New rules on cross-border marketing and sustainability of Collective Investment Undertakings
On the 9th of December, Decree Law no.109-F/2021 was published which amended the General Framework for Collective Investment Undertakings (hereinafter "RGOIC") approved by Law no. 16/2015 of 24 February and transposed into the Portuguese jurisdiction Directive (EU) 2019/1160 of the European Parliament and of the Council of 20 June 2019 and Delegated Directive (EU) 2021/1270 of the European Parliament and of the Council of 21 April 2021.
This decree-law has in view, on the one hand, the harmonization of the rules on cross-border activity of collective investment undertakings ("CIUs") and, on the other hand, to introduce in the Portuguese jurisdiction, and in accordance with the latest developments in European Union legislation, the matter of sustainable financing.
This Decree-Law introduces the following provisions regarding the cross-border marketing of CIUs, in particular:
· Amendments to the notification procedure to the Portuguese supervisor by the supervisory body of the home Member State of the Undertaking for Collective Investment in Transferable Securities ("UCITS") that wishes to market participation units in Portugal;
· Obligation of management companies of CIUs and management entities of UCITS authorised in another Member State, the units of which are marketed in Portugal, notwithstanding the fact that a physical presence in national territory is not required, to have the means of marketing which enable them to:
o Process subscription, payment, repurchase and redemption orders from investors regarding units, in accordance with the conditions disclosed in the instruments of incorporation or other information;
o Inform investors of the manner in which the orders referred to in the preceding sub-paragraph are carried out and the procedures for payment of proceeds from repurchase and redemption transactions
o Facilitate the processing of information on the exercise of investors' rights associated with their investments and access to mechanisms for the handling of complaints;
o Make available to investors, on a durable medium, for consultation or copying, the prospectus, the annual report and half-yearly reports, the key investor information document, as well as information relating to the tasks performed in Portugal under this Article; and
o Function as the point of contact with the CMVM.
· Requirement that management companies in the European Union which market units of Alternative Investment Undertakings (henceforth "AIFs") in Portugal have the necessary means of marketing as described in the point above;
· Amendments to the procedure for the ceasing the marketing in Portugal of UCITS authorised in another Member State, and also for the ceasing of marketing in another Member State of UCITS registered in Portugal;
· Possibility of premarketing in Portugal of AIFs registered in another Member State to potential professional investors, activity which is subject to compliance with the set of rules better described in the Decree-Law. To this end, the following are considered as premarketing: "the provision of information or communication, directly or indirectly, about investment strategies or investment ideas by or on behalf of a management entity to gauge the interest of potential professional investors, domiciled or with their registered office in the European Union, in an AIF, or a separate asset compartment, which is not authorised or has not been notified for marketing in the Member State where the potential investors have their domicile or registered office".
Moreover, we underline the following provisions envisaged in the decree law under analysis:
· Increase of the minimum amount of initial share capital mandatory for management companies of collective investment undertakings (hereinafter "SGOIC") that are authorised to carry out the ancillary activity of registration and deposit of units of CIUs; and,
· Duty to adopt mechanisms for the identification and mitigation of risks and sustainability factors identified in their activity by the UCITS.
With the publication of this decree-law, Article 71-L(2), Article 110-D(3), Article 152, Article 198 and Article 202(2) of the Legal Framework for Collective Investment Undertakings, approved in annex to Law No. 16/2015, of 24 February, as amended, are repealed.
This Decree-Law entered into force on the day following its publication, with the exception of the provisions regarding sustainability measures, the entities which must enforce these provisions have until the 31st of August of 2022 to adapt their system accordingly.
To access to the entire wording of Decree Law no. 109-F/2021 of 9th December, please click here.
For more information on this subject, please contact:
Head of the Banking and Finance Department