EUROPE - Ucits IV, described as a badly-needed upgrade of European Union rules governing pan-EU cross-border fund movements, is back on the European Commission's agenda.

The Commission is sending the reformed package for the directive for Undertaking for Collective Investment in Transferable Securities (UCITS) back to the European Parliament for clearance on 16 July, having previously been blocked by Commissioner Charlie McCreevy's desk.

That said, the much discussed "passport" system - which would allow management company services to centralise control of funds in one jurisdiction - is being dropped from the Ucits IV directive, as concerns about apparent fragmentation of regulatory supervision from some member states have yet to be resolved.

Were the ‘passporting' element eventually resolved, it would allow companies to manage all of their assets from one jurisdiction, but could be at the cost of financial services support firms in Ireland and Luxembourg where many funds are currently domiciled.

Under normal progress, the new directive is unlikely to see light of day in EU national codes before 2010 or 2011.

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