No excuse for late UCITS V readiness, says BNY Mellon

A lack of formal approval should not affect fund managers’ readiness for UCITS V, according to BNY Mellon.

Under initial UCITS V directives released in August 2014, an 18 month transition period was granted for implementation which is due to expire on 18 March.

However, a delay in formal approval by the European Council and Parliament has caused a wave of uncertainty throughout the market.

“Delays to UCITS V level 2 measures have put pressure on fund managers to meet the 18 March deadline for depository agreements. Despite the lack of clarity until late in the day, prudent managers should be able to keep to the original timeframe without the need for a deadline extension,” said Rolf Bachner, EMEA funds product manager, BNY Mellon.

Formal approval for the new measures is expected this month prior to implementation.

According to Bachner, fund managers who have not sufficiently prepared will still need to be ready for spring implementation and that this may involve making alterations to pricing.

“The industry has had sufficient guidance to ensure that their depository agreements are finalised in accordance with the spring timeframe,” he added.

“However some fund managers that have been waiting on the final level 2 measures before concluding depository arrangements will now have to swiftly renegotiate legal terms and revised pricing. Many fund managers will need to familiarise themselves with new oversight requirements and ensure an appropriate degree of separation between the depository and the management company,” Bachner added.