Ucits Rules, Iceland Banks, Transocean: Compliance

Ucits, European funds known by the acronym for Undertakings for Collective Investment in Transferable Securities, have become the fastest-growing segment of the $1.7 trillion industry, while regulators and investors raise questions about the promises being made by the new funds, according to reporting by Bloomberg’s Tom Cahill.

Some regulators and investors have questioned the ability of the instruments to meet promises such as returning cash quickly to clients, when tested in a crisis like the banking squeeze that followed the September 2008 collapse of Lehman Brothers Holdings Inc. The securities held by Ucits can’t be re-hypothecated, or lent out. That financing technique tied up billions of dollars in hedge-fund assets in Lehman’s bankruptcy.