Does it still make sense, from the EU perspective, to distinguish between UCITS and non-UCITS schemes?

- The adoption and the implementation of the Alternative Investment Fund Managers Directive (AIFMD) among the European Union (EU) Member States leads to the observation that it no longer makes sense to distinguish between Undertakings for Collective Investment in Transferable Securities (UCITS) and non-UCITS schemes. - This conclusion can be reached by interpreting the rationale behind the AIFMD and by analysing the definition of an alternative investment fund (AIF). In fact, due to the broad scope of this new legal definition, each undertaking for collective investment that is non-UCITS now falls inside the new AIF category. - It follows that currently the distinction to be made is the one between UCITSs and AIFs, because from the EU legislation perspective tertium non datur. - Additionally, according to the internal regulations of the EU Member States, it is also possible to distinguish (within the AIF category) between AIFs for retail investors and AIFs reserved for professional investors. - The same classifications can be used within the UK, where it is possible to establish: (i) UCITSs, such as authorized unit trust schemes (AUTs) and authorized open-ended investment companies (OEICs), which have to be managed according to the UCITS Directive (UCITSD) and (ii) AIFs, ie every UK collective investment undertaking, which is not compliant with the rules of the UCITSD. The UK AIFs can be addressed to retail investors or reserved for professional investors on the basis of the marketing choices made by their managers.