Act No. 124 / 1998 Coll.
Act amending and supplementing Act No. 248 / 1992 Coll., on Investment Companies and Investment Funds, as amended
Valid
Effective from 08.06.1998
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124
THE LAW
of 13 May 1998
amending and supplementing Act No. 248 / 1992 Coll., on Investment Companies and Investment Funds, as amended
Parliament has decided on this law of the Czech Republic:
Act No. 248 / 1992 Coll., on Investment Companies and Investment Funds, as amended by Act No. 591 / 1992 Coll., Act No. 600 / 1992 Coll., Act No. 61 / 1996 Coll., Act No. 151 / 1996 Coll. and Act No. 15 / 1998 Coll., is amended as follows:
1. In Article 2 (2), the first sentence is replaced by the following: "The management of assets in a mutual fund and the management of assets in an investment or pension fund under an investment or pension fund management contract by an investment company (hereinafter referred to as the" management contract ") shall also be considered as collective investment. '.
2. Article 3 (2) reads as follows:
"(2) Securities transactions may only be carried out by an investment company or investment fund through broker2) or by a securities dealer. ';
3. In Paragraph 4 (2), the second sentence is deleted.
4. In Article 4, paragraphs 3 and 4 are added:
"(3) The designation" investment company 'is entitled to use in its commercial name or when describing its activity only a legal person having its registered office in the Czech Republic, which has been authorised under § 8 of this Act.
(4) The capital of the investment company must be at least CZK 20 million. "
5. In Paragraph 5 (1), the first sentence is replaced by "By issuing units, the investment company collects funds in the holding fund."
6. Article 5 (3) reads as follows:
"(3) Property in the mutual fund is entrusted to the investment company for management. The investment firm shall use it for the purchase of securities or deposit it into accounts with banks held for the mutual fund and shall manage it on its behalf on behalf of the holders of the units (hereinafter referred to as the shareholders). '.
7. In Paragraph 5a (1), the words "an authorisation granted under Paragraph 8 (1) 'are replaced by" an authorisation granted (Sections 8 (1) and 9 (1))'.
8. Paragraph 5a (1) (a) reads as follows:
"(a) to collect funds in mutual funds and to manage assets in mutual funds in accordance with this Act and the statutes of mutual funds,";
9. Paragraph 5a (1) (b) reads as follows:
"(b) to manage the assets of investment funds in accordance with this Act, the statutes of the investment funds managed and the management contracts;"
10.
"(c) to manage the assets of pension funds in accordance with this Act, the statutes of the pension funds managed and the management contracts;"
11. in § 5a (2), the words "with professional care (§ 17a)" and the words "with respect to the rules laid down for risk limitation and distribution (§ 24)" shall be replaced by the words "in accordance with this law."
12. In Paragraph 5a (3), after the word "partners', the dot is replaced by a comma and the words" employees, prosecutors and members of the board of directors and supervisory board 'are added.
13.
"(4) Save as otherwise provided in this Act, an investment company may not grant or use loans, loans or gifts from the assets it has acquired to secure its own obligations or obligations of third parties. An investment company may not use the assets it has used to cover liabilities which are not directly related to the business of the asset. '
14. In Paragraph 5a, the following paragraph 5 is inserted after paragraph 4:
"(5) An investment company may not grant an advance on the assets of the investment fund, the assets of the mutual fund or the assets of the pension fund for the purchase of securities for that fund."
Paragraph 5 shall become paragraph 6.
15. in Article 5b (1), at the end of the sentence, the word 'to' is replaced by 'to'.
16. in Article 5b (5), the word 'does not specify' is replaced by 'does not specify';
17.
"(1) An investment company may conclude options 3d for a holding fund that manages only to reduce risks from adverse developments in securities, interest rates or foreign exchange rates in connection with the management of assets in that fund. For the purposes of this Act, a contract for the purchase of securities shall be deemed to be a futures transaction if the period between the conclusion of the contract and the fulfilment of the obligations under this contract is longer than 15 days.
3d) § 14 of Act No. 591 / 1992 Coll., as amended. '
18. Paragraph 5d (2) (d) reads as follows:
"(d) an arrangement to ensure the debtor's liability."
19. in Article 5d (3), the word "reasonably" shall be replaced by "mutatis mutandis."
20. In Paragraph 5e, a new paragraph 1 is added to the beginning and paragraph 2 is deleted.
Paragraph 1 shall read as follows:
"(1) Where an investment company accepts a loan or loan to bridge the short-term needs of a mutual fund (Paragraph 14 (3)), it may provide it with a hedge transfer of securities from that fund. ';
Paragraph 1 shall become paragraph 2.
21. in Article 5e (2) (e), the word "debtor" is replaced by the word "creditor."
22. Paragraph 7 (2) to (10) reads as follows:
"(2) The Investment Fund uses its assets to purchase or deposit securities, real estate and movable property in a bank account.
(3) The Investment Fund shall manage its own assets or may only entrust the management of its assets to investment companies under the management contract. An investment fund or an investment company that manages it shall not conduct securities transactions held by an investment fund through a property or a staffed person. This prohibition shall not apply to trading through a person performing the functions of depositary under this Act for an investment fund or mutual fund.
(4) If an investment fund manages its own property, the persons acting on its behalf are required to deal with professional care (§ 17a) and in accordance with the IF Statute. Where there is a conflict of interest of the IF with the interests of a person acting on its behalf, that person shall give priority to the interests of the IF.
(5) The Investment Fund may not use its assets to provide an advance on the purchase of securities.
(6) Investment fund shares are publicly negotiable. The statutes of companies cannot limit their transferability. The investment fund may issue shares of only one nominal value and may not issue priority and employee shares.
(7) The trading name of the investment fund shall bear the designation "investment fund '.
(8) The designation "investment fund" is entitled to use in its commercial name or in the description of its activity only a legal person having its registered office in the Czech Republic who has been authorised under § 8.
(9) The Investment Fund may not grant gifts, loans or loans from its assets or use its assets to secure the obligations of third parties, unless otherwise provided for in this Act (§ 5d).
(10) Only loans, loans and securities loans granted for a period not exceeding six months may be accepted by the Investment Fund to cover temporary needs. The aggregate of the loans, loans and securities received shall not exceed 10% of the fund's assets at the date of conclusion of the loan or loan agreement. ';
23.
Establishment of an investment company and an investment fund
(1) The creation of an investment company or investment fund requires authorisation.
(2) The authorisation is granted at the request of the Commission's founders.
(3) An investment company or investment fund may not be established on the basis of a call for subscription of shares and their initial capital must be paid in full before the application for authorisation referred to in paragraph 1 has been lodged.
(4) In the application for authorisation referred to in paragraph 1, the founder shall indicate:
(a) the business name and registered office of the investment firm or investment fund;
(b) the amount of the capital (§ 4 (4)),
(c) material, personnel and organisational assumptions for the activities of the investment company or investment fund;
(d) the names, residence and signature models of the proposed board members and members of the supervisory board of the investment firm or investment fund, and details of their assets and personnel links (Section 24a);
(e) the name, registered office and identification number of the bank which will carry out the depositary's activities for the investment company or investment fund (Section 30);
(f) other facts required by this law.
(5) The Annex to the application for authorisation referred to in paragraph 1 shall consist of:
(a) instruments proving the establishment of a public limited liability company, including its statutes;
(b) documents or statements of honour of persons referred to in paragraph 4 (d) on education, professional experience, membership of statutory bodies and supervisory boards of other companies and compliance with the conditions laid down in paragraph 29;
(c) extracts from the criminal record of persons referred to in paragraph 4 (d), no more than three months old;
(d) a proposal for the Statute of the Investment Fund;
(e) a draft prospectus for an investment fund's share to the extent that it is not replaced by a statute, 4)
(f) a contract with a postponement or future contract with a bank that will carry out the depositary's activities (§ 30);
(g) proof of repayment of the capital.
(6) If an investment fund uses the services of an investment company, the application shall be accompanied by a contract with a postponement or a contract with a future investment firm that manages the assets of the investment fund.
(7) When deciding on a request, the Commission shall take into account in particular the origin and amount of the capital of an investment company or investment fund which must enable them to carry out their activities properly. The Commission shall not grant an authorisation if the proposed members of the Board of Directors or the Supervisory Board are not suitable for the credible and transparent activities of the investment firm or the Investment Fund, in particular in terms of unwanted staff or capital links or conflicts of interest, or if they have not the necessary experience and qualifications to perform the function of the Board member or Supervisory Board.
(8) The authorisation referred to in paragraph 1 shall be granted for an indefinite or definite period, as requested by the investment company or investment fund, and may not be transferred to another person.
(9) The prior approval of the Commission shall be a condition for the selectivity or appointment of a new member of the Board of Directors or a member of the Supervisory Board. The documents referred to in points (b) and (c) of paragraph 5 shall form part of the request for consent to the choice or appointment.
(10) The Commission shall not give its consent unless it is satisfied that the person chosen or appointed is suitable for the credible and transparent operation of the investment firm or investment fund, in particular in terms of unwanted staff or property links or conflicts of interest, and that he has the necessary experience and qualifications to perform the functions of board member or supervisory board.
(11) A decision on the application referred to in paragraph 10 shall be taken by the Commission not later than 15 days after the date of its notification.
4) § 74 of ČNR Act No. 591 / 1992 Coll. '.
24. in Paragraph 9 (2), the word "designation" shall be replaced by "title" and the words "its Statute (§ 15)" shall be replaced by the words "draft of its Statute (§ 15) and the proposal for a prospectus of a participation note to the extent that it is not replaced by the Statute."
25. Article 9 (5) reads as follows:
"(5) The designation" open holding fund "or" closed holding fund "shall be entitled to use only the investment company for the mutual fund for which it has been authorised in accordance with paragraph 1."
26. In Paragraph 10 (2), the words "repurchase 'are replaced by the words" repurchase' and the words "buy 'are replaced by the words" repurchase' under the conditions laid down in Paragraph 13 (1) and (2) of this Act.
Article 27 (10) (3) reads as follows:
"(3) The authorisation for the issue of units of a closed holding fund shall specify the minimum number of units issued necessary to establish the holding fund and shall specify the period during which the units will be issued. Where a fixed minimum number of units has not been issued within a specified period, the closed holding fund shall not be established. ';
28. In Article 10, the following paragraph 4 is added:
"(4) The Commission may authorise the establishment of new closed holding funds only for a fixed period not exceeding 10 years. '
29. Article 11 (1) reads as follows:
"(1) The equity instrument is a security with which the shareholder's share of the assets in the holding fund is linked and the right to pay the share of the profit from the holding fund's management of the assets, if provided for in the holding fund's statute, and to the extent and under the conditions laid down in this Statute. The actual value of the share certificate shall be determined as a share of the equity in the holding fund (Paragraph 17 (4)) per share sheet. '.
30. In Article 11 (2), the following sentence is added: "A paper-based unit sheet is transferable by name. '
Article 11 (4) reads as follows:
"(4) Share certificates of the same holding fund and of the same value are based on the same rights of all shareholders."
32. in Article 12 (1), "from emise4b)" is replaced by "from emise4b)";
33. In the first sentence of Article 12 (2), the words "the amount corresponding to its share of the holding fund minus liabilities' are replaced by the words" its current value fixed at the date of issue ', and the sentence of the second sentence is replaced by the words "The difference between the nominal and the current value of the issued holding sheet is an issue premium which increases the equity in the fund or a disarrangement which reduces the equity in the fund'.
34. In Article 12, the following paragraph 3 is inserted after paragraph 2:
"(3) The value of the participation note at the date of issue may be increased at the time of issue by the premium shown in the holding fund status. ';
Paragraph 3 shall become paragraph 4.
35. In Paragraph 12, the word "common 'shall be inserted after the words" convert to' in paragraph 4.
36. The heading under Section 13 reads: "Buying up the shares of an open holding fund."
37. Paragraph 13 (1) reads as follows:
"(1) An investment company shall purchase a unit list using the assets in the holding fund for an amount fixed in accordance with Article 11 (1) on the date on which the right to purchase the unit list is exercised. This amount may be reduced by the deduction provided for in the Statute. ';
38. In Paragraph 13 (2), the word "buy 'is replaced by the word" buy-back' and the words "sell-back of the participation certificate 'are replaced by" buy-back'.
39. in Paragraph 13 (3), the word "purchased" is replaced by the word "bought";
40. Paragraph 13 (4) reads as follows:
"(4) An investment company may suspend the purchase of units in exceptional cases for a maximum period of three months where this is necessary for the protection of the rights or interests of shareholders. A written notification of the decision to suspend the purchase of units, stating the date and reasons for the suspension and the period for which the buy-out is suspended, shall be required by the investment company to deliver the Commission without undue delay. At the same time, it must inform the shareholders of the suspension of the buy-out in the manner set out in the Fund's Statute. The investment company shall inform the Commission within three working days of the date of suspension of the suspension of the purchase of the units. ';
41. In Paragraph 13, paragraphs 5 to 10 are added:
"(5) In the event that the suspension of the purchase of units is contrary to the interests of the shareholders, the Commission shall repeal the decision of the investment company to suspend the purchase of units. An appeal against the decision to revoke the suspension of the buying-in of units shall not have suspensory effect. The investment company shall inform the unit-holders without undue delay of the suspension of the redemption of the units in the manner specified in the fund's Statute.
(6) If the Commission does not consider the measures provided for in paragraph 4 to be sufficient, it may decide to withdraw the authorisation provided for in Paragraph 9 (1) of this Law.
(7) The suspension period for the purchase of units begins on the date of the investment company's decision to suspend the purchase of units. From that date, the investment company may not issue units or redeem units. The prohibition on the purchase of profit participation certificates shall also apply to profit participation certificates which have been requested by the shareholders before its suspension, provided that they have not yet been redeemed, and to units to which the right has been exercised during the suspension period.
(8) If, during the suspension period, the equity in the holding fund is reduced, the investment company is obliged to send the Commission, without undue delay, after it has been established that the reasons for the equity reduction are analysed.
(9) The investment company shall purchase the units at the price determined in accordance with Paragraph 11 (1) on the date on which the shares were repurchased.
(10) The shareholder shall not be entitled to interest on late payments for the period of suspension of the purchase of units, unless the investment company has already been late at the time of suspension or the Commission has annulled the decision of the investment company to suspend the purchase of units as unjustified. Interest on late payments shall be paid by the investment company on its own account. ';
42. In Paragraph 14 (1), point (a) shall be deleted.
Points (b) and (c) shall become points (a) and (b).
43. Paragraph 14 (2) reads as follows:
"(2) An investment company may not carry out transactions in securities held in a mutual fund through an asset or personnel connected person. This prohibition shall not apply to trading through a person performing a depositary function under this Act for an investment fund or a mutual fund. ';
44. Paragraph 14 (3) reads as follows:
"(3) An investment company may accept loans and loans, including securities lending, for a maximum period of six months, to meet the temporary needs associated with the management of assets in the mutual fund. The aggregate of loans received and loans, including securities lending, shall not exceed 10% of the value of the assets in the mutual fund at the date of conclusion of the loan or loan agreement. ';
45. in the second sentence of Paragraph 15 (1), the words "and amendments" shall be deleted.
46. In Paragraph 15 (2), the words "mutual fund or investment fund 'are deleted.
47. In the title under Section 16, the words "and the prospectus' are deleted.
48. In Article 16 (1), at the end of point (d), the words "data on their form and form," shall be added.
49. In Article 16, at the end of paragraph 1, the dot is replaced by a comma and the following point (h) is added:
"(h) the rules governing the adoption of amendments to the Statute."
50. Paragraph 16 (4) and (5) are deleted.
51. Paragraph 17 (1) (d), including footnote 4da, reads:
"(d) other bonds that are publicly negotiable, 4d) and bonds with a maturity of up to one year which are kept in the register established by the Czech National Bank under a special law. 4da)
4da) § 98 (2) of ČNR Act No. 591 / 1992 Coll., as amended. '
52. In Article 17 (1) (e), a comma shall be deleted at the end and the words "and interim certificates replacing shares for which the issuer has applied for a public trade permit shall be added."
53.In Article 17 (1) (f), the words "States of the European Union" are replaced by the words "Member States of the Organisation for Economic Cooperation and Development (OECD)."
54. In the first sentence of Paragraph 17 (1) (g), the word "foreign" shall be deleted and the words "OECD countries or other foreign markets" shall be inserted after the word "market."
55. In Paragraph 17 (1) (g), the second sentence is deleted.
56. In Article 17 (1), the dot is replaced by a comma at the end of the paragraph and the following points (h) to (j) are added:
"(h) option lists 4ea) authorising the acquisition of publicly negotiable securities;
(i) units of open units;
(j) coupons on the securities referred to in points (a) to (g) .4eb)
4ea) § 217a of Act No. 513 / 1991 Coll., as amended by Act No. 142 / 1996 Coll.
4eb) § 12 of ČNR Act No. 591 / 1992 Coll. '.
57. Article 17 (4) reads as follows:
"(4) By decree, the Ministry shall determine the method of calculating the value of securities held in the mutual fund or investment fund. The calculation of the values by the Ministry of designated types of securities according to the Order is carried out and published by the Securities Centre. Public Market Organizers and the Czech National Bank are required to provide the Securities Centre with the data it needs to fulfil its obligations under the previous sentence."
58. Paragraph 17 (5) is deleted.
59. After Paragraph 17, the following Section 17a is inserted:
Professional care for the management of assets in the mutual fund and assets of the IF
(1) An investment company and an investment fund are required to buy the security at the lowest price at which it could be purchased when it is paid for professional care and sold only at the highest price at which it could be sold when it is paid for professional care. The same professional care is required for transactions in securities or derivatives, interest rates and foreign exchange rates.
(2) The exercise of professional care by persons acting on behalf of an investment company or investment fund means, in particular, that the persons concerned:
(a) do not manipulate prices on public markets, do not abuse confidential information, do not disseminate incorrect or misleading information;
(b) act honestly, responsibly and for the benefit of shareholders or shareholders of the funds managed;
(c) all transactions are carried out under the best conditions (price, terms, interest rates, credit risks, etc.) which are evidently documented;
(d) the prices of individual purchases and sales are compared between each other and the development of prices and rates published by public markets;
(e) document the way in which transactions are executed, check the objectivity of the recorded data and prevent the risk of financial losses;
(f) carry out an analysis of the economic advantage of the transactions from publicly available information.
(3) Where, in proceedings for damages caused by a breach of property management obligations (§ 5a (6)), it is disputed whether the investment company or the investment fund acted with professional care, they shall bear the burden of proof. However, where an investment company or investment fund buys or sells securities or securities rights linked to the public market by accepting proposals for a pre-determined range of persons, it shall be deemed to have acted with professional care when buying or selling them. ';
60. In Article 18 (2), the second sentence is replaced by the following sentence, including footnote (4fa): "Valuation shall be carried out.4fa)
4fa) Act No. 36 / 1967 Coll., on Experts and Interpreters. '
The third sentence is released.
61. § 19 is released.
62. In Article 21, the words "or prices' shall be inserted after the word" courses'.
63. The heading under Section 22 reads: "Breakdown of the result of the management."
64. Paragraph 22 (2) reads as follows:
"(2) If the investment firm's holding fund or investment fund's management ends with a loss, the retained earnings from previous years, the reserve fund and other profit-making funds shall be used to cover the loss. If these resources are insufficient, the loss must be covered by the mutual fund by reducing its own funds and by the investment fund by reducing its capital. '
65. In Section 23, the words "economic results' are inserted after the words" data on '.
66. Paragraph 24, including the title, reads:
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Regulation Information
| Citation | Act No. 124 / 1998 Coll., amending and supplementing Act No. 248 / 1992 Coll., on Investment Companies and Investment Funds, as amended |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 08.06.1998 |
|---|---|
| Effective from | 08.06.1998 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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