Politics & Regulation Regulation

Restrictions to UCITS hedge funds being proposed by European regulators


European regulators are proposing to change the way that UCITS III funds are classified under the Markets in Financial Instruments Directive or MiFID.

The aim is to stop complex funds being sold freely to retail investors and proposes to tackle the issue of the increasing number of sophisticated strategies within the UCITS wrapper.

The current MiFID regime non-complex products like UCITS fund can be sold freely to retail investors.

Regulatory Times, published by PwC Ireland, states: “The proposed changes to MiFID would mean that products, such as so-called Newcits, could only be distributed with a health warning or be restricted to just sophisticated investors.”

Meanwhile a draft UCITS V directive is expected to be published in July 2011, the same month the fourth version