Senate passes Amendment to Investment Companies and Investment Funds (ICIF) Act
On 29 May 2024, the senate approved an amendment to the Act on Investment Companies and Investment Funds (ICIF) and related laws including changes to some parts of the consolidation package, in the wording as passed by the chamber of deputies. In September last year, we covered the five most important changes contained in the ICIF bill, such as the regulation of SICAVs or how some forms of investment funds would be more attractive. Debating the bill in the chamber, the deputies also approved three amending proposals. The resulting amendment will enter into effect on 1 July 2024.
Changes to the ICIF Act
A summary of the changes can be found here.
Deadline for filing auditor’s reports for unlicensed managers
Under Section 15 of the ICIF Act, unlicensed managers will be allowed to collect funds from up to 20 investors not meeting the minimum investment threshold of EUR 125,000. To not circumvent the law, the amendment requires an auditor's assurance if an unlicensed manager collects funds from more than 20 investors. The auditor shall review whether the abovementioned requirement for the exemption has been complied with – i.e., whether only 20 or fewer investors did not meet the minimum investment threshold. The deadline shall be the same as for other managers: within six months from the end of the previous calendar year (regardless of the unlicensed managers’ accounting period).
Obligatory deletion of an unlicensed manager from the CNB list
The amendment explicitly introduces the CNB’s obligation to delete unlicensed managers from its list if they have been banned from carrying out their activity by a public authority.
Same scope of obligations for administrators and managers
The amendment explicitly stipulates that managers may offer investments in the fund they manage without being authorised to do so by the administrator, provided that they perform this activity with professional care. Requirements imposed on administrators and managers offering investments are being eased, as they will also only be required to perform their activities with professional care. The amendment abolishes the obligation to comply with rules similar to those applicable to securities traders dealing with customers, i.e., rules concerning the provision of an investment service and the reception and transmission of orders in the area of investment instruments.
Technical amendment to the consolidation package
The changes intended to remove certain inaccuracies introduced by the consolidation package are summarised here. These include, e.g., partial changes of the taxation of employee benefits, adjustments concerning the use of a functional currency, a new regulation of statutory insurance premiums for employee shares and options, and new rules on statutory insurance premiums upon agreements to complete a job.
Impact on the taxation of investment funds
An overview of the key changes and their impact on the application of the lower 5% income tax rate for investment funds and sub-funds can be found here.