Amendment of The Open – Ended Type Collective Investment Undertakings Law 2016

An amendment of the Open – Ended Type Collective Investment Undertakings Law, 78(I)/2012, (UCITS Law) was approved by the Parliament, in line with the provisions of the EU Directive 2014/91 (“UCITS V Directive”).

According to the amended Section 30, any company that, during the enactment of the amending law, is registered under the Companies Law and whose securities are admitted to trading on a regulated or non-regulated market in the Republic as an investment fund, may become a Variable Capital Investment Company and pursue UCITS activities, on the condition that a prior licence is granted by the Securities and Exchange Commission and given that it fulfills the requirements laid down in Schedule II of the Law.

Further to the above, the amending legislation:

• eliminates the derogation from the general obligation to entrust assets to a depositary by a Variable Capital Investment Company;
• contains rules laying down the tasks and duties of depositaries;
• designates the legal entities that may be appointed as depositaries and clarifies the liability of depositaries;
• lays down the conditions for the delegation of the depositary’s safekeeping duties to a third party;
• regulates issues related to the independence of the Management Company and the Depositary;
• imposes an obligation on UCITS management companies to apply remuneration policies that are consistent with and promote sound and effective risk management;
• enhances the Securities and Exchange Commission’s supervisory and investigatory powers and establishes effective mechanisms to encourage reporting of potential or actual infringements.