Decree No. 265 / 2004 Coll.
Declaration on the details of the performance of the depositary's duties
Valid
Order
Effective from 01.05.2004
Text versions:
01.05.2004
30.04.2004
265
DECLARATION
of 25 March 2004
on details of the performance of the depositary's duties
According to Section 139 (c) in conjunction with § 21 (2) and § 139 (d) in conjunction with § 23 (6) of Act No. 189 / 2004 Coll., on Collective Investment, hereinafter referred to as "the Act":
Subject matter
This Order provides for details of the performance of the depositary's obligations in relation to:
(a) custody or other custody of the assets of the collective investment fund;
(b) the issue and redemption of units and the issue of shares in a collective investment fund;
(c) by calculating the current value of the share or share certificate of the collective investment fund;
(d) implementing the instructions of the investment fund, investment company or other person managing the assets of the collective investment fund;
(e) the use of the proceeds of the collective investment fund's assets;
(f) the management of the assets of the collective investment fund.
Storage and other custody of the assets of the collective investment fund
(1) The custody and other custody of the assets of the collective investment fund is ensured by the depositary 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 (2) or shall be maintained in the owner's account kept by the CSD; this also applies mutatis mutandis to other book-entry securities,
(b) other property of its nature
1. takes physical custody and takes care of himself,
2. ensure that it is kept by a third party under the conditions of paragraph 2; or
3. ensure that the property is kept in the relevant register of rights to that type of property in such a way that no change of rights to that type of property can be made without the consent of the depositary.
(2) The depositary may use a third party (hereinafter referred to as the "delegate") to carry out the duties referred to in paragraph 1 (b) only if:
(a) the delegate is entitled to exercise custody or other custody;
(b) the depositary shall conclude a contract with the delegate under which the delegate:
1. Issue the assets of the collective investment fund and the documentation relating to such assets to another person without prior approval of the depositary, unless they are subject to a statutory obligation and the delegate informs the depositary immediately of the issue of the property or documentation;
2. not execute a transaction where it receives instructions from the depositary to suspend the transaction relating to the trust; and
3. allow the depositary at any time to take over the assets of the collective investment fund, if its nature so permits.
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 units or shares are issued,
(a) whether the number of units issued by an investment company per the date on which the check is carried out is equal to the proportion of the total amount credited to the current account of the holding fund held by the depositary for the relevant day and the actual value of the holding sheet issued for that date, taking into account any premium under the holding fund's statute when the check is made; This is without prejudice to the authorisation of an investment company under the law, 3) where applicable
(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) The depositary shall, before settling the buy-in of units, carry out a check to the extent that it ensures that an amount equal to the product of the actual value of the units issued for the date on which the shareholder applied for the buy-in will be paid out of the assets held in the open holding fund and the number of units the unit-holder has requested to buy-in of; when checking, the depositary shall take into account any haircut in accordance with the open holding fund status. Where a participant requests the redemption of units corresponding to a specified amount, the depositary shall, before settling the purchase of units, carry out a check to the extent that it ensures that the assets in an open holding fund receive the payment of the amount requested by the participant and the purchase of the amount of units equal to the share in whose denominator the amount is requested by the shareholder and the numerator of the actual value of the units declared for the date on which the participant requested the redemption; when checking, the depositary shall take into account any haircut in accordance with the open holding fund status. In the event of the redemption of repurchases after their suspension, the depositary shall check that the outstanding repurchases are carried out at the current value as determined at the date of the renewal of the issue and redemption of the units.
(3) 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 the manner specified in the open holding fund and under an agreement between the investment company or investment fund and the unit-holder, provided that this agreement does not conflict with the law or the Statute.
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 distributes holdings of profit from the management of the assets of a collective investment fund, the payment of funds to shareholders or shareholders shall be governed by the provisions of Paragraph 3 (3) mutatis mutandis.
Control of the calculation of the current value of the share or share certificate of the collective investment fund
The depositary shall carry out a check on the calculation of the current value of the investment fund's share or share fund's share certificate before the publication of that value (5) by verifying the accuracy of the data 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 which professional investors usually use in their activities.
Control of instructions on the management of the assets of the collective investment fund
(1) The depositary shall monitor the investment firm and the investment fund's instructions for the management of assets 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 paragraph 2 and to the extent and in a manner specified in paragraphs 3 to 6.
(2) The depositary shall check the order prior to the settlement of the transaction executed on the basis of the order. The depositary may check the order referred to in paragraph 3 or 4 after settlement of the transaction if the assets referred to in Article 26 (1) (a) and (c) or Article 51 (1) (a) and (b) of the law (hereinafter referred to as the "standard asset type ') are the subject of trade, provided that:
(a) the way of trading on the market pursuant to Article 26 (1) (a) of the Act excludes settlement of trade later than the day following the submission of the order; or
(b) 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, he has satisfied himself that the management and internal control system of that person ensures that compliance with the law, the Statute, the depository contract and the management contract is adequately controlled.
(3) Where an order for the purchase of an asset in the assets of a collective investment fund is issued, the depositary shall, in the context 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 nature of the asset is not apparent, the check shall also be carried out by analysing 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 data on the fund's assets on the date on which the order was submitted; and
(c) the control of professional care in determining the price and other conditions of the transaction, unless it is an anonymous transaction concluded on the market under Article 26 (1) (a) of the Act; This check shall be carried out in particular by reviewing the analysis demonstrating the acquisition of the asset under the best conditions and the advantage of its acquisition. 6)
(4) If it is an order for the sale of an asset from the assets of a collective investment fund, 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 the transaction, unless it is an anonymous transaction concluded on the market under Article 26 (1) (a) of the Act; This check shall be carried out in particular by reviewing the analysis demonstrating the sale of the asset under the best conditions and the advantage of its sale. 6)
(5) If the instruction 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 instruction control, carry out a check on professional care in determining the price and other terms of the transaction; This check shall be carried out in particular by reviewing the analysis of the advantages of the trade (6) and, in the case of a standard fund, by verifying compliance with the rules on the use of techniques and tools for the efficient management of property. 7)
(6) Where an order is not referred to in paragraphs 3 to 5, in particular a cash order, the depositary shall, in the context of an order check, verify that the order does not contradict the law, the Statute or the management contract, including professional care, and in particular whether the reasons for the investment firm to submit the order are justified.
Periodic monitoring of compliance with risk distribution and reduction rules
The depositary shall:
(a) checking compliance with the limits relating to the assets of the collective investments8) at least within a monthly interval within 15 days of the end of the previous month, according to the latest available data; and
(b) checking compliance with the limits applicable to the issuer of securities held by the collective investment fund, (9) 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 six months.
Reasons for not executing the order by the depositary
The reason for not carrying out the order by the depository pursuant to Article 23 (6) of the Act is the contradiction of the order with the law, the statute of the collective investment fund, the depositary agreement or the management contract where:
(a) the investment company or investment fund does not ensure that the order is amended in a timely manner in such a way that it does not contradict the law, the Statute, the depositary or the management contract;
(b) the investment firm or the investment fund shall not make a correction before the order has been settled, in particular by entering a new order, the implementation of which will remove the deficiency resulting from the original order and which can reasonably be expected to be settled; or
(c) the execution of the order exceeds 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 associated with failure to settle the order; 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.
Transitional provisions
(1) The depositors shall bring their activities into line with the Order no later than 6 months after the date of entry into force of the Order; This does not apply to the provisions of Sections 3 to 5.
(2) 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.
Efficacy
This decree takes effect on the date of the entry into force of Act No. 189 / 2004 Coll., on Collective Investment.
Presidium member acting as Chairman:
Ing. Shimáček v. r.
1) Paragraph 92 (1) of Act No. 256 / 2004 Coll., on Capital Market Business.
2) Paragraph 92 (3) of the Capital Market Act.
3) Articles 11 (2) and 13 (4) of Act No. 189 / 2004 Coll., on Collective Investment.
4) Paragraph 12 (10) of the Collective Investment Act.
5) Section 88 of the Collective Investment Act.
6) Paragraph 75 (2) (h), (i) and (k) of the Collective Investment Act.
7) Paragraph 27 of the Collective Investment Act.
8) Sections 28 to 30, 32, 33, 49 and 51 to 57 of the Collective Investment Act.
9) Sections 31, 51 and 55 (1) of the Collective Investment Act.
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Regulation Information
| Citation | Decree No. 265 / 2004 Coll., on the details of the performance of the depositary's duties |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 30.04.2004 |
|---|---|
| Effective from | 01.05.2004 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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