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AI Summary of Article 70

The prospectus for a UCITS must clearly outline the asset categories in which it is authorised to invest, including details on the use of financial derivative instruments. A prominent statement should specify whether these instruments are for hedging or achieving investment objectives, alongside their potential impact on risk.

Additionally, if a UCITS invests primarily in assets outside transferable securities or replicates an index, both the prospectus and marketing communications must highlight this strategy. Any indication of high volatility due to portfolio management techniques must also be prominently stated to inform investors accurately.

Version status: Applicable | Document consolidation status: Updated to reflect all known changes
Version date: 1 July 2011 - onwards
Version 3 of 3

Article 70

1. The prospectus shall indicate in which categories of assets a UCITS is authorised to invest. It shall mention if transactions in financial derivative instruments are authorised, in which case it shall include a prominent statement indicating whether those operations may be carried out for the purpose of hedging or with the aim of meeting investment goals, and the possible outcome of the use of financial derivative instruments on the risk profile.

2. Where a UCITS invests principally in any category of assets defined in Article 50 other than transferable securities or money market instruments, or where a UCITS replicates a stock or debt securities index in accordance with Article 53, its prospectus and, where necessary, marketing communications shall include a prominent statement drawing attention to the investment policy.

3. Where the net asset value of a UCITS is likely to have a high volatility due to its portfolio composition or the portfolio management techniques that may be used, its prospectus and, where necessary, marketing communications shall include a prominent statement drawing attention to that characteristic.

4. Upon request of an investor, the management company shall also provide supplementary information relating to the quantitative limits that apply in the risk management of the UCITS, to the methods chosen to this end and to the recent evolution of the main risks and yields of the instrument categories.