Decree No. 57 / 2012 Coll.
Decree on minimum requirements for the status of participating fund
Valid
Effective from 28.02.2012
57
DECLARATION
of 16 February 2012
on minimum requirements for the status of participating fund
The Czech National Bank provides pursuant to § 170 (1) of Act No. 427 / 2011 Coll., on supplementary pension savings, for implementation of § 97 (8) (a) and (b) of the Act on supplementary pension savings and under § 110 (1) of Act No. 426 / 2011 Coll., on pension savings, for implementation of § 45 (8) (a) and (b) of the Pension Savings Act:
Subject matter
This decree lays down the minimum requirements for the status of the participating fund and its amendments which are not subject to prior approval by the Czech National Bank under the Act on supplementary pension savings.
Structure of the status of the participating fund
(1) The status of the participating fund shall be broken down into at least parts corresponding to Sections 4 to 13.
(2) The elements of the Statute of the Participating Fund required in Section 13 may also be indicated in other parts of the Statute if they are related in substance. For the information referred to in Articles 4 (c) and (d), 5 (e), (f) and (i), 7 (1) and 13 (3) (c), reference may be made in the relevant part of the Statute of the Participating Fund to the Annex to this Statute, in which such an indication is given.
(3) Where the nature of the case precludes the indication of a particular element of the status of the participating fund, an indication shall be given which corresponds closest to the content required.
Forms of the status of the participating fund
The requirements of the Statute of the Participating Fund shall be:
(a) basic information on the participating fund (Section 4);
(b) information on the pension company (Section 5),
(c) investment objectives and method of investing the participating fund (Section 6);
(d) the risk profile of the participating fund (Section 7);
(e) information on the historical performance of the participating fund (Section 8);
(f) the principles governing the management of assets in the participating fund (Section 9);
(g) information on the remuneration of the pension company and other charges (Section 10);
(h) information on the depositary of the participating fund (Section 11);
(i) information on activities carried out through another person (Section 12); and
(j) further information (§ 13).
Basic information about the participating fund
The basic information on the participating fund shall be:
(a) the name of the participating fund1),
(b) details of the decision authorising the creation of a participating fund2), including the designation of the authority which issued the decision, the date of issue, the number of proceedings and the date on which the decision was taken;
(c) details of the person audited (3);
(d) the exact address of the website through which the participating fund publishes the information required by law; and
(e) historical data on statutory matters, in particular data on the merging or other transformation of the operator.
Information on the pension company
Information about the pension company is
(a) identification of the person of the pension social4),
(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 pension company where they are relevant in relation to the activities of the pension company or the participating fund managed by the pension company;
(g) details of the subject matter of the business and services provided;
(h) information on the consolidation unit of which the pension company is part; and
(i) a list of the participating funds whose assets are managed by the pension company.
Investment objectives and method of investing the participating fund
(1) Information on the investment objectives of the participating fund contains an accurate description of the objectives pursued by the participating fund and, where applicable, in particular the specification of guarantees provided by third parties for the protection of participants and the limitation of such guarantees.
(2) Information on how the participating fund is invested shall include:
(a) a more detailed description of the participating fund according to the type of assets in which it invests (1), such as the share fund or the participating bond fund;
(b) a detailed definition of the types of assets in which the participating fund invests, including investment limits, if any;
(c) depending on the nature of the relevant assets in which the participating fund invests;
1. a list of the most commonly used types of financial derivatives (5), their economic characteristics, the purpose of their use and the indication of the transfer points on which the derivatives in question are admitted to trading; 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 carries out repurchase transactions or lends 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. maximum open position limit relating to financial derivatives (6);
4. the maximum limit of investment in investment securities (7) and money market instruments (8) pursuant to § 103 (5) to (7) of the Supplementary Pension Savings Act, issued by one person and the designation of their issuers;
5. permission of the Czech National Bank to invest in investment securities and money market instruments under the conditions laid down in Section 104 of the Additional Pension Savings Act and a description of the fulfilment of the conditions laid down in Section 104 of the Additional Pension Savings Act;
6. the maximum threshold for investment securities from the new emission9),
(d) types of bonds or similar securities representing the right to repayment by category of their issuer, such as government bonds, municipal bonds, bonds issued by trading companies, the maximum weighted average maturity of the bond portfolio and the quality assessment requirements for held bonds;
(e) more detailed information on the way in which the participating fund concentrates its investment 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, part of, or return on the transferred funds is to be secured (secured funds) and an indication of how the collateral will be achieved;
(g) an indication of the obligation of the participating fund not to invest in investment securities issued by the pension company that manages it or by a person belonging to the same group as that pension company;
(h) an indication of the obligation of the participating fund not to use the assets in the fund for the provision of credit, loan, gift and collateral of a third party's liability or payment of an obligation not related to the management of the participating fund pursuant to Article 108 (2) of the supplementary pension savings law;
(i) an indication of the obligation of the participating fund not to carry out uncovered sales pursuant to Section 108 (3) of the supplementary pension savings law; and
(j) the conditions under which the participating fund accepts loans or loans where the fund intends to accept loans or loans under Paragraph 108 (1) of the supplementary pension savings law, including the rules for securing them.
(3) Furthermore, the investment objectives and the way in which the participant fund is invested include the characteristics of the typical participant for which the fund is intended, in particular in terms of the participant's relationship with the risks associated with the investment method and the required level of its experience in the trading of investment instruments.
Risk profile of the participating fund
(1) The information on the risk profile of the participating fund is based on the risk-benefit ratio, depending on how the fund is invested, and includes a risk warning. The information shall also include a warning that the value of the participating unit may fall and rise and that the return on the funds entered is not always guaranteed.
(2) The risk profile of the participating fund is mainly expressed by a synthetic indicator based on the volatility of the historical performance of the fund. On the basis of the calculation of the synthetic indicator, the Fund shall be classified in the relevant risk category of the Fund on a numerical scale comprising whole numbers in ascending order according to the volatility of the Fund from 1 to 7 to the left to the right.
(3) The method of calculating the synthetic indicator of the participating fund, the classification of the fund on the scale for the synthetic indicator in the relevant category, the change in the classification of the fund and the method of calculating the synthetic indicator of the fund with insufficient data on its historical performance is set out in the Annex to this decree.
(4) Depending on the investment objective chosen and how the fund is invested, the risk profile shall also include a description of all significant risks, in particular risks:
(a) monetary, linked to currency exchange rate movements, including a description of the method and degree of collateral against currency risk;
(b) credit, consisting of the issuer or counterparty failing to comply with its obligation;
(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 a 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 deficiencies or failures in internal processes or human factors, 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 insolvency, negligence or intentional conduct of a person who has custody or other custody of the assets in 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) the possibility that, for legal reasons, the participating fund may be abolished, in particular because of:
1. Withdrawal of an authorisation to create a participating fund10), an application to withdraw a participant's fund11),
2. the winding-up of a pension company with liquidity12) or a judgment (13).
Information on the historical performance of the participating fund
(1) Information on the historical performance of the participating fund is given in the form of a column diagram showing the annual income after tax over at least 10 consecutive years.
(2) The calculation of historical performance is based on the value of the fund's equity after deduction of the remuneration for the management and remuneration for the valuation of the assets in the participating fund.
(3) The historical performance information does not include the performance data of the participating fund for the year in which the communication was published or is to be published.
(4) Where a participating fund exists for less than 10 years but for more than 1 year, annual returns shall be reported for all years of its existence. Where data are not available for some periods, a date without a performance record shall be indicated in the relevant section of the column diagram.
(5) Where less than 1 year has elapsed since the inception or creation of the Participating Fund, a notice shall be given of a lack of data that could provide information to the Participant on the historical performance of the Participating Fund.
(6) Where there has been a substantial change in the investment objectives or the way in which the participant fund has been invested that affected its performance during the period shown in the column diagram referred to in paragraph 1 or in paragraph 4, the column diagram shall also indicate the period preceding that change. The data relating to this period shall be supplemented by an explanation that the performance has been achieved in other circumstances.
(7) The column diagram shall be accompanied by an indication that the data used relate to the past and that past performance is not a reliable indicator of future revenues.
Principles for the management of assets in the participating fund
The principles governing the management of the assets in the participating fund shall include in particular:
(a) the definition of the accounting year;
(b) rules and timelimits for valuation of assets and liabilities (14);
(c) the rules for calculating the actual value of the pension unit; and
(d) rules on the crediting and depreciation of pension units.
Information on payment of pension companies and other fees
Information on the remuneration of the pension company and other fees
(a) the method of determining and paying the remuneration of the pension company for the management of the fund's assets, including the limit in accordance with Article 60 (3) of the supplementary pension savings law;
(b) the method of identification and the amount of the remuneration of the pension company for the evaluation of the assets in the fund, the limit data provided for in Article 60 (4) of the supplementary pension savings law and the additional conditions for the entitlement of the pension company to remuneration for the evaluation of the assets in the fund under Article 60 (5) and (6) of the supplementary pension savings law; and
(c) information on one-off fees from the participant which the pension company may claim under Section 61 of the supplementary pension savings law.
Information on the depositary of the participant fund
Information on the depositary of the participant fund shall be:
(a) identification of the depositary person (4);
(b) a description of the essential characteristics of the depositary's activities, including the definition of its responsibility, in particular for the custody and control of the assets in the Fund, even if the depositary has entrusted 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 custody or control of the assets in the Fund.
Information on activities carried out through another person
If the pension company entrusts another person to carry out the management of the assets of the participating fund or part of the assets of the fund, it shall provide the following information:
(a) details of which part of the fund's assets are allocated to another person's management and details of the relevant part of the fund's assets;
(b) identification of the other person; and
(c) the identification of the main activities carried out by such a person.
Further information
(1) Further information is on the status of the participating fund and additional information on the participating fund.
(2) Information on the status of the participating fund is:
(a) the rules governing the adoption and amendment of the Statute and the manner in which the Statute and its amendments are published;
(b) a statement that, in addition to the Statute, the Participating Fund also publishes a key informationdocument (15) and that the information contained therein must be consistent with the information contained in the Statute;
(c) an indication of the authority or person within the pension company whose competence is to approve the Statute and its amendments; and
(d) the date of signature of the valid text of the Statute by the statutory authority or a member of the statutory authority, indicating its name, surname and function in the pension company.
(3) Additional information on the participating fund is
(a) information on the conditions under which cancellation of the participating fund may be decided upon at the request or ex officio or merger of the participating fund or transfer of the participating fund, including the period within which the participants are informed, and the procedure for the cancellation, merger or transfer of the fund;
(b) notice of participants' rights under Section 135 of the supplementary pension savings law;
(c) an indication of the contact point where it is possible to obtain additional information where necessary (address, telephone, e-mail address, website address),
(d) basic information on the tax arrangements applicable to the participating fund;
(e) the manner and frequency of publication of the management reports of the Fund;
(f) data on the Czech National Bank as a supervisory authority pursuant to § 141 (1) of the Act on Supplementary Pension Savings; and
(g) informing participants that authorisation to create a fund, exercise of supervision and approval of the Statute by the Czech National Bank is not a guarantee of the return of the funds entered or the performance of the fund, they cannot exclude the possibility of breach of legal obligations or the status of pension companies, depositors or other persons and do not guarantee that any damage caused by such infringement will be compensated.
Amendments to the Statute not subject to prior approval by the Czech National Bank
Changes to the status of the participating fund which are not subject to prior approval by the Czech National Bank are changes
(a) basic information on the Fund under Article 4 (b) to (e);
(b) information on the pension company pursuant to § 5 (b) to (i);
(c) the investment objectives and method of investment referred to in Article 6 (2) (h) and (i);
(d) synthetic indicators pursuant to Article 7;
(e) column diagram according to § 8;
(f) information on the depositary pursuant to Article 11 (a) and (c);
(g) information on the activity carried out through another person under Paragraph 12 (c);
(h) further information pursuant to Articles 13 (2) (c) and (d) and 13 (3) (c), (d) and (f);
(i) references to the legislation resulting from their amendments, under the conditions set out in Section 97 (6) (c) of the supplementary pension savings law, and amendments to the sub-data on persons mentioned in the Statute, in particular the change of registered office, business subject matter, official name or surname change; and
(j) other information and data which are not minimum elements of the Statute laid down by this Decree.
Efficacy
This Decree shall take effect on the day of its publication, with the exception of the provisions of Paragraph 15, which shall take effect on 1 January 2013.
Governor:
Ing. Singer, Ph.D., v. r.
Annex to Decree No 57 / 2012 Coll.
Method of calculation of the synthetic indicator and associated rules
[Paragraph 8 (2)]
1. Calculation of the synthetic indicator of the participating fund is based on these criteria
(a) the synthetic indicator is based on the volatility of the historical performance of the fund;
(b) historical performance shall be calculated at weekly or monthly intervals for at least the last five years of the existence of the Fund;
(c) the volatility of the fund shall be calculated and converted on an annual basis using the following standard method:
Volatility = σf = mT-1
The historical performance of the fund (rf, t) is measured during T over a period over l / m of year
m = 52 and T = 260 for calculation based on weekly intervals and m = 12 and T = 60 for calculation based on monthly intervals
rf 'is the arithmetic mean of the historical performance of the fund during the T period: rf = 1T' s = 1Trf, t.
2. On the basis of the calculation of the synthetic indicator, the participating fund shall be classified on the synthetic indicator scale in the relevant category, which shall express the risk of the fund:
| Rizikovost fondu | Intervaly volatility | |
|---|---|---|
| rovno/více než | méně než | |
| 1 | 0% | 0,5% |
| 2 | 0,5% | 2% |
| 3 | 2% | 5% |
| 4 | 5% | 10% |
| 5 | 10% | 15% |
| 6 | 15% | 25% |
| 7 | 25% | |
3. A change in the classification of the participating fund on the synthetic indicator scale shall be made where:
(a) the volatility interval of the fund has been outside the relevant risk category on the basis of each weekly or monthly volatility reference calculation over the past 4 months;
(b) the change in the risk of the fund is the result of a decision by the pension company to change the investment objectives and the way in which the participating fund or the risk profile of the participating fund is invested.
4. If the volatility of the participating fund during the last 4 months corresponds to several risk groups on the scale, the relevant category shall be reported which corresponds to most weekly or monthly volatility reference calculations over the last 4 months.
5. A Participating Fund which does not have sufficient data on its historical performance to calculate the synthetic indicator,
(a) use available relevant data on its historical performance;
(b) identify the characteristic reference portfolio on the basis of its investment objectives and investment methods;
(c) calculate the historical performance of the characteristic portfolio model from the beginning of the period required under point 1 (a) up to the date on which the Fund has data on its historical performance and connects all these data to meet the data requirement for at least the last 5 years of the Fund's existence and to estimate the annual volatility of the Fund using the standard method referred to in point 1 (c).
1) § 95 of Act No. 427 / 2011 Coll., on Supplementary Pension Savings.
2) § 96 paragraph 1 of Act No. 427 / 2011 Coll.
3) § 2 (e) of Act No. 93 / 2009 Coll., on Auditors and on the amendment of certain laws (Act on Auditors), as amended by Act No. 227 / 2009 Coll. and Act No. 139 / 2011 Coll.
4) § 3 (f) of Act No. 427 / 2011 Coll.
5) Paragraph 100 (2) (f) and (g) of Act No. 427 / 2011 Coll.
6) § 102 (2) of Act No. 427 / 2011 Coll.
7) Paragraph 100 (2) (a) of Act No. 427 / 2011 Coll.
8) Paragraph 100 (2) (h) of Act No. 427 / 2011 Coll.
9) Paragraph 100 (2) (b) of Act No. 427 / 2011 Coll.
10) § 153 of Act No. 427 / 2011 Coll.
11) § 111 of Act No. 427 / 2011 Coll.
12) § 69 paragraph 1 of Act No. 427 / 2011 Coll.
13) § 69 (2) of Act No. 427 / 2011 Coll.
14) § 115 of Act No. 427 / 2011 Coll.
15) Sections 134 and 135 of Act No. 427 / 2011 Coll.
Sign in for notes, favorites and notifications
Regulation Information
| Citation | Decree No 57 / 2012 Coll., on the minimum requirements of the Statute of the Participant Fund |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 28.02.2012 |
|---|---|
| Effective from | 28.02.2012 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
Comments 0