The UCITS directive (Undertakings for Collective Investment in Transferable Securities, UCITS) is a key facilitator to the successful development of the European investment funds industry by providing a globally recognised quality label for investment funds. Over 11.5% of European household financial assets were already invested in UCITS funds in 2007 and around 40% of UCITS originating in the EU were sold in third countries like Asia, the Gulf region and Latin America. In terms of market share, UCITS compliant funds account for around 75% of Europe’s investment funds market with total assets of around EUR 6 trillion (see note 1). Despite this enormous success, there is an urgent need to adapt the UCITS regime to today’s market needs and, hence, to allow fund managers to fully exploit the potential of Europe’s single market for investment funds. In recent years, UCITS have encountered increased competition from substitute retail investment products with some commentators taking the view that UCITS funds have become disadvantaged by the more flexible regulatory frameworks of retail structured products and insurance linked investment products - especially when it comes to the time and costs to market new products (see note 2)..