Decree No. 193 / 2011 Coll.
Ordinance on minimum requirements for the Statute of a collective investment fund and conditions for use of the designation of a short-term MMF and an MMF
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Effective from 15.07.2011
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15.07.2011
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193
DECLARATION
of 27 June 2011
on the minimum requirements for the Statute of the Collective Investment Fund and the conditions for use of the designation of the short-term MMF and MMF
Pursuant to § 139 (2) of Act No. 189 / 2004 Coll., on Collective Investment, as amended by Act No. 188 / 2011 Coll., for implementation of § 3 (4), § 84a (5) and § 8:
BASIC PROVISIONS
Subject matter
This decree implements the relevant European Union1 regulations and provides for the minimum requirements of the Statute for a Collective Investment Fund (hereinafter referred to as "the Statute ') and its amendments which are not subject to prior approval by the Czech National Bank under the Collective Investment Act (hereinafter referred to as" the Act') and the conditions for the use of the designation "short-term money market fund 'and" money market fund'.
Requirements for the content of the Statute
(1) The Statute is to be broken down into at least parts corresponding to the individual provisions of Title I of Part Two and Sections 18 and 19, unless otherwise provided for in this Decree.
(2) The elements of the Statute required in Section 17 may also be indicated in other parts of the Statute if they are related in substance. For the information referred to in Articles 4 (3) (e) and (f), 5 (1) (e), (f) and (i), 8 (1), 12 (1) and (3), 17 (3) (c), 21 (5) (f) and 22 (4) and (5), reference may be made in the relevant part of the Statute to the Annex to the Statute in which such an indication is given.
(3) The elements of the Statute required in paragraphs 20 to 24 shall be indicated in the part of the Statute referred to in paragraph 1 to which it belongs according to its content.
(4) Where the nature of the case precludes the indication of one of the elements of the Statute, an indication shall be given which corresponds closest to that required by its content.
MINIMUM OBLIGATIONS OF STATUTE
GENERAL OBLIGATIONS OF STATUTE
The general provisions of the Statute shall be:
(a) basic data on the collective investment fund (Section 4);
(b) information on the investment company, if it manages the assets of the collective investment fund (Section 5);
(c) investment objectives and means of investment (Section 6);
(d) risk profile (§ 7),
(e) information on historical performance (§ 8);
(f) property management principles (§ 9);
(g) information on the payment of profit or income shares (Section 10);
(h) data on securities issued by the collective investment fund (Section 11);
(i) information on fees and charges (Sections 12 to 14);
(j) data on the depositary (§ 15);
(k) details of the entrustment of the management of assets or activities to another person (Section 16); and
(l) further information (§ 17).
Basic information on the collective investment fund
(1) The basic data on the collective investment fund are:
(a) the name of the holding fund or person data (2) of the investment fund;
(b) details of the decision authorising the creation of a holding fund (3) or an investment fund (4), including the designation of the authority which issued the decision, the date of issue, the reference number and the date on which the decision was taken;
(c) the period on which the Fund is created or based;
(d) whether the fund is a standard or special fund; if it is a standard fund, also an indication of whether it is a managing standard fund or a subordinate standard fund, and if it is a special fund, also a category of fund under § 49 (1) and (2) of the Act;
(e) details of the auditor5),
(f) a precise indication of the internet address through which the Fund publishes information under the law in a way that allows remote access;
(g) historical data on the statutory matters, in particular the previous names or companies of the fund, data on the merger or merger, changes to the operator, date of conversion of the special fund into a standard fund; where a historical figure is not known to the manager or investment fund or has doubts as to the accuracy of such data, an explanatory appendix shall be provided; and
(h) information on the relevant language of the Statute when securities issued by the collective investment fund are offered abroad.
(2) In the case of a mutual fund, the basic data on the collective investment fund shall also be those on whether:
(a) an assembly of shareholders is set up; where established, details of the competence, powers and rules for the assembly of unit-holders shall be provided;
(b) after the end of the period to which the closed holding fund has been set up, enter into liquidation or be converted into another type of holding fund; and
(c) the unit-holder has the right to purchase the unit-sheet during the period of the closed unit-fund and to define the time period between the dates in which the closed unit-share fund will buy-in (6).
(3) In the case of an investment fund, the basic data on a collective investment fund are:
(a) the amount of the capital;
(b) the date of origin;
(c) data on the consolidation total7) to which the IF belongs;
(d) whether the investment fund has entrusted the management of its assets to the investment firm;
(e) a list of managers, indicating their functions; and
(f) data on the main activities of the managers referred to in point (e) that they carry out outside the IF, if relevant in relation to the IF.
Investment company data
(1) The investment company data are:
(a) details of the person of the investment firm;
(b) the amount of the capital and the payment of the capital,
(c) the date of origin;
(d) details of the decision authorising the operation, including the designation of the authority which issued the decision, the date of issue, the reference number and the date on which the decision was acquired and its subsequent amendments;
(e) a list of the managers, indicating their functions;
(f) details of the main activities of the managers that are carried out outside the investment firm where they are relevant in relation to the activity of the investment firm or the collective investment fund of the investment firm;
(g) details of the subject matter of the business and services provided;
(h) the consolidation unit to which the investment company belongs; and
(i) a list of collective investment funds whose assets are managed by the investment firm.
(2) Where a collective investment fund is managed by a foreign investment company, the data referred to in paragraph 1 shall be reported mutatis mutandis.
Investment objectives and method of investment
(1) Information on investment objectives contains an accurate description of the objectives pursued by the collective investment fund and, where applicable, in particular:
(a) the specification of guarantees provided by third parties in order to protect investors and limit such guarantees;
(b) an indication that the Fund intends to monitor an index or indicator (benchmark);
(c) an indication that the fund copies an index; and
(d) in the cases referred to in points (b) and (c), an indication of the index or indicator, the extent to which the index or indicator is copied, or how and to what extent the fund monitors it, the market segment of the index or indicator and where the investor can obtain more information on the index or indicator, including its current value (in particular the internet address).
(2) Information on how to invest a collective investment fund contains:
(a) a more detailed designation of the collective investment fund according to the risk of the type of assets in which it invests, such as the equity fund, the bond fund or the mixed fund, where such designation is usually used; in the case of the designation "short-term MMF 'or" MMF', the fund must comply with the conditions set out in Part Four;
(b) a detailed definition of the types of assets in which the Fund is to invest, including investment limits or strategic asset allocation data, if any;
(c) according to the nature of the relevant assets in which the collective investment fund is to invest;
1. a list of the most commonly used types of financial derivatives, their economic characteristics, the purpose of their use and an indication of European regulated markets and foreign markets similar to the regulated market on which the Fund intends to trade the derivatives in question; in the case of financial derivatives not admitted to trading on the markets referred to in Section 26 (1) (a) of the Act, the terms and conditions for the selection of counterparties shall be indicated; the fund shall indicate that the individual risks associated with those investments are described in the risk profile of the fund,
2. an indication of whether the fund will carry out repurchase transactions (8) or lend securities, the conditions for the selection of counterparties to such transactions and the characteristics of the securities that may be the subject of such transactions;
3. a description of all the significant characteristics of investment securities or money market instruments referred to in Article 26 (1) (i) of the Act, including taking into account the risks arising from investments in such assets as compared to investment securities and money market instruments pursuant to Article 26 (1) (a) and (h) of the Act;
4. whether the Fund makes use of an exemption for investment within the meaning of Articles 28, 29 or 51 (5) or 55 (4) of the Act;
5. a description of the way in which it will be verified whether the conditions of the exemption under Article 28 (2) (c) or Article 51 (4) (a) of the Act have been fulfilled if the Fund intends to apply such an exemption to investment securities or money market instruments;
6. the designation of issuers or persons who have taken over a guarantee for investment securities or money market instruments where the fund intends to apply an exemption under Article 29 (1) of the Act or an option under Article 51 (5) of the Act,
7. the maximum limit on investment in investment securities or money market instruments containing a derivative pursuant to Article 27 (7) of the Act, including their type and characteristics of their economic nature and the manner in which the risks associated with those investments will be taken into account;
8. Maximum open position limit relating to financial derivatives;
9. maximum investment limit in money market instruments referred to in § 26 (1) (h) (4) or § 51 (1) (a) of the Act and the designation of their issuers;
10. maximum limit on investment in investment securities from a new issue pursuant to § 26 (1) (b) or § 51 (1) (a) of the Act;
(d) types of bonds or similar securities representing the right to repayment by category of issuer (sovereign, municipal, commercial, etc.), the modified duration of the bond portfolio and the requirements for quality assessment of held bonds;
(e) more detailed information on the investment method according to which the Fund will concentrate its investments in a particular economic sector, state or region, other part of the market or type of asset;
(f) more detailed information on the collateral where the return on the investment, part of it or the return on the investment are to be secured (secured funds) and an indication of how the collateral will be achieved;
(g) an indication of the obligation of the collective investment fund not to use the fund's assets for the provision of credit, loan, gift and collateral of a third party's liability or payment of an obligation which is not related to the management of the collective investment fund pursuant to § 34 or § 49a (2) of the Act;
(h) an indication of the obligation of a collective investment fund not to carry out uncovered sales under Section 35 of the Act or the conditions under which a special collective investment fund may carry out uncovered sales under Section 49a (4) of the Act; and
(i) the conditions under which the Fund accepts loans or loans where the Fund intends to accept loans or loans pursuant to § 33, § 49a (3) or § 53i (4) to (6) of the Act, including the rules on their collateral.
(3) The investment objectives and the method of investment also include the characteristics of the typical investor for which the collective investment fund is intended, in particular in terms of the investor's relationship to the risks associated with the investment in the fund, the level of its capital market investment experience required and the approximate period for which the investment should be held in order to achieve the expected return.
Risk profile
(1) The information on the risk profile of the collective investment fund is based on the risk-benefit ratio of the investment concerned and contains a risk warning for the investment in the collective investment fund. The information also includes an indication that the value of the investment may fall and rise and that the return on the amount originally invested is not always guaranteed.
(2) The risk profile of the collective investment fund is mainly expressed by a synthetic indicator. Article 8 and Annex No 1 of the directly applicable European Union law implementing the Directive of the European Parliament and of the Council on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (9) shall apply mutatis mutandis to the presentation of the synthetic indicator and the need for verbal explanations (hereinafter referred to as "the Commission Regulation ').
(3) Depending on the investment objective chosen and how the collective investment fund is invested, the risk profile shall also include a description of all the significant risks that an investor may encounter in relation to his investment in the collective investment fund, in particular the risks:
(a) credit, consisting of the issuer or counterparty failing to comply with its obligation;
(b) insufficient liquidity to ensure that a particular asset of the Fund is not cashed in in time at a reasonable price and that, for this reason, the Fund will not be able to meet its obligations under the securities redemption requests issued by the Fund or that the redemption of securities issued by the Fund may be suspended;
(c) settlement associated with the settlement of the transaction not taking place as expected on the ground that the counterparty does not pay or deliver the investment vehicles within the specified period;
(d) market-based effects on the prices and value of the individual assets held by the Fund,
(e) operational, consisting of loss due to shortcomings or failures in internal processes or human factor or due to external events and the risk of loss of assets entrusted to custody or other custody, which may be due in particular to the insolvency, negligence or intentional conduct of a person who has custody or other custody of the fund's assets or securities issued by the Fund;
(f) related to the investment focus of the Fund on a specific economic sector or part thereof, a specific geographical area, another part of the market or certain types of assets; and
(g) associated with the possibility that the Fund may be cancelled for statutory reasons, in particular because of:
1. the decision to convert the Fund;
2. Withdrawal of authorisation, for example where the equity of a collective investment fund 10) does not reach the limit of CZK 50 million within one year from the date of granting the permit or if the collective investment fund does not have a depositary for more than three months,
3. Request for withdrawal of authorisation, withdrawal of an investment company with liquidation or court decision.
Information on historical performance
(1) Information on the historical performance of the collective investment fund is shown in the column diagram.
(2) The calculation of historical performance shall be based on the value of the equity of the collective investment fund and on the assumption that the profits or returns of the collective investment fund have been reinvested.
(3) Articles 15 to 19 and Annex 3 of the Commission Regulation shall apply mutatis mutandis to the presentation of the bar diagram, additional warnings and possible use of simulated historical performance values.
Principles of property management
(1) The principles of the management of the assets of the collective investment fund include in particular:
(a) the definition of the accounting year;
(b) whether the approval of the accounts of the collective investment fund under Article 16a of the Act falls within the competence of the statutory body of the investment company which manages the assets of the collective investment fund;
(c) rules and time limits for valuation of assets and liabilities 11)
(d) the use of profit or income from the management of the fund's assets, in particular whether they will be paid or reinvested.
(2) When a mutual fund is referred to in Article 8 (3) (b) of the Act and treats shareholders differently, the management principles for such a fund include transparent and fair rules for the difference in treatment of shareholders, including a detailed description of the method for determining the equity ratio of individual groups of shareholders treated differently, in calculating the actual value of the mutual fund.
Information on the payment of profit or income shares
Where a collective investment fund pays a share of profits or income, it shall provide information on its payment, which shall include:
(a) the relevant date for the payment of profit or loss shares;
(b) the time limit for the payment of profits or income shares;
(c) the way in which the shares in profits or income will be paid;
(d) the period during which entitlement to the payment of shares in profits or income is barred;
(e) an indication of the arrangements for approving the distribution of profits or income from the assets of the collective investment fund under Article 16a of the Act; and
(f) whether the investment company can pay the unit-holders a share of the income from the management of the holding fund, regardless of the result of the holding fund's management under Paragraph 85 (4) of the Act, including the setting of the conditions under which such payment is possible and the way in which the shares are paid.
Data on securities issued by the collective investment fund
The data on securities issued by the collective investment fund shall be:
(a) the type of security;
(b) whether securities admitted to trading or registered on a European regulated market12) or admitted to trading on a multilateral trading venue 13),
(c) the form of the security;
(d) the form of the security;
(e) the nominal value of the security, if any;
(f) the designation of the currency in which the nominal value of the securities is indicated;
(g) identification markings according to the international numbering system for securities identification (ISIN), if assigned;
(h) the identification of the persons providing the deposit of securities in paper form;
(i) details of the person who registers the securities in a book-entry form under the law governing the capital market business (14), and a brief description of the method of such registration;
(j) a description of the rights attached to the securities, the manner and time limits for their exercise; and
(k) an indication of the method or document proving the right of ownership of the securities.
Information on fees and charges
(1) Data on fees charged to investors and costs borne by the collective investment fund shall be presented in the form of a table in Annex 1 and the following requirements:
(a) surpluses and haircuts indicate the highest payment15) which may be charged to the investor before or after the investment;
(b) the total cost (16) shall express the total amount of the costs referred to in Article 13 paid from the assets of the collective investment fund during the year; and
(c) where the fee is indicated, depending on the year-on-year increase in the value of the equity capital per share sheet or per share of the collective investment fund (hereinafter referred to as the "performance fee"), it shall express the total amount of remuneration that may be paid from the fund's assets if the performance of that fund exceeds the specified benchmark (benchmark) with which performance is compared.
(2) The amounts of the fees referred to in paragraph 1 (a) and (c) shall be expressed in percentage terms together with the basis on which the calculation is based.
(3) The total cost referred to in paragraph 1 (b) shall be expressed as a percentage for the previous financial year. The total cost indicator of the Fund (TER) is equal to the ratio of the total cost to the average monthly equity value. The total cost amount shall be the sum of the costs of fees and commissions, administrative costs and other operating costs in the statement of costs, revenues and gains or losses of the collective investment fund under other legislation17), minus fees and commissions for operations involving investment instruments under this special legislation.
(4) The data on the fees and costs of the collective investment fund shall be supplemented by an explanation showing what the investor pays directly and what is covered by the collective investment fund's assets and what the amount of all fees and charges is. It must also be clear from the explanations that the fees and costs of the collective investment fund serve to ensure the management of its assets and may reduce the appreciation of the funds invested.
Information on total costs is
(a) the method of identification and the amount of remuneration of the investment company which manages the fund's assets;
(b) the method of identification and the amount of payment to the depositary;
(c) the method of identification and the amount of remuneration to persons entrusted with the management of the fund's assets or parts thereof, or to whom the exercise of certain activities which are usually part of the management of the collective investment fund's assets is entrusted (18), where such entrustment takes place and where the fee is paid from the fund's assets;
(d) an overview of the fees paid to the person responsible for the stock register; and
(e) an overview of other costs borne by the Fund's assets not included in the remuneration referred to in points (a) to (d).
(1) In the case of a collective investment fund which:
(a) charge a flat-rate fee covering all charges charged to investors, the flat-rate fee shall be indicated in the table set out in Annex 1;
(b) determine the maximum charge payable, the maximum charge payable in the table set out in Annex 1, where the investment firm which manages the fund's assets undertakes to comply with and pay any additional costs.
(2) Unless otherwise stated, the total cost referred to in Article 12 (1) (b) shall be determined by a qualified estimate. In that case, the estimate figure shall be supplemented by an indication that the total cost amount is merely an estimate and information on where and when an investor can become acquainted with the actual total cost.
(3) If the unit-holders of the same holding fund are determined in accordance with Article 8 (3) (a) of the Act by different increases, reductions or charges in connection with the management of the holding fund's assets, depending on the volume of the initial investment, the length of the holding of the holding sheet or other status of the holding fund as determined by the objective criteria, the holding fund shall inform thereof in the fee section, shall indicate it in the table set out in Annex 1 and explain the criterion used.
Data on the depositary
The depositary's data shall be:
(a) details of the depositary person;
(b) a description of the essential characteristics of the depositary's activities, including the definition of its responsibility in particular for the safekeeping and control of the assets of the collective investment fund, even where the depositary has entrusted the exercise of that activity to another person, and a description of the extent to which it is entrusted to another person; and
(c) details of the persons to whom the depositary has entrusted the custody or control of the assets of the collective investment fund.
Information on the entrustment of assets or activities to another person
An indication of the entrustment of the assets of a collective investment fund, or part of the assets of a collective investment fund, or of an activity which is usually part of the management of the assets of a collective investment fund, or of the management of a matter belonging to the assets of a collective investment fund, to another person pursuant to § 78 (1) and (3) of the Act are:
(a) information on the part of the assets of the collective investment fund entrusted to another person in the management of the fund, and a description of the relevant part of the assets of the collective investment fund;
(b) an indication of the activities entrusted to another person under Paragraph 78 (3) of the Act and a description of the matter belonging to the assets of the collective investment fund, the management of which is entrusted to another person;
(c) details of the other person; and
(d) the identification of the main or other significant activities carried out by such a person.
Further information
(1) Further information is on the status and additional information on the collective investment fund.
(2) Information on the Statute is
(a) the rules governing the adoption and amendment of the Statute and the manner in which the Statute and its amendments are published, unless such information is included in the statutes of the IF attached to the Statute;
(b) a statement that, in addition to the Statute of the Collective Investment Fund, it also publishes a key information document and that the information contained therein must be consistent with the information contained in the Statute;
(c) the designation of the authority or person within the investment company or investment fund under whose jurisdiction the approval of the Statute and its amendments are to apply; and
(d) the date of signature of the valid version of the Statute by the statutory authority or a member of the statutory authority, indicating its name, surname and function it carries out in the investment firm or investment fund.
(3) Additional information on the collective investment fund is
(a) information on the conditions under which the cancellation or conversion of the fund may be decided, including the period within which investors are to be informed, and the cancellation or conversion procedure, including whether shares in the liquidation balance may also be provided to the shareholders of the cancelled holding fund within the meaning of Article 99a of the Act, indicating the maximum length of the period within which the investment company is required to pay the shares to the shareholders and the outstanding shares in the custody;
(b) information on the rights of holders of securities issued by the collective investment fund in relation to the abolition or conversion of the fund and pursuant to Section 84b of the Act;
(c) an indication of the contact point where additional information may be obtained, if necessary (address, telephone, e-mail address, internet address),
(d) basic information on the tax arrangements applicable to the fund, the holding and the transfer of securities of that fund, including an indication that the tax regime for the income or profits of individual investors depends on the tax rules in force which may not be identical for each investor and that, where an investor is not sure of the tax arrangements relating to that investor, he should seek professional advice;
(e) the manner and frequency of publication of the management reports of the Fund;
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Regulation Information
| Citation | Decree No. 193 / 2011 Coll., on the minimum requirements of the Statute of the Collective Investment Fund and the conditions for use of the designation of the short-term MMF and MMF |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 15.07.2011 |
|---|---|
| Effective from | 15.07.2011 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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