CHAPTER VIII

MASTER-FEEDER STRUCTURES
SECTION 1

Scope and approval
Article 58
1
A feeder UCITS is a UCITS, or an investment compartment thereof, which has been approved to invest, by way of derogation from Article 1(2)(a), Articles 50, 52 and 55, and Article 56(2)(c), at least 85 % of its assets in units of another UCITS or investment compartment thereof (the master UCITS).
2
A feeder UCITS may hold up to 15 % of its assets in one or more of the following:
a
ancillary liquid assets in accordance with the second subparagraph of Article 50(2);
b
financial derivative instruments, which may be used only for hedging purposes, in accordance with Article 50(1)(g) and Article 51(2) and (3);
c
movable and immovable property which is essential for the direct pursuit of the business, if the feeder UCITS is an investment company.
For the purposes of compliance with Article 51(3), the feeder UCITS shall calculate its global exposure related to financial derivative instruments by combining its own direct exposure under point (b) of the first subparagraph with either:
a
the master UCITS’ actual exposure to financial derivative instruments in proportion to the feeder UCITS’ investment into the master UCITS; or
b
the master UCITS’ potential maximum global exposure to financial derivative instruments provided for in the master UCITS’ fund rules or instruments of incorporation in proportion to the feeder UCITS investment into the master UCITS.
3
A master UCITS is a UCITS, or an investment compartment thereof, which:
a
has, among its unit-holders, at least one feeder UCITS;
b
is not itself a feeder UCITS; and
c
does not hold units of a feeder UCITS.
4
The following derogations for a master UCITS shall apply:
a
if a master UCITS has at least two feeder UCITS as unit-holders, Article 1(2)(a) and Article 3(b) shall not apply, giving the master UCITS the choice whether or not to raise capital from other investors;
b
If a master UCITS does not raise capital from the public in a Member State other than that in which it is established, but only has one or more feeder UCITS in that Member State, Chapter XI and the second subparagraph of Article 108(1) shall not apply.