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EFAMA Peter de Proft

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Asset management firms unprepared for Ucits key information document

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Many of Europe’s asset management firms have not yet understood the significance of the Ucits key information document and are ill-prepared for its impact, according to a survey from PricewaterhouseCoopers and the European Fund and Asset Management Association.

Although one of the key mandatory changes under Ucits IV is the replacement of the simplified prospectus for Ucits with the key information document, 58 per cent of respondents have not yet considered the cost implications of the necessary changes to their systems and controls.

Sally Cosgrove, director, PricewaterhouseCoopers, says: “The key information document has far wider reaching implications than asset managers currently realise. It changes the way in which funds are perceived and will potentially leave some asset managers with gaps in their product ranges.

“For those that have not considered the cost and time implications of these changes, this could result in some nasty surprises come July when the European Commission is expected to adopt implementing measures. Managers must start to adapt their operating systems and fast or they risk being caught out.”

Some of Europe’s largest cross-border asset management players have also raised concerns over the effectiveness of the key information document in the survey.

Peter De Proft (pictured), director general, European Fund and Asset Management Association, says: “We understand industry concerns due to the lack of key implementing measures at EU and national level. However, Efama is convinced that the key information document will deliver significant improvements over the simplified prospectus and should be the benchmark for investor disclosure documents for competing retail products.”

The key information document is intended to be a concise and focused presentation of information for prospective investors in Ucits funds, but 60 per cent of European asset managers surveyed are concerned the level of detail required within the document may not be sufficient to enable investors to make sound investment decisions.

Furthermore, 30 per cent of respondents felt it was quite or very unlikely that the key information document would result in a level playing field, an additional 22 per cent being undecided on whether it will contribute or not to a level playing field.

Fifty four per cent of respondents believe that the key information document will provide the investor with a better understanding of a product’s risks and rewards, while only 41 per cent believe that the document will improve on the transparency of management charges.

Finally, in spite of the Ucits IV Directive text, 50 per cent of respondents are concerned about the possibility of civil liability being applicable to the key information document disclosures.

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