Q. Must the non-UCITS investment fund include conforming provisions in its constitutional document in order to be eligible for investment by a UCITS or is it sufficient for the non-UCITS investment fund to operate in practice in a manner which complies with the requirements of Regulation 68(1)(e)?
A. The UCITS Regulations require that the constitutional document of the non-UCITS fund in which it is intended to invest includes a prohibition on investing more than 10% of its assets in other investment funds.
A non-UCITS investment fund must also be subject to requirements in its jurisdiction of domicile which are equivalent to UCITS investor protections in order to comply with Regulation 68(1)(e). Alternatively, the non-UCITS fund must have requirements of the same effect in its constitutional document or offering document. A statement of the intended investment approach does not constitute a rule for this purpose.