Full text of Act No. 403 / 2006 Coll.

Full version of Act No. 189 / 2004 Coll., on Collective Investment, as seen from subsequent amendments

Valid Declared full text
Contents
ČÁST PRVNÍ § 1 § 2 § 2a § 3 ČÁST DRUHÁ HLAVA I § 4 § 5 HLAVA II § 6 § 7 § 8 § 9 HLAVA III § 10 § 11 § 12 HLAVA IV § 13 ČÁST TŘETÍ § 14 § 15 § 16 § 17 § 18 § 19 ČÁST ČTVRTÁ § 20 § 21 § 22 § 23 ČÁST PÁTÁ HLAVA I § 24 § 25 HLAVA II § 26 § 27 § 28 § 29 § 30 § 31 § 32 § 33 § 34 § 35 HLAVA III § 36 § 37 § 38 HLAVA IV § 39 § 40 § 41 § 42 HLAVA V § 43 § 44 § 45 § 46 HLAVA VI § 47 § 48 ČÁST ŠESTÁ HLAVA I § 49 § 49a § 49b § 50 HLAVA II § 51 § 52 § 53 § 53a § 53b § 53c § 53d § 53e § 53f § 53g § 53h § 53i § 53j § 54 § 55 § 56 § 57 HLAVA III § 58 § 59 ČÁST SEDMÁ HLAVA I § 60 § 61 § 62 § 63 HLAVA II § 64 § 65 HLAVA III § 66 § 67 § 68 ČÁST OSMÁ HLAVA I § 69 § 70 HLAVA II § 71 § 72 § 73 HLAVA III § 74 § 75 § 76 § 77 § 78 § 79 § 80 § 81 § 81a § 82 ČÁST DEVÁTÁ § 83 § 84 § 84a § 85 § 86 § 87 § 88 § 89 § 90 § 91 ČÁST DESÁTÁ HLAVA I Díl 1 § 92 § 93 § 94 § 95 Díl 2 § 96 § 97 HLAVA II § 98 § 99 § 100 § 101 HLAVA III § 101a ČÁST JEDENÁCTÁ HLAVA I § 102 HLAVA II § 103 § 104 § 105 § 106 § 107 § 108 § 109 § 110 § 111 § 112 § 113 § 114 § 115 § 116 § 117 § 118 HLAVA III § 119 § 120 § 121 § 122 § 123 § 124 § 125 § 126 § 127 § 128 § 129 HLAVA IV § 130 ČÁST DVANÁCTÁ HLAVA I § 131 § 132 § 133 § 134 § 135 HLAVA II § 136 § 137 § 138 § 139 § 140 § 141
403
PRESIDENT OF THE GOVERNMENT
Announces
full text of Act No. 189 / 2004 Coll., on Collective Investment, as is apparent from the amendments made by Act No. 377 / 2005 Coll., Act No. 57 / 2006 Coll., Act No. 70 / 2006 Coll. and Act No. 224 / 2006 Coll.
THE LAW
on collective investment
Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

BASIC PROVISIONS
§ 1
Subject matter
This law implements the relevant provisions of the European Community1) and provides for collective investment.
§ 2
Definition of terms
(1) In this Act:
(a) by collective investment in a business the purpose of which is to collect funds by subscribing to shares of an investment fund or by issuing units of a mutual fund, by investing on the principle of risk distribution and by further managing such assets;
(b) a foreign investment company, an investment company having its registered office in another Member State of the European Union, which is entitled to carry out the activities of an investment company in the Member States of the European Union on the basis of an authorisation granted in accordance with European Communitylaw (2);
(c) a collective investment fund or a mutual fund;
(d) a standard fund of a collective investment fund which fulfils the requirements of European Community law;
(e) a special fund of a collective investment fund which does not comply with the requirements of European Community law;
(f) the assets of the collective investment fund and, in the case of the mutual fund, the assets of the mutual fund;
(g) the sub-fund, the separate part of the assets of the collective investment fund,
(h) the current value of the share of the investment fund or of the share fund's share capital ratio per share or per share;
(i) own capital of the mutual fund own resources of the financing of assets in the mutual fund;
(j) details of the person
1. in the case of a legal person, the commercial firm or the name, registered office and identification number, if assigned;
2. in the case of a natural person, the name and surname, date of birth, address of residence; in the case of an entrepreneur incorporated in a commercial register, the commercial firm or place of business, where applicable, and the identification number, if assigned;
(k) property for the purposes of calculating the limit set for investments in a collective investment fund of assets, minus the rights and adjustments;
(l) the supervisory authority of the institution entrusted by the State to supervise collective investment;
(m) the method of determining the fair value of the property on the basis of sustainable rental income, minus the management costs of the property and the risk of rental loss considered;
(n) open positions, a summary of the liabilities charged on off-balance-sheet accounts arising from derivative transactions that are not negotiated, purchased and held to reduce risk.
(2) Investment paper means shares or similar securities representing a share of companies, bonds or similar securities representing the right to repayment of the amount due and securities entitled to acquire such securities. Investment securities are not the techniques and instruments referred to in Section 27.
(3) Money market instruments in this law are instruments that are usually used in the money market, are liquid and have a value that can be accurately determined at any time.
§ 2a
(1) Collection of funds from the public for the purpose of joint investment or investment of funds so acquired shall be prohibited where:
(a) the return on the investor's investment or profit should be even partially dependent on the value or return of the assets in which the funds were invested; and
(b) is not carried out under this law.
(2) The promotion of participation in joint investment shall be prohibited for the assistance of another person in the activity referred to in paragraph 1.
(3) The infringement of the prohibitions referred to in paragraphs 1 and 2 does not in particular constitute the collection of funds from the public
(a) banks, branches of foreign banks and savings and credit cooperatives (2a);
(b) pension funds in the framework of the supplementary pension scheme with a State contribution (2b);
(c) insurance (2c),
(d) foundations and foundations 2d)
(e) in the framework of the organisation of public collections 2e),
(f) in the framework of the organisation of lotteries and other similar her2f),
(g) in the context of offering securities to the public in accordance with special legislation3),
if implemented in accordance with the laws.
(4) Furthermore, the infringement of the prohibitions referred to in paragraphs 1 and 2 does not constitute the collection of funds from the public, the main purpose of which is to finance an activity which has the character of production, trade, research or the provision of services other than financial services and is financed mainly by the person who collects the funds by its own funds.
§ 3
(1) Each collective investment fund must have its depositary (Paragraph 20 et seq.).
(2) The obligations imposed by this law on the holding fund or the rights conferred on that law on the holding fund are obligations and rights of the investment company.

ČÁST DRUHÁ

COLLECTIVE INVESTMENT FUNDS

HLAVA I

INVESTMENT FUND
Basic provisions
§ 4
(1) The Investment Fund is a legal entity whose business is collective investment and which is authorised by the Czech National Bank to operate the Investment Fund.
(2) Only the founders of a public limited-liability company which has not yet been established may apply for authorisation to operate the investment fund. This company may not be established on the basis of a public offer of shares.
(3) The investment fund's trading company shall bear the designation "closed investment fund."
(4) A person who is not authorised to operate an investment fund may not use the term "investment fund."
(5) The investment fund is established for a fixed period, which must be indicated in the Statute.
(6) The Investment Fund may entrust the management of its assets to an investment company under a contract for the management of its assets under Paragraph 17 (hereinafter referred to as the "Management Agreement").
(7) A change in the subject matter of the investment fund's business is not permitted.
§ 5
(1) The transferability of investment fund shares may not be limited unless otherwise provided for by this law (Paragraph 56 (2)).
(2) Only shares of the same nominal value may be issued by an investment fund.
(3) The Investment Fund may not:
(a) issue provisional certificates;
(b) issue priority shares;
(c) issue shares to its employees on favourable terms;
(d) conclude a profit transfer contract;
(e) conclude a control contract;
(f) issue bonds.
(4) The provisions of the Commercial Code concerning the choice of members of the Supervisory Board by employees, the offer of takeover and the right to purchase participating securities shall not apply to the Investment Fund.
(5) The Investment Fund is obliged to inform the Czech National Bank of the establishment of an organisational component of its business (hereinafter referred to as the "organisational component").
(6) An investment fund which has an organisational component located in the territory of a State which is not a Member State of the European Union shall inform the Czech National Bank of the measures imposed on it by the supervisory authority of that State, indicating the reason for the imposition of such a remedy or fine.

HLAVA II

SHEET FUND
§ 6
Basic provisions
(1) The funds are collected by the investment company into the holding fund by issuing units of the holding fund.
(2) The mutual fund is a set of assets belonging to all owners of the mutual fund (hereinafter referred to as the "shareholders'), in proportion to the shares held. The mutual fund is not a legal person.
(3) The holding fund may be open or closed.
(4) In order to create a mutual fund, the Czech National Bank must be authorised. An investment company shall apply for authorisation to create a holding fund.
(5) A person who is not authorised to create a holding fund may not use the term "holding fund" in his business.
§ 7
Property in the mutual fund
(1) Property in the holding fund is managed by the investment company on its behalf on behalf of shareholders.
(2) Where specific legislation or legal act requires an indication of the owner's person, the information on all unit-holders shall be replaced by the name of the mutual fund and the information on the investment company that manages it.
(3) An investment company shall be entitled and bound by legal acts in connection with the management of assets in the mutual fund. The liability arising from the management of the assets in the mutual fund shall be paid by the investment firm of the assets in the mutual fund.
(4) The shareholder or any other person shall not be entitled to require the distribution of the assets in the holding fund or the cancellation of the holding fund.
(5) The provisions of the Civil Code on co-ownership shall not apply to the mutual fund, the assets in the mutual fund, the management of the property in the mutual fund or other matters relating to the mutual fund.
§ 8
Share sheet
(1) The equity instrument is a security which represents the share of the shareholder in the holding fund and which is associated with other rights under this law or the Statute.
(2) The unit sheet contains:
(a) the name of the holding fund;
(b) the nominal value of the unit sheet, if established;
(c) an indication of the form of the unit sheet;
(d) the date of issue or issue of the unit sheet;
(e) in the case of paper-based forms, the numerical identification of the unit list, signatures or signatures of persons authorised to act on behalf of the investment company at the date of issue and, in the case of the unit-name, the name of the first shareholder.
(3) The units of the same holding fund and the same nominal values base the same rights of shareholders.
(4) The transfer of the share certificate to the series is effective in relation to the investment company by entering in the list of shareholders kept by the investment company.
§ 9
Registration
(1) An investment company shall ensure management
(a) the register of book-entry units of an open holding fund in the central securities register or in the separate registration of investment vehicles in accordance with the special legislation governing the capital market business;
(b) separate records of paper securities issued by the collective investment fund which the customers have entrusted to it in custody or administration.
(2) The records referred to in paragraph 1 are kept in electronic form.

HLAVA III

OPEN LEVEL FUND
§ 10
Basic provisions
(1) An open holding fund is not limited to the number of units issued.
(2) The participation certificate of an open holding fund shall also be associated with the right to purchase the participation certificate of an investment company at the request of its owner.
(3) The share sheet of an open holding fund may not have a nominal value.
(4) Part of the name of the open holding fund is the trading company of the investment company that manages it and the designation "open holding fund."
§ 11
Issue of units of an open holding fund
(1) An investment company shall issue an open holding fund unit sheet for an amount equal to its current value as declared at the relevant date. This amount may be increased by the premium provided for in the Statute. The Statute shall also specify which date shall be deemed to be the operative date on the issue of the participation certificate.
(2) An investment company may, for a maximum period of 3 months from the date on which it began issuing units, issue units of an open holding fund for an amount equal to their nominal value, or units without nominal value for an amount specified in the open holding fund status. This amount may be increased by the premium provided for in the Statute.
(3) An investment company shall not issue a holding sheet of an open holding fund until the amount referred to in paragraphs 1 or 2 has been paid on behalf of the fund.
§ 12
Redemption of shares of an open holding fund
(1) An investment company shall purchase the share sheet of an open holding fund for an amount equal to its current value as declared on the date on which the shareholder's request to buy the share sheet was received. This amount may be reduced by the deduction provided for in the Statute.
(2) The investment company will purchase the share sheet of an open holding fund using the assets in the holding fund without undue delay upon receipt of the request for redemption, but within a maximum of 15 working days, unless the redemption of the shares is suspended. The special real estate fund or the special fund of qualified investors may adjust the time limit for the purchase of their units by way of derogation in its Statute, provided that that period may not exceed 6 months. The Statute of the Special Real Estate Fund or of the Special Fund of Qualified Investors may also set deadlines for the submission of an application for the purchase of units, provided that the time limit for the individual dates for the submission of an application must not exceed 6 months.
(3) For the period during which an investment company, pursuant to Paragraph 11 (2), issues units of an open holding fund for an amount equal to their nominal value or an amount specified in the open holding fund Statute, it shall purchase units of shares for the same amount as it issues them.
(4) An investment company may suspend the issue or redemption of units of an open holding fund for a maximum period of 3 months where necessary for the protection of the rights or interests of the shareholders. The suspension of the issue or redemption of units shall be decided by the management board of the investment firm which is required to draw up the minutes of its decision. The registration shall state the date and the exact time of the suspension decision, the reasons for the suspension and the period for which the issue or redemption of the units is suspended. The special real estate fund or the special fund of qualified investors may adjust the time limit for the suspension of the issue or redemption of units by way of derogation from its Statute, provided that that period may not exceed 2 years.
(5) The issue or redemption of units of an open holding fund shall be suspended at the time of the decision suspending their issue or redemption. From this point on, the investment company may not issue or buy the units of the open holding fund. The prohibition on the issue or redemption of profit participation certificates shall also apply to the shares which the shareholder has requested to be issued or repurchased.
(a) prior to the suspension of the issue or redemption of units and which have not been settled; or
(b) during the period of suspension of the issue or redemption of units.
(6) The investment company will immediately deliver a record of the suspension of the issue or redemption of the shares of an open holding fund to the Czech National Bank, and at the same time publish the date and exact time of the decision to suspend the issue or buy-in of units, the reasons for the suspension and the period for which the issue or buy-in of units is suspended.
(7) The investment company shall inform the Czech National Bank of the measures taken and other facts aimed at eliminating the causes of suspension of the issue or redemption of the shares of an open holding fund within 3 working days of the date of suspension. In the case of a special real estate fund, the investment company shall also inform the Czech National Bank of the process of removing the causes of suspension every 6 months until the date of the renewal of the issue or redemption of the units. This date is the day following the date for which the period for which the issue or redemption of units was suspended or the date of the acquisition of the legal power of the decision of the Czech National Bank repealing the decision of the investment company to suspend the issue or buy-in of units.
(8) If the suspension of the issue or redemption of the shares of an open holding fund endangers the interests of the shareholders, the Czech National Bank shall repeal this Decision.
(9) The administrative procedure referred to in paragraph 8 shall be initiated by the Czech National Bank by issuing a decision addressed to the investment company and notified by a public decree. An appeal against this Decision shall not have suspensory effect.
(10) The investment company shall immediately publish in a way that allows remote access information that the Czech National Bank has withdrawn the suspension of the issue or redemption of the shares of an open holding fund.
(11) As from the date of the renewal of the issue or redemption of the units, the investment company shall issue or buy the units whose issue or redemption has been suspended for an amount equal to the current value determined on the date of the renewal of the units. This amount may be increased by a premium or reduced by the deduction provided for in the Statute.
(12) The shareholder shall not be entitled to interest on late payment for the period of suspension of the issue or redemption of the shares of an open holding fund, unless the investment company is already late on the date of suspension with the payment of the redemption amount or the Czech National Bank has cancelled the decision to suspend the issue or buy-in of the shares. The investment company shall pay interest for late payment on its assets.

HLAVA IV

CURRENT SIGNIFICANT FUND
§ 13
(1) The investment company does not buy back the units of the closed holding fund from shareholders of the assets of the closed holding fund, unless otherwise provided for in this Act (Sections 100 (6) and 101 (6)).
(2) The name of the closed holding fund shall include the trading company of the investment company which manages it and the designation "closed holding fund '.
(3) An investment company shall issue a mutual fund holding sheet for an amount equal to its current value as declared at the relevant date. This amount may be increased by the premium provided for in the Statute. The Statute shall determine which date shall be deemed to be the operative date for the purchase of the participation certificate.
(4) An investment company may issue a share certificate of a closed holding fund no more than 3 months after the date on which the issue of the share certificates begins for an amount equal to the nominal value of the share certificate. This amount may be increased by the premium provided for in the Statute.
(5) An investment company shall not issue a holding sheet of a closed holding fund until an amount corresponding to its current value or nominal value has been paid, including a possible premium.
(6) A closed holding fund is established for a fixed period. At the end of that period, the fund enters into liquidation or is converted into an open holding fund (Section 101a). The period on which the closed holding fund is based shall be indicated in the Statute, including information on whether the fund enters into liquidation or is converted into an open holding fund.

ČÁST TŘETÍ

INVESTMENT COMPANY
Basic provisions
§ 14
(1) An investment company is a legal person whose business is collective investment consisting of:
(a) the creation and management of mutual funds; or
(b) in the management of investment funds under the management contract (§ 17).
(2) The Czech National Bank must be authorised to operate an investment company.
(3) The trading company of an investment company contains the designation "investment company."
(4) A person who is not authorised to operate an investment company may not use the term "investment company."
(5) An investment company may not issue bonds.
§ 15
(1) An investment company may also manage assets in a mutual fund of another investment company or assets of an investment fund which does not have a management contract (§ 78).
(2) An investment company may provide as a service to another investment company or investment fund that does not have a management contract, one of the activities related to the management of a collective investment fund, in particular:
(a) keeping the accounts of the collective investment fund;
(b) the provision of legal services for the collective investment fund;
(c) the handling of queries and complaints by shareholders of the collective investment fund;
(d) the valuation of the assets and liabilities of the collective investment fund and the determination of the actual value of the share sheet or shares of the collective investment fund;
(e) ensuring compliance with the fiscal obligations of the collective investment fund;
(f) keeping records of units or shares of the collective investment fund and keeping a list of shareholders or shareholders of the collective investment fund;
(g) the distribution and payment of the proceeds of the collective investment fund's assets if they are paid;
(h) the issue and redemption of units or shares of a collective investment fund;
(i) the conclusion and settlement of contracts for the issue or redemption of units or shares of a collective investment fund;
(j) the establishment and security of the business strategy of the collective investment fund;
(k) offering units or shares of a collective investment fund;
(l) promotion of the services of the investment company and the products offered.
(3) An investment firm may, in addition to collective investment, manage the client's assets under contract with the client, provided that the investment instrument is part of the assets and that the activity referred to in the permit for its activity.
(4) An investment company which manages a client's assets may, if indicated in the permit to operate,
(a) to store and manage securities issued by the collective investment fund; or
(b) provide investment advice on the investment instrument.
(5) An investment company may not apply any of the increases or reductions referred to in the Statute to a collective investment fund that it manages, provided that the securities issued by it are purchased into or sold from the assets of another collective investment fund which:
(a) it manages the property or part of the property itself; or
(b) the assets or parts of the assets are managed by another investment company which is part of the consolidation unit for which consolidated financial statements are drawn up.
(6) The activities referred to in paragraph 2 may also be carried out by an investment company for a foreign investment company or a foreign collective investment fund.
§ 16
Accounting for assets in the mutual fund
(1) An investment company shall account for the status and movement of assets and other assets, liabilities and other liabilities, as well as for costs and revenues and for the result of the management of assets in the holding fund separately from the subject matter of its accounts and of other mutual funds.
(2) An investment company shall ensure, in accordance with accounting methods, in accordance with a special law governing accounting for the subject-matter of the accounts in separate books for each holding fund it manages, in order to enable it to draw up the accounts for each holding fund.
(3) The accounts of the holding fund must be audited by the auditor.
§ 17
Investment fund assets management contract
(1) The investment company undertakes to manage the assets of the investment fund without its direction by the management contract and the investment fund undertakes to pay the investment company a remuneration for that activity. The essential elements of the management contract are:
(a) the method of determining and paying the remuneration for services rendered;
(b) an arrangement as to whether and under what conditions an investment company may entrust the management of the assets of an investment fund or the pursuit of activities related to the management of its assets to another person (§ 78).
(2) The management contract is concluded for an indefinite period and the notice period is 6 months.
§ 18
Remuneration for the management of the assets of the collective investment fund
(1) The remuneration for the management of the assets of the collective investment fund is fixed at:
(a) a share of the average value of the equity of the collective investment fund for the financial year;
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Regulation Information

CitationFull version of Act No. 403 / 2006 Coll., Act No. 189 / 2004 Coll., on Collective Investment, as resulting from subsequent amendments
Regulation TypeDeclared full text
Author-
CollectionCode of Laws
Date of Promulgation14.08.2006
Effective from-
Effective until-
Status Valid
Legal Areas: Banking, Money Securities Finance
The regulation text is for informational purposes only.

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