May 2013

commercial law


In the process of adapting Spanish legislation to Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 ("UCITS IV Directive") the National Securities Exchange ("CNMV") has issued a new circular, Circular 2/2013 of 9 May on the key investor information document (“KIID”) and the prospectus [ ]).” of Spanish collective investment schemes ("Circular 2/2013") The main changes introduced in Circular 2/2013 are detailed below.

Circular 2/2013 has three objectives: first, to regulate the KIID, establishing those matters that pertain only to real estate funds and hedge funds. It also establishes models for the KIID and the prospectus of collective investment schemes, and finally, it adapts Spanish legislation to recent legislative changes concerning, among others, the new circumstances that give shareholders the right to withdrawal and ESMA recommendations relating to the termination of securities lending and repos agreements.

Regarding the KIIDs, following the guidelines set by EU legislation, Circular 2/2013 has extended the obligation to issue a KIID to all Collective Investment Schemes (“CIS”) which are not considered to be UCITS (non-harmonized CIS) as it does not seem reasonable for two different marketing documents to be issued for the CIS depending on whether or not it is an UCITS, even though the directive only applies to harmonized CIS.

However, in extending the obligation to issue this document to all CIS, it provides certain exceptions and adjustments to the content and form of the document for certain types of non-harmonized UCITS (including real estate funds and hedge funds) in order to adapt it to the characteristics of this type of CIS.

In all these cases, the presentation of the KIID and the prospectus of UCITS for registration and, in the case of investment funds, for additional prior verification and subsequent updates, must be made electronically through CIFRADOC.

Moreover, the Circular provides different scenarios in which the members have the right to information on an individual basis regarding those changes deemed to be of particular relevance.

In relation to the right of withdrawal when the updating of the KIID and/or the prospectus is the result of some of the modifications that are deemed essential by Circular 2/2013, a shareholder may choose, within a period of 30 calendar days to request a refund for, or transfer of, their shares, in whole or in part, without any deduction of redemption fees or expenses, for the applicable net asset value on the last day of the 30 calendar day reporting period.

Circular 2/2013 came into force on 25 May and will replace the previous Circular 3/2006 on the prospectus of UCITS. It establishes transitory rules for the implementation of the Circular, with a series of specific deadlines.

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The information contained in this Newsletter is of a general nature and does not constitute legal advice