Did you know that one of the EU’s biggest success stories in financial services is celebrating its 40th birthday this year? The EU’s framework for collective investment schemes – undertakings for collective investment in transferable securities (UCITS) – offers retail investors a safe and attractive way to put their money to work. At the same time, UCITS funds channel funding to the economy, supporting job creation, innovation, the green transition and other big EU political priorities.
Remaining best in class
UCITS funds are by far the most popular type of collective investment vehicles for retail investors in Europe – and a global hit as well, available in more than 50 countries beyond the EU. The European Commission wants to ensure that UCITS remain best in class. This means that we regularly have to modernise and improve the framework. Capital markets are evolving, with new investment strategies emerging and digitalisation opening up new possibilities for fund managers and investors alike. At the same time, investors’ preferences and ways of using financial services are changing. This is especially true for young people. UCITS funds must keep abreast of these developments if they are to remain competitive.
That is why the Commission will consider revising the rules setting out what kinds of assets UCITS funds can invest in. These rules are specified in the UCITS Eligible Assets Directive, a directive that serves to implement UCITS – and that is almost 20 years old.
To kick off the work, the Commission asked the European Securities and Markets Authority (ESMA) to assess whether and how the directive should be amended. ESMA submitted its technical advice to the Commission in June 2025.
Consultations and analysis
Building on ESMA’s input, the Commission will move forward with public consultations and market analysis in 2026. We will need to assess, for example, to what extent definitions and links with other pieces of EU legislation should be updated. And we will have to determine if the provisions in their current form are sufficiently clear about the direct and indirect investments UCITS funds can make – and whether they should evolve to enable access to innovative investment strategies. We will reach out and listen to all stakeholders, including citizens.
Any updates to the rules will have to adequately reflect market developments and lead to greater supervisory convergence, while protecting the UCITS brand. This will be key in helping us boost retail participation in capital markets and private wealth creation, in line with the objectives of the savings and investments union.
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