Decree No. 115 / 2007 Coll.
Order on details of the performance of the obligations of the depositary of the collective investment fund
Valid
Effective from 15.07.2007
Text versions:
15.07.2007
17.05.2007
115
DECLARATION
of 9 May 2007
on the details of the performance of the obligations of the depositary of the collective investment fund
The Czech National Bank provides pursuant to § 139 (c) and (d) of Act No. 189 / 2004 Coll., on Collective Investment, as amended by Act No. 57 / 2006 Coll. and Act No. 224 / 2006 Coll., (hereinafter "the Act '):
Subject matter
(1) This decree provides for the details of the performance of the obligations of the depositary of the collective investment fund (hereinafter referred to as the depositary) in respect of:
(a) custody of the collective investment fund;
(b) other custody of the assets of the collective investment fund where the nature of the case precludes the disposal of the assets;
(c) checking the issue and redemption of units and the issue of shares in a collective investment fund;
(d) by checking the calculation of the current value of a share or a mutual investment fund;
(e) settlement of transactions in the assets of the collective investment fund within the normal time limit;
(f) checking the use of the return on the assets of the collective investment fund;
(g) control of the management of the collective investment fund's assets.
(2) This decree further regulates
(a) the conduct of an investment company or investment fund which may justify the execution of an order by the depositary;
(b) cases where the activities of the depositary may be carried out through another person.
Deposits of assets of a collective investment fund
The depositary shall ensure that the assets of the collective investment fund are held in such a way that:
(a) the book-entry securities registered in the central register of securities (1) shall be kept in the owner's account in the central register of securities; other investment vehicles shall be kept in separate records (2) or in a separate register,
(b) other property, if its nature so permits, shall be taken over physically or by another person.
Other custody of collective investment fund assets
(1) The custody of real estate held by a special property fund or a real estate company in which it has a participation and the custody of holdings in a real estate company is ensured by the depositary by controlling the handling of such property by verifying the conditions for consent to the disposal in accordance with the law.
(2) Where the legal order governing the management of the property so permits, the depositary shall agree with the collective investment fund on the arrangements of the relationship in such a way that the assets of the collective investment fund cannot be treated in a valid manner without the consent of the depositary.
(3) Furthermore, the depositary shall verify, mutatis mutandis, the value and nature of the assets which cannot be entrusted in the custody provided for in Article 2, in particular by:
(a) continuously checks the status of the registration in the real estate register or other register;
(b) compare information from an investment company or investment fund with information from its own records;
(c) where, on the basis of the information referred to in points (a) and (b), it cannot reliably establish the current state of the property, it shall verify the state of the property by on-the-spot checks or other appropriate procedures at least once a year; they shall verify the state of the property whenever, for any reason, there is doubt as to the accuracy or completeness of the information provided by the investment firm or investment fund.
(4) The depositary may carry out the custody referred to in paragraphs 1 to 3 through another person.
Control of the issue and redemption of units and the issue of shares of a collective investment fund
(1) The depositary shall carry out checks on the issue of the units of the mutual fund and the shares of the investment fund, in particular by verifying each day on which the unit or shares are issued,
(a) whether the number of units issued by an investment company is equal to the proportion of the total amount paid for it in the current account of the mutual fund held by the depositary and the actual value of the units issued for the relevant date; taking into account, where appropriate, the premium in accordance with the holding fund rules; or
(b) whether the number of IF shares issued per inspection date is equal to the proportion of the total amount credited for the issue of such shares to the depositary's current account of the IF and the fixed share issue rate.
(2) When checking under paragraph 1, the depositary shall take into account the premium and the premium on the issue account at least in terms of whether the total amount credited takes into account at least the smallest premium or premium and the highest premium or premium possible under the collective investment fund's Statute or under the decision of the General Meeting of the Investment Fund3).
(3) The depositary may, instead of the procedure referred to in point (a) of paragraph 1, carry out a check on the issue of units of the mutual fund by checking that the number of units of the unit of account corresponding to the amount credited to the account of the Fund has been issued to individual shareholders; Article 9 (2) shall apply mutatis mutandis.
(4) The depositary is responsible for checking whether the units are purchased in accordance with the law and the Statute of the Collective Investment Fund as part of the control of payments under this Order.
(5) The settlement of the buy-in of units shall be carried out by the depositary on the basis of an order from the investment company in accordance with the rules of the open holding fund and under the agreement between the investment company and the shareholder, provided that this agreement does not conflict with the law or the statute.
Control of the calculation of the current value of the share or share certificate of the collective investment fund
The depository of a collective investment fund designated for the public shall carry out a check on the calculation of the current value of an investment fund's share or a mutual fund's share certificate each time before the publication of that value (4) by verifying the accuracy of the information submitted by the investment company or investment fund. The verification shall be carried out by the depositary on the basis of data from sources independent of the investment company or investment fund normally used by professional investors in their activities; in the absence of such resources, the depositary shall base itself on reliable evidence of the investment company or investment fund. The expert's opinion under § 53e of the Act may also be used for the verification.
Securing settlement of transactions in collective investment fund assets within the normal time limit
The settlement of transactions in the assets of the collective investment fund shall be ensured by the depositary by the provision of the assets of the collective investment fund which it holds in custody or by the provision of such transactions in cases where the handling of such transactions is subject to its approval.
Control of the use of the proceeds of the collective investment fund's assets
(1) The depositary checks that the distribution of the proceeds of the collective investment fund's assets is in accordance with the law and the Statute of the collective investment fund.
(2) Where a collective investment fund pays interest in the management of the assets of a collective investment fund, the depositary shall check the payment of funds to shareholders or shareholders by analogy in accordance with the provisions of Paragraph 4 (4).
Control of the management of the collective investment fund's assets
(1) The depositary shall monitor the investment firm and the investment fund's asset management instructions that form part of the assets of the collective investment fund (hereinafter referred to as the "control of the order") at the dates set out in Section 9 and to the extent and in a manner specified in paragraphs 2 to 5.
(2) Where an order is issued for the acquisition of an asset into the assets of a collective investment fund, the depositary shall, as part of the control of the order:
(a) checking that only the types of assets permitted under the law and the Statute are acquired into the assets of the collective investment fund; If the type of asset is not apparent, the check shall also be carried out on the basis of an analysis of the documentation relating to the relevant asset;
(b) checking compliance with the investment limits under the law and the Statute by comparing the established limits with the latest available information on the assets of the collective investment fund on the date on which the order was submitted.
(3) Where an order for the acquisition or disposal of an asset is concerned, the depositary shall, in the context of the control of the order, carry out a check of professional care in determining the price and other conditions of trade, unless it is an anonymous transaction concluded on the market pursuant to Article 26 (1) (a) of the Act; This check shall be carried out in particular by a review of the analysis evidencing the acquisition or disposal of the asset under the best conditions and the advantage of the market5).
(4) If the order is related to techniques and tools for the efficient management of assets or similar techniques and instruments, the depositary shall, in the framework of the order control, check the professional care costs in determining the price and other trading conditions; This check shall be carried out in particular by reviewing the analysis of the benefits of the trade (5) and verifying compliance with the rules on the use of techniques and tools for the efficient management of the property (6).
(5) Where an order for payment of the assets of a collective investment fund is not referred to in paragraphs 2 to 4, the depositary shall verify, in the context of the control of the order, that the order does not contradict the law, the Statute or the management contract, including professional care, in particular that the reasons for the investment firm or the investment fund to submit the order are justified.
(1) The depositary shall check the order before making the payment or other settlement of the transaction on the basis of the order. After payment or other settlement of the transaction, the order may be checked only where:
(a) the amount on which the order is issued shall not exceed CZK 500 000 until the aggregate daily value of such payments reaches 0,1% of the value of the collective investment fund's assets; or
(b) the assets referred to in § 26 (1) (a) and (c) or § 51 (1) (a) and (b) of the Act are the subject of trade; and
1. the way in which the market is traded pursuant to Paragraph 26 (1) (a) of the Act excludes settlement of the transaction later than the day following the submission of the order; or
2. the depositary, on the basis of an inspection by an investment company, investment fund or other person managing the assets of a collective investment fund, carried out in agreement with such persons during the last 12 months, has satisfied itself that the management and internal control system of that person ensures that compliance with the law, the Statute, the Depository Agreement and the Management Agreement is adequately controlled.
(2) The control of the orders referred to in paragraph 1 (a) may be carried out by checking a representative sample of payments within 30 days of the end of the week in which the order was issued. A representative sample of payments shall be selected by the depositary for a period not exceeding 30 days.
The depositary shall carry out compliance checks
(a) the limits relating to the assets of the collective investment fund at least once a month within 15 days of the end of the preceding month, according to the latest available data; and
(b) the limits applicable to the issuer of securities held by a collective investment fund, on the basis of the last available information on the capital of the issuer or the number of voting rights associated with the issuer's shares, but at least once a quarter, in the case of the issuer, at least once every half year; and
(c) other limits according to the law and the Statute, mutatis mutandis, the nature of the limit.
Reasons for not executing the order by the depositary
The reason for not carrying out the order by the depositary pursuant to Article 23 (6) of the Act is where:
(a) the investment firm or the investment fund fails to remedy, in particular by entering a new order, the implementation of which will eliminate the lack of the original order and which can reasonably be expected to be settled; or
(b) the execution of the order would exceed the limit laid down by law or by the Statute by more than 1% or the risk of damage caused by settlement of the order clearly exceeds the risk of damage associated with failure to settle it; for the mutual fund, the depositary shall also consider the likelihood of early compensation for damage by the investment firm or another person managing the collective investment fund when assessing the risk of damage.
Rules for the implementation of activities through another person
(1) Where this decree allows the depositary to use another person (hereinafter referred to as "the delegate ') to carry out its activities, the depositary shall:
(a) verify that the delegate is entitled to carry out the delegated activity;
(b) conclude a contract with the authorised person according to which, depending on the nature of the case, the authorised person:
1. Issue of the assets of the collective investment fund or documentation relating to such assets to another person without prior approval of the depositary, unless the performance of a statutory obligation and the delegate informs the depositary without delay of the issue of the property or documentation;
2. comply with the depositary's request to suspend the execution of an order concerning the trust;
3. allow the depositary at any time to take over the assets or documentation of the collective investment fund, where its nature so permits;
4. does not use any other person for that activity except in accordance with paragraph 2;
5. carry out the delegated activities in such a way as not to restrict the compliance of such activities with the legislation and allow for the control carried out by the depositary.
(2) In the case of safekeeping, the contract shall determine whether and under what conditions the delegate may use additional persons to carry out the delegated activities; the conditions laid down in paragraph 1 must be met.
Transitional provision
Until such time as a CSD takes over the records of book-entry and immobilized securities maintained by the CSD, the depositary shall ensure that the management of those securities in a legal record is possible only with the consent of the depositary.
Repeal
Decree No. 265 / 2004 Coll., on the details of the performance of the depositary's duties, is hereby repealed.
Efficacy
This Decree shall take effect on 15 July 2007.
Governor:
Doc. Ing. Tůma, CSc.
1) Paragraph 92 (1) of Act No. 256 / 2004 Coll., on Capital Market Business, as amended.
2) Section 93 of the Capital Market Enterprise Act.
3) Article 204a (2) of the Commercial Code.
4) § 88 of Act No. 189 / 2004 Coll., on Collective Investment, as amended.
5) Paragraph 75 (2) (h), (i) and (k) of the Collective Investment Act.
6) Sections 27 and 49b of the Collective Investment Act.
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Regulation Information
| Citation | Decree No. 115 / 2007 Coll., on the details of the performance of the obligations of the depositary of the collective investment fund |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 17.05.2007 |
|---|---|
| Effective from | 15.07.2007 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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