The fifth Undertakings for Collective Investment in Transferable Securities (UCITS V) Directive and the Alternative Investment Fund Manager Directive (AIFMD) have reshaped the operational landscape of the European investment funds market. The UCITS Directive, which covers mutual funds, introduces uniform rules allowing mutual funds to be offered cross-border, whilst the AIFMD, which covers hedge funds and private equity, prescribes rules for authorising, supervising, and overseeing the managers of such funds. Jointly, both directives aim to implement a framework that increases transparency and ensures greater investor protection.

Market participants, in particular those appointed as depositary banks, have faced significant operational and legal challenges, due to this regulatory package, which may have affected their operating model, including their use of market infrastructure providers. In 2021, the Commission opened a review process resulting in proposal to amend both the AIFMD and UCITS. The co-legislators adopted the proposed amendments in February 2024, that will enter into force pending transposition into national legislation.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.