There is considerable confusion as to how two European Union directives, Mifid and Ucits, will interact in the long run.

Unlike Ucits, which governs cross-border funds, Mifid, the markets in financial instruments directive, is a horizontal directive that cuts across the entire financial services industry (except for insurance – and this carve-out makes little sense). Precisely because the two directives are rooted in diverging regulatory philosophies, they are not natural partners, and the exercise of trying to fit the two together will be neither effortless nor seamless.