The European Council and Parliament adopted UCITS V in 2014, transposed into Dutch law on 18 March 2016, to align the existing UCITS regulation with the new depositary rules, rules on remuneration and sanction procedures under the AIFMD.

The main points of attention in UCITS V are the following:

  • A new depositary regime based on the AIFMD
  • Remuneration policies for UCITS managers consistent with the AIFMD and the Capital Requirements Directive
  • Harmonization of the minimum sanction regime across European Member states

UCITS V clarifies that a UCITS fund shall only have one single depositary, not being the manager of the fund. The tasks of a UCITS depositary are similar to those of a depositary acting for an Alternative Investment Fund. In principle, the liability provisions under UCITS V are similar to the AIFMD, however UCITS V prohibits the discharge of liability for the safekeeping function of custody assets by transferring such liability to a sub custodian.

Pursuant to UCITS V, managers should have implemented remuneration policies and practices that are consistent with and promote sound and effective risk management. Foremost, these policies should not encourage risk taking inconsistent with the risk profile and/or other rules of the fund and/or impact possible non-compliance by the manager.

Harmonized rules on regulatory sanctions should secure, amongst others, specification of instances where and when a regulatory sanction should be taken, rules on maximum pecuniary sanctions and publication of sanctions as well as the introduction of a whistle blower regime.