On January 1, 2015, an amendment to Act No. 240/2013 Coll., on investment companies and funds (the “Investment Companies Act“) came into effect.
As a result, each investment fund may only have one manager and one administrator. Other persons may subsequently perform individual management and administration tasks so long as the administrative activities concerned are named in the newly worded Act. The detailed (i.e. exhaustive) list of statutory activities includes accounting, provision of legal services, settlement of investors’ complaints and claims and allocation and disbursement of payments from fund assets. The new regulation also provides rules on the depository’s control duties vis-à-vis the manager; in particular, it stipulates the timing for controls by the depository both before and after the adoption of the Act.
Under the amendment, risk distribution rules also apply to qualifying investor funds. This means that it will now be possible to acquire promissory notes and bonds issued by qualifying investor funds as well as by non-qualifying investors. Other developments concern collective investment funds. Changes are now allowed to the investment strategy for fund activities, and expenses can be counted within collective investment fund costs. This was not possible before January 1, 2015.
The amendment also affects private offerings, which were previously not explicitly regulated. In these so-called private placements, the offer is limited to twenty persons. The change aims to apply the Investment Companies Act specifically to offerings to the general public.
Finally, there are changes to the specific legal forms of investment funds. In the case of a joint stock company with variable registered capital (SICAV), an investor who is the company’s statutory body must also be the sole member of its executive body. Thus, the Investment Companies Act introduces a mandatory monistic structure for joint stock companies with variable registered capital. This should help to ensure the compliance of the Investment Companies Act with the Act on Business Corporations.