Cure period

A cure period sets how long a portfolio may stay outside a limit while the breach is corrected (cure periods by regime). It usually applies to passive breaches only. The UCITS Directive sets no fixed period: it requires correction as a priority objective.

Spain’s IIC rules allow six months to regularise an excess arising after the last acquisition. If the excess is more than 35% of the limit, it must fall below that level within three months. A US regulated investment company that fails its diversification test through an acquisition has 30 days after the quarter end.

Policies can set their own: one US foundation treats a deviation rectified within three business days as no breach. In Acclimetry, a rule version can carry a grace period in days. The result is a breach from the first observation; the case opens at once, and its clocks start when the grace ends.