Undertakings for Collective Investment in Transferable Securities (UCITS)

Typically used where the intention is to invest solely in transferable securities such as stocks and bonds, UCITS are regulated and require a licence from the Financial Services Commission.

Scheme Summary

  • Open-ended investment scheme which may be offered to the general public across EU member states.
  • Established in accordance with EU Directive 2009/65/EC, Gibraltar UCITS funds may passport their services within the European union.
  • Governing Gibraltar Legislation is the Financial Services (Collective Investment Schemes) Act 2011.
  • Specialised investment limited to specified liquid securities.
  • Highly regulated to protect the interests of the investor.
  • Gibraltar offers a favourable combination of on-shore status, EU membership, a low-tax regime and an experienced financial centre.
  • Choice of structures: common fund established by trust deed or, as an open ended investment company (“OEIC”).
  • Ability to create UCITS fund within an umbrella scheme with multiple sub-funds within a single structure.

Common features

  • In addition to a full prospectus, a UCITS fund must issue a Key Investor Information Document (“KIID”) summarising the main aspects of the fund which is clear and readily comprehensible.
  • As a result of the European directive, larger fund structures may be created by the merger of cross border UCITS thereby structuring master-feeder funds. This allows investors who have invested in an UCITS in one country investing in a foreign UCITS via their locally domiciled master-feeder fund.
  • The KIID must include a risk analysis and appropriate indicator. In the event of a sub-fund structure, such risk indicators must apply to each in addition to the head fund,
  • Gibraltar UCITS will be taxed according to the local Income Tax Act 2010 at 10% on the ‘accrued and derived’ principle. Due to the nature of investment activities, income into a Gibraltar based UCITS is likely to fall outside of the tax regime.
  • A UCITS management company will pay 10% corporation tax on taxable profits.