UCITS IV Management Company Domiciliation

First for business. First for people.

AssuranceAsset Management

PwC contacts:

Ken Owens Tel: +353 1 792 8542 Email: ken.owens@ie.pwc.com

Andy O’CallaghanTel: +353 1 792 6247Email: andy.ocallaghan@ie.pwc.com

Pat ConveryTel: +353 1 792 8687Email: pat.convery@ie.pwc.com

“The UCITS IV Management Company passport aims to help asset managers by removing the burdensome task of setting up multiple Management Companies”

A key component to UCITS IV is the introduction of the Full Management Company Passport, a most welcome development allowing for the cross border management of UCITS funds located in other jurisdictions, effectively one location for the Management Company managing a host of UCITS across the various member states. Under the current UCITS III regime, fund promoters need to establish a fully fl edged Management Company in every Member State where their funds are located except in the case of a self-managed UCITS fund. According to the Exposure draft from the EU Commission, this is estimated to generate costs in the range of €500,000 to €1 million per Management Company a year. Additionally, out of the top 30 asset management groups in terms of cross-border distribution of UCITS, 50% have management companies in 4 countries or more. It is recognised that substantial cost savings will be gained by operating from one core centre.

Going forward, Fund Managers will have the option to centralise their asset management, administration, risk management operations within one domicile.

Key Opportunities: 1. Signifi cant cost savings

2. One location for the primary Management Company streamlining the authorisation procedures across all jurisdictions

3. One service centre

What does this mean for Investment Managers?With the new found freedom of the UCITS IV regime, investment managers are starting to look at restructuring their current corporate structures. This may involve amalgamating or moving existing management companies. Consideration needs to be given to;

• Where is the most appropriate location for the Management Company?

• Whether it is right to move the Management Company?

• What will be the benefi ts to moving/consolidating existing Management Companies?

UCITS IVManagement Company Domiciliation

What is our response?PwC can assist by completing a feasibility study which will give a recommendation on the most appropriate jurisdiction best suited for the location of the core Management Company and respective administration services.

This review will include criteria such as:

• Tax and Regulatory environment

• Legal and political environment

• Fiscal environment

• Governmental incentives

• Ease of passporting the relevant activity

• Availability of qualifi ed resources/ cost of those resources

• Internal corporate governance requirements

Our Services comprise of the following:-PwC has a fully integrated Asset Management service offering for

promoters operating and distributing UCITS fund which includes the following services:

1. Tax Services which include:

• Company redomiciliation and migration services including consideration of location in group structure;

• Provision of ongoing regulatory and tax reporting to ensure compliance with cross border requirements in each relevant jurisdiction;

Ireland

France

Belgium

NeatherlandsGermany

Italy

Denmark

Sweden

Poland

Russia

Malta

Romania

Greece

Ukraine

Hungary

Austria

Switzerland

Norway

Iceland

United Kingdom

SpainPortugal

Lux.

2009: 8 different Management Companies, 8 locations

Ireland

Neatherlands

Germany

Italy

Denmark

Sweden

Poland

Russia

Malta

Romania

Greece

Ukraine

Hungary

Austria

Switzerland

Norway

Iceland

United Kingdom

Spain

Portugal

Lux.

2011: 1 Management Company, 1 location

Belgium

France

Example of current & revised structure under new regime

• Group restructuring with integrated advisory and tax services; and

• Product structuring of a cross border fund platform with a single management company.

2. Assessment & feasibility study on rationalisation of EU domi-ciled activities – with focus on the following:-

• Product Structure and Investment Strategy

• Marketing & Distribution

• Management Company & related Administration activities

As part of the feasibility study, we will analyse the determining factors for domiciling each entity structure in a particular member state. Our review criteria will consist of the following:-

• Assessment of the regulatory environment;

• Review of the taxation implications;

• Consideration of the legal and political principles;

• Government incentives & local inducements;

• Staffi ng & resource capabilities;

• Local compliance & corporate governance requirements; and

• Marketability & passporting arrangements.

3. Business Rationalisation Ser-vices:-

• We will assist with the transfer of existing services to the primary core business location of choice and best suited to your corporate structure and strategy;

• Services will include corporate set ups, liquidation of existing structures, regulatory and advisory assistance; and

• Consolidation of existing Management Company Structures into one key structure in primary location best suited to the organisation structure and management company resources and requirements

Who would this be of interest to?• Investment Companies entering

the UCITS market for the fi rst time; and

• Investment Managers with existing UCITS funds, which have several Management Companies scattered around Europe who may want to consolidate their management companies into one domicile.

Current status and expected timelineThe Commission has until July 2011 until UCITS IV has to be fully implemented into the national legislation of the 27 Member States. The fi nal text has been adopted by the Commission on 22nd June 2009, with an enforcement date anticipated within 3 to 4 months.

UCITS IVManagement Company Domiciliation

Feb 2001 Feb 2004 2004-2008

July 2008 31 Oct 2008

Oct - Nov 2008 2-3 Dec 2008 22 June 2009

1 July 2009 1 July 2011

Adopt. of UCITS III

End of impl. of UCITS III in MS

Consul-tation process re UCITS IV

EU Com proposal for a recast UCITS Directive

CESR Advice on MCP

Work on Compromise by Council of EU

ECOFin meeting

UCITS Directive adopted

Imp

lem

entin

g m

easu

res

Imp

lem

enta

tion

in M

S

stat

es

Timeline for UCITS IV implementation

pwc.com/ie© 2009 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member fi rms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. PricewaterhouseCoopers, One Spencer Dock, North Wall Quay, Dublin 1 is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business. Designed by PwC Design Studio 02117.