FSA Puts Forward Proposals For Eligible Assets Directive Implementation

by Philip Morton, Investors Offshore.com

08 October 2007

The UK's Financial Services Authority (FSA) on Friday set out proposals to implement the EU Eligible Assets Directive (EAD) and the related Committee of European Securities Regulators (CESR) guidelines for operators of Undertakings for Collective Investments In Transferable Securities (UCITS) schemes.

The EAD helps with the definition of which assets are eligible for UCITS schemes to invest in.

FSA Retail Policy Director, Dan Waters explained that:

"Our proposals implement the EAD and the guidelines in a practical way which will help UK scheme operators promote their products freely into Europe. This European work, involving the European Commission, CESR and national regulators shows how common standards can be achieved across the EU in a practical and flexible way, working with the grain of the markets."

According to the FSA, the principal benefits from implementation of the EAD are expected to be:

• An increase in the quality of UCITS products, resulting from an improvement in risk management within the funds;
• Innovation through the launch of new products e.g. funds based on hedge fund indices; and
• A possible improvement in the efficiency of competition as a result of a more consistent interpretation of regulations by firms and regulators.

Comments on the proposals are sought by 5 December 2007. It is hoped that they will then come into effect from 23 July 2008.

Recommended