Decree No. 482 / 2006 Coll.
Decree on minimum requirements for the Statute and compulsory requirements for the simplified Statute of the collective investment fund
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Order
Effective from 25.11.2006
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25.11.2006
06.11.2006
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482
DECLARATION
of 27 October 2006
on the minimum requirements of the Statute and the compulsory requirements of the simplified Statute of the collective investment fund
The Czech National Bank provides pursuant to § 139 (b) of Act No. 189 / 2004 Coll., on Collective Investment, as amended by Act No. 224 / 2006 Coll., ("the Act '):
BASIC PROVISIONS
Subject matter of adaptation and definition of terms
(1) This decree implements the relevant provisions of the European Community1) and regulates the minimum requirements of the Statute, the compulsory requirements of the simplified Statute of the Collective Investment Fund 2) and the amendments to the Statute which are not subject to prior approval by the Czech National Bank under the law.
(2) For the purposes of this decree:
(a) profit participation in the profit or loss of the profit or loss of the assets of the collective investment fund - profit participation in the profit or loss of the property in the mutual fund or dividend of the investment fund;
(b) the target collective investment fund - a collective investment fund whose securities are acquired by another collective investment fund;
(c) Internet address - URL address accessible in a way that allows remote access.
Requirements for the content of the Statute and the simplified Statute
(1) The Statute is to be broken down into at least parts corresponding to the individual paragraphs of part two of Titles I to III of this Order, unless otherwise provided for in this Decree (§ 19).
(2) The formalities required in Section 15 may also be indicated in other parts of the Statute where they are related in substance. For the data referred to in Articles 4 (3) (e) and (f), 5 (e), (f) and (i), 6 (2) (c), 8 (b) to (e), 12 (f) to (i), 15 (3) (c), 16 (f) and 18 (5) (f), the relevant section of the Statute may refer to the Annex to the Statute in which such an indication is given.
(3) The formalities required under Title IV of Part Two shall be indicated in the part of the Statute referred to in paragraph 1 to which it belongs according to its content.
(4) The simplified Statute contains the elements in the order set out in Section 21. For the data referred to in Article 23 (5) in conjunction with Articles 8 (b) to (e) and 24 (b), (c) and (f), reference may be made in the relevant part of the simplified Statute to the annex to the simplified Statute in which such an indication is given.
(5) The data contained in the simplified Statute must comply with the data contained in the Statute.
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) if the assets of the collective investment fund are managed by an investment company, the information on that investment company (Section 5);
(c) investment objectives and policies (Section 6);
(d) risk profile (§ 7),
(e) information on historical performance (§ 8);
(f) property management principles (§ 9);
(g) information on the payment of profit shares (Section 10);
(h) data on securities issued by the collective investment fund (Section 11);
(i) information on the remuneration of the management and other expenditure borne by the Fund (Section 12);
(j) data on the depositary (§ 13),
(k) details of the entrustment of the management of the assets or part thereof or the pursuit of collective investment activities (Section 14); and
(l) further information (§ 15).
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 the data relating to a person (3) of the investment fund;
(b) details of the decision on the basis of which the holding fund was set up (4) or which was granted an authorisation to operate or arise (5) of the investment fund, to the extent that the designation of the authority which issued the decision, the date of issue, the number of the case and the date on which the decision was acquired;
(c) the period on which the fund is based or created and an indication of whether, after the closure of the mutual fund, it enters into liquidation or is converted into an open mutual fund;
(d) an indication of whether the fund is a standard or special fund6); if there is a special fund, also the categories of the fund under Section 49 (1) and (2) of the Act,
(e) details of the auditor;
(f) an indication of the internet address through which the Fund publishes information under the law in a way that allows remote access; and
(g) historical data on statutory matters, in particular previous fund names, merger data, changes to the manager, date of conversion of the special fund into a standard fund; where a historical figure is not known to the IF or the manager or has doubts as to the accuracy of such data, an explanatory appendix shall be provided.
(2) The basic information on the collective investment fund shall also, in the case of the mutual fund, be an indication of the competence, powers and rules for the assembly and decision-making of unit-holders when established.
(3) The basic data on the collective investment fund are for the IF
(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) information on the main activities of the managers they carry out outside the IF, where relevant in relation to the IF.
Investment company data
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, within the scope of the designation of the authority which issued the decision, the date of issue, the number of the case 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 total7) to which the investment company belongs; and
(i) the list of collective investment funds managed by investment firms.
Investment objectives and policy
(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); This data shall indicate the index or indicator and how or to what extent the Fund monitors it; and
(c) an indication that the Fund is copying an index; This data shall indicate the index, the extent to which the index is copied, the market segment to which the index relates and where the investor can obtain more detailed information about the index, including its current value (in particular the Internet address).
(2) Information on the investment policy of the collective investment fund shall include:
(a) a more detailed designation of the fund according to the risk of the type of assets in which it primarily invests, such as the MMF, the equity fund, the bond fund, if such designation is usually used;
(b) a detailed definition of the types of assets in which the Fund is to invest, including investment limits, if any;
(c) the information referred to in (b) to the extent and structure referred to in Annex 1 to this Regulation;
(d) according to the nature of the relevant assets in which the collective investment fund is to invest;
1. the maximum limit on investment in investment securities from a new issue pursuant to § 26 (1) (b) or § 51 (1) (a) of the Act;
2. the maximum limit of investment in investment securities or money market instruments which contain 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;
3. a list of the most commonly used types of financial derivatives, indicating the regulated markets on which the fund intends to dispose of the derivatives in question, and, in the case of derivatives not admitted to trading on a regulated market pursuant to Article 26 (1) (a) of the Act, the terms of the selection of counterparties shall be indicated. For each type of derivative, its economic characteristics and information shall be given as to whether transactions with that derivative will be carried out in the context of the efficient management of the property (8) in order to reduce the risks arising from investment (securing the assets of the fund against adverse developments in securities, currencies, interest rates or indices) or in order to obtain additional returns for the fund, and to note that the individual risks associated with those investments are shown in the risk profile of the fund (§ 7). The list shall be supplemented by an indication as to whether a collective investment fund may also use explicitly specified types of financial derivatives and under what conditions,
4. the maximum investment limit for open positions related to financial derivatives (exposure to financial derivatives);
5. the 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;
6. 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;
7. the designation of issuers and entities that have taken over the 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. The standard fund shall also indicate that it is an exemption authorised by the Czech National Bank9),
8. Types of bonds by category of their issuer (government bonds, municipal bonds, bonds issued by trading companies, etc.), modified bond portfolio duration and quality rating requirements,
9. a description of the way in which it will be verified whether the conditions of the derogation under Article 28 (2) (c) or Article 51 (4) (a) of the Act have been fulfilled, where the Fund intends to apply such an exemption to investment securities or money market instruments;
(e) more detailed information on the investment policy according to which the Fund will concentrate its investments in a particular industry, state or region, another part of the market or a particular type of asset;
(f) in the case referred to in point (e), an indication that such an investment may pose an increased risk, although the Fund invests in accordance with the principles laid down in the Statute and the legislation and that the individual risks associated with those investments are shown in the risk profile of the Fund (Section 7);
(g) an indication of whether the Fund will carry out repos 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;
(h) more detailed information on the collateral where the return on the investment, part of it or the return on that investment are to be secured (secured funds) and the way in which the collateral is to be achieved. Where there are conditions on the basis of which the Fund is partly or fully involved in the development of an index or indicator, these conditions shall also be indicated; and
(i) an indication of whether the fund's management style is based on tactical asset placement and the frequency at which the portfolio adapts.
(3) Furthermore, the objectives and objectives of the investment policy 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 experience in the capital market and the approximate period for which the investment should be held in order to achieve the expected return.
Risk profile
The risk profile of a collective investment fund shall include:
(a) a statement that the value of the investment may fall and rise and that a return on the amount initially invested is not guaranteed;
(b) depending on the investment policy chosen, a detailed description of all the significant risks associated with the investment policy chosen which the investor may encounter in connection with his investment in the collective investment fund, for example:
1. the risk of the volatile current value of the security issued by the Fund as a result of the composition of the assets or the management of the assets of the Fund;
2. Market risks arising from the effects of changes in the overall market on the prices and values of the individual assets of the Fund;
3. credit risk by the issuer or counterparty failing to comply with its obligation;
4. the settlement risks 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;
5. the risk of insufficient liquidity, consisting of the fact that a particular asset of the Fund will not be cashed in in time at a reasonable price and that, for that reason, the Fund will not be able to meet its obligations under the purchase of units or that the redemption of securities issued by the Fund may be suspended;
6. the monetary risk of the investment being affected by a change in the foreign exchange rate;
7. the risks associated with the different types of financial derivatives that the Fund intends to acquire;
8. the risk of loss of assets entrusted to custody or other custody, which may be due in particular to insolvency, negligence or intentional conduct of the person who has the assets of the fund or securities issued by the Fund in custody or other custody,
9. risks related to the investment focus of the Fund on certain industries, states or regions, other parts of the market or certain types of assets;
10. the risk that investment companies will be obliged under statutory conditions to pay the asset liabilities in the mutual fund resulting from the transformation from the investment fund (10); or
11. the risk that the fund may be cancelled for statutory reasons, for example because of the decision to convert the fund, the equity capital of less than CZK 50 million, the application for withdrawal of authorisation, the cancellation of the investment company with liquidation, the decision of the court.
Information on historical performance
Information on the historical performance of the collective investment fund
(a) an indication that historical performance data in the past are not future performance indicators;
(b) historical performance in the form of a column diagram showing the annual income after tax over at least 10 consecutive years; where the fund exists for less than 10 years but for more than 1 year, annual returns for all years of its existence shall be reported. The historical performance data must be accompanied by an explanation as to whether the performance of the Fund includes fees related to the issue (subscription) and the redemption of securities issued by the Fund,
(c) a comparison of the historical performance [point (b)] with the development of the benchmark monitored by the Fund in the event that the fund monitors such a benchmark. The comparison shall be given in the form of a column diagram showing the compared data,
(d) the total average historical performance for the last 3, 5 and 10 consecutive years, if the Fund exists for that period, and for the period of its existence, if it exists for less than 10 years; and
(e) a comparison of the total average performance over the last 3, 5 and 10 years, if the Fund exists for that period, with the development of the benchmark monitored by the Fund, and for the period of its existence if it exists for less than 10 years.
Principles of property management
The principles of management of the assets of the collective investment fund shall include:
(a) the accounting year;
(b) rules and time limits for the valuation of assets;
(c) use of profit or loss on the profit or loss;
(d) information on the prohibition on the use of the fund's assets for the provision of credit, loan, gift and collateral of a third party's liability or the payment of an obligation not related to the management of a collective investment fund pursuant to § 34 or § 49a (2) of the Act;
(e) information on the prohibition on carrying out uncovered sales pursuant to § 35 or § 49a (4) of the Act; and
(f) 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 for securing them.
Information on the payment of profit shares
Where a collective investment fund pays a profit share, it shall provide information on the payment of profit shares from the results of the management of the collective investment fund's assets containing:
(a) the relevant date for the payment of the profit shares;
(b) the time limit for the payment of the profit shares;
(c) the way in which the profit shares will be paid; and
(d) the period during which entitlement to the payment of profit shares is barred.
Data on securities issued by the collective investment fund
The data on securities issued by the collective investment fund shall be:
(a) species,
(b) whether securities registered on the official market, quoted securities or securities admitted to free market trading (11),
(c) form,
(d) the form,
(e) the nominal value, if any,
(f) the designation of the currency in which the 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 persons who may be responsible for the preservation of securities in paper form;
(i) details of the person who registers the securities in a book-entry form in accordance with the Special Act (12), and a brief description of the manner in which such records are to be recorded;
(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.
Compensation for management and other expenditure borne by the Fund
Information on the remuneration of management and other expenditure borne by the collective investment fund shall be:
(a) the method of determining and determining the amount of the remuneration of the investment company in so far as it manages the fund's assets;
(b) the method of determining and determining the amount of payment to the depositary;
(c) the method of determining and determining the amount of remuneration to persons entrusted with the management of the fund's assets or parts thereof, or who are entrusted with certain activities relating to the management of the fund's assets (13), where such entrustment or entrustment takes place and is borne by the fund's assets;
(d) an overview of other expenditure borne by the Fund not included in the remuneration referred to in points (a) to (c);
(e) the maximum amount of management fees which may be charged to both the fund itself and to another collective investment fund in which it intends to invest, where the fund invests a substantial part of its assets in another collective investment fund;
(f) the total cost indicator of the Fund (TER) for the previous financial year, in percentage terms, equal to the ratio of total operating costs to the average monthly value of equity, the total operating costs being the sum of fees and commissions, administrative costs and other operating costs in the statement of costs, revenues and gains or losses under the special legislation governing economic information, minus fees and commissions for operations with investment instruments under this specific legislation;
(g) synthetic TER where the fund invests at least 10% of the value of the assets in other collective investment funds that publish its own TER. Synthetic TER in percentage terms is equal to the sum of the own TER and TER of each of the target funds in proportion to the share of the investment in the target fund in total assets, the percentage of the ratio of the surpluses and haircuts of the target funds to the average monthly equity value in this case being included in the target fund's TER. Where the target fund belongs to the same consolidation entity as the collective investment fund for which the synthetic TER is counted, those surpluses and haircuts shall not be included for the purpose of calculating the TER. Where the target fund does not publish its own TER, its amount shall be estimated for the purposes of calculating the synthetic TER. Synthetic TER shall be calculated using the formula set out in Annex 2 to this Order,
(h) an estimate of the individual costs as a percentage of the estimated average monthly value of the equity for the calendar year in which the fund is set up and for each other calendar year following the previous accounting year, in the structure set out in Annex 3 to this Regulation; and
(i) the asset turnover indicator (PTR) for the last financial year, expressed as a percentage, calculated in accordance with the formula set out in Annex 4 to this Order.
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 other custody of the Fund's assets, even if the depositary has delegated the performance of that activity to a third party; and
(c) details of the persons to whom the depositary has delegated custody or other custody of the fund's assets.
Information on the entrustment of the management of the assets or part thereof or the pursuit of collective investment activities
(1) Indication of entrustment to another person of the assets of a collective investment fund or part thereof 14) are
(a) the information on which part of the property is entrusted to another person in the management and the indication of the relevant part of the property; and
(b) the particulars referred to in paragraph 3.
(2) The information on entrustment of collective investment activities is:
(a) the designation of collective investment activities entrusted to others (15); and
(b) the particulars referred to in paragraph 3.
(3) Indication of the persons entrusted with the management of the assets of, or part of, a collective investment fund or the pursuit of collective investment activities
(a) details of such persons; and
(b) the identification of the main or other significant activities carried out by such persons.
Further information
(1) Other information is information on the Statute and the simplified Statute, additional information on the collective investment fund and economic information and other information.
(2) Information on the Statute and the simplified Statute is
(a) the rules governing the adoption and amendment of the Statute and the simplified Statute and the manner in which they 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 Fund's Statute, it also publishes a simplified statute containing selected data from the Statute and that such data must comply 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 be made;
(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 and surname;
(e) notice of the subscriber's rights referred to in § 84a (7) of the Act; and
(f) an indication of the manner in which any subscriber of a security issued by a collective investment fund may obtain the documents referred to in point (e) (2) in writing or electronic form.
(3) Additional information on the collective investment fund and economic information is
(a) information on the conditions under which the cancellation or conversion of the Fund may be decided, including the time limit by which investors are informed of the intention and the procedure for the cancellation or conversion;
(b) information on the rights of holders of securities in relation to the cancellation or conversion of the Fund;
(c) an indication of the contact point where it is possible to obtain additional information (address, telephone, e-mail address, internet address, contact details, working hours),
(d) basic information on the tax system applicable to the fund, the holding and transfer of securities of that fund, including an indication that the scheme for taxation of the income or profits of individual investors depends on the applicable tax rules which may not be identical for each investor, and that where an investor is not sure about the tax regime relating to that investor, he should seek professional advice; and
(e) the manner and frequency of publication of the management reports of the Fund.
(4) Other information is:
(a) details of the supervisory authority of the fond16) (name, address, telephone, e-mail address and internet address); and
(b) an indication to investors that the authorisation to create or create a fund, the exercise of supervision and approval of the Statute by the Czech National Bank is not a guarantee of the return on the investment or the performance of the collective investment fund, cannot exclude the possibility of a breach of legal obligations or of an investment fund or an investment company, depositary or other person, and do not guarantee that any damage caused by such a breach will be compensated.
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Regulation Information
| Citation | Decree No. 482 / 2006 Coll., on the minimum terms of the Statute and the compulsory terms of the simplified Statute of the Collective Investment Fund |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 06.11.2006 |
|---|---|
| Effective from | 25.11.2006 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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