Background
UCITS are undertakings whose sole object is the collective investment in transferable securities and/or other liquid financial instruments, which operate on the principle of risk-spreading, and the units of which are, at the request of investors, redeemed or repurchased, directly or indirectly out of the undertaking’s assets. Strong regulation of UCITS following harmonisation of the UCITS law with EU legislation ensures optimum investor protection. UCITS can be structured as, inter alia, master feeder funds, where the feeder fund invests its portfolio in another fund or as an umbrella fund containing several investment compartments each one concentrating a separate pool of segregated assets.
A UCITS may be constituted either (i) under the law of contract as a common fund managed by a management company, or (ii) under statute as a variable capital investment company.