In the last four years in particular, Undertakings for Collective Investment in Transferable Securities (UCITS) have been increasingly utilised by fund sponsors pursuing alternative investment strategies. This can be attributed to a desire on the part of those fund sponsors to source new lines of capital at a time that many investors were seeking shelter in regulated structures with built-in investor protection measures. Whether those factors are here for the long term may not be clear, but with approximately €123 billion estimated to be invested in alternative investment UCITS, it is fair to say that a market for these funds has successfully been forged. However, there is a small yet growing wave of sentiment in favour of narrowing the investment scope of UCITS. But is this really the time to consider tightening the reins on UCITS? In a guest article, Maples and Calder Partner Stephen Carty provides background on the UCITS regime and explores this pressing question. See also “The Implications of UCITS IV Requirements for Asset Management Functions,” Hedge Fund Law Report, Vol. 4, No. 36 (Oct. 13, 2011).