NEW STANDARD APPLICATION FORM PUBLISHED BY THE CNMV FOR THE AUTHORISATION OF MANAGEMENT COMPANIES OF COLLECTIVE INVESTMENT INSTITUTIONS
The National Securities Market Commission (“CNMV”) has published through its website (www.cnmv.es, in the section Standard Versions -Modelos Normalizados-) a standard application form (the “SAF”) to facilitate and simplify the procedure for the authorisation of Management Companies of Collective Investment Institutions (“SGIIC”). The SAF may be downloaded from said website in order to be completed and filed with the official registry of the CNMV. The CNMV is open to suggestions or improvements, to simplify or provide instructions as to how to complete the SAF.
The SAF is divided into several sections which summarise the requirements set forth in the applicable laws for the incorporation of a SGIIC, be it new or resulting from any type of corporate transaction (transformation, merger, etc.). All the sections refer to the applicable rules and include hyperlinks to access these rules.
The sections included in the SAF are the following:
1. Authorisation request: includes the basic data of the incorporation procedure, the founders, the contact persons, the adhesion to the Investors Guarantee Fund in the even that the SGIIC is to manage portfolios and the regulations on money laundering.
2. By-laws: the draft of the by-laws and the amendments of the existing by-laws must be enclosed with the SAF.
3. Board of Directors: the list of directors, their connection to any other entity and the remuneration system, amongst others, must be established.
4. Shareholders and Group Structure: includes the list of partners and their corresponding share percentages, the details of the entities or persons acting as directors, their involvement in the organizational structure of the SGIIC and information about the Group to which the SGIIC will be allocated.
5. Activities Programme: a description of the activities to be carried out, the products and instruments, the type of clients, the business plan, the territorial scope of action and the cross border activities shall be included.
6. Organizational structure: the organizational chart, the personnel per department and area, the tasks entrusted to each department and area as well as the powers of attorney structure must be provided.
7. Delegation of activities or functions: the activities or functions delegated, details of the delegated entity, the control procedures over the delegated activities or functions, the delegation agreements and a specific sub-section for the delegation of activities of SGIIC which purpose is the management of the new free investment vehicles set forth under the Regulation on Collective Investment Institutions of November 2005, which are yet to be further developed by the CNMV (“Instituciones de Inversión Colectiva de Inversión Libre or IICIL and Instituciones de Inversión Colectiva de Instituciones de Inversión Colectiva de Inversión Libre or IIC of IICIL”).
8. Material means: information concerning the corporate domicile, the software/hardware resources, contingency plans and accounting system.
9. Internal procedures for the evaluation, control and monitoring of risks: distinguishes between the procedures applicable for the management of CIIs and discretionary portfolio management, for the management of private equity entities, for marketing of CIIs and private equity entities as well as for the administration and custody of CIIs.
10. Rules of conduct and relationships with clients: includes the Internal Code, the Regulations for the Protection of Clients’ rights, the provision of information to clients, information on the marketing, standard agreements and fees brochure.
Certain information and documentation is required for each of the sections, although the CNMV can request additional information.
Moreover, the CNMV has published a guide in its website providing a list of the documents required for the authorisation proceedings for SGIICs which have already been registered at the CNMV. Such guide is very useful in view of the amendments to be adopted by the SGIICs authorised to manage IICIL and IIC of IICIL. In particular, certain information referred to in the SAF would have to be filed in connection with the different types of authorisations:
- Extension of the Activities Programme in order to include:
(i) the administration, representation and management of subscriptions and redemptions of IIC IL and IIC of IICIL;
(ii) individualised and discretionary investment portfolio management services;
(iii) non-core investment advisory services;
(iv) non-core services of custody and administration of units/shares of investment funds or companies;
(v) the administration, representation and management of private equity entities; and
(vi) the marketing and distribution of units/shares of CIIs.
- Delegation to third parties of the management, administration and other activities.
- Delegation of the activities of SGIICs that manage IIC IL and IIC of IICIL.
- Acquisition of the majority or a significant stake of the share capital of a SGIIC, be it directly or indirectly, reaching or exceeding any of the levels set forth by law on CIIs 35/2003 (10%, 15%, 20%, 25%, 33%, 40%, 50%, 66% or 75%).
- Extension of the operational set-up with derivative financial instruments or non-listed securities in the management of IIC.
- Change of the corporate domicile.
- Removal, appointment or re-election of directors, managers or similar employees.
- Opening of branches.
- Appointment of agents.
The SAF and the guide have been issued to simplify the administrative procedures for the incorporation and updating of SGIICs which we believe is a positive initiative that we hope will result in the speeding up and standardisation of these administrative procedures.
27 March 2006
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For further information, please contact Salvador Ruiz Bachs (firstname.lastname@example.org) or Marta Oñoro Carrascal (email@example.com) (telephone no. +34 915860696) in our Madrid office or Juan Carlos Machuca (firstname.lastname@example.org, telephone no. +44.20 7.645.02.80 ) in our London office.