of transitional issues are only now being solved by the Committee of European Securities Regulators (CESR) (to wit the recently closed public consultation by CESR), the two Commission Recommendations on the use of derivatives and on some contents of the simplified prospectus have yet to be implemented in many countries. Also, a number of definition problems, in particular with respect to eligible investment instruments for UCITS, are only now starting to be considered by CESR and a public consultation as well as a public hearing are planned for April/May 2005.

The final “Level 2” regulation will surely not be on the table before late 2005. Other issues are bound to come up once the new Directive is really working. Even when this happens, the single retail market for investment funds will not have been achieved. This is made clear in the recent report of the Commission’s Experts Group on asset management. CESR’s working programme on investment management already draws some conclusions. While other markets, such as insurance and banking, seem to be undergoing further development, the Commission and CESR both agree that future regulation is needed to achieve the final goal of a single market for investment funds. What such legislation might look like will be the key discussion point between legislators, regulators and the industry in the years to come. The main obstacles to the single market for investment funds have been more or less identified

o Cross-border registration of passported funds is still far too complicated, time consuming and expensive;

o Merging funds or pooling funds’ assets across borders is nearly impossible because of regulatory and tax barriers;

o The passport for the management company is not what it should be: managing funds across borders is impossible;

o A significant number of funds (such as real estate funds) are not covered by the Directive;

o As the Directive is not a Lamfalussy-style directive, any modification and/or modernisation requires a new directive, which we all know is burdensome and very time consuming.

Competition Challenges

Another problem is that the current Directive is mainly a so-called “product directive” – unlike the more modern Investment Services Directive/Markets in Financial Instruments Directive (ISD/MiFiD) and other financial services directives. UCITS are increasingly competing with new products, such as structured notes, which though less regulated and less transparent are nonetheless, in the case of retail investors, difficult to distinguish from the highly regulated investment funds. Retail investors are increasingly keen on these absolute return products. Should it prove impossible to provide them with similar products under the UCITS Directive because of a restrictive interpretation of allowed investments – for example, What are transferable securities? What about investment in structured notes or in listed closed ended funds? – they will, in fact, be the losers.

They will be driven towards products which might look cheaper, but which in reality provide a lower level of investor protection. The discussion on how to achieve a balanced regulation for UCITS in this respect will be one of the core issues on the regulatory agenda in the months ahead. However, a really convincing and consistent solution to the problem will probably not be achievable under the current Directive simply by “including” new products. The shape of the current Directive needs to be reconsidered. Nobody today will argue that investor protection can also be achieved through other means such as a certain level of distribution regulation, as currently being undertaken through Level 2 regulation within the MiFiD. These are all points which the Commission will have to take into account when drafting its Green Paper on UCITS, the answer on the review clause included in the UCITS Directive, planned for mid-2005.

How to Open an Offshore Bank Account

Many banks require a physical interview but not all of them do for a bank account formation. It is still largely possible to open your offshore account by mail.

Your bank will always be happy to find the following documents included in your account-formation package:

Bank Account Purpose.

Draw up a letter describing the purpose of your offshore company and the use to which its offshore bank account will be put, including intended annual turnover and information regarding the origin of the funds deposited in the account.

You should provide this information even if your bank has not asked; an upfront explanation might help avoid tiresome scrutiny later on.

Company Existence.

Provide evidence of your offshore company’s legal existence. This can take the form of a Certificate of Incorporation or if the company was incorporated more than a year ago a Certificate of Good Standing.

Make the effort to have these documents either apostilled or legalised by consular authentication, unless, of course, you are opening a bank account in the same country where your offshore company is registered.

Company Charter.

Include a copy of your offshore company’s Memorandum and Articles of Association, By-Laws or another form of your company’s charter.

Directors’ Mandate.

Include a resolution by the offshore company’s board of directors to open the offshore bank account. Some offshore banks provide their own resolutions for the directors to sign.

Directors.

Provide firm evidence of the current directorships. Non-anonymous companies (those that place their directors on public file) can provide an officially certified copy of the relevant register for this purpose. Anonymous companies (those that only maintain a private, internal register of directors) must sometimes provide other evidence.

If your offshore bank does not accept the internal register alone, you can supply incorporators’ resolution that originally appointed the first director(s) of the company, if they are still acting. If directors have changed since, be sure to also provide further documents evidencing any changes (letters of resignation, resolutions to appoint new directors, etc.)

Shareholders.

Many banks require information about the shareholders of any company seeking a banking relationship with them. Most often, this can take the form of a copy of the company’s register of shareholders.

Some offshore banks provide their own-format declaration regarding ownership; if they do, you have to complete and sign that, too. In an increasing number of jurisdictions, banks have legal responsibility to have this information.

Confirmation of identity.

Virtually all offshore banks want to receive some form of evidence of the account signatories’ identity. This is can be a copy of a passport or a driving license.

Depending on the bank, photocopies might have to be notarised. In addition, there are offshore banks that request proofs of identity not only for the actual account signatories, but for all directors and owners of the company as well (if different).

Bank references.

Many offshore banks, but not all, request that letters of reference from another bank is provided by account signatories.

Some offshore banks go even further: they demand that a bank reference each be given by all directors and shareholders of the company. There even are a few that will contact the issuing bank to verify references.

References are sometimes needed instead of, and sometimes in addition to, the confirmation of identity. There are jurisdictions where banks are under legal obligations to seek references, and there are banks that request references despite any legal obligation to do so.

Senior Housing 101

Housing needs has always been of prime importance for entire life span of every individual. This major necessity in life intensifies as one approach the retirement stage. Houses that had been comfortable since last many years at the age of retirement now seem to require some alterations and changes. Physical capabilities of persons change with passing time and this leads to discomfort in performing activities that were earlier very easy. So an elderly person now increasingly needs a house that is more comfortable, safe and secure. Houses pertaining to the individual requirements of people who are to live in the house are more important for intimates who have reached their golden years in life.

Certain modifications and renovation in the house where they had spend most of there youthful time can render the house perfect for seniors who are satisfactorily healthy and can manage most of their personal jobs. These alterations are a blessing for those who do not want to depart from the same premises where they had lived for most of their life. But for seniors who suffer from certain physical disability and need some assistance for their personal daily routine activities continuing in the same house can pose some risks. There are many choices available for elders who want to go for shared living. Assisted living, board and care facilities, senior apartments and many other types of options exist of senior citizens to choose. Every combination of privacy and socializing that would be appropriate uniquely for each individual can be obtained with little effort. While deciding on the house pattern that should be opted one must take into consideration the personal health issues and privacy concerns of every person.

Most of the old age homes provide health facilities and other lodging conveniences to make life easier for people after retirement. At a place where one can find like-minded people most seniors find peace and happiness they wanted. For citizens who do not want to miss their privacy an option of assisted living is always there. An assisted living provides the comforts of having help at hand whenever needed and also allows one to lead an independent life. A qualified staff is readily accessible whenever assistance is desired for cooking bathing or any other chores. It also bestows elders with a feeling of self-confidence that they are able to live all by themselves.

Houses for elders must take care of certain common conveniences. Like the stairs preferably should have a side support and the height of stairs should be very short so that it’s easier for them to climb. The flooring ought to be of some non-slippery material and the doorknobs are supposed to be some easy to grasp handles. It is always recommended to have low height cupboards is the residence build specifically for aged. Low height of cupboards enables them to reach for things easily and saves them from evident dangers arising from the need to climb on any object to reach for some required article. With just a little careful considerations life after retirement can be made safe and happy so that the elders can enjoy their golden days.