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Main Heading Main Heading Document Transcript

  • Poland Regulation FUNDS AND FUND MANAGEMENT 2009 2.1 Type of funds An investment fund (the fund) is a separate legal entity and may be established as: • open-ended fund (UCITS fund); • specialized open-ended fund (UCITS fund); and • closed-ended fund (this type of fund does not fulfill the definition of UCITS within the meaning of the UCITS Directive). An open-ended fund sells the participation units, which must not be transferred to third parties. The fund is obliged to repurchase and redeem the participation units from those participants who requested it. Additionally, the participation units may be pledged and inherited. A specialized open-ended fund is a type of open-ended investment fund. The main difference is that the by-laws of the fund may restrict participation in the fund to certain categories of entities; that is, the fund may be created only for legal persons. A closed-ended fund issues investment certificates, which are considered as transferable securities. Investment certificates may be either subject to introduction into public trading or may be issued as non-public securities. Investment certificates may be issued either as registered securities or bearer securities. However, the investment certificates admitted to public trading may only be bearer securities. It should be noted that the above-mentioned types of funds might be created in various forms (see Section 2.9). 2.2 Laws Investment funds are regulated by the Act on Investment Funds (Act) dated 27 May 2004, (Journal of Laws no.04.146.1546 with subsequent amendments). © 2009 KPMG Sp. z o.o., a Poland limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
  • 2 Poland – Regulation 2.3 Managers, trustees, and custodians Investment fund management company (IFMC) The IFMC is a separate legal entity, which constitutes a body of the investment fund. The only legally admissible objects of its activity may be: creation of investment funds and the management thereof – including intermediation in the sale and redemption of units – their representation in relation to third parties and the management of collective portfolios of securities and certain other activities. The IFMC may exclusively be formed as a joint-stock company having its registered office in Poland and after obtaining a relevant permit from the Polish Committee of Financial Supervision (CFS). In general, the initial capital of the IFMC must not be lower than PLN equivalent of EUR 125,000. If the IFMC also provides securities trading advisory services the required initial share capital is EUR 175,000. For an IFMC, which offers also management of segregated portfolios the minimum paid in share capital amounts to EUR 730,000. Custodian (depositary) The function of the custodian of the investment fund may be entrusted to: • a domestic bank whose equity amounts to at least PLN 100 million; • a branch of a credit institution that has a registered office in the Republic of Poland, if the funds available to that branch amount to at least PLN 100 million; or • the Polish National Depository for Securities The custodian’s duties under the agreement to maintain a register of the investment fund’s assets shall include: • the maintenance of a register of the investment fund’s assets; • including the assets credited to the appropriate accounts and stored by the depositary and other entities on the grounds of other regulations or pursuant to agreements concluded by the depositary on the fund’s instructions; • ensuring that the sale and redemption of the units or the issue, • allocation and redemption of investment certificates comply with the law and with the investment fund’s statute; © 2009 KPMG Sp. z o.o., a Poland limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
  • 3 Poland – Regulation • ensuring that the settlement of agreements concerning the assets of the investment fund takes place without undue delay and supervising the timeliness of the settlement of agreements with unitholders; • ensuring that the net asset value of the fund and the value of each unit is calculated in accordance with the law and with the investment fund’s statute; • ensuring that the investment fund’s income is used in accordance with the law and with the investment fund’s statute; and • carrying out the investment fund’s instructions, unless they contravene the law or the investment fund’s statute. 2.4 Investment restrictions The open-ended investment funds, specialized open-ended investment funds, and close-ended investment funds may invest their assets in securities admitted and not admitted to public trading, bank deposits, and shares in a limited liability companies, currencies, and certain other financial instruments. However, open-ended investment funds and specialized open-ended investment funds are subject to more restrictions with regard to investing in less liquid and more risky securities. The investment funds are subject to the various investment restrictions, in general: • the open-ended investment fund/specialized open-ended investment fund must not: o invest more than 5 percent of its assets in securities of money-market investments issued by one entity; o deposit more than 20 percent of its assets in one bank or credit institution; o invest more than 35 percent of the value of its assets in securities issued by the State Treasury, National Bank of Poland, territorial self-government unit, OECD member country, or international financial institution; o grant loans, warranties, and guarantees (with some exceptions); and o buy securities or transferable property rights that represent rights to precious metals; • closed-ended investment fund: © 2009 KPMG Sp. z o.o., a Poland limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. View slide
  • 4 Poland – Regulation o may not acquire investment certificates issued by itself; o may not invest more than 50 percent of the value of its assets in participation titles issued by one investment fund; o mortgage bonds issued by the single mortgage bank may not constitute more than 25 percent of the fund’s assets; and o securities, money-market instruments and debts of one entity may not constitute more than 20 percent of the fund’s assets. 2.5 Borrowing An open-ended investment fund (including a specialized one) may borrow only for the short-term (up to one year) and only from Polish banks and EU credit institutions. The total amount of loans must not exceed 10 percent of the funds net assets value. A closed-ended investment fund may borrow from domestic banks or foreign credit institutions in an amount not exceeding 75 percent of its net assets value. Under certain conditions the fund may issue bonds. 2.6 Accounts and prospectus IFMC are obliged to submit for publishing audited annual financial statements of its investment funds not later than within four months from the end of the financial year. Semiannual financial statements of the investment funds reviewed by an auditor shall be published on IFMC’s Web site no later than within two months from the end of the first six moths of the financial year. An open-ended investment fund (including a specialized one) is obliged to publish information prospectuses and financial statements. A closed-ended investment fund issuing investment certificates, which are subject to introduction into public trading, shall publish information in accordance with the Act on public trading in securities. 2.7 Supervision The supervision over the fund, IFMC and the custodian is exercised by the CFS. The scope of the CFS’s powers encompasses in particular: • supervision over the financial situation of the fund and IFMC, • imposing financial penalties, © 2009 KPMG Sp. z o.o., a Poland limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. View slide
  • 5 Poland – Regulation • granting and canceling permits allowing to perform the regulated activity of the above entities. More information on the CFS and its supervisory role can be found on its Web page: www.knf.gov.pl 2.8 Fund ownership There are no restrictions with regard to the percentage of participation units/investment certificates, which may be held by any person or group of persons. 2.9 Fund structure The following specific forms of structure of funds may be created: • Funds with the various categories of participation units: commonly known as open-ended investment fund or specialized open-ended investment fund issuing different types of participation units. The differences between participation units may concern: o the technique of calculation and collecting of fees for the acquisition and redemption of the participation units; and o fees and expenses charged on the fund’s assets. • Umbrella fund: the open-ended investment fund or specialized open-ended investment fund which creates the so-called sub-funds applying different investment policies. The sub-funds are not separate legal entities. • Fund of funds: pursuant to Polish law it is possible to establish a fund which invests in participation units of other funds. 2.10 Stock exchange Only investment certificates of closed-ended investment funds may be introduced to public trading on the Warsaw Stock Exchange. The participation units are not considered as transferable securities. 2.11 Bank secrecy The Act provides for a detailed list of entities, which are obliged to keep secret all the confidential information connected with the activity of the fund. Pursuant to the Act, such information may be disclosed only upon request of the authorized entities such as public prosecutor or a director of a fiscal control office. © 2009 KPMG Sp. z o.o., a Poland limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
  • 6 Poland – Regulation 2.12 Fund set-up A fund may be established only by the IFMC after obtaining the relevant permit from the CFS. The permit should be granted by the CFS within two months from the date of filing the application. The fund must collect the contributions to the fund with initial contributions being not lower than PLN 4 million. The final act of fund’s creation process is entering the fund to the respective court register. 2.13 Foreign funds Foreign funds with their registered offices in the EU Member States (and the EEA but under certain conditions) constituting the UCITS funds are allowed to promote their participation units in Poland subject to various conditions. In particular, a fund is obliged to notify the CFS of its intention to promote the participation units. The sale of units issued by a foreign investment fund may commence two months following the filing of all the required documents. The CFS may deny the permission in certain situations. In general other foreign funds are either restricted in selling their participation units in Poland or they are subject to other regulations such as, where the units of the fund are considered as securities, their sale may be regulated by the Act on public trading in securities. 2.14 Bearer shares Only the investment certificates in the closed – ended investment funds may be issued as a bearer shares. If this is the case they are considered as transferable securities. The participation units of other types of funds are always issued as registered units and must not be transferred to third parties. 2.15 Use of the internet The Act permits to acquire and transfer participation units in the fund with the use of the electronic means of communication observing the requirements guaranteeing authenticity and credibility of such transactions. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. © 2009 KPMG Sp. z o.o., a Poland limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.