The Impact of UCITS and COLL 5.2 on Fund Managers
 

In the ever-evolving regulatory landscape of fund management, UCITS (Undertakings for Collective Investment in Transferable Securities) and COLL 5.2 (from the FCA Handbook) have become cornerstones of compliance. These frameworks aim to bolster investor protection, transparency, and governance while presenting both challenges and opportunities for fund managers. 

Navigating these complexities can be daunting. That’s where Thomas Murray’s Market Eligibility Due Diligence service becomes a game-changer, offering automated solutions to simplify compliance, enhance decision-making, and build investor confidence. 

The UCITS Framework 

UCITS is the gold standard for fund regulation in the EU, setting stringent guidelines on diversification, risk management, and transparency. For fund managers, compliance means adhering to rules that govern: 

• Risk Management: Implementing robust systems to ensure investments align with fund objectives while managing exposure limits. 

• Governance: Ensuring oversight through structures like depositaries, which safeguard assets and ensure compliance. 

The Role of COLL 5.2 

In the UK, COLL 5.2 integrates UCITS principles while introducing additional standards tailored to UK-domiciled funds. Post-Brexit, its relevance has grown for funds navigating both UK-specific regulations and global equivalency standards. Key requirements include: 

• Enhanced Disclosure: Simplifying complex strategies and risks into clear, regulator-ready documentation. 

• Governance and Accountability: Strengthening oversight with tailored governance structures, including audit processes and remuneration policies. 

• Increased focus on governance: The regulation emphasises the importance of effective governance structures, including board composition, audit committees, and remuneration policies. 

The Challenges Fund Managers Face 

While these regulations promote greater investor confidence and market stability, they also introduce significant operational demands. Fund managers must juggle: 

• Rigorous due diligence to ensure market eligibility and operational suitability. 

• Continual updates to comply with evolving standards. 

• Time-intensive reporting to provide evidence of compliance. 

These challenges can be barriers to efficiency—but they don’t have to be. 

How Thomas Murray Simplifies Compliance and Empowers Fund Managers 

At Thomas Murray, we understand the burden of regulatory requirements. Our Market Eligibility Due Diligence service is designed to streamline compliance and ensure fund managers have the tools they need to thrive in a competitive market. 

1. Simplified Compliance 

Effortlessly demonstrate adherence to UCITS and FCA COLL 5.2 with automated, regulator-ready reports. By leveraging Thomas Murray’s Orbit Intelligence platform, fund managers save time and avoid the pitfalls of manual reporting processes. 

2. Informed Investment Decisions 

Evaluate the eligibility and suitability of global markets with access to comprehensive and continuously updated data from over 100 global markets. Whether you’re a compliance officer, portfolio manager, or risk analyst, our detailed reports ensure your investment decisions are backed by reliable, high-quality data. 

3. Continuous Monitoring 

Regulations and market conditions evolve—so should your compliance processes. With Thomas Murray, you benefit from ongoing assessments that ensure your operations remain aligned with UCITS and COLL requirements. 

The Market Eligibility Due Diligence Service in Action 

Here’s how our service works step-by-step: 

1. Comprehensive Data Evaluation: Use our proprietary platform to quickly assess market eligibility and operational suitability. 

2. Automated Mapping of Responses: Key regulatory criteria (e.g., from the FCA and ESMA) are automatically mapped using our continuously updated data, saving time and ensuring accuracy. 

3. Detailed Reporting: Download country-specific reports to provide clear evidence to regulators that: 

• Investment due diligence has been performed. 

• Market eligibility under UCITS has been evaluated. 

• Operational suitability has been assessed. 

Opportunities for Forward-Thinking Fund Managers 

By embracing tools like Thomas Murray’s Market Eligibility Due Diligence service, fund managers can turn compliance into a strategic advantage: 

• Build Trust: Demonstrating rigorous adherence to UCITS and COLL boosts investor confidence. 

• Save Time: Automated processes reduce the administrative burden, allowing managers to focus on delivering value to investors. 

• Gain a Competitive Edge: Proactively addressing compliance challenges positions your fund as a leader in governance and risk management. 

The impact of UCITS and COLL 5.2 on the fund management industry is undeniable. While these regulations introduce challenges, they also present opportunities for those who adapt and innovate. 

With Thomas Murray, fund managers can simplify compliance, make informed decisions, and continuously monitor market suitability—all while demonstrating their commitment to investor protection and operational excellence.