engleski

Madoff scandal as driving factor of EU UCITS law reform: new liability rules for fund depositaries in EU member states

Bernard Madoff's Ponzi scheme began to unravel in December 2008 when the general market downturn accelerated. Since then, investors of so-called ''Madoff feeder funds'' have brought large number of legal actions against funds and their custodians in various jurisdictions. Managers of these funds, as well as theirs depositaries delegated their duties to Madoff's BLMIS which has, contrary to European rules (the UCITS Directive), led to the accumulation of their functions. None of that was mentioned in the fund's prospectus nor reported to the competent authorities. The scandal has had a huge impact on the EU mutual fund market. Namely diverging regulatory approaches in national laws of EU member states and have opened political debates, especially between Luxembourg and France. This article presents an analysis of pre-Madoff UCITS regulatory framework and efforts of investors of Luxalpha SICAV and Thema fund in pursuing their claims before Luxembourg, French, Italian and Irish courts focusing on liability of depositary. As a result, new proposal (UCITS V Directive) has been made and its solutions are also addressed in this article.

Madoff; UCITS funds; investor protection; liability of depositary; compensation of damages; UCITS V

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