OFFICIAL INFORMATION OF THE CZECH NATIONAL BANK of 20 December 2011

Transcription

1 OFFICIAL INFORMATION OF THE CZECH NATIONAL BANK of 20 December 2011 regarding the notification of UCITS and regarding the conditions for the distribution of foreign UCITS in the Czech Republic In reference to Act No. 189/2004 Coll., on Collective Investment, as amended (hereinafter the Collective Investment Act ), the Czech National Bank hereby summarizes the conditions for the marketing of units of domestic UCITS in another Member State, and for the marketing of units of EEA UCITS in the Czech Republic, and specifies the relevant technical aspects thereof. I. Reason for issuance of the Official Information 1. Directive 2009/65/EC of the European Parliament and of the Council, on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferrable units (hereinafter the UCITS IV Directive ), has substantially altered the conditions for the public marketing of units of UCITS on the market in another Member State of the European Economic Area (EEA) (hereinafter Member State ) 1. As regards the marketing of units of UCITS in another Member State of the EEA, the UCITS IV Directive is followed up by the directly applicable Commission Regulation (EU) No. 584/ (hereinafter the Commission Regulation ). 2. The UCITS IV Directive has become reflected in the legislation of the Czech Republic with effect from 15 July 2011 by means of an amendment to the Collective Investment Act, issued as Act No. 188/2011 Coll. (the Commission Regulation is directly effective in the Czech). 3. In this Official Information, the Czech National Bank summarizes relevant information in relation to the marketing of a. units of UCITS established in another Member State (hereinafter the EEA UCITS ) in the Czech Republic; and b. units of domestic UCITS (hereinafter CZ UCITS ) in another Member State. 4. The Official Information is determined for entities interested in the marketing of units in another Member State, but it also contains information relevant to the competent authority of the home Member State of an EEA UCITS. 1 (footnote with significance to UCITS IV translation into Czech) 2 Commission Regulation (EU) No. 584/2010, implementing Directive 2009/65/EC of the European Parliament and of the Council as regards the form and content of the standard notification letter and UCITS attestation, the use of electronic communication between competent authorities for the purpose of notification, and procedures for on-thespot verifications and investigations and the exchange of information between competent authorities.

2 Definition of certain terms 5. In this Official Information, the term a. notification means the notification (and possibly also the notification procedure) of an intention to market units of an EEA UCITS in the Czech Republic, or of a CZ UCITS in another Member State, crowned with the ability to market units of the UCITS within the territory of this Member State; b. Notification Letter means the standardized form as per Annex I to the Commission Regulation; c. Attestation means the attestation as per Annex II to the Commission Regulation; d. unit of an EEA UCITS means a security or an unit of an EEA UCITS which is not a security (Article 1(1) of the UCITS IV Directive); and e. unit class in relation to a CZ UCITS means a group of units to which different rights of unit-holders are attached within the limits of Article 8(3) of the Collective Investment Act and within the limits of the statute of a CZ UCITS. II. Distribution in the Czech Republic 6. Distribution of the units of EEA UCITS may be ensured in the Czech Republic by way of business solely by persons who are authorized to provide the investment services of reception and transmission of orders in relation to one or more financial instruments within the territory of the Czech Republic or, as the case may be, to provide the investment service of underwriting of financial instruments or, as the case may be, by CZ management company, too. Certain facilities ( kontaktní místo in Czech) may be provided (but do not have to) be the distributor, too Distribution may also be ensured directly by the management company of an EEA UCITS or by the EEA UCITS itself. A branch situated in the Czech Republic is not required for these purposes. 8. Solely such units of an EEA UCITS may be marketed to the public, the marketing of which has been duly notified by the EEA UCITS (see Items 24 to 28 below) to the Czech National Bank, and in respect of which the EEA UCITS has ensured fulfilment of the conditions for marketing to the public (i.e., the provision of information to investors and the maintain of certain facilities). A distributor different from the management company of an EEA UCITS may not make the notification itself and on its own behalf. 9. When marketing the units of an EEA UCITS to the public, it is necessary to follow the rules governing the promotion communications of collective investment funds (Article 81a of the Collective Investment Act) and other regulations, including the Consumer Protection Act, the Advertising Act, etc. 3 Cf. Item 56 of the Official Information or Section 44 of the Collective Investment Act. 2

3 III. Notification of an EEA UCITS When notification is required 10. Notification is required in the Czech Republic in the event of an intention to introduce 4 units of an EEA UCITS to the public. Notification is also required in the event of a repeated introduction of units of an EEA UCITS which previously terminated the marketing of its units within the territory of the Czech Republic and was deleted from the list of foreign UCITS Notification is not required in the event of private placement of EEA UCITS 6, including any cases of offering the units of an EEA UCITS to investment firms for the purpose of acquisition for the client s portfolio within the framework of the investment service of portfolio management. 7 Notification is not required in the event of an EEA master UCITS either, on condition that it raises capital in the Czech Republic from feeder UCITS only and, at the same time, does not collect funds in the Czech Republic from the public. 12. Notification to the Czech National Bank is to take place only once, even if the units of an EEA UCITS are distributed in the Czech Republic by several distributors. 13. Rules for the notification of investment compartments and unit classes are described in more detail in Items 36 to 40 below. Requirements for the Notification Letter 14. An EEA UCITS which intends to market units in the Czech Republic shall notify its intention by means of a Notification Letter (i.e., using the standardized form as per Annex I to the Commission Regulation). 15. The EEA UCITS shall complete all parts (A, B and C) of the Notification Letter in the language customary in the world of finance (i.e., in English) 8. A Slovak UCITS may also, with regard to Article 16(1) of the Code of Administrative Procedure, complete the Notification Letter in the Slovak language. 4 Opinion STAN/7/2004 of the Czech Securities Commission On the marketing of units of foreign special funds pursuant to the Collective Investment Act, and Opinion STAN/6/2005 of the Czech Securities Commission On the collection of funds from the public pursuant to the Collective Investment Act. The said Opinions are available at under Financial market supervision, Legislation, Archive of the Opinions issued by the Czech Securities Commission. 5 Article 13(1)(k) of Act No. 15/1998 Coll., on Supervision in the Capital Market Area. 6 The Opinion of the Czech Securities Commission On the marketing of units of foreign special funds pursuant to the Collective Investment Act, and the Opinion of the Czech Securities Commission On the collection of funds from the public pursuant to the Collective Investment Act (cf. footnote no. 4 above). 7 For more details, see the Answer of the Czech National Bank entitled Marketing of units to be acquired into managed assets of 30 August 2011, available at under Financial market supervision, Legislation, Collective investment, Methodological and interpretative documents, Answers to enquiries. 8 If so agreed by and between the home and the host authorities, the Notification Letter and the Attestation may be made out in the official languages of both Member States. Currently, however, no such agreement has been made by the Czech National Bank. 3

4 16. In Part A of the Notification Letter Additional information about the UCITS (if necessary), the EEA UCITS shall state (if this is the case) that the instrument of incorporation/ fund rules 9 and the prospectus have been consolidated into a single document, which is why the set of attachments to the Notification Letter is limited. 17. In Part B.2 of the Notification Letter Arrangements for the provision of facilities to unitholders in accordance with Article 92 of Directive 2009/65/EC, the EEA UCITS shall inform about any arrangements for making payments to investors (e.g. dividends), for the repurchasing of units or for their redeeming (e.g. in the event of liquidation) and for making available the information required pursuant to Article 92 of the UCITS IV Directive (hereinafter CZ facilities ). In the Czech Republic, such an arrangements need to contract and make use of the investment firm pursuant to Article 44 of the Collective Investment Act; thus, information about the shall be given in Part B.2 of the Notification Letter (see Items 56 to 58 below) /hereinafter CZ facilities operator /. 18. The agreement entered into with the CZ facilities operator shall not constitute an attachment to the Notification Letter. 19. In relation to Part B.3 of the Notification Letter Other information required by the competent authorities of the host Member State in accordance with Article 91(3) of Directive 2009/65/EC, no such information is required in the Czech Republic. 20. In relation to Part B.3 of the Notification Letter Other information required by the competent authorities of the host Member State in accordance with Article 91(3) of Directive 2009/65/EC, no information is to be given as regards the fee. No fee is associated with the marketing of units of an EEA UCITS on the market in the Czech Republic. 21. The EEA UCITS shall submit the Notification Letter with the following attachments: a. the fund rules/instruments of incorporation 9 ; b. the prospectus 10 ; c. the latest published annual or half-yearly report; and d. the key investor information document (KIID) Regarding the language versions of the attachments to the Notification Letter, the following rules apply: a. the KIID of the EEA UCITS shall be attached in the Czech language; and 9 In some jurisdictions, this is also referred to as the statute. The statute of a collective investment scheme pursuant to Section 84(1) of the Collective Investment Act has a broader meaning and also includes the prospectus of the fund within the meaning of Schedule A of Annex I to the UCITS IV Directive. 10 The prospectus is to be understood as a document within the meaning of Article 68, in conjunction with Schedule A of Annex I to the UCITS IV Directive. This document is not identical with the prospectus pursuant to Directive 2033/71/EC as regards the prospectus to be published on the occasion of marketing or admission of units to trading. In the Czech Republic, the prospectus in the former sense and the instruments of incorporation are contained in the single document named statute. Just as it is in the Czech Republic, any document of an EEA fund containing the prospectus of the fund may, partly or fully, fulfil the function mentioned in Article 93 of the UCITS IV Directive (i.e., the function of an instrument of incorporation), too. 11 Until 1 July 2012, pursuant to Item 9 of Article II of Act No. 188/2011 Coll., implementing Article 118(2) of the UCITS IV Directive, the simplified prospectus may be submitted instead of the KIID. 4

5 b. the fund rules/ instruments of incorporation and the prospectus (statute), the annual and half-yearly report of the EEA UCITS shall be attached in the Czech, Slovak or English language The form of the Notification Letter (paper or electronic) and the format of the attachments to the Notification Letter is determined for the EEA UCITS by the competent authority of the home Member State. Manner of notification 24. The EEA UCITS shall make the notification through the competent authority of its home Member State. 25. The EEA UCITS shall transmit the Notification Letter along with the attachments to the competent authority of its home Member State. The competent authority shall attach an Attestation to it and, not later than within 10 working days of the receipt of the complete Notification Letter including the required attachments, the competent authority shall transmit all the documentation to the Czech National Bank. 26. If filed with the Czech National Bank directly by the EEA UCITS, the Notification Letter shall not be effective (Article 93(1) and Article 4(1) of the Commission Regulation); in such case, the Czech National Bank shall inform the applicant of its not being the competent authority. 27. The competent authority of the home Member State shall transmit all the documentation to the Czech National Bank exclusively in electronic form to the designated address The size of the message (including the attachment) must not exceed 30 MB. The attachments must be provided in a format enabling the Czech National Bank to read the documents (i.e., the permitted suffixes include doc, docx, xls, xlsx and pdf). The documents may be compressed into the zip, 7z or rar format. No special identification in the subject line is required for such an message. 28. The EEA UCITS is allowed to start marketing its units in the Czech Republic immediately after it has been informed by the competent authority of the home Member State that the Notification Letter had been transmitted to the Czech National Bank. Additional information regarding the procedure following the receipt of the Notification Letter and regarding the consequences of defective notification 29. About the delivery of the message by means of which the competent authority of the home Member State has transmitted all the documentation, the Czech National Bank shall automatically inform the sender (i.e., the authority of the home Member State) first. Subsequently, not later than within 5 days from the receipt of the message, the Czech National Bank shall confirm to authority of the home Member State in electronic form that it 12 Official Information of the Czech National Bank of 13 July 2011, determining the languages in which documents may be published and submitted to the Czech National Bank for the purposes of certain provisions of the Collective Investment Act. 5

6 has received all the documentation and that the attachments are capable of being viewed and printed (hereinafter the Confirmation ). 30. Should the Notification Letter or any of the attachments be missing, incomplete or provided in a format other than as set out in Item 27 of this Official Information, the Czech National Bank shall issue no Confirmation and inform the competent authority of the home Member State instead that the transmitted documentation shows defects within the meaning of Article 4(2) of the Commission Regulation. 31. Should the Attestation be missing, the Czech National Bank shall request the competent authority of the home Member State to supply the same. 32. Should the Notification Letter show any defects other that incompleteness or an unpermitted technical format (e.g. a CZ facilities operator is given that does not comply with the requirements of Article 44 of the Collective Investment Act), the Czech National Bank shall confirm the receipt of the Notification Letter and subsequently discuss the rectification of such defects with the competent authority of EEA UCITS home Member State. 33. The competent authority of the home Member State should inform the EEA UCITS of the fact that it had transmitted the Notification Letter to the Czech National Bank either after it has received the Confirmation of the Czech National Bank or after it has received the automatic read receipt (Item 29 of this Official Information) and carefully verified that the transmitted documentation is complete and in the prescribed language and technical format. Should these conditions not be complied with, the Notification Letter shall not be considered transmitted In spite of the fact that, until any defects of the Notification Letter or attachments (as referred to in Item 30 of this Official Information) have been rectified, the EEA UCITS has pursuant to European law no right to market its units in the Czech Republic, the Czech National Bank shall take no measures against any foreign UCITS or distributor which would regardless of it start to market its units in the Czech Republic, providing that the defects will be rectified without undue delay. However, the foregoing is without prejudice to the liability for any violation of the requirements while marketing the units of the EEA UCITS (e.g. the use of an inadmissible CZ facilities operator), even if such a violation was the subject of the rectification of the defects of the notification. 35. Upon sending the Confirmation, the Czech National Bank will enter the EEA UCITS in the list maintained pursuant to Article 13(1)(k) of Act No. 15/1998 Coll., on Supervision in the Capital Market Area, as amended. Such entry in the list is for information only (that is, the entry in the list does not establish an authorization to market the units of the EEA UCITS, and 13 Pursuant to the third subparagraph of Article 93(3) of the UCITS IV Directive, an EEA UCITS may enter the market of the host Member State as from the day it has been informed by the home authority of the transmission of the documentation. Pursuant to Article 4(2) of the Commission Regulation, the documentation shall not be regarded as transmitted (the Directive loosely, yet equivalently makes use of the terms to transmit and to transmit completely ), should any of the documents be missing, should the competent authority of the home Member State have failed to use the designated address, or should any technical failure have occurred. 6

7 deletion from the list does not terminate the duties of the EEA UCITS arising from its notification). Notification of multiple funds, investment compartments and classes of units 36. An intention to market in the Czech Republic the units of multiple foreign UCITS requires a separate notification for each such fund. The reason for that consists particularly in the technical limitations of the Notification Letter and the Attestation, which do not make it possible to list multiple foreign UCITS in the relevant form. 37. Notification of the marketing of the units of one or more investment compartments of an EEA UCITS, or of one or more classes of units of an EEA UCITS or investment compartment which issues multiple classes of units, may be made by the fund using a single combined Notification Letter, too. The EEA UCITS may also use a separate Notification Letter for each investment compartment. In the event of an intention to market in the Czech Republic an additional class of units of the EEA UCITS, the fund shall, in reference to Article 93(8) of the UCITS IV Directive, follow the instructions given in Items 40 and 44 of this Official Information. 38. In compliance with Rules No. 25 and 26 of Commission Regulation (EU) No. 583/2010, however, separate KIID is required for each investment compartment and for each class of units. Yet, under the conditions set out in this Regulation, it is exceptionally permitted to combine the KIID relating to the individual classes of units. If the Notification Letter applies to certain investment compartments only, it shall suffice to attach to the Notification Letter solely the part of the prospectus of the EEA UCITS that relates to the investment compartment given in the Notification Letter (i.e., the common part of the prospectus and the special part relating to the investment compartment). 39. Notification of an additional investment compartment or compartments of an EEA UCITS requires a new Notification Letter, which is to be submitted to the Czech National Bank through the competent authority of the home Member State. Once again, it is possible to notify multiple additional investment compartments in the Czech Republic using a single Notification Letter. Regardless of potential overlaps with the previous notification of other investment compartments, it is necessary to attach all the documents required by the law of the European Union (e.g. the prospectus) once again. 40. About the marketing of an additional class or classes of units of an EEA UCITS (or of an investment compartment thereof) in the Czech Republic which has not been given in the Notification Letter, the EEA UCITS shall inform the Czech National Bank directly in the manner prescribed for the provision of information regarding changes pursuant to Item 44 of this Official Information. 7

8 IV. Conditions for the activities of an EEA UCITS in the Czech Republic Common rules 41. The rules on the activities of an EEA UCITS in the Czech Republic, as set out in this part of the Official Information, shall apply equally to all foreign UCITS, irrespective of whether they notified their intention to market their units before 15 July 2011 or after that date. 42. An EEA UCITS may perform its duties in relation to the marketing of its units by means of a person who is authorized to perform the relevant activities within the territory of the Czech Republic (e.g. the provision of information to investors or to the Czech National Bank 14 ). The delegation of such authority needs to be proved to the Czech National Bank only where it so requests. Information duties of an EEA UCITS 43. An EEA UCITS has no regular information duties with respect to the Czech National Bank. 44. An EEA UCITS shall inform the Czech National Bank about any changes in relation to the prospectus, the /fund rules instruments of incorporation (if they are not part of the prospectus) and the KIID, or about any expansion of the set of classes of units marketed in the Czech Republic, and about any changes relating to the CZ facilities directly (i.e., not through the supervisory authority of the home Member State). The information shall be provided by the EEA UCITS prior to the execution of any such changes. The preferred form is via to the address podatelna@cnb.cz, with a guaranteed electronic signature attached 15. In the body of the message, the fund shall identify the document to be affected by the change, briefly characterize the change 16 [particularly indicating any changes that must be reflected in the list of EEA UCITS (Item 35)], and specify the location (usually an Internet address) where the updated electronic version of the changed document will be available. 45. The information referred to in Item 44 above also includes information regarding a merger, regarding the EEA UCITS incorporation into a master-feeder structure, regarding the change of administrator/management company, and regarding the liquidation of an EEA UCITS. 46. As part of the information regarding an amendment to the contract made with a CZ facilities operator, the EEA UCITS shall describe the amendment and, if the information concerning any arrangements for investors is affected (Part B.2 of the Notification Letter), the fund shall give the new information. The very contract entered into with the CZ facilities operator shall not be submitted by the EEA UCITS. However, the Czech National Bank may request to see it. 14 For this purpose, e.g. a trade authorization shall suffice, too. 15 Guaranteed electronic signature pursuant to Article 2(2) of Directive 99/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures. 16 For instance, as a change of the name, change of the administrator, change of the investment policy, change of the depositary, changes to the fees, regular update of the KIID, changes of the KIID required by a change of the prospectus, etc. 8

9 47. The Czech National Bank shall receive the information regarding any changes in relation to the Notification Letter in the Czech, Slovak or English language. 48. If any change must be reflected in the list of foreign UCITS, the Czech National Bank shall reflect the change usually within 10 working days. Provision of information to investors 49. The manner of providing such information in the Czech Republic does not deviate from the requirements imposed by the UCITS IV Directive. 50. In a manner enabling remote access, an EEA UCITS shall make accessible to the investors in the Czech Republic its prospectus (including the fund rules/ instruments of incorporation), the annual and half-yearly report, the KIID and the prices at which the fund issues or repurchases or redeems its units (Article 45(1) of the Collective Investment Act) and any other information that the EEA UCITS is obliged to make accessible to investors pursuant to the regulations of its home Member State. In technical terms, it is irrelevant whether such information is being made accessible from the territory of the Czech Republic or from abroad, or who is technically ensuring the same. 17 Where a central storage or a central access point is used for the providing of such information, however, technical measures must be taken to prevent the marketing of any foreign funds (neither EEA UCITS nor non-ucits) which have not been notified or even not permitted in the Czech Republic (Article 58 of the Collective Investment Act). 51. More detailed rules on the provision of information (e.g. the content of individual information duties, the manner of their performance, the format of the information provided and the time limits, particularly as regards the time limit for the publication of the price at which the fund issues or repurchases or redeems its units) are, in reference to Chapter IX of the UCITS IV Directive, to be determined by the regulations of the home Member State. 52. The language regime for the provision of information is, within the limits of Article 94(1) of the UCITS IV Directive, laid down in Article 45(4) of the Collective Investment Act, and further specified through the relevant Official Information of the Czech National Bank 18, and also described in Item 22 of this Official Information. The prescribed language regime does not affect the right of an EEA UCITS to publish the documents in any other additional language, too. 53. The rules governing the marketing communications of collective investment funds (Article 81a of the Collective Investment Act) imply that translations must not cause any uncertainty or inform investors in a deceptive or misleading manner. Therefore, the name of any EEA UCITS should neither in the prospectus nor in the KIID be translated into the Czech language so as to give a false impression of the fund s domestic origin and make it more complicated to identify the fund. A translation is acceptable, where it accompanies the original name of 17 For instance, the administrator of an EEA UCITS, one of the European distributors, or a CZ distributor. 18 Official Information of the Czech National Bank of 13 July 2011, determining the languages in which documents may be published and submitted to the Czech National Bank for the purposes of certain provisions of Act No. 189/2004 Coll., on Collective Investment, as amended by Act No. 188/2011 Coll. 9

10 the fund as an explanatory note. Also in performing the distribution itself, the fund s original name or any common abbreviations derived from it or, as the case may be, the fund s original name along with the Czech designation should be used in order to make it obvious which name is the official one and which is just a translation thereof into the Czech language. 54. Information of an EEA UCITS must be made accessible to end investors that is, both in the event of direct investment and in the event of investment intermediated by an investment firm, which acquires units for the investor in its own name (as the nominee) and keeps them on a special client securities account (nominee account). No intermediated investment must be abused as to reduce the rights of any investor to information in the extent guaranteed by European law (e.g. regarding the conditions for the provision of information in electronic form, or for the transformation of units into a security, which would provide the investor with a narrower scope of rights than guaranteed by the UCITS IV Directive). 55. An EEA UCITS which notified its intention to market the units of some of its investment compartments only shall publish information solely in relation to these investment compartments. Where information relating to an investment compartment cannot be isolated from the rest without adversely affecting its information value, the EEA UCITS shall supplement the information with a clear message that the remaining units are not being marketed to investors in the Czech Republic; such units should not be sold to investors from the Czech Republic either. Otherwise, this would constitute an unlawful marketing of the units of the remaining investment compartments. CZ facilities 56. Pursuant to Article 44 of the Collective Investment Act, the CZ facilities operator ( kontaktní banka ) may be a bank, a branch of a foreign bank in the Czech Republic and, with effect from 15 July 2011, the CZ facilities operator may also newly be an investment firm other than a bank or a foreign entity providing investment services in the Czech Republic through an organizational unit pursuant to Article 24 or 28 of the Capital Market Undertakings Act. 57. A CZ facilities operator provides investors with certainty that they can handle any issues relating to the EEA UCITS in the Czech Republic such as, for instance, complaints regarding dividend not credited, the repurchase or redemption of units or their redeeming upon the fund s liquidation, or the availability of information. The activities performed by a CZ facilities operator represent a certain minimum standard of the services, the provision of which to CZ investors the EEA UCITS must ensure. Other services (such as, for instance, cash payments at a branch of the CZ facilities operator, where the contractual documentation (the prospectus) guarantees cashless payments, etc.) cannot be claimed. As stated above, a CZ facilities operator does not have to ensure the distribution; therefore, the majority of the said services will often be possible to ensure through the distributor, too. The investor shall also retain an option to assert its rights directly with the EEA UCITS. 58. Accomplishment of any other tasks exceeds the basic framework of the contract to be entered into with the CZ facilities operator. Depending on the scope of the business authorization, such tasks may be ensured by the CZ facilities operator as supplementary services, or they may be provided by a third party, too. 10

11 V. Termination of activities of an EEA UCITS in the Czech Republic Preconditions for termination of activities 59. Factual attenuation of the marketing of the units of an EEA UCITS in the Czech Republic (for instance, the security is currently not being offered by any distributor) has no impact on the notification made and the marketing may be resumed at any time. Attenuation has no impact on the duties of the EEA UCITS in connection with the marketing of units either. 60. Pursuant to Article 45(2) of the Collective Investment Act, information duties of an EEA UCITS shall last until any investors in the Czech Republic own any of its units, regardless of a factual termination of their marketing in the Czech Republic. In public-law terms, the duty shall be deemed performed, if the fund analogously with Article 129(1) of the Collective Investment Act makes all efforts which may reasonably be required from it in order to repurchase or redeem its units from investors. The fund will not always know the identity of its investors, however, so it does not even have to be aware of which investors purchased the fund s units within the scope of their marketing in the Czech Republic and which ones purchased the same abroad, maybe even after their marketing in the Czech Republic had been terminated. Moreover, fulfilment of this condition depends on the cooperation provided by the investors themselves As efforts which may be reasonably required in connection with termination of marketing, the Czech National Bank shall regard a procedure whereby an EEA UCITS addresses investors from the Czech Republic and offers them to repurchase or redeem its units without any deductions within a time limit of at least 30 days. Such a procedure complies with measures aimed to protect investors (e.g. in the field of resolving the impacts of cross-border mergers of UCITS, or in the event of establishment of master-feeder structures [the second subparagraph of Article 43(2) and Article 64(1)(d) of the UCITS IV Directive]. Where an EEA UCITS knows the identity of investors in the Czech Republic, it should address them individually. Otherwise, it is necessary to publish a blanket offer of repurchase or redemption in a manner and for a period of time corresponding to the structure of the fund s investors or, as the case may be, to the structure of the typical investors for whom the EEA UCITS is designed. At the same time, the fund must point out any consequences of the termination of marketing in the Czech Republic for investors. 62. Any investors who even after having been warned of the consequences of the termination of marketing (Item 61 above) decide to possess the units of the EEA UCITS cannot expect the fund to perform the information duties in the Czech language or any CZ facilities to exist. The units held by them will thus lose the nature of units acquired within the scope of marketing. However, the Czech National Bank cannot anticipate the court s decision in the 19 Even though the rules on the termination of activities are missing in the UCITS IV Directive, the principle of the free movement of UCITS balanced by a certain standard of investor protection makes it obvious that the Directive respects the possibility of terminating the activities with a simultaneous lowering of the standard as regards the treatment of the investors who intend to maintain the investment in spite of that. 11

12 event of an action filed by the investors. The present Official Information describes the approach of the Czech National Bank only. 63. An investment compartment of an EEA UCITS shall terminate its activities in the same manner as an EEA UCITS itself. Deletion from the list of the Czech National Bank 64. The Czech National Bank shall delete from the relevant list any foreign UCITS which has requested it to do so, has informed the Czech National Bank on how it had fulfilled the condition requiring the fund to repurchase or redeem its units from investors in the Czech Republic and, simultaneously, which has informed the Czech National Bank as from what date it shall terminate its activities in the Czech Republic. The Czech National Bank will be pleased to learn the reason why the termination of the fund s activities is to take place, too. The date of termination of the fund s activities must not precede the completion of the repurchase or redemption of its units. As from the date of termination of the fund s activities, the Czech National Bank shall delete the EEA UCITS from its list. The recommended model filing forms the annex to this Official Information. 65. The request for deletion (i.e., elimination of the fund from the relevant list) may be filed with the Czech National Bank directly or through the competent authority of the EEA UCITS home Member State, if so required by the legal regulations of the home Member State. The request shall be filed in documentary form to the address of the Czech National Bank, or better in electronic form to the address podatelna@cnb.cz, with a guaranteed electronic signature attached. 66. The Czech National Bank shall inform the EEA UCITS of its deletion from the list. Other rules relating to termination of activities 67. Deletion of an EEA UCITS from the list shall not affect the possibility for the fund to keep ensuring payments to investors, repurchasing or redeeming of units to the investors in the Czech Republic who will show interest in it. 68. The Collective Investment Act does not regulate the details of such a procedure, but in terms of the purpose of the rules contained in the Act, we may believe that the EEA UCITS should terminate its contract with the CZ facilities operator and the publication of information in the manner prescribed in Article 45 of the Collective Investment Act not earlier than as from the day of its deletion from the relevant list. 69. An EEA UCITS which markets its units within a limited subscription period and which has a fixed investment horizon (typically capital protected funds) should publish information pursuant to Article 44(6) of the Collective Investment Act and perform all of its other duties until the fixed investment horizon has been reached. Any earlier termination of the EEA UCITS activities would result in an unacceptable reduction of the rights of investors from the Czech Republic. They would either have to consent to repurchase or redemption of the units under less favourable conditions than they would have achieved upon the expected attainment of the investment horizon, or they would lose the option of asserting their rights in connection 12

13 with the maturity of their investment within the territory of the Czech Republic. Moreover, they would lose the availability of the KIID in the Czech language. VI. Notification of a CZ UCITS Basic rules 70. A CZ UCITS which intends to market its units on the market in another Member State shall notify its intention through the Czech National Bank using a Notification Letter. 71. The notification shall be assessed by the Czech National Bank in terms of compliance with the required formal elements thereof (i.e., completeness and the permissible language of the Notification Letter and the documents attached thereto). However, the Czech National Bank shall not investigate whether a Notification Letter is necessary for the CZ UCITS to perform its activities abroad. Requirements for the Notification Letter 72. A CZ UCITS shall complete all parts (A, B and C) of the Notification Letter in the English language In Part A of the Notification Letter Legal form of the UCITS, the CZ UCITS shall indicate that the legal form of the fund corresponds to the type common fund. 74. In the list of classes of units given in Part A, the CZ UCITS shall indicate the groups of units to which different rights of unit-holders are attached within the limits of Article 8(3) of the Collective Investment Act and within the limits of the statute of the CZ UCITS. Simultaneously, the CZ UCITS shall always give the identification of the relevant group of units. 75. In Part A, the CZ UCITS may provide Additional information about the UCITS (if necessary). For the time being, however, the Czech National Bank has not identified any information that would have to be given in this part. 76. Information required in Part B.3 shall be given in accordance with the requirements imposed by the host Member State. 77. To the Notification Letter, the CZ UCITS shall attach the statute, the latest annual or halfyearly report (whichever has been issued later) and the KIID. 78. The statute and the annual or half-yearly report shall be submitted at the fund s choice in the language customary in the world of finance (i.e., in English), in the official language of the Member State which the Notification Letter is addressed to (i.e., the host state), or in 20 If so agreed by and between the home and the host authorities, the Notification Letter (and the Attestation) may be made out in the official languages of both Member States. Currently, however, no such agreement has been made by the Czech National Bank. 13

14 a language acknowledged by the host state. The KIID shall always be attached translated into the official language (or one of the official languages) of the host state, or into a language acknowledged by the competent authority of the host Member State. 79. The Czech National Bank shall refuse to transmit any Notification Letter which is incomplete or lacks the prescribed attachments, or any Notification Letter (or the attachments thereto) which is executed in an obviously inadmissible language. However, the Czech National Bank is not obliged to examine the details of the language regimes of the host Member States. Any consequences of transmitting a Notification Letter (or the attachments thereto) in a language inadmissible for the host state shall be borne by the notifying CZ UCITS. Manner of notification 80. A CZ UCITS which intends to market its units on the market in another Member State shall notify its intention through the Czech National Bank. Notification through the competent authority of the target Member State shall not be effective. 81. The Notification Letter and attachments thereto shall be submitted by the CZ UCITS to the Czech National Bank to the address podatelna@cnb.cz in electronic form, with a guaranteed electronic signature attached, in the doc, docx, xls, xlsx or pdf format. The size of the message must not exceed 30 MB. Documents may be compressed into the zip, 7z or rar format. 82. Should the documentation be incomplete, the Czech National Bank shall invite the CZ UCITS to rectify the defects. 83. To the complete documentation (i.e., to the Notification Letter and the attachments thereto), the Czech National Bank shall attach the Attestation and, not later than within 10 working days from the receipt of the complete documentation, the Czech National Bank shall transmit the documents to the competent foreign authority. 84. The CZ UCITS is allowed to start marketing its units in the Member State which it notifies of its intention immediately after it has been informed by the Czech National Bank that the Notification Letter had been transmitted to the competent authority of the host Member State (i.e., that the competent authority of the host Member State had been notified of the fund s intention). 85. The Czech National Bank shall inform the CZ UCITS about the notification by an message sent to the contact person of the investment company to the address given in Part A of the Notification Letter. Should this be impossible (i.e., should the message return as undeliverable), the Czech National Bank shall inform the CZ UCITS to the address from which the request for notification was filed with the Czech National Bank, or to the physical address of the investment company s registered office, if the request for notification was filed in documentary form. 86. Should the Czech National Bank receive no Confirmation within 5 working days of notifying the foreign authority, it shall contact the foreign supervisory authority and verify whether the 14

15 complete documentation was transmitted, and shall inform the CZ UCITS about the further procedure. 87. Should, instead of receiving the Confirmation, the Czech National Bank be informed by the foreign authority that the transmitted documentation is not regarded as complete by the same, the Czech National Bank shall without undue delay request the CZ UCITS to rectify the defects, and shall transmit the compliant documentation to the competent foreign authority. Details shall be specified in the request. Notification of multiple funds or classes of units 88. An intention to market in another Member State the units of multiple CZ UCITS requires a separate notification for each such fund. The reason for that consists particularly in the technical limitations of the Notification Letter and the Attestation, which do not make it possible to list multiple UCITS in the relevant form. 89. Notification of the units of one or more classes of units of a CZ UCITS which issues multiple classes of unit certificates shall be made using a single combined Notification Letter. Thus, no separate notification for each unit class is required. In the event of an intention to notify an additional unit class, the fund shall in reference to Article 93(8) of the UCITS IV Directive follow the instructions given in Items 40 and 44 of this Official Information, as appropriate. 90. In compliance with Rules No. 25 and 26 of Commission Regulation (EU) No. 583/2010, separate KIID is required for each class of units. Yet, under the conditions set out in this Regulation, it is exceptionally permitted to combine the KIID relating to the individual unit certificate classes. Termination of activities of a CZ UCITS abroad 91. The conditions for the termination of the activities of a CZ UCITS abroad are to be determined by the host Member State or, as the case may be, by the competent authority of the host Member State. The Czech National Bank is to play no prescribed role in this process. Vice-Governor prof. PhDr. Ing. Vladimír Tomšík, Ph.D., signed Financial Market Regulation and International Co-operation Department Responsible: Mgr. Alena Šebestová, tel

16 RECOMMENDED MODEL Annex Application for the deletion of an EEA UCITS from the list of the Czech National Bank in relation to the termination of the EEA UCITS activities in the Czech Republic (Article 45(2) of Act No. 189/2004 Coll., on Collective Investment; and Article 13(1)(k) of Act No. 15/1998 Coll., on Supervision in the Capital Market Area) I. BASIC INFORMATION Administrative authority Czech National Bank Na Příkopě 28, Prague 1, post code Applicant and its representative (The management company of the EEA UCITS, or the selfmanaged EEA UCITS) Name Registered office incl. identification of the Member State Representative in the Czech Republic Contact person (phone, ) If not clear from the name, state whether it is a management company or an self-managed fund State here his/her name, or its corporate name, and address (e.g. attorney at law, CZ facilities operator, authorized as a representative) Indicate the contact person in matters relating to this Request Request Electronic/in documentary form* * Delete as required. If in electronic form, a guaranteed electronic signature must be attached to the Request. II. SUBJECT Request for deletion from the list of EEA UCITS marketing their units within the territory of the Czech Republic, in relation to the termination of the EEA UCITS (or, as the case may be, of its investment compartment s) activities within the territory of the Czech Republic. III. DETAILS REGARDING THE TERMINATION OF ACTIVITIES 1 Identification of the EEA UCITS/investment compartment State here 1. Fund/investment compartment* 2. Fund/investment compartment* 2 Date of termination of the EEA UCITS/investment compartment s activities State here in the format dd.mm.yy The date of termination of activities should correspond to the date as from which the fund will be deleted from the list. The date shall not precede the date of completion of the repurchasing of units 3 Information regarding the repurchasing of units from the investors in the Czech 16

17 Republic In what manner were the investors informed about the termination of activities, about the repurchasing, about the reasons for it and about the procedure of the repurchasing: State, for instance, sent to the investors addresses, etc In what manner could the investors claim their right to the repurchasing State, for instance, through the distributors as well as through the CZ facilities operator and provide their identification 3.2. The time limit for the repurchase or redemption was at least 1 month, namely State here in the format dd.mm.yy from [...] to [..] 4 Information regarding the termination of the CZ facilities operator s activities Activities of the CZ facilities operator [ ] will be terminated as from [ ] State here the precise name of the CZ facilities operator and the day of termination of its activities (This date should not precede the date of termination of the fund s activities) 5 Information regarding the possibilities of claiming investor rights following the termination of activities Following the termination of activities: 5.1. information on the fund s activities will be available on the website [...] in the language [...] State the internet address in the format it will remain possible to claim the repurchase or redemption in the Czech Republic (as a voluntary arrangement of the fund) directly through [...] for a period of [...] If the repurchase or redemption can no longer be claimed in the Czech Republic, state here NO and go to Item 5.3.; otherwise, state the precise name of the intermediary and specify the period of time it will be possible to claim the repurchase or redemption outside of the Czech Republic only, namely [...]. State here the identification of the entity and any other specifying information 6 Additional information 6.1. Information regarding (or, as the case may be, an estimate of) the amount of the fund s equity capital which will remain in the possession of the investors in the Czech Republic following the termination of the fund s activities [...] State including the relevant currency 6.2. Information regarding (or, as the case may be, an estimate of) the number of the investors in the Czech Republic following the termination of the fund s activities [...] 6.3. In relation to the termination of the fund s activities in the Czech Republic, the home state stipulates any rules with significance for the investors in the Czech Republic* i. NO ii. YES, the details are as follows [...] State here the details * Delete as required. 17