Ucits funds now speak Mandarin
The European Commission’s asset management unit has for the first time published the text of a directive in Mandarin.
The Ucits IV directive, the latest iteration of the European retail fund regulation, appears in Mandarin on the commission website, as well as the usual English and French.
A spokesperson for the commission told FTfm: “This publication is linked to the interest of Chinese regulators and investors in knowing more about EU rules governing retail investment funds.”
This is an acknowledgment of the success of Ucits, which is recognised in markets around the world as a reliable structure. Although the vast majority of Ucits funds are registered in Dublin and Luxembourg, they are sold in more than 100 countries.
In Hong Kong, where more than 90 per cent of the funds market is from overseas, Ucits is the dominant structure. There is currently a process under way to establish mutual recognition between Hong Kong and China, so that funds regulated in one can be sold in the other.
The Chinese regulator already publishes its rules in English. However, the prospect for mutual recognition between European and Chinese markets is still distant, according to European experts.
Given that it has taken months for Ucits regulators to be comfortable allowing funds to invest in Chinese shares via Stock Connect, a link between the Shanghai and Hong Kong stock exchanges, it is likely to be a long time before fund structures in the Chinese market are deemed to offer equivalent investor protection to Ucits.