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As the European Commission undertakes to publish its White Paper on the enhancement of the EU framework for investment funds (scheduled for November 2006), now is a good time to reflect on whether the UCITS framework needs a radical overhaul if the regulatory landscape is going to adapt itself to the reality of market evolutions. Jean-Pierre Casey contributes to this important debate with the second ECMI Policy Brief, in which he argues that UCITS ought to move to a risk-based approach as opposed to relying on the product approach. Casey concludes that both the product approach, which necessitates defining eligible assets – a laborious exercise – and the investment restrictions which form the other cornerstone of investor protection in UCITS, are outdated and out of sync with the lessons of modern portfolio theory.