New streamlined and nationally harmonised regulation and a large
pool of potential investors make Canada an attractive distribution
market for UCITS (Undertakings for Collective Investment in
Transferable Securities) funds, according to a new report by RBC
Investor & Treasury Services and Borden Ladner Gervais LLP
(BLG) entitled UCITS in Canada: Driving business growth through
cross-border fund distribution.
Canada has recently implemented a new streamlined and nationally
harmonised registration system that facilitates the distribution of
UCITS funds to qualified investors in the country. Exemptions
from Canadian registration requirements which recognize and rely on
the regulation in home markets are now available to Global Asset
Managers when distributing UCITS funds to qualified investors -
high net worth (HNW) and institutional investors according to the
report. Distributions of UCITS funds can be done using
European or other disclosure documents, with Canadian wrappers. The
Canadian investment market represents a significant pool of
potential investors for UCITS funds. The country's pension
industry, fifth largest in the world1, is showing an
increasing appetite for global assets, the report identifies.
Canada also has the world's eighth largest population of HNW
investors2 and the eighth largest mutual fund
UCITS products have continued to extend their international
reach in recent years, the report explains, as fund managers expand
into new markets. As of June 30, 2014, net assets of UCITS funds
worldwide totalled $10.2 trillion4, with approximately
48% of that amount domiciled and administered in Luxembourg and
Ireland, the two largest UCITS fund markets by net assets. RBC
Investor & Treasury Services has considerable experience and
expertise in the two offshore fund centres of Luxembourg and
Ireland, administering UCITS funds since they were first introduced
more than 25 years ago.
"European and North American fund managers are increasingly
looking to broaden and diversify their distribution strategies
internationally," said Sébastien Danloy, Managing
Director, Continental Europe & Offshore, RBC Investor &
Treasury Services. "The overall cachet of the UCITS brand,
along with a large Canadian investor base, and harmonization of the
regulatory environment make Canada an attractive UCITS distribution
market for international fund houses."
"Canada's securities regulatory framework gives global
players the opportunity to enter Canada and distribute UCITS funds
– a brand of investment fund that is well understood in
Canada – to qualified investors. This creates significant
opportunities for international fund managers and allows greater
investment choices for Canadian HNW and institutional
Alfred Page, partner and national practice leader,
Securities, Capital Markets and Public Companies, BLG LLP.
"The UCITS in Canada report is one of the first comprehensive
guides to the Canadian framework uniquely tailored to offering
UCITS funds in Canada."
BLG's professionals have expertise and long experience in
helping investment management firms to understand and comply with
the regulatory requirements and identify the opportunities that
exist in Canada.
1. Towers Watson Global Pension Assets Study, February
2. World Wealth Report, RBC Wealth Management and
Capgemini, June 2014
3. 2014 Investment Company Fact Book, Investment Company
Institute, as at December 31, 2013
4. Quarterly Statistical Release, European Fund and Asset
Management Association, as at June 30, 2014
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