UCITS - Undertakings for Collective Investment in Transferable Securities
A Gibraltar fund may be licensed in accordance with the laws on UCITS where the intention of the fund is:
- to operate with the sole object of collective investment in transferable securities or in any other liquid financial assets
- raise capital from the public and invest on the principles of risk-spreading
- issue units which are at the request of holders redeemed, directly or indirectly, out of those assets
A UCITS in Gibraltar may be established as:
- a Gibraltar open-ended investment company
- a Gibraltar unit trust comprising a trustee and an independent manager
- a contractual fund which is an unincorporated body established by a management company under which the participants agree to share in the assets of the fund
A UCITS fund can be structured as an umbrella scheme, under which the contribution of the participants and the profits out of which payments are to be made are pooled separately in relation to separate parts of the scheme.
In order to appoint an authorised UCITS management company and a licensed depositary in Gibraltar, a UCITS fund, structured as a common fund, is required. A standard arrangement would be for the UCITS fund to engage a UCITS management company, which in turn would contract with service providers such as an investment manager, administrator and distributor. A UCITS fund structured as an open-ended investment company may opt to be self-managed by its directors, in which case the fund will contract directly with its service providers in its own name. A UCITS management company is able to passport its services from the member state, where it is domiciled, to another member state where it wishes to provide services.
UCITS benefit from a full EU marketing passport. By following a simplified regulator-to-regulator notification procedure, a UCITS established in one member state may market its shares or units in other member states. A Gibraltar UCITS intending to distribute its shares or units in another member state is required to submit a notification letter of its intention to market in a target member state to the Financial Services Commission (FSC). The FSC will then verify and transmit the request to the relevant competent authority of the member state, where the Gibraltar UCITS wishes to raise capital or distribute its shares or units. The Gibraltar UCITS may begin its activities in that member state only once the transmission has been confirmed by the FSC.