Translated by the Ministry of Finance
Consolidated version valid as of 4 December 2015
republic of lithuania
LAW ON MANAGEMENT COMPANIES OF COLLECTIVE INVESTMENT UNDERTAKINGS INTENDED FOR PROFESSIONAL INVESTORS
18 December 2014, No. XII-1467
(As last amended on 26 November 2015 – No XII-2079)
Vilnius
CHAPTER I
GENERAL PROVISIONS
Article 1. Purpose of the Law
1. The present Law regulates activities of management companies of collective investment undertakings intended for professional investors, and defines the limits of the State supervision of such activities. The purpose of the Law is to ensure protection of interests of participants of collective investment undertakings intended for professional investors.
2. The present Law implements the legal acts of the European Union specified in the Annex to the present Law.
Article 2. Scope of the Law
1. The present Law applies to the activities of management companies of collective investment undertakings intended for professional investors. The requirements prescribed in the present Law shall be complied with by:
1) management companies of collective investment undertakings intended for professional investors and incorporated in the Republic of Lithuania, and managing one or more collective investment undertakings intended for professional investors and incorporated in another Member State or a third country;
2) management companies of collective investment undertakings intended for professional investors and incorporated in a third country, and managing at least one collective investment undertaking intended for professional investors and incorporated in the Republic of Lithuania;
3) management companies of collective investment undertakings intended for professional investors and incorporated in a third country, and markets investment units or shares in the Republic of Lithuania of at least one collective investment undertakings intended for professional investors and incorporated in the Republic of Lithuania, another Member State or a third country.
2. Save for Article 12, the provisions of the present Law shall not apply to:
leveraged management companies of collective investment undertakings which directly or indirectly, or through the control of a company with which the management companies of collective investment undertakings are linked by common management or control, or by a substantive direct or indirect holding, manage collective investment undertakings whose assets under management including the assets acquired through use of leverage do not exceed the threshold of EUR 100 million, excluding the assets of the harmonised collective investment undertakings managed thereby;
2) management companies of collective investment undertakings which directly or through the control of a company with which the management companies of collective investment undertakings are linked by common management or control, or by a substantive direct or indirect holding, manage collective investment undertakings whose assets under management, excluding the assets of harmonised collective investment undertakings managed thereby, do not exceed the threshold of EUR 500 million, provided the management company of collective investment undertakings manages only unleveraged collective investment undertakings that during the period of 5 years from the incorporation of each collective investment undertakings intended for professional investors do not grant to the investors the right to apply for the redemption of investment units or shares, or the repayment of contributions.
3. The provisions of this Law shall not apply to:
1) companies with shareholdings in one or more other companies, the commercial purpose of which is to carry out a business strategy or strategies through its subsidiaries, associated companies or participations in order to contribute to their long-term value, and which are operating on their own account and whose shares are admitted to trading on a regulated market; or not established for the main purpose of generating returns for its investors by means of divestment of its subsidiaries or associated companies, as evidenced in its annual report or other official documents (holding companies);
2) associations of participants of occupational retirement funds and life insurance companies authorised to engage in occupational retirement accumulation activities, unless they manage collective investment undertakings intended for professional investors;
3) the Bank of Lithuania, except the cases where the Bank of Lithuania performs supervisory functions, central banks of other Member States;
6) the European Central Bank, the European Investment Bank, the European Investment Fund, the European Development Finance Institutions and bilateral development banks, the World Bank, the International Monetary Fund, and other supranational institutions and similar international organisations, provided that such institutions or organisations manage one or more collective investment undertakings intended for professional investors, and in so far as those collective investment undertakings intended for professional investors act in the public interest;
4. Where, having regard to the provisions of para. 2 of this Article, a management company of collective investment undertakings does not fall within the scope of the present Law, but seeks to exercise the rights of management companies of collective investment undertakings intended for professional investors as provided for in the present Law, the management company shall apply to the supervisory authority with a request to issue the relevant licence.
5. The requirements set forth with respect to management companies of collective investment undertakings for professional investors in the Law on Companies of the Republic of Lithuania, and the Law on Partnerships of the Republic of Lithuania shall apply to the extent that the present Law does not specify differently. The provisions of the Law on Collective Investment Undertakings of the Republic of Lithuania (hereinafter – the Law on Collective Investment Undertakings) shall apply only in the cases specified in this Law. The provisions of the Law on Financial Institutions of the Republic of Lithuania (hereinafter – the Law on Financial Institutions) shall apply to the management companies of collective investment undertakings intended to professional investors only in the cases stipulated in this Law. Where, having regard to the provisions of para.2 of this Article the present Law does not apply to the activities of management companies of a collective investment undertaking intended for professional investors, such management company shall register at the supervisory authority as specified in Article 12 of this Law.
6. The requirements of the present Law does not apply to management companies operating according to the Law on Collective Investment Undertakings or the Law on Collective Investment Undertakings for Informed Investors of the Republic of Lithuania (hereinafter – the Law on Collective Investment Undertakings for Informed Investors) to the extent the assets of the collective investment undertakings (except the harmonised collective investment undertakings) managed by the management company does not reach the values specified in para. 2 of this Article, unless acting in accordance with para. 4 of this Article the management company seeks to act according to this Law. Once the assets of the collective investment undertakings (except the harmonised collective investment undertakings) managed by a management company reach the values specified in para. 2 of this Article, the management company must in the manner specified by this Article apply to the supervisory authority with a request to be issued a licence of a management company of collective investment undertakings intended for professional investors. In that case as of the issue of the licence of a management company of collective investment undertakings intended for professional investors, the management company of collective investment undertakings intended for professional investors shall be subject to the requirements of the present Law, and the management company is no longer subject to the requirements set forth, respectively, in the Law on Collective Investment Undertakings, or the Law on Collective Investment Undertakings Intended for Informed Investors. However, in case the management company chooses to continue exercising the right referred to in para. 7 of this Article, the management company shall additionally comply with the requirements set forth in the Law on Collective Investment Undertakings, or the Law on Collective Investment Undertakings Intended for Informed Investors ensuring the protection of the interests of investors.
7. The management companies operating according to the Law on Collective Investment Undertakings, or the Law on Collective Investment Undertakings Intended for Informed Investors, and managing special collective investment undertakings, and/or collective investment undertakings intended for informed investors, shall have a right to continue incorporating and/or managing such collective investment undertakings and market the investment units or shares, respectively, of the special collective investment undertakings and/or of collective investment undertakings to, respectively, non-professional investors and/or informed investors also in the case the assets of the collective investment undertakings (except the harmonised collective investment undertakings) managed by the management company reaches the values set forth in para. 2 of this Law, or the management company has opted to operate according to the present Law in the manner set forth in para. 4 of this Law.
8. The provisions of paras. 6 and 7 of this Article shall mutatis mutandis apply to investment companies operating according to the Law on Collective Investment Undertakings, or the Law on Collective Investment Undertakings Intended for Informed Investors and whose management has not been transferred to management companies.
9. Management companies licensed according to this Law, management companies of collective investment undertakings intended for professional investors that have obtained the licence in other Member States, and management companies of collective investment undertakings intended for professional investors incorporated in third countries, having obtained a licence from the Member State of reference, shall have a right to market investment units or shares of the collective investment undertakings managed thereby in the Republic of Lithuania to professional investors only.
10. The limitation set forth in para. 9 of this Article shall not apply to the marketing of investment units or shares of collective investment undertakings incorporated and managed according to the Law on Collective Investment Undertakings, or the Law on Collective Investment Undertakings Intended for Informed Investors.
11. The present Law does not apply to the activities of management companies of collective investment undertakings for professional investors where such companies manage one or more collective investment undertakings intended for professional investors and whose only investors are management companies of collective investment undertakings intended for professional investors, or their parent or subsidiary companies, or other subsidiaries of those parent companies, provided that none of those investors itself is not a collective investment undertaking intended for professional investors.
Article 3. Principal concepts for the purpose of the Law
1. Supervisory authority of the depository:
1) an authority of the Republic of Lithuania, or another Member State exercising the supervision of credit institution and/or financial brokerage firms;
2. Control over the issuer– an impact upon the issuer exercised through the acquisition independently or in concert with other persons by a collective investment undertaking intended for professional investors of voting securities of the issuer, and which in connection with the holding held by the collective investment undertaking intended for professional investors, or in connection with the holding held by the other persons acting in concert entitle to more than 1/3 of votes at the general meeting of shareholders.
3. Financial instrument – as defined in the Law on Markets in Financial Instruments of the Republic of Lithuania (hereinafter – the Law on Markets in Financial Instruments).
4. Leverage – a method by which the management company of the collective investment undertaking intended for professional investors increases the exposure of the collective investment undertaking intended for professional investors managed thereby whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means.
5. Master collective investment undertaking intended for professional investors – a collective investment undertaking in which a feeder collective investment undertaking intended for professional investors invests or has an exposure.
6. Feeder collective investment undertaking intended for professional investors – a collective investment undertaking intended for professional investors which:
1) invests at least 85 % of its assets in investment units or shares of another collective investment undertaking intended for professional investors (master collective investment undertaking intended for professional investors);
2) invests at least 85 % of its assets in more than one master collective investment undertaking intended for professional investors, where those master collective investment undertakings intended for professional investors have identical investment strategies, or
8. Net assets means difference between the value of assets of the investment fund or the investment company and non-current and current liabilities of the investment fund or the investment company.
9. Non-listed company – a company which has its registered office in a Member State, and the shares of which are not admitted to trading on a regulated market.
10. Control over a non-listed company– an impact upon a non-listed company exercised through the acquisition independently or in concert with other persons by a collective investment undertaking of voting securities of the company, and which in connection with the holding held by the collective investment undertaking intended for professional investors, or by the other persons acting in concert grant more than 50 % of votes at the general meeting of shareholders of that company.
11. Control over an entity – a direct and/or indirect decisive influence over an entity as defined in the Law on Consolidated Financial Statements of a Group of Undertakings of the Republic of Lithuania (hereinafter – the Law on Consolidated Financial Statements of a Group of Undertakings).
13. Collective investment undertaking intended for professional investors and established in another Member State – a collective investment undertaking intended for professional investors whose registered and/or head office is established in another Member State, also a collective investment undertakings intended for professional investors licensed in another Member State.
14. Supervisory authority of another Member State – a competent authority of another Member State performing the functions of supervision of collective investment undertakings intended for professional investors and their management companies in accordance with the provisions of legal acts effective on those Member States.
17. Prime broker means a credit institution, a financial brokerage firm, regulated investment firm or another entity subject to prudential regulation and ongoing supervision, and which according to an agreement with the management company of a collective investment undertaking intended for professional investors offer to professional investors one or more investment services whereby seeking primarily to finance or execute transactions in financial instruments as counterparty and which may also provide other services such as clearing and settlement of trades, custodial services, securities lending, customised technology and operational support facilities;
18. Securitisation special purpose entities – means entities whose sole purpose is to carry on a securitisation or securitisations within the meaning of Article 1(2) of Regulation (EC) No 24/2009 of the European Central Bank of 19 December 2008 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions (OJ 2009 L 15, p. 1).
19. Subsidiary undertaking – a subsidiary undertaking as defined in the Law on Consolidated Statements of Groups of Undertakings.
20. Parent undertaking – a parent undertaking as defined in the Law on Consolidated Statements of Groups of Undertakings.
21. Supervisory authority – Bank of Lithuania, carrying out the functions of supervision of collective investment undertakings and their management companies in the manner set forth in this and other laws.
22. Collective investment undertaking intended for professional investors – is a collective investment undertaking – an investment fund or an investment firm, including the subfunds, which:
1) raise capital from a number of professional investors with a view to investing the capital for the benefit of those investors according to a defined investment policy; and
23. Home Member State of a collective investment undertakings intended for professional investors – a Member State in which the collective investment undertaking intended for professional investors has been authorised to operate, or in which the collective investment undertaking is established in the manner defined in this Law, or the legal acts of another Member State. In case a collective investment undertaking intended for professional investors has obtained the licence or is established in several Member States, the home Member State is the Member State in which the collective investment undertaking was first licensed or was established.
24. Participant of a collective investment undertaking intended for professional investors – a person who has acquired investment units or shares of a collective investment undertaking, or who has made a contribution to a general or limited partnership – a co-owner of an investment fund, a shareholder of a public company or a private company, a general member or a limited member of a general or limited partnership.
25. Marketing of investment units or shares of a collective investment undertaking intended for professional investors – direct or indirect offering of investment units or shares of a collective investment undertaking of a collective investment undertaking managed by a management company at the initiative or on behalf of the management company to professional investors domiciled or having their registered office in the European Union.
26. Instruments of incorporation of a collective investment undertaking – Articles of Association of a public or private company, regulations of an investment fund, the partnership agreement of a general or limited partnership.
27. Management of a collective investment undertaking intended for professional investors – performance of at least the following functions of management of a collective investment undertaking intended for professional investors:
1) management of a portfolio of a collective investment undertaking intended for professional investors;
28. Management company of a collective investment undertaking intended for professional investors – a legal entity whose ordinary activity is management of a collective investment undertaking(s) intended for professional investors. In case the management of an investment firm is not delegated to a management company, the requirements specified in the present Law for management companies shall be respectively applied for the investment firm itself.
29. Holding of the management company of a collective investment undertaking intended for professional investors – a share of the authorised capital or voting rights directly or indirectly managed by the management company and accounting for no less than 1/10 of the authorised capital or voting rights, or making it possible to exercise an essential impact upon the managements of the management company. The calculation of whether the share of the authorised capital or the voting rights of the management company accounts for no less than 1/10 of the authorised capital shall be carried out with reference to the obligation set forth in the Law on Securities of the Republic of Lithuania (hereinafter – the Law on Securities) to notify of the acquisition of the shareholding, or its disposal and the procedure for the calculation of the votes held by a person.
Amendments to the Article:
No. XII-2079, 26-11-2015, published in TAR, 03-12-2015, company code 2015.-19287.
30. Share of the remuneration of the management company of a collective investment undertaking intended for professional investors – a share of the remuneration received for the management of a collective investment undertaking intended for professional investors. This share of the remuneration does not include the return from the investment of the management company into the collective investment undertaking intended for professional investors.
31. Home Member State of a management company of a collective investment undertaking intended for professional investors – the Member State in which the management company has its registered office. In case the management company is established in a third country, its home Member State is the Member State of reference.
32. Branch of the management company of a collective investment undertaking intended for professional investors – a structural division of the management company, and which has no legal personality. For the purpose of the present Law, all branches established in the Republic of Lithuania of a single management company are considered to constitute a single branch.
33. Own funds of the management company of a collective investment undertaking intended for professional investors – cash or cash equivalents of a management company, other liquid assets, as well as investment illiquid low risk financial instruments and other assets.
34. Host Member State of the management company of a collective investment undertaking intended for professional investors – a Member State in which the collective investment undertakings intended for professional investors are being managed, or in which investment units or shares of such collective investment undertakings are being managed, but which is not the home Member State of the management company, and in the cases the management company is not established in the European Union or the European Economic Area – a Member State which is not a Member State of reference.
35. Managers of the management company of a collective investment undertaking intended for professional investors – manager of a management company or an investment firm, members of the Board, members of the Supervisory Board, and general members of a general or limited partnership.
36. Professional investor – an investor that meets the criteria set forth in the Law on Markets in Financial Instruments.
37. Third country – a State that is a non-Member State of the European Union or of the European Economic Area.
38. Supervisory authority of another Member State – a competent authority of another Member State performing the functions of supervision of collective investment undertakings intended for professional investors and their management companies in accordance with the provisions of legal acts effective on those Member States.
39. Property or business valuation company – as defined in the Law on the Bases of Property and Business Valuation of the Republic of Lithuania.
40. Closed-ended collective investment undertaking intended for professional investors – a collective investment undertaking intended for professional investors, including its sub-funds whose shares or investment units are redeemed, or the contribution to the general or limited partnership is repaid only upon the expiry of the period specified or agreed in advance in the incorporation instruments.
41. Member State – a Member State of the European Union, as well as a Member State of the European Economic Area.
42. The other concepts used for the purpose of the present Law shall be interpreted as defined in the Law on Markets in Financial Instruments, the Law on Financial Institutions, the Law on Consolidated Financial Statements of Groups of Undertakings, the Law on Collective Investment Undertakings, and the Law on Securities.
CHAPTER II
ACTIVITIES OF MANAGEMENT COMPANIES
SECTION ONE
MANAGEMENT COMPANIES AND THEIR FUNCTIONS
Article 4. Forms and types of collective investment undertakings
1. A collective investment undertaking intended for professional investors (hereinafter – the collective investment undertaking) may operate in the form of an investment fund or an investment company incorporated in the Republic of Lithuania.
2. An investment firm intended to act according to this Law can be of the following legal forms:
3. Investment funds or investment firms may be of open-ended or closed-ended type, as defined in their incorporation instruments.
4. The procedure established in the incorporation transaction and applied of investment firms whose legal form is a general partnership or a limited partnership may differ from the procedure for making and/or returning contributions, or the procedure for the distribution of profit to participants of the general or limited partnership established according to the Law on Partnerships of the Republic of Lithuania.
Article 5. Activities of management companies of collective investment undertakings
1. When managing collective investment undertakings a management company of a collective investment undertakings (hereinafter – the management company) shall also carry out the management of the investment portfolio, and the management of related risks.
2. A management company may provide other additional services related to a collective investment undertaking where such services are provided for in the licence issued to the management company, and where the management company is engaged in the following principal activities:
1) administration: accounting, customer inquiries, computation of net assets, internal regulatory compliance monitoring, maintenance of unit and shareholder register, distribution of income, valuation and pricing, issuance and redemption of investment units, contract settlements, operations record keeping;
3) other activities related with the assets of the collective investment undertaking, such as provision of the services necessary to perform the functions of a management company, facilities management, real estate administration activities, advice to undertakings on capital structure, industry management and related issues, advice and services related to mergers and purchase of undertakings, as well as management of the assets of a collective investment undertaking, and the companies and other assets in which it has invested;
4) management of pension funds and portfolios of financial instruments of other persons, where the management company complies with the requirements of the laws governing pension accumulation activities or management of investment portfolios, and of other legal acts;
3. A management company providing the investment services referred to in Items 4 and 5 of para.2 of this Article, shall be mutatis mutandis subject to the requirements of Article 2(5) and Articles 12, 13 and 22 of the Law on Markets in Financial Instruments, and the implementing legal acts of the supervisory authority.
4. A management company can provide the services specified in Item 5 of para. 2 of this Article only provided the licence issued to it provides for a possibility to provide the services referred to in Item 4 of para. 2 of this Article.
5. An investment firm whose management has not been transferred to a management company, shall have a right to engage only in the activities specified in para. 1 and Items 1, 2 and 3 of para. 2 of this Article that are related to the management of an investment company.
6. A collective investment undertaking can have only one management company ensuring the compliance with the requirements of the present Law.
SECTION TWO
ISSUANCE OF THE LICENCE FOR A MANAGEMENT COMPANY, AND REGISTRATION OF THE MANAGEMENT COMPANY WITH THE SUPEVISORY AUTHORITY
Article 6. The right to engage in the activities of a management company
1. Only a private or a public company holding an appropriate licence issued by the relevant supervisory authority shall have a right to engage in the activities of a management company operating according to this Law. The relevant licence must be obtained prior to commencing to engage in the activities of a collective investment undertaking as set forth in this Law.
2. The collective investment undertakings established in the Republic of Lithuania can be managed by management companies established in other Member States according to the law of those Member States.
3. Financial brokerage firms or credit institutions operating according to a financial brokerage firm licence or the credit institution licence issued by the supervisory authority or a supervisory authority of another Member State, provided the licence of the credit institution authorises the credit institution to provide investment services, do not have to obtain a separate licence to provide investment services related to a collective investment undertaking, including the portfolio management or investment unit marketing services. Financial brokerage firms can directly or indirectly, publicly or privately market investment units or shares of a collective investment undertaking to investors only in the case and to the extent investment units or shares can be marketed according to this Law.
4. In case a management company has obtained a licence in another Member State, and the management company complies with the requirements of the legal acts adopted in the other Member State and transposing the requirements of Directive 2011/61/EU, such management company may operate in the Republic of Lithuania.
Article 7. Procedure for issuing the licence for a management company
1. A legal entity seeking to obtain a management company licence shall submit an application to the supervisory authority, in addition to the documents and information referred to in para. 2 of this Article.
2. In connection with the application the legal entity seeking to obtain a management company licence shall submit:
1) a curriculum vitae of each candidate to the position of the manager of the management company and the position of the person passing investment decisions certified by the signature of the candidate, specifying the date of its drawing up and other information certifying that the persons concerned comply with the requirements specified in this Law and other legal acts;
2) the information about the identity of the owners of the holdings of the management company, and the amount of the holding held by them. The data referred to in the present Item are submitted about the owners of the holdings of the management company. In case the owners of the holding of the management company are public companies or private companies, the applicant is required to disclose the data of the natural persons holding more than 10 % of the voting rights and/or the authorised capital of such companies; in case the owners of the holding of the management company are general or limited partnerships, the applicant is required to disclose the data of those participants-natural persons (in case the participants of a general or a limited partnership having the holding of the management company are public or private companies, the applicant is required to disclose the data of the natural persons holding in those companies more than 10 % of their voting rights and/or authorised capital);
3) an activity plan containing, inter alia, a description of intended areas of activities, of the organisational structure of the legal person, as well as the information about the legal entity, its participants, managers, operations, compliance with the capital and other prudential requirements;
5) the information about the arrangements to delegate part of own functions to another company in accordance with Article 14 of this Law;
6) the information about the investment strategies of the collective investment undertakings intended to be managed, including the types of the principal collective investment undertakings, in case the collective investment undertaking invest into other collective investment undertakings;
7) policy of the collective investment undertakings intended to be managed as regards the use of leverage;
8) information about the risk profile and other characteristics of the collective investment undertakings intended to be managed, including information about the Member States or third countries in which such collective investment undertakings are established or are expected to be established;
9) information on where the master collective investment undertaking is established if the collective investment undertaking is a feeder collective investment undertaking;
10) the instruments of incorporation of each collective investment undertaking the management company intends to manage;
11) the agreement with the future depository of the collective investment undertaking (provided such agreement has been concluded), the account manager, the person intending to provide administrative services, and other service providers whose services will have an essential impact upon the performance of the management company;
12) description of the procedure for the appointment of the depositary for each collective investment undertaking that the management company intends to manage, in accordance with Article 23 of this Law;
3. With a view to ascertaining that a legal entity complies with all the requirements provided for a management company in the present Law and the relevant legal acts of the European Union the Supervisory authority has a right to require additional documents and/or information related with the intended activities of the management company.
4. When a legal entity that had received a management company licence according to the requirements of the Law on Collective Investment, or an authorisation of a management company according to the Law on Collective Investment Undertakings Intended for Informed Investors applies regarding the issue of a management company licence according to this Law, the legal entity is not required to submit to the supervisory authority repeatedly the documents and/or the information which the legal entity had already provided when applying for the licence according to the Law on Collective Investment Undertakings, or for an authorisation of the management company according to the Law on Collective Investment Undertakings Intended for Informed Investors, provided the legal entity informs the supervisory authority that the content of such documents and/or information remains up-to-date.
5. In case a management company delegates certain management or administration functions to another company, the information about the delegation of the functions and the procedure for such delegation, as set forth in Article 14 of this Law shall be submitted to the supervisory authority in relation to applying regarding the issue of the licence.
Article 8. Refusal by a supervisory authority to issue a management company licence
1. The supervisory authority refuses to issue a licence for the management company if:
1) not all documents and/or information requested by the supervisory authority and specified in Article 7(2) of the present Article, or additional documents/information requested under Article 7(3) of the present Law have been submitted, or the requirement to eliminate the shortcomings has not been executed within the period set forth by the supervisory authority;
3) the documents and/or the information submitted by the management company does not comply with the requirements of this Law and the legal acts adopted on the basis thereof;
4) managers of the management company fail to comply with the requirements of this Law and the legal acts passed on the basis thereof regarding the impeccable repute, qualification or their professional experience;
5) there is a reason to consider that the selected depository will not be able to properly perform the functions as set forth by the present Law;
6) the supervisory authority has reasonable doubts regarding the efficiency of the process of risk management of the collective investment undertaking and its management company, or their compliance with the requirements of the present Law or the legal acts implemented thereby ;
7) there is a reason to believe that the close link between the management company and other natural or legal persons may interfere with the efficient performance of supervisory authorities;
8) the shareholders or members of the management company holding its qualifying holding are not fit and proper having regard to the necessity to ensure reliable and prudential management of the management company;
9) there is a basis to believe that efficient exercise of supervisory functions might be prevented by the legal regulation of natural persons or legal entity registered or incorporated in a third country with which the management company has close links, and its implementation;
2. Within three months of the receipt of complete information the supervisory authority shall notify the legal entity in writing whether or not the entity is issued the licence. The information is considered complete if the legal entity has submitted at least the information referred to in Items 1-4 and 6-9 of Article 7(2) of this Law. In special cases the supervisory authority may extend the period but for no more than additional three months. The information about such decision shall be notified no later than within three working days of the passing the decision.
3. A management company may start managing a collective investment undertaking having obtained the licence, but not earlier than 30 calendar days after having submitted any missing information referred to in Items 5, 10, 11, 12 and 13 of Article 7(2) of this Law, where such information or part of such information has been not been submitted in relation to the submission of the application of the licence.
4. Prior to issuing the licence the supervisory authority shall consult the supervisory authority of the other Member State regarding the issuance of the licence if:
1) the licence is issued to a subsidiary of another management company, a management company of a harmonised collective investment undertaking, or a financial brokerage firm, of an investment firm, of a credit institution or of an insurance undertaking licensed in another Member State; or
2) the licence is issued to an entity managed by a subsidiary of another management company, a management company of a harmonised collective investment undertaking, or a financial brokerage firm, of an investment firm, of a credit institution or of an insurance undertaking licensed in another Member State; or
3) the licence is issued to a company controlled by the same natural or legal persons as those that control another management company, the management company by a harmonised collective investment undertaking, an investment firm, a credit institution or an insurance undertaking licensed in another Member State.
Article 9. Initial capital requirements for a management company seeking or holding the licence
2. The initial capital of an investment firm whose management has not been delegated to a management company shall be at least EUR 300,000.
3. Where the value of the portfolios of collective investment undertakings managed by a management company exceeds EUR 250 million, the management company shall provide an additional amount of own funds. That additional amount of own funds shall be equal to 0.02 % of the amount by which the value of the portfolios of the collective investment funds exceeds EUR 250 million, but the required total of the initial capital and the additional amount shall not, however, exceed EUR 10 million.
4. A management company may be released from the obligation to provide up to 50 % of the additional amount of own funds referred to in para. 3 of this Article, if they benefit from a guarantee of the same amount given by a credit institution or a surety bond issued by an insurance undertaking established in a Member State. The management company shall submit the guarantee or the surety bond to the supervisory authority. The guarantee or the surety bond may be submitted also by a credit institution or an insurance undertaking in a third country where it is subject to prudential rules considered by the competent authorities as equivalent to those laid down in European Union law.
5. A management company or an investment company whose management has not been delegated to a management company, may cover any potential civil liability risk by own funds or third party liability insurance. For the purpose of insurance of the potential third party liability risk by a third party liability insurance a management company or an investment firm whose management has not been delegated to a management company shall comply with the rules set forth by the European Commission.
6. Where the management company also manages harmonised collective investment undertakings, the provisions of paras. 1, 2, 3 and 4 of this Article shall not apply.
7. The amount of the own funds held by the management company shall comply with the requirements established by the supervisory authority.
8. For the purpose of para. 3, all collective investment undertakings managed by management companies, including the collective investment undertakings for which one or more functions have been by the management companies delegated to another entity, but excluding the portfolios of collective investment undertakings whose management functions have been delegated to those management companies, shall be deemed to be the portfolios of the management companies.
Article 10. Change of the licence of the management company
1. Prior to the implementation of any essential changes that would change the information submitted according to Article 7 of this Law, also implementing other changes in the operations that may become material, the management company shall in advance, and within a reasonable period of time, though no later than within one month to the anticipated changes inform the supervisory authority thereof.
2. In case the supervisory authority decides to restrict or reject any anticipated changes in the operations, the supervisory authority shall notify the management company within one month of the receipt according to para. 1 of this Article. The term for the submission of the notification of the supervisory authority may be prolonged for a period of up to one month having notified the management company accordingly thereof.
Article 11. Procedure for the revocation of the licence for a management company
The supervisory authority shall have a right in the manner specified by laws to revoke the validity of the licence issued to the management company, if:
2) within 12 months the licence holder does not make use of the rights granted thereto by the licence, and has ceased the activity for more than six past months;
3) it becomes known that the licence holder has obtained the licence having submitted false data or information, or was seeking to obtain the licence while infringing laws and other legal acts of the Republic of Lithuania;
4) the licence holder no longer meets the requirements for being granted a management company licence;
5) the licence holder fails to fulfil its duties according to the relevant obligations, or there is evidence that the licence holder will not be able to do that in the future;
6) the licence holder no longer complies with the capital adequacy requirement if the licence also covers the discretionary portfolio management services indicated in Item 4 of Article 5(2) of this Law;
7) the licence holder has seriously and/or systematically infringed the requirements specified in the present Law, and thus has or can infringe the interests of the participants of the collective investment undertakings;
Article 12. Registration of a management company with the supervisory authority
1. The entities referred to in Article 2(2) of this Law shall all register with the supervisory authority.
2. For the purpose of registration the management company shall provide the supervisory authority the information about itself, the collective investment undertakings managed thereby and their investment strategy.
3. No less frequently than once in six months, also in view of any significant changes or within five working days from the receipt of a request to provide the information from the supervisory authority, the management company shall submit to the supervisory authority the information about the investment units or shares being marketed, the principal exposures and risk concentrations, so that the competent authorities could efficiently supervise the systemic risk.
4. In case the assets of collective investment undertakings managed by the management company exceeds the limits set forth in Article 2(2) of this Law, the management company shall without delay, and in any case no later than within five working days from the date of exceeding the threshold, notify the supervisory authority thereof, and no later than within 30 calendar days from the date of exceeding the threshold submit an application to issue the management company licence set forth by this Law.
Article 13. Requirements for the activities of management companies, and prudential requirements
1. A management company shall:
1) act fairly and professionally fulfilling the obligations assumed for the investor, and in accordance with the documents of incorporation of the collective investment undertaking and the management company, as well as the requirements set forth in this Law and other legal acts;
3) ensure that all participants of the collective investment undertaking comply with the requirements set forth for a professional investor in this Law and other legal acts, and, where necessary, without delay update the list of participants of the collective investment undertaking;
4) disclose to participants the information related to their investment or other information set forth in this Law;
5) have in place an organisational structure for the determination, prevention, management and monitoring of conflicts of interests able to segregate potentially incompatible tasks and duties of the management company, and ensuring avoidance of conflicts and interests between the management company and the collective investment undertakings managed thereby or the investors of the collective investment undertaking, between the collective investment undertaking managed by the management company or its investors and another collective investment undertaking or its investors; the collective investment undertaking or the investors of the collective investment undertaking and another customer of the management company; the collective investment undertaking managed by the management company or the investors or that collective investment undertaking, and a harmonised collective investment undertaking managed by the same management company or its investors; two customers of a management company. In case any conflict of interests appears, there must be all the structural organisational conditions in place enabling determination of such conflicts, prevention of their proliferation, and appropriate conditions created for managing and monitoring such conflicts of interests and notifying the investors thereof;
6) ensure that the persons passing the decisions regarding the management of the assets of a collective investment undertakings have appropriate qualification, experience and are of impeccable repute.
7) permanently control the performance of the essential management functions of the management company and the collective investment undertaking (hereinafter – control over the performance of essential functions), and no less frequently than once per year submit to the supervisory authority a report on the control of performance of essential functions;
8) comply with the risk identification, management and evaluation policy set forth by the supervisory authority of the collective investment undertaking, and carry out a revision of the related internal procedure regulations at least once per year;
9) when assessing the assets credit risk of a collective investment undertaking not to completely trust the credit ratings assigned by credit rating agencies according to Regulation (EC) No. 1060/2009 (hereafter – credit ratings) and rely on them automatically;
10) functionally and hierarchically separate the risk management function from the other functions of the management company, and at least once per year review whether or not the risk profile of the collective investment undertaking matches the size of the collective investment undertaking, the portfolio structure, the investment strategies and the objectives set forth in the documents of incorporation of the collective investment undertaking, the prospects and other documents defining the activities of the collective investment undertaking;
11) apply with respect to a collective investment undertaking which is a closed-ended type collective investment undertaking using a leverage a suitable system and procedures for the alignment of the investment strategy, liquidity profile and redemption policy.
12) periodically, however, no less frequently than once per 12 months, conduct stress test which enables to assess the liquidity of the collective investment undertaking and ensure the compliance with liquidity requirements, and submit the results to the supervisory authority;
13) ensure that administration and accounting procedures, control and safeguard arrangements for electronic data processing are sound and enabling an identification of all the parties to the transaction, the content, time and place of the transactions, and determine whether the assets are investment in compliance with the conditions specified in the documents of incorporation of the collective investment undertaking, and the requirements set forth in legal acts;
14) ensure that the documents related to the executed transactions, and the applications of the investors to acquire or redeem investment units, shares, or make or redeem contributions are retained throughout the period of activity of the collective investment undertaking and no less than five years from the termination of that activity;
15) ensure that, for each collective investment undertaking that they manage, appropriate and consistent procedures are established so that a proper and independent valuation of the assets of the collective investment undertaking can be performed in accordance with this Law and the instruments of incorporation of the collective investment undertaking, and that the price of the investment unit or a share of the collective investment undertaking are computed and notified to the investors in accordance with the provisions of this Law and the instruments of incorporation of the collective investment undertaking; .
16) provide to the supervisory authority any information requested thereby and required for the supervision of the collective investment undertaking and the management company;
17) comply with all the requirements stipulated in the present Law, other legal acts and the instruments of incorporation of the collective investment undertaking;
2. The management company shall not grant any preferential treatment for any investors, unless such preferential treatment is provided in the documents of incorporation of the collective investment undertaking.
3. The management company shall ensure that the collective investment undertaking complies with the operating requirements specified in the present Law.
4. Having regard to the nature, scope and complexity of the activities of the collective investment undertaking the supervisory authority shall monitor the appropriateness of the assessment of the credit risk of the management company, including the assessment of the use of references to credit ratings in the investment policy of the collective investment undertaking having regard to the requirements of Item 9 of para. 1 of this Article. If necessary, the supervisory authority seeks reducing the impact of such references with a view to ensuring that such credit ratings are less blindly relied upon.
5. Where a management company manages pension funds and/or portfolios of financial instruments of other persons according to Item 4 of Article 5(2), the management company may invest in the investment units or shares of the collective investment undertaking managed thereby only subject to advance consent of the customer.
6. In the cases when a management company may not ensure that a collective investment undertaking or any other entity acting on behalf of a collective investment undertaking complies with the requirements of the present Law, the management company shall immediately notify the supervisory authority, and in case the collective investment undertaking is registered in another Member State the management company shall notify the supervisory authority of that Member State.
7. In case the duties set forth in para. 6 of this Article are not being fulfilled, and there is no possibility to ensure compliance with the obligations, the supervisory authority shall have a right to require that the management company does not perform the functions of management of the collective investment undertaking, and in case the management company disagrees with the requirement or avoids fulfilling the requirement immediately, the supervisory authority can suspend or revoke the validity of the licence of the management company, or prohibit the activities of a management company established in another Member State or a third country.
8. Subject to the provisions of para. 7 of this Article, once the supervisory authority requests to suspend the activities of the management company marketing of investment units or shares of non-compliant collective investment undertakings in the Republic of Lithuania is prohibited.
9. Where organisational arrangements made by the management company to identify, prevent, manage and monitor conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to investors’ interests will be prevented, the management company shall clearly disclose the general nature or sources of conflicts of interest to the investors before undertaking business on their behalf, and develop appropriate policies and procedures.
10. The functional and hierarchical separation of the functions of risk management in accordance with Item 10 of para. 1 of this Article shall be reviewed by the supervisory authorities. When reviewing the supervisory authority shall comply with the principle that the management company shall in all cases be able to demonstrate that specific safeguards against conflicts of interest allow for the independent performance of risk management activities, and that the risk management process satisfies the requirements of this Article and is consistently effective.
11. The supervisory authority shall within no later than three working days inform the supervisory authority of the host Member State of the suspension or revocation of the validity of the management company referred to in para. 7 of this Article, or the prohibition of the activities of a management company established in another Member State or a third country.
Article 14. Rights of a management company to delegate part of its functions to another company
1. The management company has a right to delegate the performance of part of its functions to another entity authorised to provide other services; prior to the effective date of the agreement regarding the delegation the management company shall notify the supervisory authority thereof. The notification shall indicate the name of the entity intending to accept the delegated functions, and the list of the functions intended to be delegated.
2. Delegation of part of management functions may be only provided that:
2) the delegate (representative) has sufficient resources to carry out the tasks, and the persons who effectively conduct the business of the delegate must be of sufficiently good repute and sufficiently experienced;
3) where the delegation concerns portfolio management or risk management, it must be conferred only on undertakings which are authorised or registered for the purpose of asset management and subject to identical activity requirements. Where the conditions as specified above cannot be met, the functions related to portfolio or risk management may be delegated only subject to prior approval by the supervisory authorities of the management company. Such delegation is possible only provided the supervisory authority of the management company and the supervisory authority of the delegate and established in a third country have signed the agreements regarding cooperation and exchange of information;
4) the delegation of part of the functions does not or should not prevent an effective supervision of the management company, and does not impede or should not impede the activities of the management company and the management of the collective investment undertaking in the best interest of its investors;
5) the management company must be able to demonstrate that the delegate is qualified and capable of undertaking the functions in question, that it was selected with all due care and that the management company is in a position to monitor effectively at any time the delegated activity, to give at any time further instructions to the delegate and to withdraw the delegation with immediate effect when this is in the interest of investors.
4. No delegation of portfolio management or risk management shall be conferred on:
2) any other entity whose interests may conflict with those of the management company or the investors of the management company, unless such entity has functionally and hierarchically separated the performance of its portfolio management or risk management tasks from its other potentially conflicting tasks, and the potential conflicts of interest are properly identified, managed, monitored and disclosed to the investors of the collective investment undertaking.
5. The third party may sub-delegate any of the functions delegated to it provided that the following conditions are met:
2) the management company notified the supervisory authorities before the sub-delegation arrangements become effective;
6. The delegate of the functions may not sub-delegate the portfolio or risk management functions to entities referred to in para. 4 of this Article.
7. In case the delegate of the functions sub-delegates its functions to other entities, the delegate shall review the services provided by each sub-delegate on an ongoing basis.
8. The management company's liability towards the collective investment undertaking and its investors shall not be affected by the fact that the management company has delegated functions to a third party, or by any further sub-delegation, nor shall the management company delegate its functions to the extent that, in essence, it can no longer be considered to be the manager of the collective investment undertaking.
Article 15. Remuneration policy
1. A management company shall put in place a remuneration policy with respect to senior managers, and employees performing risk management and control functions.
2. Management company shall have remuneration policies and practices for the employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers, whose professional activities have a material impact on the risk profiles of the management companies or of the collective investment undertaking they manage.
3. The remuneration policy should be in line with and promote reliable and efficient risk management.
4. The remuneration policy should not encourage risk-taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the collective investment undertaking.
Article 16. Valuation of net assets
1. The value of net assets and the price of investment units or shares of a collective investment undertakings are determined at least once per year, having regard to the market price of the assets of the collective investment undertaking, following the rules on the valuation of net assets provided for in the documents of incorporation of the collective investment undertaking, or the assets valuation principles and methods recommended by association structures recognised in the market.
2. If the collective investment undertaking is of the open-ended type, such valuation shall also be carried out at a frequency that is both appropriate to the assets held by the collective investment undertaking and its issuance and redemption frequency. Valuation shall be carried out following the regulations approved by the European Commission.
Article 17. Requirements for the asset valuer of a collective investment undertaking
1. A valuer of assets of a collective investment undertaking may be:
1) external valuer – a property and business valuation company established in accordance with legal acts of the Republic of Lithuania and not related with the collective investment undertaking or the management company, and to which the management company delegates the property valuation functions;
2) the management company itself, provided that any conflicts of interests between the valuation of assets of the management company and the interests of the employees of the collective investment undertaking, the employees of the management company or other related and/or dependent persons are avoided. The management company shall ensure that the valuation task is functionally independent from the portfolio management and the remuneration policy.
2. An assets valuer may be also the depository, however, provided that the functional organisational structure of the depository allows separating the collective investment undertaking depository functions from the tasks carried out by the collective investment undertaking assets valuer, and provided that the participants of the collective investment undertaking are in advance, in writing or an equivalent form are notified of the selection of the asset valuer and the arising conflicts of interest.
3. In all cases the management company is responsible to the collective investment undertaking and its participants for the proper valuation of the assets of the collective investment undertaking, also calculation of the net asset value and the publication of such value. The persons referred to in Item 1 of para. 1 of this Article are liable to the management company for any loss suffered thereby through the fault of the asset valuer.
4. The persons referred to in Item 1 para. 1 of this Article may not delegate the functions of the valuation of the assets of the collective investment undertaking to any other entities.
5. The management company shall notify the supervisory authority about the asset valuer appointed according to Item 1 of para. 1 of this Article. The supervisory authority may require that a different assets valuer specified in Item 1 of para. 1 of this Article is appointed, in case in the opinion of the supervisory authority the asset valuer intended to be appointed does not have sufficient competence, professionalism, expertise or fails to comply with other requirements set forth in the present Law.
6. Prior to conducting the asset valuation the person specified in Item 1 of para. 1 of this Law shall submit the information demonstrating that the person concerned is able to perform the valuation functions efficiently.
7. The provisions of Article 14 (2), (3) and (4) of this Law shall mutatis mutandis apply to the delegation of the asset valuation functions to the persons specified in Item 1 of para. 1 of this Article.
8. Where the valuation carried our by the management company is incomplete, inaccurate or potentially failing to disclose the actual net asset value of the collective investment undertaking, the supervisory authority shall have a right to require from the management company that the valuation at the expense of the management company is verified by an independent asset valuer and/or the auditor.
CHAPTER III
INFORMATION PROVIDED TO INVESTORS
Article 18. Procedure for the provision of information to investors of the collective investment undertaking
1. Prior to commencing to invest the management company shall submit to investors of the collective investment undertaking:
1) a description of the investment strategy and objectives of the collective investment undertaking;
3) if the collective investment undertaking invests into other collective investment undertakings, a description of the types of assets in which the collective investment undertaking may invest, the techniques it may employ and all associated risks, any applicable investment restrictions, the circumstances in which the collective investment undertaking may use leverage, the types and sources of leverage permitted and the associated risks, any restrictions on the use of leverage, and nay collateral and asset reuse arrangements, and the maximum level of leverage that the management company is entitled to employ on behalf of the collective investment undertakings;
4) a description of the procedures by which the collective investment undertaking may change the investment strategy and/or the investment policy;
5) a description of the main legal implications of the contractual relationship entered into for the purpose of investment, including information on jurisdiction, on applicable law and on the existence or not of any legal instruments providing for the recognition and enforcement of judgements in the territory where collective investment undertaking is established;
6) the identity of the management company, the depository of the collective investment undertaking, all other service providers, and the description of their duties and the investors' rights;
7) a description of how the management company is complying with the requirements of additional own funds and/or third party liability insurance;
8) a description of any delegated management function and of any safe-keeping function delegated by the depository, the identification of delegates and any conflicts of interests that may arise from such delegations;
9) a description of the collective investment undertaking net asset valuation procedure and of the icing methodology for valuing assets;
10) a description of the collective investment undertaking liquidity risk management, including the redemption rights both in normal and in exceptional circumstances, and the existing redemption arrangements with investors;
11) descriptions of all fees, charges and expenses an of the maximum amounts thereof which are directly or indirectly borne by investors;
12) a description of how the management company ensures a fair treatment of investors and, whenever an investor obtains preferential treatment or the right to obtain preferential treatment, a description of that preferential treatment, the type of investors who obtain such preferential treatment and, where relevant, their legal or economic links with the collective investment undertaking or the management company;
15) the latest net asset value of the collective investment undertaking or the latest market price of the unit or share of the collective investment undertaking, in accordance with the methodology indicated in the present Law;
17) the identity of the prime broker and a description of any material arrangements of the collective investment undertaking with its prime brokers and the way the conflicts of interest in relation thereto are managed and the provision in the contract with the depositary on the possibility of transfer and reuse of collective investment undertaking assets, and information about any transfer of liability to the prime broker that may exist;
2. The management company shall inform the investors before they invest in the AIF of any arrangement made by the depositary to contractually discharge itself of liability, or any other changes in the liability of the depository.
Article 19. Periodically disclosed information on the collective investment undertaking
1. The management company shall on a regular basis update and make available to investors and the supervisory authority the following information:
1) the percentage of the collective investment undertaking’s assets which are subject to special arrangements arising from their illiquid nature
Article 20. Other information periodically disclosed by the management company
Any managing company managing collective investment undertakings established in the Republic of Lithuania or another Member State and using leverage, or marketing investment units or shares of collective investment undertakings using leverage shall, no less frequently than once per month update and make available to investors the following information :
1) any changes to the maximum level of leverage which the management company may employ on behalf of the collective investment undertaking as well as any right of the reuse of collateral or any guarantee granted under the leveraging arrangement;
CHAPTER IV
REQUIREMENTS FOR THE ANNUAL REPORT AND THE AUDIT OF A COLLECTIVE INVESTMENT UNDERTAKING
Article 21. Annual reports of a management company and the collective investment undertakings managed thereby
1. No later than within six months of the end of a financial year the management company shall provide the most recent annual report of each collective investment undertaking managed thereby and established in the Member State, and or each collective investment undertaking whose investment units or shares it markets in the European Union or the European Economic Area. The annual report shall be provided to the supervisory authority of the home Member State of the management company and, on request, the supervisory authority of the home Member State of the collective investment undertaking.
2. The annual report shall be provided to investors, on request. Where in accordance with the provisions of the Law on Securities the collective investment undertaking is required to make its annual report public, only additional information shall be provided to investors on request. The additional information may be also provided as an additional part of the annual information.
3. The accounting of the management company shall be managed and the set of financial statements shall be drawn up in accordance with laws of the Republic of Lithuania, other legal acts and the International Accounting Standards.
4. The accounting of the collective investment undertaking shall be managed and the set of financial statements shall be drawn up in the procedure set forth in laws of the Republic of Lithuania and other legal acts.
5. A management company with the head office registered in the Republic of Lithuania shall, in the manner and to an extent set forth by the supervisory authority, submit to the supervisory authority, the reports, in which, inter alia, it indicated the principal markets in which it trades on behalf of the collective investment undertaking it manages, and the principal exposures and concentrations of each collective investment undertaking.
6. An annual report of a collective investment undertaking shall specify:
1) in case the collective investment undertaking acts as an investment fund – a net assets statement, statement on changes in net assets, and the notes, and in case the collective investment undertaking acts as an investment firm the annual report shall contain the balance sheet, the income statement, the statement on changes in equity, the cash flow statement and the notes to the annual report;
4) the total amount of remuneration for the financial year, split into fixed and variable remuneration, paid by the management company to its staff, the number of beneficiaries and the share of the remuneration assigned in specific cases to the management company;
5) the aggregate amount of remuneration broken down by senior management and other employees whose actions have a material impact upon the risk profile of the collective investment undertaking;
6) in the cases where, in accordance with Article 31(1) of the present Law the collective investment undertaking controls the non-listed companies – the overview of the business development of such companies specifying any important events that have occurred since the end of the past financial year, the prospects for the company's future development and the information about the acquisition of own shares as set forth in the Law on Financial Statements of Entities of the Republic of Lithuania;
Article 22. Audit of a management company and the collective investment undertakings managed thereby
1. An audit of the management company is subject to the requirements specified in the Law on Audit, the Law on Financial Institutions of the Republic of Lithuania as well as in this Article.
2. The data of the set of the annual financial statements of a collective investment undertaking shall be audited. Having conducted an audit of a set of the annual financial statements of a collective investment undertaking the audit firm shall produce an audit opinion regarding the statements, and the report on audit. In the audit report the auditor shall provide the information whether the value of net assets was computed correctly, whether the assets have been invested in accordance with the instruments of incorporation of the collective investment undertaking, whether or not the efficiency of the approved measures for the control over the performance of essential functions and the investment risk distribution of the management company or an investment firm whose management has not been delegated to a management company and related to the collective investment undertaking, also shall list all identified infringements of this Law and other legal acts.
CHAPTER V
DEPOSITORY
Article 23. An obligation to transfer the assets to the depository and activities of the depository
1. The assets of a collective investment undertaking shall be held in custody at a single depository, the fact of whose appointment shall be recorded in a written agreement. Inter alia, the agreement shall discuss the exchange in information required for the depository to perform the functions assigned to it.
2. A valuer of assets of a collective investment undertaking may be :
1) a licensed credit institution authorised to provide investment services in the Republic of Lithuania or another Member State;
3. The depository of a collective investment undertaking established in the Republic of Lithuania or another Member State shall be established in the Member State of incorporation of the collective investment undertaking.
4. The depository of a collective investment undertaking established in a third country may be established in:
2) the Republic of Lithuania where the collective investment undertaking established in a third country is managed by the management company licensed in the Republic of Lithuania;
5. The depository of a collective investment undertaking established in a third country may be established in the third country where all the following conditions are met:
1) the location of the establishment of the depository complies with the requirements of para. 4 of this Article.
2) the depository is subject to effective prudential regulations including the minimum capital requirements ;regulations
3) the supervision exercised by the supervisory authority of the depository and the sanctions are equivalent to or even more stringent than established in the Republic of Lithuania, and their enforcement is effectively ensured;
4) the supervisory authority has signed with the supervisory authority of the depository regarding cooperation and exchange of information;
5) the Republic of Lithuania, in which the management company of a collective investment undertaking established in a third country is registered, and the other Member States in which the investment units and shares of a the collective investment undertaking established in a third country, have signed an agreement with the third country in which the depository is established, which fully complies with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and Capital, and ensures an effective exchange of information in tax matters including any multilateral tax agreements;
6) the third country where the depository is established is not listed as a Non-Cooperative Country and Territory by FAFT (Financial Action Task Force).
7) the conditions for the application of responsibility of the depository of a collective investment undertaking established in a third country are not less stringent than indicated in Article 27 of this Law, and the depository has clearly expressed its consent to comply with the requirements set forth in Article 25 regarding the delegation of the functions of the depository.
6. In addition to the other functions referred to in this Article the depository shall:
1) ensure that the sale, issue, repurchase, redemption and cancellation of units or shares of a collective investment undertaking are carried out in accordance with the applicable national law and the instruments of incorporation of the collective investment undertaking;
2) ensure that the value of the units or shares is calculated in accordance with the applicable national law and the instruments of incorporation of the collective investment undertaking, as well as the procedure set forth in Articles 16 and 17 of the present Law;
3) carry out the instructions of the management company unless they conflict with the applicable national law or the documents of incorporation of the collective investment undertaking;
4) ensure that in transactions involving collective investment undertaking assets any consideration is remitted to the collective investment undertaking within the usual time limits, as set forth by the agreement concluded with the depository or the relevant legal acts;
7. In performing the functions assigned to it the depository shall act honestly, fairly and in the best interests of the collective investment undertakings, and shall avoid any conflicts of interests, and in case of a rising threat of such, shall immediately notify the management company thereof. The depository may not use the financial instruments held by a collective investment undertaking, unless the depository receives prior general consent of the collective investment undertaking or its management company.
8. A depository shall not carry out activities with regard to the collective investment undertaking or its management company that may create conflicts of interests between the collective investment undertaking, the management company and itself, unless the depository has functionally and hierarchically separated the performance of its depository tasks from its other potentially conflicting tasks, and the potential conflicts of interests are properly identified, managed, monitored and disclosed to investors of the collective investment undertaking.
9. In case the supervisory authority disagrees with the assessment of the supervisory authority of another Member State regarding the venue of establishment of the depository of the collective investment undertaking, the supervisory authority with a request to take actions according Regulation (EU) No. 1095/2010 of 24 November 2010 of the European Parliament and of the Council establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ 2010 L 331, p. 84) (hereinafter – Regulation (EU) No. 1095/2010), the European Securities and Markets Authority, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
10. The depository ensures proper monitoring of cash flows of the collective investment undertaking, especially ensuring that all payments effective by investors or on their behalf in relation to acquiring investment units or shares of the collective investment undertaking are received, and that all funds of a collective investment undertaking are booked in the accounts opened on behalf of the collective investment undertaking, or on behalf of the management company operating in the name of the collective investment undertaking in the entity, or another entity of the same nature in a relevant market in which such accounts are required, provided the entity is subject to a prudential regulation and supervision corresponding the provisions of the European Union, and the implementation of such regulations is efficiently supervised.
Article 24. Legal regime of the assets held by the depository
1. In case of custody of financial instruments that can be registered in the accounts of financial instruments opened by the depository, the depository shall ensure that all the financial instruments concerned are booked in the financial instruments accounts opened by the depository in the name of the collective investment undertaking, or in the separate accounts opened in the name of the management company operating on behalf of the collective investment undertaking, following the principles set forth in Article 16 of Commission Directive 2006/73 of 10 August 2006 implementing Directive 2004/39 of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (OJ 2006 L 241, p. 26), to ensure that according to the applicable legal acts it is at all times possible to establish that they are owned by the collective investment undertaking.
2. For other assets, also in cases the depository holds the financial instruments that are physically delivered to the depository, the depository shall verify the rights of ownership of the collective investment undertaking or the management company acting on behalf of the collective investment undertaking with respect to such assets and the financial instruments concerned, and shall include the assets into its accounting. The verification of whether or not the assets are owned by the collective investment undertaking or the participants of the collective investment undertaking shall be conducted on the basis of the information and documents submitted by the management company, and, if possible and necessary, with reference to other evidence. All the information shall be on a regular basis updated.
Article 25. Right of the depository to delegate part of its functions to another company
1. The depository can delegate safekeeping of financial instruments and other assets of a collective investment undertaking or of the management company acting on behalf of the collective investment undertaking to other entities. The depository may not delegate any functions set forth in the present Law to any other entity.
2. The asset custody function of the depository may not be delegated with a view to avoiding the requirements of this Law or the relevant implementing legal acts.
3. The depository can delegate the asset custody functions to another entity only when the delegation is carried out for objective reasons.
4. When selecting another entity, delegating the asset safe-keeping function to such entity, periodically reviewing the performance of the asset safe-keeping function and monitoring the entity to which the functions have been delegated and the conditions of such delegation, the depository shall exercise all the due skill, care and diligence.
5. The depository shall ensure that the entity to which the asset custody function has been delegated at all times meet the following conditions:
1) the structure and the expertise of the entity are adequate and proportionate to the nature an complexity of the assets of the management company or the collective investment undertaking;
2) in the case of delegation of financial instruments, the entity concerned is subject to effective prudential regulation, minimum capital requirements, permanent supervision and external audit with a view to ensuring that the company is in possession of the financial instruments concerned;
3) the entity segregates the assets of the depository’s clients whose assets have been transferred to the depository, from its own assets and the assets of the depository in such a way that they can at any time be clearly identified as belonging to clients of a particular depository;
4) the entity shall not use the assets transferred for custody without having received prior consent of the collective investment undertaking, the management company or the depository;
6. Where the law of a third country requires that certain financial instruments be held in custody by a local entity and no local entities satisfy the delegation requirements set forth in Item 2 of para.5 of this Law, the depository may delegate its functions to that local entity only to the extent required by the law of the third country, and for as long as there are no local entities that satisfy the delegation requirements. The delegation is possible only in the case the participants of the collective investment undertaking are in advance and properly informed that such delegation is required due to legal constraints of the third country, and when the collective investment undertaking or the management company instructs the depository in writing to delegate the custody of such financial instruments to the local company specified.
7. The entity to which the depository has delegated the assets custody function may delegate the function to other entities provide such entities comply with all the requirements for the delegation of depository functions specified in this Law, and subject to consent of the depository. In that case, the provisions of this Article shall apply mutatis mutandis.
Article 26. Separation of the prime broker from the depository
1. The management company shall diligently, professionally, with due care select and appoint the prime broker and inform the depository about it.
2. In case the management company uses the services of the prime broker, the condition for the provision of such services shall be recorded in a written agreement. Such agreement shall at least specify the possibilities for the transfer and the use of the assets of the collective investment undertaking that are available according to the instruments of incorporation of the collective investment undertaking. The agreement shall also provide that the depository shall be notified of the conclusion thereof.
3. Managers and employees of the prime broker cannot be managers or employees of the depository providing custody for the assets of the collective investment undertaking and whose functions are directly related with the operations of the depository.
4. The prime broker may perform the functions of the depository only in the cases where the functional organisational structure of the prime broker allows separating the collective investment undertaking depository functions from the tasks and functions carried out by the prime broker, and investors of the collective investment undertaking have been in an adequate form notified of the selection of the depository and any conflicts of interest arising in that relation.
Article 27. Liability of the depository
1. The depository shall be responsible to the collective investment undertaking or participants of the collective investment undertaking for the financial instruments held in its custody or whose custody has been delegated to another entity.
2. In case of a loss of financial instruments held in its custody the depository shall without delay, but in any case no later than within 20 working days from the day the loss becomes known, return the financial instruments of the same type or the equivalent amount determined according to the market price of the financial instrument at the loss moment. The amount or the financial instruments shall be returned to the collective investment undertaking, or the management company acting on behalf of the collective investment undertaking.
3. In case the depository has been fulfilling its obligations under the present Law negligently or intentionally inappropriately, the depository shall compensate the collective investment undertaking and/or the management company for any loss or damage incurred thereby due to inappropriate fulfilment of the obligations.
4. The delegation of the assets custody functions to other entities does not release the depository from the liability.
5. Having transferred the financial instruments of the collective investment undertaking or of the management company acting on behalf of the collective investment undertaking to another entity, the depository may be released from liability if it can prove that the following conditions are met:
1) the depository has complied with all the requirements for the transfer of the assets set forth in this Law and other legal acts;
2) a written contract has been concluded between the depository and the entity to which the asset custody has been transferred regarding the transfer of the depository's liability to the entity to which the asset custody function has been delegated, and the collective investment undertaking, the management company acting on its behalf or the depository has a right to make a claim against the third party in respect of the loss of the financial instruments to the entity for which the custody over the assets of the collective investment undertaking has been delegated;
3) in each specific case the depository and the collective investment undertaking or the management company acting on behalf of the collective investment undertaking have concluded a written agreement regarding the release of the depository from liability specifying the objective reasons to apply the release from liability.
6. Where the relevant legal acts of a third country requires that certain financial instruments be held in custody in an entity established in that third country, and no local entity satisfy the task delegation requirements set forth in Item 2 of Article 25(2), the depository may be released from liability, as long as all of the following conditions are met:
1) the instruments of incorporation of the collective investment undertaking expressly allow for a possibility to release the depository from the liability subject to the conditions set forth in this paragraph:
2) prior to investment the investors of the collective investment undertaking shall be properly informed about a possibility to release the depository from the liability, and the circumstances justifying such release;
3) the collective investment undertaking or the management company operating on its behalf has instructed the depository to delegate the custody of such financial instruments to an entity established in the third country;
4) the depository and the collective investment undertaking or the management company operating on its behalf have concluded a written agreement expressly allowing such discharge from liability;
5) there is a written contract between the depositary and the entity established in a third country that expressly transfers the liability of the depositary to that entity and makes it possible for the collective investment undertaking, the management company operating on its behalf or the depository to make a claim against that local entity in respect of the loss of financial instruments.
7. The depository shall be released from the liability provided the depository is able to demonstrate that the loss has been incurred due to an external event that the depository could not reasonably control, and the outcomes of which would have been unavoidable despite any reasonable efforts (force majeure).
8. Having regard to the legal nature of the relations between the depository, the management company and the participants, the participants of the collective investment undertaking may require the depository to compensate the loss by applying to the depository directly or through the management company.
Article 28. Changing of the depository
1. A collective investment undertaking or the management company acting on behalf of the collective investment undertaking may change the depository only provided the supervisory authority has issued prior authorisation to that effect.
2. In case the depository fails to comply with the requirements of legal acts, to fulfil its obligation or fulfils its obligations inappropriately, with a view to ensuing the rights of investors of the collective investment undertaking the supervisory authority has a right to instruct the management company to change the depository.
CHAPTER VI
LEVERAGE
Article 29. Requirements for management companies managing leveraged collective investment undertakings
1. The management company shall set the maximum level of leverage which it may employ on behalf of each collective investment undertaking it manages, as well as the extent of the right to reuse collateral or guarantee that could be granted under the leveraging agreement.
2. When computing the level of the leverage the management company shall take into account:
4) any other interlinkage or relevant relationships with other financial institutions which could pose systemic risk;
3. The management company shall demonstrate to the supervisory authority that the leverage limits set by it with respect to each collective investment undertaking managed thereby are reasonable and that they comply with those limits at any time.
4. A managing company managing a collective investment undertaking employing leverage on a substantial basis shall make available information about the overall level of leverage employed by each AIF it manages, a break-down between leverage arising from borrowing of cash or securities and leverage embedded in financial derivatives and the extent to which the collective investment undertaking’s assets have been reused under leveraging arrangements to the supervisory authority of its home Member State.
5. That information shall include the identity of the five largest sources of borrowed cash or securities for each of the collective investment undertakings managed by the management company, and the amounts of leverage received from each of those sources for each of those collective investment undertakings.
6. The provisions of paras. (4) and (4) of this Article shall apply to management companies established in third countries shall apply to collective investment undertakings established in the Republic of Lithuania, or established in third countries but whose investment units or shares are marketed in the Republic of Lithuania.
Article 30. The functions of the supervisory authority when monitoring the actions of the management companies established in the Republic of Lithuania for the purpose of applying the leverage
1. The supervisory authority shall collect the data on the operations of management companies established in the Republic of Lithuania, and uses the data for the purposes of identifying the extent to which the high the use of leverage contributes to the build-up of systemic risk in the financial system, risk of disorderly markets and risk to the long-terms growth of economy.
2. For the purpose of assessing the risk referred to in para. 1 the supervisory authority cooperates with the supervisory authorities of other Member States, third countries or of financial markets of the European Union, and exchanges with them the information required for supervisory purposes.
3. The supervisory authority shall assess the risk that could potentially appear through the use by a management company established in the Republic of Lithuania with respect to a collective investment undertaking managed thereby.
4. With a view to ensuring the stability and integrity of the financial system the supervisory authority may impose limits to the level of leverage that a management company can employ, or any other restrictions over the management of the collective investment undertakings with respect to the collective investment undertakings managed thereby in order to limit the extent to which the use of leverage contributes to the build-up of systemic risk in the financial system, and risk of disorderly markets.
5. The supervisory authorities shall notify the intended measures as referred to in para. 4 of this Article to the European Securities and Markets Authority, the European Systemic Risk Board, and the supervisory authorities of the collective investment undertaking managed thereby no later than within 10 working days to the coming into effect of the decision regarding the application of the measure. The notice shall also present the information about the measure proposed, an indication of the reasons for its application, and the intended effective date of the relevant decision regarding its application.
6. In exceptional circumstances that could potentially cause actual threat for the interests of investors the supervisory authority may decide that the decision regarding the application of the proposed measures must come into effect before the end of the period of 10 working days referred to in para. 5 of this Article.
7. Where within 10 working days after the submission of the relevant notice to the European Securities and Markets Authority the supervisory authority does not receive any opinion of the European Securities and Markets Authority regarding the appropriateness of the measure proposed under para. 4 of this Article, the supervisory authority may start applying the measure.
8. In an event that the measures referred to in para. 4 of this Article have been already made effective, and the subsequently received opinion of the European Securities and Markets Authority claims that the conditions for the application of the measures have not been met, and/or that the measures are not appropriate, and/or the term for the validity of the measures is not appropriate, the supervisory authority shall suspend the application of the measures, or submit to the European Securities and Markets Authority an explanation why the measures concerned are still being applied disregarding the recommendations of the European Securities and Markets Authority.
CHAPTER VII
MANAGEMENT OF MANAGEMENT COMPANIES MANAGING COLLECTIVE INVESTMENT UNDERTAKING THAT ACQUIRE CONTROL OVER NON-LISTED COMPANIES OR CONTROL OVER ISSUERS
SECTION ONE
CONTROL OVER NON-LISTED COMPANIES
Article 31. Acquisition and loss of control over non-listed companies
1: Where a management company manages one or more collective investment undertakings which individually or jointly, on the basis of a control acquisition agreement, acquire control over a non-listed company, or in case a management company has entered into agreement with another management company pursuant to which the collective investment undertakings managed jointly by such management company acquire the control concerned, the management company shall notify of the takeover of the control:
2) shareholders of the company taken over and whose identity and addresses are known to the management company, or that can be provided by the non-listed company or the register to which the management company has or can obtain access;
2. The notifications shall specify:
2) the policy on the conflicts of interests especially arising between the management companies, the collective investment undertaking and the company taken over, including the information about the specific safeguards established to ensure that any agreements between the management company and/or the collective investment undertaking and the company taken over are concluded at arm's length terms;
3. The notifications shall also contain the information about the new distribution of the voting rights, the conditions under which the control was acquired (including the identity of the different shareholders involved, any natural person or legal entity entitled to exercise voting rights on their behalf and, if applicable, the chain of undertakings through which voting rights are effectively held), and the control acquisition date.
4. The management company shall disclose (in case the management company operates on behalf of the collective investment undertaking), or ensures that the collective investment disclose its intentions with regard to the future business of the non-listed company and the likely repercussions on employment, including any material change in the conditions of employment to the non-listed company and the employees of the non-listed company, whose identity and addresses are known to the management company, or that can be provided by the non-listed company or the register to which the management company has or can obtain access;
5. The management company shall submit to the supervisory authority the information about the funds used to acquire the securities of the non-listed company.
6. The notifications specified in this Article are made as soon as possible, and in any case no later than within 10 working days after the date on which the share of voting rights of the collective investment undertaking has reached the control acquisition threshold or exceeded or fallen below the relevant threshold, or the date on which the collective investment undertaking has acquired control over the non-listed company.
7. The provisions of the present Article do not apply when the non-listed companies are small or medium-sized companies as defined in the Law on Small and Medium-Sized Business Development, or when the non-listed companies are real estate companies with the purpose of purchasing, holding or administrating real estate.
8. The provisions of the present Article shall be mutatis mutandis applied to management companies managing collective investment undertakings acquiring control over an issuer.
Article 32. Restrictions on the disposal of the assets of controlled non-listed companies or issuers
1. Upon acquiring the control according to Article 31(1) of this Law, for 24 months of the acquisition of control over the company the management company shall be prohibited from:
1) distribute the company's assets under more favourable terms, reduce the capital, redeem the shares and/or acquire own shares of the company, or promote equivalent activity, instruct taking such actions as indicated in para. 3 of this Article;
2) vote in favour of a distribution, capital reduction, share redemption and/or acquisition of own shares by the company as described in para. 3 of this Article, where the management company has a right to vote on behalf of the collective investment undertaking at the management bodies of the company;
3) act directly or indirectly seeking to distribute the company's assets or reduce the capital of the company, or redeem shares and/or acquire the company's own shares as indicated in para. 3 of this Article. The management company shall under any circumstances use its best efforts to prevent the actions as specified above.
2. The provisions of this Article on capital reductions shall not apply on a reduction in the capital, the purpose of which is to offset losses incurred or to include sums of money in a non-distributable reserve provided that, following that operation, the amount of such reserve is not more than 10 % of the reduced capital.
3. For the performance of the requirements of para. 1 of this Law the management company shall be prohibited from:
1) carrying out any distribution to shareholders (including but not limited to the payments of dividends and share-related interest), made when on the closing date of the last financial year the net assets as set out in the company’s annual accounts are, or following such a distribution would become, lower than the amount of the subscribed capital plus those reserves which may be not distributed under the law or the statutes, in this case where the uncalled part of the subscribed capital is not included in the assets shown in the balance sheet, this amount shall be deducted from the amount of subscribed capital;
2) any distribution to shareholders (including but not limited to the payments of dividends and share-related interest) the amount of which would exceed the amount of the profits at the end of the last financial year plus any profits brought forward and sums drawn from reserves available for this purpose, less any losses brought forward and sums placed to reserve in accordance with the law or the statutes;
3) to the extent that acquisitions of own shares are permitted, the acquisitions by the company, including shares previously acquired by the company and held by it, and shares acquired by a person acting in his own name but on the company’s behalf, that would have the effect of reducing the net assets below the amount mentioned in Item 1.
4. The provisions of the present Article shall be mutatis mutandis applied to management companies managing collective investment undertakings acquiring control over an issuer.
Article 33. Acquisition of part of the capital of non-listed companies
1. When a collective investment undertaking acquires, transfers or holds shares of a non-listed company, the management company managing the collective investment undertaking concerned shall notify the supervisory authority of the share of the voting rights of the non-listed company held by the collective investment undertaking, whenever the share reaches or exceeds, in a decreasing order, the threshold of 10 %, 20 %, 30 %, 50 % and 75%.
2. The notifications shall also contain the information about the new distribution of the voting rights, the conditions under which the control was acquired (including the identity of the different shareholders involved, any natural person or legal entity entitled to exercise voting rights on their behalf and, if applicable, the chain of undertakings through which voting rights are effectively held), and the control acquisition date.
3. When computing a percentage shares of voting rights held by a collective investment undertaking account shall be taken not only of the voting rights directly held by the collective investment undertaking, but also indirectly managed shares that, inter alia, are managed by the companies controlled by the collective investment undertaking, and/or natural or legal entity acting in its own name, but for the interests of the collective investment undertaking, or the entity controlled by the collective investment undertaking.
4. The percentage of voting rights shall be calculated on the basis of all the shares to which voting rights are attached even if the exercise thereof is suspended.
5. The notifications specified in this Article are made as soon as possible, and in any case no later than within 10 working days after the date on which the share of voting rights of the collective investment undertaking has reached the control acquisition threshold or exceeded or fallen below the relevant threshold or at the date when the collective investment undertaking has acquired control over the non-listed company.
6. The provisions of the present Article do not apply when the non-listed companies are small or medium-sized companies as defined in the Law on Small and Medium-Sized Business Development, or when the non-listed companies are special purpose entities with the purpose of purchasing, holding or administrating real estate.
7. The duty to notify the acquisition of a holding of a non-listed company or of an issuer shall be mutatis mutandis subject to the provisions of Article 31(1) of this Law.
Article 34. Information of employees of a controlled non-listed company about the take-over of the control
1. The management company shall ensure that the managers of the company without delay, however, no later than within 10 working days from the date of the acquisition of control notify the representatives of the employees, and, where there are none, the employees themselves, without undue delay of the acquisition of control.
2. The management company shall ensure that the managers of the company submit, within no later than 6 months from the end of the financial year, a set of the annual financial statements of the company to the employees’ representatives or, where there are none, the employees themselves.
CHAPTER VII
THE RIGHT OF MANAGEMENT COMPANIES TO ENGAGE IN CROSS-BORDER ACTIVITIES
SECTION ONE
THE RIGHT OF MANAGEMENT COMPANIES LICENSED IN THE REPUBLIC OF LITHUANIA TO MANAGE COLLECTIVE INVESTMENT UNDERTAKINGS AND MARKET INVESTMENT UNITS OR SHARES OF COLLECTIVE INVESTMENT UNDERTAKINGS
Article 35. The right of a management company licensed in the Republic of Lithuania to market investment units and shares in the Republic of Lithuania
1. A management company licensed in the Republic of Lithuania has a right to market investment units or shares of a collective investment undertaking managed thereby and established in the Republic of Lithuania or another Member State to professional investors in the Republic of Lithuania, provided the supervisory authority has been in the manner set forth in this Law notified about an intention to market investment units or shares, and a consent notification has been received from the supervisory authority, and other conditions specified in this Article have been fulfilled.
2. A management company licensed in the Republic of Lithuania shall notify the supervisory authority of each collective investment undertaking established in the Republic of Lithuania or another Member State whose investment units or shares are intended to be marketed in the Republic of Lithuania. The submitted notification shall specify:
1) a programme of operations of the management company providing principal information about the collective investment undertaking whose investment units or shares the management company intends to market;
5) information on where the master collective investment undertaking is established if the collective investment undertaking is a feeder collective investment undertaking;
6) the information referred to in Article 18 of this Law about each the collective investment undertaking whose investment units or shares the management company intends to market;
7) the information about the measures used to prevent marketing of investment units or shares of a collective investment undertakings to non-professional investors, including the cases when the management company provides investment services with respect of the collective investment undertaking through independent entities.
3. The supervisory authority shall within 20 working days from the receipt of the documents and the information specified in para. 2 of this Article notify the management company of its consent or objection to starting marketing the investment units or shares of the collective investment undertaking in the Republic of Lithuania.
4. The supervisory authority may object to the marketing of investment units or shares of the collective investment undertaking in the Republic of Lithuania only in case the activities of the collective investment undertaking carried out by the management company do not or might not comply with the requirements set forth in this Law or other legal acts, or where the marketing of investment units or shares of the collective investment undertaking managed by the management company would infringe the interests of investors.
5. After the supervisory authority submits its consent to marketing investment units or shares of a collective investment undertaking, the management company may start marketing the investment units or shares of the collective investment undertakings in the Republic of Lithuania as of the date of the supervisory authority's notification.
6. Where a management company licensed in the Republic of Lithuania manages a collective investment undertaking established in another Member State, the supervisory authority shall notify of its consent to marketing investment units r shares in the Republic of Lithuania shall notify to the supervisory authority of the Member State of the collective investment undertaking.
7. The management company shall notify the supervisory authority of all intended changes in the submitted information in advance, however not later than one month before the change is to take effect. If, pursuant to a planned change, the management of the collective investment undertaking would no longer comply with this Law, the relevant competent authority shall inform the management company without undue delay that it is not to implement the change.
8. The management company shall without delay notify the supervisory authority of any unplanned change in the information provided according to this Article.
9. If a collective investment undertaking established in the Republic of Lithuania is a feeder collective investment undertaking, such collective investment undertaking shall have a right to market investment units or shares only when the master collective investment undertaking is established in the Republic of Lithuania or another Member State, and is being managed by a management company licensed in the Republic of Lithuania or another Member State.
10. In case the marketing of investment units or shares of a management company of collective investment undertaking licensed in the Republic of Lithuania is subject to the requirements of Article 31(1) of this Law, the management company licensed in the Republic of Lithuania shall additionally comply with the requirements set forth in this Article.
Article 36. Marketing in other Member States of investment units or shares of collective investment undertakings managed by a management company licensed in the Republic of Lithuania
1. A management company licensed in the Republic of Lithuania has a right to market investment units or shares of a collective investment undertaking established in the Republic of Lithuania or another Member State also in other Member States, provided:
1) before starting to market investment units or shares of a collective investment undertaking established in the Republic of Lithuania or another Member State, the management company submits a notification to a supervisory authority about each collective investment undertaking containing the information indicated in Article 35(2) of this Law;
2. before starting to market investment units or shares of a collective investment undertaking established in the Republic of Lithuania the management company licensed in the Republic of Lithuania shall indicate to the supervisory authority the Member State in which it intends to market the investment units or shares, also provide the information on the procedure for marketing investment units or shares of the before starting to market investment units or shares of the collective investment undertaking.
3. Within 20 working days of the receipt of the documents and information referred to in paras. 1 and 2 of this Article the supervisory authority shall communicate the notification to the supervisory authorities of the Member States in which the investment units or shares of the collective investment undertaking established in the Republic of Lithuania or other Member State are intended to be marketed.
4. Together with the notification the supervisory authority shall enclose a statement to the effect that the management company licensed in the Republic of Lithuania is authorised to manage a collective investment undertaking established in the Republic of Lithuania or another Member State with a particular investment strategy.
5. Having communicated the notification to the supervisory authorities of the Member States in which the investment units or shares of the collective investment undertaking established in the Republic of Lithuania or other Member State are intended to be marketed, the supervisory authority shall without delay notify of the submission of the complete required information the management company licensed in the Republic of Lithuania which may start, as of the notification receipt date, marketing the investment units or shares of the collective investment undertaking established in the Republic of Lithuania or other Member State in the host Member State.
6. In case a collective investment undertaking established in the Republic of Lithuania or another member State and managed by a management company licensed in the Republic of Lithuania is a feeder collective investment undertaking, the investment units or shares of such collective investment undertaking can be marketed in other Member States only provided the master collective investment undertaking is also an undertaking established in the Republic of Lithuania or another Member State and is managed by a management company licensed in the Republic of Lithuania or another Member State.
7. The supervisory authority shall be notified of all intended changes in the submitted information in advance, however not later than one month before the change is to take effect. Having noticed that as a result of a change the management of a collective investment undertaking established in the Republic of Lithuania carried out by the management company established in the Republic of Lithuania will no longer comply with the requirements set forth by this Law, the supervisory authority shall without delay inform the management company established in the Republic of Lithuania that it is not to implement the change.
8. The management company established in the Republic of Lithuania shall without delay notify the supervisory authority of any unplanned change in the information provided according to this Article.
9. If the proposed or implemented changes are acceptable to the supervisory authority and they do not affect the management of a collective investment undertaking established in the Republic of Lithuania or another Member State carried out by the management company established in the Republic of Lithuania, and the management company licensed in the Republic of Lithuania complies with the requirements set forth by this Law, the supervisory authority shall without delay notify the supervisory authorities of the host Member State of the management company of such changes.
10. The information referred to in paras. 1, 3, 4 and 9 of this Article must be presented in the English language.
Article 37. The right of a management company licensed in other Member State to market investment units and shares of collective investment undertakings in the Republic of Lithuania
1. A management company licensed in another Member State has a right to market to professional investors in the Republic of Lithuania investment units or shares of collective investment undertaking managed thereby, provided the supervisory authority has received from the supervisory authority of the Member State of the management company to the effect that a management company licensed in another Member State has been authorised to manage a collective investment undertaking established in the Republic of Lithuania or another Member State with a particular investment strategy.
2. Where the supervisory authority has clear and demonstrable grounds for believing that a management company licensed in another Member State has been or is conducting any actions contradicting the provisions of this Law, the supervisory authority shall notify the European Securities and Markets Authority and the supervisory authority of the Member State of the management company, and the supervisory authority of host Member States, providing the most specific information, and requests taking relevant actions to ensure that the management company licensed in another Member State markets the investment units or shares of the collective investment undertaking in the Republic of Lithuania without infringing the requirements of this Law.
3. In case the supervisory authority does not receive any response from the European Securities and Markets Authority and the supervisory authority of the Member State of the management company, and the supervisory authority of host Member States, may apply to them with a request to submit the information on the actions that have been taken, and the outcomes of such actions.
4. The information referred to in para. 1 of this Article must be presented in the English language.
Article 38. Conditions for the provision of services of management companies licensed in the Republic of Lithuania in another Member States
1. A management company licensed in the Republic of Lithuania shall have a right, directly or through a branch, to manage a collective investment undertaking established in another Member State, if the licence of the management company provides for a possibility to manage collective investment undertaking of the type.
2. A management company licensed in the Republic of Lithuania interning for the first time to manage a collective investment undertaking in another Member State, shall submit to the supervisory authority:
1) the information as to in which Member State the management company intends to manage the collective investment undertaking directly or through an established branch;
3. For the purpose of establishing a branch of a management company licensed in the Republic of Lithuania additionally shall be submitted the organisational structure of the branch, as well as the contact information of the registered office of the branch in another Member State and of the persons responsible for the management of the branch.
4. The supervisory authority shall, within 30 calendar days of the receipt of the documents referred to in para. 2 of this Article, or within 60 calendar days of the receipt of the documents referred to in para. 3 of this Article, submit all the documents to the supervisory authority of the host Member State of the management company licensed in the Republic of Lithuania. To the documents concerned the supervisory authority shall attach a statement to the effect that the management company has been licensed.
5. The transfer is conducted only provided the management of the collective investment undertaking carried out by the management company licensed in the Republic of Lithuania does and will comply with the provisions of this Law, and provided the activities of the management company complies with the requirements set forth in this Law.
6. The supervisory authority shall without delay notify of the transfer of the documents conducted in the manner specified in para. 4 of this Article the management company licensed in the Republic of Lithuania, which, having received the notification, may start providing the services in the host Member State of the management company.
Article 39. The right of a management company licensed in another Member State to provide services in the Republic of Lithuania
1. A management company licensed in another Member State shall have a right, directly or through a branch, to manage a collective investment undertaking established in the Republic of Lithuania, if the licence of the management company provides for a possibility to manage collective investment undertaking of the type.
2. The right may be granted to a management company licensed in another Member State only provided the supervisory authority of the management company licensed in another Member State has submitted to the supervisory authority the information and the documents referred to in Article 38(2), and, if relevant, in Article 38(3) demonstrating that the management company has been licensed.
Article 40. Conditions for the operations of the management companies licensed in the Republic of Lithuania and managing collective investment undertakings established in a third country
1. A management company licensed in the Republic of Lithuania has a right to manage collective investment undertakings established in a third country and whose investment units or shares are not marketed in the Republic of Lithuania and/or other Member States, if:
1) the supervisory authority and the supervisory authorities of the third country in which the collective investment undertaking is established cooperate and exchange information;
2. A management company licensed in the Republic of Lithuania has a right to market investment units or shares of collective investment undertakings established in a third country to professional investors in the Republic of Lithuania and/or other Member States, if:
1) the supervisory authority has concluded cooperation and information exchange agreements with the supervisory authority of the third country of the collective investment undertaking;
2) the supervisory authorities of the Republic of Lithuania and of the third country have concluded an agreement which fully complies with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and Capital, and ensures an effective exchange of information in tax matters including any multilateral tax agreements;
3) other Member States in which the management company licensed in the Republic of Lithuania intends to market investment units of shares of a collective investment undertaking established in a third country, and the third country in which the collective investment undertaking is established, have concluded agreements which fully comply with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and Capital, and ensures an effective exchange of information in tax matters including any multilateral tax agreements;
4) the third country where the collective investment undertaking is established is not listed as a Non-Cooperative Country and Territory by FAFT (Financial Action Task Force).
5) there are no obstacles preventing the supervisory authority from monitoring the activities of a collective investment undertaking established in a third country;
3. In case the supervisory authority of the Member State in which a management company licensed in the Republic of Lithuania intended to market investment units or shares of collectives investment undertakings established in a third country does not agree with the assessment by the supervisory authority of the application of Items 1 and 4 of para. 2 of this Articles, the supervisory authority of that Member State may refer the matter to the European Securities and Markets Authority which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
4. Before starting to market investment units or shares of a collective investment undertaking established in a third country in the Republic of Lithuania, the management company licensed in the Republic of Lithuania shall submit to the supervisory authority a notification about each collective investment undertaking whose investment units or shares the management company intends to market established in a third country. The requirements for marketing activities prescribed to the management company, as well as the rights and responsibilities having received a notification about each collective investment undertaking established in a third country managed by a management company licensed in the Republic of Lithuania whose investment units or shares the management company intends to market in the Republic of Lithuania are mutatis mutandis established in Article 35 of this Law.
5. Before starting to market in another Member States investment units or shares of a collective investment undertaking established in a third country a management company licensed in the Republic of Lithuania shall submit to the supervisory authority a notification about each collective investment undertaking established in a third country and whose investment units or shares the management company intends to market. The requirements for marketing activities prescribed to the management company, as well as the rights and responsibilities having received a notification about each collective investment undertaking established in a third country managed by a management company licensed in the Republic of Lithuania whose investment units or shares the management company intends to market in other Member States are mutatis mutandis established in Article 36 of this Law.
6. The supervisory authority shall inform the European Securities and Markets Authority that the management company has been authorised to market investment units or shares of the collective investment undertaking established in the third country in the Republic of Lithuania and/other Member States.
Article 41. Marketing in the Republic of Lithuania of investment units or shares of a collective investment undertaking established in a third country managed by a management company established in the Republic of Lithuania or another Member State
The supervisory authority may authorise a management company licensed in the Republic of Lithuania or another Member State to market to professional investors in the Republic of Lithuania investment units or shares of collective investment undertakings managed thereby and established in a third country, or of feeder collective investment undertakings established in the Republic of Lithuania or another Member State whose master collective investment undertakings are not established in the Republic of Lithuania and another Member State, if:
1) the management company complies with all the requirements except the procedure for the transfer the assets to the depository. In that case the management company shall ensure that one or more entities are appointed to fulfil the functions specified in Article 23 (6) and (10), and Article 24;
2) the supervisory authority has concluded cooperation and information exchange agreements with the supervisory authority of the third country in which the collective investment undertaking has been established;
3) the third country where the collective investment undertaking is established is not listed as a Non-Cooperative Country and Territory by FAFT (Financial Action Task Force).
4) there are no other legal obstacles preventing the supervisory authority from monitoring the activities of a collective investment undertaking established in a third country;
SECTION TWO
MEMBER STATE OF REFERENCE
Article 42. Member State of reference of a management company established in a third country
1. In order to manage and market in the Republic of Lithuania investment units or shares of a collective investment undertaking the management company established in a third country shall obtain a license issued by the Member State of reference.
2. In case a management company established in a third country intends to manage one or several collective investment undertakings established in the Republic of Lithuania, the Member State of reference for such management company shall be the Republic of Lithuania, and the supervisory authority shall be responsible for the appropriate monitoring of the management company, and the licence issue procedure.
3. If a management company established in a third country intends to manage several collective investment undertakings established in the Republic of Lithuania and other Member States, and does not intend to market the investment units or shares of the collective investment undertakings managed thereby in the Republic of Lithuania and/or other Member States, the Republic of Lithuania shall be considered the Member State of reference of the management company, if that is the State in which most of the collective investment undertakings managed by the management company are established, or the largest amounts of assets are managed.
4. In case a management company established in a third Member State intends to market investment units or shares of only one collective investment undertaking established in the Republic of Lithuania, and in the Republic of Lithuania only, the Republic of Lithuania shall be considered the Member State of reference of the management company concerned.
5. In the cases when a management company established in a third country has established a collective investment undertaking also in the Republic of Lithuania, the Republic of Lithuania may also be the Member State of reference of the management company.
6. Where a management company established in a third country intends to market investment units or shares of only one collective investment undertaking established in a third country, and in the Republic of Lithuania only, the Republic of Lithuania shall be considered the Member State of reference of the management company established in a third country.
7. Where a management company established in a third country intends to market investment units or shares of a collective investment undertaking established in the Republic of Lithuania or another Member State, however, in several Member States, the Republic of Lithuania may be considered the Member State of reference of the management company established in a third country, provided the investment units or shares of the collective investment undertaking are marketed in that Member State.
8. In the cases where a management company established in a third country manages a collective investment undertaking established in another Member State and whose investment units or shares are marketed in the Republic of Lithuania, the Republic of Lithuania may be considered the Member State of reference of the management company.
9. In case a management company established in a third Member State intends to market in the Republic of Lithuania and other Member States investment units or shares of only one collective investment undertaking, the Republic of Lithuania may be considered the Member State of reference of the management company concerned.
10. In case a management company established in a third Member State intends to market in the Republic of Lithuania investment units or shares of several collective investment undertakings established in the Republic of Lithuania or another Member State, the Republic of Lithuania is considered to be the Member State of reference, where the management company intends to develop in the Republic of Lithuania effective marketing of investment units or shares of mostly those collective investment undertakings.
11. In case a management company established in a third Member State intends to market in the Republic of Lithuania and other Member States investment units or shares of several collective investment undertakings established in the Republic of Lithuania only, the Republic of Lithuania may be considered to be the Member State of reference.
12. In case a management company established in a third Member State intends to market in the Republic of Lithuania or another Member State investment units or shares of several collective investment undertakings established in the Republic of Lithuania or another Member State, and investment units or shares of collective investment undertakings established in a third country, or market in the Republic of Lithuania and another Member State investment units or shares of several collective investment undertakings established in a third country, the Member State of reference may be the Republic of Lithuania where the management company established in the third county intends to develop in the Republic of Lithuania effective marketing of investment units or shares of mostly those collective investment undertakings.
13. In case a management company established in a third Member State intends to market investment units or shares of a collective investment undertaking established in a Member State in several Member States with the Republic of Lithuania among them, however, the collective investment undertaking is established not in the Republic of Lithuania, the Republic of Lithuania may be the Member State of reference provided effective marketing is intended in such Member State.
14. In case according to the provisions of this Article the Republic of Lithuania may alternatively be a Member State of reference, a management company established in a third country shall file a request to determine the Member State of reference to all Member State that according to the provisions of this Law can be its Member State of reference. Having received an application from a management company established in a third country and in cooperation with supervisory authorities of other Member States the supervisory authority jointly decides within 30 calendar days the Member State of reference for the management company established in a third country.
15. Having received according to Article 43(1) of this Law a positive or negative advice from the European Securities and Markets Authority the supervisory authority shall take a decision regarding the issue of the licence, and shall within no later than five working days notify thereof the management company established in a third country. The notification dispatch date shall be considered to be the date of information.
Article 43. Cooperation with the European Securities and Markets Authority when determining the Member State of reference
1. Where in the procedure and under the conditions set forth in Article 42 of this Law it has been determined that the Republic of Lithuania is the Member State of reference, the supervisory authority shall immediately, however, no later than within five working days inform of the decision the European Securities and Markets Authority, and request the European Securities and Markets Authority to submit the advice regarding the assessment. In its notification to the European Securities and Markets Authority, the supervisory authority shall provide the justification by the management company of its assessment regarding the Member State of reference and with information on the marketing strategy of the collective investment undertaking.
2. Where the supervisory authority disagrees with the determination of the Member State of reference by the management company, the supervisory authority concerned may refer the matter to the European Securities and Markets Authority which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
3. In case it has been established that the Republic of Lithuania is the Member State of reference, and the supervisory authority believes that the management company established in a third country infringes its obligations under the present Law, the supervisory authority shall within 10 calendar days notify the European Securities and Markets Authority thereof, setting out full reasons.
Article 44. Change of the Member State of reference of a management company established in a third country
1. The determination of the Member State of reference shall not be affected by the further business development of the management company in the European Union or the European Economic Area, unless the present Law specifies differently.
2. However, where the Member State of reference is the Republic of Lithuania, and the management company changes its investment unit or shares marketing strategy within 2 years of its initial authorisation, and that change would have affected the determination of the Member State of reference if the modified marketing strategy had been the initial marketing strategy, then based on the new strategy the management company shall immediately, but no later than within 10 working days notifies the supervisory authority about the change before implementing it, and shall indicate the proposed Member State of reference in accordance with the criteria set out in Article 42 of this Law.
3. Having decided that the selection of the management company under para. 2 of this Article is appropriate, supervisory authority shall immediately, however, no later than within five working days inform of the decision the European Securities and Markets Authority, and request the European Securities and Markets Authority to submit the advice regarding the assessment.
4. Having agreed with the assessment of the management company the supervisory authority shall inform the supervisory authority of the new Member State of reference about the change. The supervisory authority shall, without undue delay, transfer a copy of the authorisation and the supervision file relating to the management company to the new Member State of reference. From the date of transmission of the authorisation and supervision file, the supervisory authority is no longer responsible for the procedure and the licence of issuing the licence to the management company.
5. In case the supervisory authority disagrees with the determination of the Member State of reference proposed by the management company, or has received from the European Securities and Markets Authority negative advice regarding the selection of the new Member State of reference, the supervisory authority has a right to:
1) require the management company, having regard to the advice, to select another Member State of reference; or
2) disagree with the advice of the European Securities and Markets Authority. In that case the supervisory authority shall notify of its disagreement and the reasons thereto the supervisory authorities of the Member States in which the management company established in a third country intends to market investment units or shares of the collective investment undertaking managed thereby.
SECTION THREE
THE RIGHT OF THE MANAGEMENT COMPANIES ESTABLISHED IN A THIRD COUNTRY TO MANAGE COLLECTIVE INVESTMENT UNDERTAKINGS ESTABLISHED IN THE REPUBLIC OF LITHUANIA, AND MARKET INVESTMENT UNITS OR SHARES OF THE COLLECTIVE INVESTMENT UNDERTAKINGS MANAGED THEREBY TO PROFESSIONAL INVESTORS IN THE REPUBLIC OF LITHUANIA
Article 45. Operating conditions of management companies established in a third country and managing collective investment undertakings established in the Republic of Lithuania and/or marketing units or shares of collective investment undertakings for professional investors in the Republic of Lithuania
1. Before starting its activities a management company established in a third country and intending to manage collective investment undertaking established in the Republic of Lithuania, and/or market investment units or shares of the collective investment undertakings managed thereby in the Republic of Lithuania shall obtain a licence from the supervisory authority of its Member State of reference.
2. Where the Republic of Lithuania is the Member State of reference of the management company, the supervisory authority shall issue the licence if:
1) the management company established in a third country has an incorporated representative in the Republic of Lithuania who is also a representing person for the management company in the European Union or the European Economic Area, and any correspondence between the management company and other entities takes place through the legal representative;
2)a management company established in a third country intending to manage a collective investment undertaking and/or marketing investment units or shares of the collective investment undertaking complies with all the requirements set forth in this Law except Articles 36–39;
3) a management company established in a third country intending to manage a collective investment undertaking and/or marketing investment units or shares of the collective investment undertaking in the Republic of Lithuania, has in the procedure set forth in the Law and subject to the reservations of para. 7 of this Article, has filed an application for the licence;
3. On the basis of the regulatory technical standards developed by the European Securities and Markets Authority the supervisory authorities may decide that the management company established in a third country and/or the collective investment undertaking established in a third country and whose investment units or shares are marketed in the Republic of Lithuania is not in a position to comply with all the requirements for its activities, if the management company established in a third country can demonstrate that it is impossible to combine such compliance with the compliance with the regulatory requirements to which the management company established in a third country and/or the collective investment undertaking established in a third country is subject, however, the law to which the management company established in a third country and/or the collective investment undertaking is subject ensures the same level of protection to the investors, and that the management company and/or the collective investment undertaking established in the third country complies with the requirements of that law.
4. The supervisory authority shall immediately, however, no later than within five working days inform the European Securities and Markets Authority of the decision and the reasons for the decision, and request the European Securities and Markets Authority to submit an advice regarding the assessment.
5. A management company established in a third country and managing a collective investment undertaking established in the Republic of Lithuania shall have a right to market its investment units or shares in the Republic of Lithuania only having filed to the Member State of reference an appropriate notification about its activities, and having received the confirmation of the Member State of reference that the management company has been authorised to start marketing the investment units or shares. The procedure for the submission of the notification, and the any change in the information shall be mutatis mutandis subject to the provisions of paras. 2-11 of Article 36 of this Law.
6. A management company established in a third country and managing a collective investment undertaking established in the third country shall have a right to market its investment units or shares in the Republic of Lithuania only having filed to the Member State of reference an appropriate notification about its activities, and having received the confirmation that the management company has been authorised to start marketing the investment units or shares. The procedure for the submission of the notification, and the any change in the information shall be mutatis mutandis subject to the provisions of paras. 2-8 of Article 36 of this Law. The supervisory authority shall ensure a possibility to receive the information from the Member State of reference by electronic means.
7. A management company established in a third country and intending to manage a collective investment undertaking established in the Republic of Lithuania (if the Republic of Lithuania is the Member State of reference) shall communicate to the supervisory authority the information, the procedure for the communication and the content whereof are mutatis mutandis subject to the provisions of Article 38(2)–(6) of this Law.
8. The supervisory authority shall notify the European Securities and Markets Authority of its licence to manage collective investment undertaking.
9. The procedure for accepting, approval or objecting to any planned or completed information submitted according to the present Article shall be mutatis mutandis subject to the provisions of paras. 7–9 of Article 36.
10. A management company established in a third country shall be subject to the requirements stipulated in Items 6–13 of Article 7(2) of this Law regarding the submission of information to the collective investment undertakings established in the Republic of Lithuania and managed thereby, and to those collective investment undertakings managed by the management company established in a third country and whose investment units or shares are intended to be marketed having obtained the licence.
11. In case the supervisory authority or the supervisory authority of the third country in which the management company is established rejects a request to exchange information, the supervisory authorities concerned may refer the matter to the European Securities and Markets Authority which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No. 1095/2010.
12. Where the supervisory authority disagrees with the additional conditions imposed by the supervisory authority of another Member State upon the management company of a third country and licensed in another Member State, the supervisory authority concerned may refer the matter to the European Securities and Markets Authority which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
Article 46. The right of the management companies established in a third country to manage collective investment undertakings established in the Republic of Lithuania or other Member States
1. A management company established in a third country and holding the licence issued by the Member State of reference indicated in Article 45 of this Law shall have a right to directly or through an established branch manage collective investment undertakings established in the Republic of Lithuania, if the licence provides for a possibility to manage the collective investment undertakings of the type.
2. In case a management company established in a third country intends to manage collective investment undertakings established in other Member States, and the Republic of Lithuania is the Member State of reference, the management company established in the third country shall provide to the supervisory authority the information about the Member State in which it intends, directly or through an incorporated branch, to manage the collective investment undertakings established therein, and a programme of operations stating in particular the services it intends to perform and identifying the collective investment undertakings it intends to manage.
3. In case a management company established in a third country intends to manage a collective investment undertaking established in another Member State through a branch, in addition to the information required according to para. 2 of this Article, the management company shall submit the information about the organisational structure of the branch, the registered office in another Member State, names, surnames and contact data of the persons responsible for the management of the branch.
4. Within 30 calendar days from the receipt of all documents according to para. 2 of this Article, or within 60 calendar days from the receipt of all documents according to para. 3 of this Article, the supervisory authority shall submit the documents concerned to the supervisory authority of the host Member State of the management company. Such transmission of the documents shall occur only if the management of the collective investment undertaking carried out by the management company complies and will comply the requirements of this Law, and if the management company established in a third country otherwise complies with the requirements of this Law. The supervisory authority shall also submit a statement indicating that the supervisory authority has issued a licence to the management company established in the third country.
5. The supervisory authority shall without delay notify the management company established in the third country and the European Securities and Markets Authority of the transmission of the documents referred to in para. 4 of this Article.
6. The management company established in a third country shall notify the supervisory authority of all intended changes in the submitted information in advance, however not later than 30 calendar days before the change is to take effect. In case the supervisory authority considers that as a result of the changes the management of the collective investment undertaking carried out by the management company would not otherwise comply with the requirements of this Law, the relevant supervisory authority shall immediately inform the management company that it is not to implement the change. In other cases the supervisory authority shall immediately notify the supervisory authorities of the host Member State of the management company of the changes.
Article 47. Cooperation with the European Securities and Markets Authority regarding the operations of a management company established in a third country
1. In case the Republic of Lithuania is not the Member State of reference of a management company established in a third country, however, it disagrees with the issuance of the licence by the supervisory authority of the Member State of reference of the management company established in a third country to a management company established in a third country, the supervisory authority may apply with a request to take actions according to Regulation (EU) No. 1095/2010 to the European Securities and Markets Authority which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
2. In case the Republic of Lithuania is the Member State of reference, and the supervisory authority, acting in accordance with Article 45(3) of this Law, decided to issue the licence to a management company established in a third country, and the advice received according to Article 45(4) of this Law from the European Securities and Markets Authority is negative, the supervisory authority may grant a licence to the management company established in a third country, however, the supervisory authority shall notify the supervisory authorities of all Member States in which the management company established in the third country intends to market investment units or shares of the collective investment undertakings managed thereby.
3. In case the Republic of Lithuania is the Member State of reference, the supervisory authority shall notify the European Securities and Markets Authority of the outcomes of the licence granting process, any changes or revocation of the licence issued to a management company established in a third country, rejected applications to be granted the licence, the data on the management companies established in a third country and that have applied for a licence, and the reasons for the rejection of the applications.
4. The supervisory authority shall make all the efforts to comply with the guidelines and recommendations drafted by the European Securities and Markets Authority according to Article 16 of Regulation (EU) No. 1095/2010.
5. Within two months of the issuance of a guideline or recommendation of the European Securities and Markets Authority the supervisory authority shall confirm whether it complies or intends to comply with the guideline or recommendation. In case the supervisory authority does not comply or intend to comply with a guideline or a recommendation, it shall inform the European Securities and Markets Authority stating the reasons.
Article 48. The conditions for marketing investment units or shares of collective investment undertakings managed by a management company established in a third country to professional investors in the Republic of Lithuania
1. A management company established in a third country shall have a right to market investment units or shares of a collective investment undertaking managed thereby to professional investors in the territory of the Republic of Lithuania, provided the management company complies with the transparency and information disclosure to investors requirements, furnishes to the supervisory authority the annual reports referred to in Article 21 of this Law, and complies with the other requirements stipulated in this Article.
2. Marketing of investment units or shares of a collective investment undertaking managed by a management company established in a third country is possible only provided the supervisory authority, the supervisory authority of the third country of the management company, and the supervisory authority of the collective investment undertaking have concluded appropriate cooperation agreement in line with international standards, and for the purpose of the oversight of systemic risk, with a view to ensuring efficient information exchange thus enabling the supervisory authority of the respective Member State to carry out their duties according to this Law.
3. Where the supervisory authority or the supervisory authority of a third country rejects a request to exchange information, the supervisory authorities concerned may refer the matter to the European Securities and Markets Authority which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
4. The marketing in the Republic of Lithuania of investment units or shares of collective investment undertakings managed by a management company established in a third country is possibly only on the condition that the third country in which the management company and the collective investment undertaking are established is not listed as a Non-Cooperative Country and Territory by FAFT (Financial Action Task Force).
CHAPTER IX
OVERSIGHT OF THE DEPOSITORY AND MANAGEMENT COMPANIES
Article 49. Supervisory authority
1. The supervisory authority is responsible for the supervision of the management companies established in the Republic of Lithuania, and the supervision of the depositories of the collective investment undertakings established in the Republic of Lithuania. In the cases specified in this Law the supervisory authority shall be responsible for the supervision of the management companies and depositories of collective investment undertakings established in other Member States, however, only to the extent the activities of such undertakings need to be supervised and monitored due to the activities of the undertakings in the Republic of Lithuania.
2. In the cases when the Republic of Lithuania is the host Member State of the management company, and the management company established in another Member State or a third country manages the collective investment undertakings established in the Republic of Lithuania, and/or markets investment units or shares of the collective investment undertakings managed thereby through a branch, the supervisory authority shall be responsible for the compliance of the management company with the requirements of Article 13 of this Law.
3. In the cases when the Republic of Lithuania is the host Member State of the management company and the supervisory authority is satisfied that the management company that manages collective investment undertakings established in the Republic of Lithuania, and/or markets investment units or shares of collective investment undertakings managed thereby in the Republic of Lithuania, irrespective of whether or not the management is conducted through a branch, infringes the requirements of this Law, for the compliance with which the responsibility lies with the supervisory authority, the supervisory authority requires the management company to put an end to the infringing activities and inform the supervisory authority of the home Member State of the management company.
4. In case the management company refuses to provide to the supervisory authority the required information, or fails within an established term to put an end to a breach referred to in para. 3 of this Article, the supervisory authority shall inform the supervisory authority of the registered office of the management company.
5. Where, despite the measures enforced by the supervisory authority of the home Member State, or because the measures imposed were not sufficient, or because a specific measure could not be implemented, the management company continues to refuse to provide the information requested by the supervisory authority and continues infringing the requirements of legal acts of the Republic of Lithuania, the supervisory authority shall have a right, having informed the supervisory authority of the home Member State of the management company, take measures to prevent any further irregularities. For that purpose the supervisory authority has at its disposal all the measures provided for in legal acts of the Republic of Lithuania, including those referred to in Articles 51 and 55, and the right, to the extent necessary, to prevent the marketing of investment units or shares of collective investment undertakings in the Republic of Lithuania, and, if necessary, prevent the management company from concluding transactions in the Republic of Lithuania. In case the management company manages the collective investment undertakings established in the Republic of Lithuania, the supervisory authority shall have a right to require that the management company of the undertaking terminate the management of those collective investment undertakings.
6. In the cases when the Republic of Lithuania is a host Member State of the management company, and the supervisory authority has clear and demonstrable grounds for believing that the management company fails to comply with the requirements in relation to which they have no responsibility for supervising compliance, the supervisory authority shall notify the supervisory authority of the home Member Sate of the management company.
7. Where, despite the measures enforced by the supervisory authority of the home Member State, or because the measures imposed were not sufficient, or because the supervisory authorities of the home Member State failed to take actions within a reasonable time, the management company continues to engage in activities that are clearly prejudicial to the interests of investors of the collective investment undertaking, the financial stability or the integrity of the market, the supervisory authority shall have a right, having informed the supervisory authorities of the home Member State of the management company, take all appropriate measures needed in order to protect the investors of the relevant collective investment undertaking, the financial stability and the integrity of the market in the Republic of Lithuania. For that purpose the supervisory authority shall have a right to prevent further marketing of investment units or shares of the collective investment undertaking in the Republic of Lithuania.
8. The procedure laid down in paras. 7 and 8 shall also apply in the event that the Republic of Lithuania is a host Member State of the management company, and the supervisory authority of the host Member State have clear and demonstrable grounds for disagreement with the authorisation of a management company established in a third country by the Member State of reference.
9. In the cases when the Republic of Lithuania is the home Member State of the management company, and the supervisory authority receives from the supervisory authority of the host Member State of the management company a notification that the management company infringes the requirements the responsibility for supervising compliance with which lies according to Directive 2011/61/EU with the supervisory authority of the host Member State, and the management company refuses to provide the information to the supervisory authority of the host Member State or fails to take the necessary action to terminate the infringement the supervisory authority shall:
1) take all the appropriate measures provided for in legal acts required to ensure that the management company provides the information required by the supervisory authority of the host Member State of the management company, or puts an end to the breach;
2) request the necessary information from the supervisory authority of the host Member State of the management company;
10. In the cases when the Republic of Lithuania is the home Member State of the management company, and the supervisory authority receives from the supervisory authority of the host Member State of the management company a notification that the management company infringes the requirements the responsibility for supervising compliance with which lies with the supervisory authority, the supervisory authority shall take all the measures provided for in legal acts, including a request to the supervisory authorities of third countries to provide information.
11. Where the supervisory authority disagrees with the measures that the supervisory authority of another Member State has imposed according to paras 3–10 of this Article, the supervisory authority concerned may refer the matter to the European Securities and Markets Authority which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
12. The supervisory authority exercises its supervisory functions in accordance with this Law, the Law on Markets in Financial Instruments, the Law on the Bank of Lithuania of the Republic of Lithuania (hereinafter – the Law on the Bank of Lithuania), and has the rights and responsibilities prescribed for a supervisory authority in this and other laws of the Republic of Lithuania, also Regulation (EU) No. 345/2013 and Regulation (EU) No. 346/2013.
Article 50. Functions of the supervisory authority exercising the supervision of the depository and management companies
The supervisory authority shall:
2) provide interpretations and recommendations regarding the application of this Law and the implementing legal acts;
3) issue licences to management companies, suspend and revoke the licences, and apply other sanctions;
4) where the Republic of Lithuania is the Member State of reference, issue licences to management companies established in third countries;
5) verify whether shareholders of the management companies, and the managers of the the management companies comply with the requirements prescribed in this Law and other legal acts;
7) issue to the depository and the management company binding instructions concerning the elimination of the infringements of legal acts;
8) have a right in the manner set forth by laws of the Republic of Lithuania to receive the data about the persons that according to this Law must be of impeccable repute;
9) where necessary cooperate with other public authorities, supervisory authorities of other member States and third countries, and exchange with them the information required for supervisory purposes;
10) when requested by the supervisory authority of the host Member State of the management company in which the management company manages and/or markets investment units or shares of the collective investment undertaking, submit the information required for monitoring how the management company complies with the rules in relation to which the supervisory authority has responsibility for supervising compliance,
Article 51. Rights of the supervisory authority when exercising its functions
1. For the purpose of exercising the functions assigned to it the supervisory authority shall have a right to:
1)require to terminate any activity that infringes the provisions of this Law and other legal acts implemented by it;
2) require the depository and the management company to provide the information required for performing the functions of the supervisory authority with respect to the undertakings, including the management companies established in other Member States or third countries and managing collective investment undertakings established in the Republic of Lithuania, and/or marketing investment units or shares of the collective investment undertakings managed thereby in the Republic of Lithuania;
4) take any other measures required to to ensure that the management companies and the depository in all cases comply with the requirements stipulated in this and other legal acts;
5) require suspend the issue or redemption of investment units or shares, making or return of contributions if necessary to protect the interests of investors and the society;
6) suspend or withdraw the validity of the licence of the management company on the bases provided for in this Law;
7) initiate and/or allow auditors and experts to carry out investigations or inspections regarding the management company;
2. Upon a requirement of the supervisory authority the management company is obliged to provide the complete information required for the supervision of the management company and the collective investment undertaking.
3. In addition to the rights specified in para. 1 of this Article, the supervisory authority has the rights provided for in the Law on Markets in Financial Instruments.
4. For the purpose of the implementation of the functions delegated to it according to Regulation (EU) No. 345/2013 and Regulation (EU) No. 346/2013, the supervisory authority has the rights set forth in Items 1, 2, 4, 5 and 7 of para. 1 of this Law, and in Items 1, 2, 3,4, 7, 12, 13, 14 and 15 of Article 71(1) of the Law on Markets in Financial Instruments.
Article 52. The duty of members of the Board and other employees of the supervisory authority to protect confidential information
1. Members of the Board and other employees of the supervisory authority shall protect in the manner stipulated in the Law on Markets in Financial Instruments and the Law on the Bank of Lithuania any confidential information which they became aware of while performing the functions specified in this Law. The detailed content of confidential information shall be defined by the supervisory authority.
Article 53. The rights of the supervisory authority in relation to examining infringements of legal acts governing the operations of management companies
1. In order to determine whether the requirements set forth in the present Law and the other legal acts passed on its basis the supervisory authority shall have a right to organise and conduct, in accordance with the provisions of the present Law, the inspections of collective investment undertakings and management companies.
2. In performing inspections of a collective investment undertaking employees of a supervisory authority shall have the rights specified in Article 81(2) of the Law on Markets in Financial Instruments. For the purpose of exercising the rights as described above the supervisory authority may engage police officers.
3. Where the supervisory authority has reasons to suspect that the provisions of the present Law or of the legal acts implemented by it, and seeking to avoid material damage or irreparable outcomes to the interests of the society, investors and/or participants, the supervisory authority has a right to instruct to put an end to the activities pending the completion of the investigation and the passing of the decision regarding the suspected infringement. A decision by the supervisory authority to obligate to terminate the operations may be passed only subject to an authorisation from court. A court authorisation shall be obtained in the manner specified in Article 81(4) of the Law on Markets in Financial Instruments.
Article 54. Cooperation of the supervisory authority with other supervisory authorities
1. Personal data that the supervisory authority is obliged or intends to manage may be transferred to the supervisory authority of another Member State or the supervisory authority of third country in accordance with the provisions of the Law on Legal Protection of Personal Data of the Republic of Lithuania.
2. the adequacy of the protection secured by a Member State or a third country is assessed having regard to the circumstances related to the data transmission operation or operations, and the nature of the data, the purpose and the duration of a proposed management operation or operations, the state or states of origin and the destination, the provisions of general and sectoral laws and legal acts effective in the third countries, professional regulations and security measures effective in the State concerned, etc.
3. The supervisory authority shall disclose the information received from the supervisory authority of another Member State only provided the supervisory authority concerned has obtained express agreement of the competent authority which transmitted the information and, where applicable, the information is disclosed solely for the purposes for which that supervisory authority gave its agreement.
4. The data received from a third country, or a Member State or other supervisory authorities shall be retained for no longer than five years.
5. Having received a request to submit the necessary information from the supervisory authority of another Member State the supervisory authority shall reply to the request within 20 working days and request the information justifying the request.
6. For the purpose of the implementation of supervision the supervisory authority shall cooperate with the supervisory authorities of other Member States, also the European Securities and Markets Authority, and the European Systemic Risk Board
7. The supervisory authority may notify the European Securities and Markets Authority about the following requests of another Member State that were rejected or not fulfilled within a reasonable term:
8. Inter alia, the cooperation of the supervisory authority with other supervisory authorities shall be mutatis mutandis subject to the provisions of Section Two of Chapter X of the Law on Collective Investment Undertakings, unless the present Law clearly provides for a different procedure.
9. The supervisory authority uses its power for the purpose of cooperation also in the cases where the activity being investigated does not constitute an infringement of legal acts of the Republic of Lithuania. Where the supervisory authority has clear and demonstrable grounds for believing that a management company that is not subject to the supervision in the Republic of Lithuania is committing or has committed any action contracting the provisions of the present Law, the supervisory authority shall notify the European Securities and Markets Authority and the respective competent authorities of the home and host Member States of the management company providing the most specific information.
CHAPTER X
LIABILITY FOR INFRINGMENTS OF THE PRESENT LAW
Article 55. Sanctions imposed upon a management company and its managers
1. The supervisory authority shall have a right to impose the following sanctions upon management companies:
1) warn regarding deficiencies and infringement of legal acts and fix the term for eliminating such deficiencies;
3) prohibit from concluding transactions regarding the acquisition of investment instruments for a period no longer than three months;
4) suspend the sale or redemption of investment units, or proposals to make contributions or redeem them;
6) establish the term of validity of the licence of the management company to provide one or several services until there is a basis to have the licence suspended; upon the elimination of the basis, the supervisory authority shall immediately, but in any case no later than within 5 working days from the time it satisfied itself that there is no basis, renew the validity of the licence;
2. The supervisory authority shall have a right to impose the sanctions provided for in the Code of Administrative Violations of Law of the Republic of Lithuania upon managers of the management companies and other employees directly responsible for the compliance with the relevant legal acts.
3. Within respect to management companies that violated the provisions of Regulations (EU) No. 345/2013 or Regulation (EU) No. 346/2013 the supervisory authority shall have a right to:
2) impose, respectively, the sanctions indicated in Article 21(2)(b) of Regulation (EU) No. 345/2013, and in Article 22(2)(b) of Regulation (EU) No. 346/2013;
4. The supervisory has a right to impose with respect to a depositary of a collective investment undertaking the measures referred to in Items 1 and 2 of para. 1 of this Article.
5. The supervisory authority imposes sanctions upon a management company of a collective investment undertaking whose shares are traded publicly or there is a public offer to make contributions in violation of the requirements for the drawing up, approval and publication of the prospectus set forth in the Law on Securities in accordance with the provisions of the Law on Securities.
6. The supervisory authority may decide not to impose any sanctions in case an infringement is minor, the infringement does not incur any material damage, the violator has terminated its actions infringing the requirements of the legal acts, and eliminated the outcomes of the actions and indemnified the damage, and the compliance with the present Law may be secured in other ways.
7. The supervisory authority shall notify the administrator of the Register of Legal Entities, other institutions referred to in other legal acts and shall publish in its website the information about the issue of a licence, suspension or withdrawal of its validity. The supervisory authority shall communicate the information about the issuance of the licence, the suspension or revocation of its validity to the European Securities and Markets Authority.
Article 56. Basis for imposing sanctions
1. The supervisory authority may impose the sanctions provided for in the present Law in the presence of at least one of the following bases:
1) the management company failed to provide to the supervisory authority the required information or documents, or provided misleading or inaccurate information;
3) there has been an infringement of the laws of the Republic of Lithuania or legal acts of the European Union governing the activities of management companies or collective investment undertakings;
2. The supervisory authority shall impose sanctions in the procedure for the imposition of sanctions set forth in the Law on Markets in Financial Instruments and the Law on the Bank of Lithuania.
3. A decision to impose a sanction may be passed provided no more than 2 years have passed since the date of the infringement, and in case the infringement is continued or sustained the two years period shall be counted as of the date of the last infringement or the date of detecting the sustained breach.
Article 57. Monetary fines
1. Acting in accordance with the procedure set forth in the Law on Markets in Financial Instruments the supervisory authority shall have a right to impose the following fines:
1) for legal entities indicating that they operate or a collective investment undertaking managed thereby operated according to the present Law, however, not having a licence required by the present Law – the fine up to EUR 116,000;
2) legal entities publicly offering units of a collective investment undertaking, shares or offering making contribution without the licence required according to the present Law – the fine up to EUR 116,000;
3) management companies where the participants of the collective investment undertakings managed thereby are persons not compliant with the requirements for professional investors as specified in Article 3 of this Law, when the legal entity did not comply with the requirements of Article 13(1)(2) of this Law – the fine up to EUR 116,000;
4) legal not compliant with the prudential requirements set forth in Article 13 of this Law – the fine up to EUR 116,000;
5) legal entities not compliant with the rules on the disclose of information to investors set forth in Chapter III of this Law – the fine up to EUR 58,000;
6) legal entities that have infringed the requirements for the computation of net assets of a collective investment undertaking – the fine up to EUR 58,000;
7) legal entities not compliant with the other requirements set forth in the present Law and other legal acts of the European Union – the fine up to EUR 58,000;
8) legal entities that have failed to fulfil the instructions of the supervisory authority, provide to the supervisory authority the information set forth in this Law or preventing the supervisory authority or the persons authorised thereby to carry out investigations or verifications – the fine up to EUR 43,000. A fine of EUR 86,000 may be imposed for a repeated failure to act upon an instruction of the supervisory authority;
9) legal entities failing to fulfil the requirements of Regulation (EU) No. 1060/2009 – the fine up to EUR 57,924;
2. In case as a result of the commitment of the infringement referred to in Items 1-7 of para.1 of this Article a legal entity has generated any income, obtained other property benefit, avoided loss or incurred damage, and the amount of such income, other property benefit, avoided loss or damage incurred exceeded the amounts of the fines specified in the Items above, the supervisory authority shall have a right to impose a fine of up to double amount of the generated income, other property benefit, avoided loss or incurred damage.
3. The imposition of the fines as specified in para.1 of this Article does not release the managers and the employees of the legal entities from the civil, administrative and criminal liability provided for in legal acts of the Republic of Lithuania, also does not preclude the supervisory authority from considering an issue regarding suspension or withdrawal of licences or authorisations.
4. The supervisory authority shall at its internet website post a notice on an imposed fine or another sanctions specifying the reasons for such decision. The supervisory authority shall also have a right not to publish at its internet website the decision or the reasons for it in the cases where such publication would be of detriment to the financial market, prejudicial to interests of the investors or would cause a disproportional damage to the relevant stakeholders.
Article 58. The procedure for the implementation of decisions of the supervisory authority
1. The monetary fines shall be paid to the budget not later than within one month from the date the person concerned received the decision of the supervisory authority to impose the fine.
CHAPTER XI
FINAL PROVISIONS
Article 59. Application of the Law
1. The management companies that until 22 July 2013 were managing closed-ended type collective investment undertakings and since that date did not make any additional investment and which should be subject to the provisions of this Law, shall have to right to continue managing the closed-ended type collective investment undertakings up to the end of their validity term.
2. The management companies managing closed-ended type collective investment undertakings whose investment units and shares subscription period ended by 22 July 2013, and which have been established for a period no longer than until 22 July 2016, shall have a right to select to comply by only Article 21 of this Law, and, in case they acquire control or non-listed companies or issuers, also the provisions of Chapter VI of this Law.
3. The management companies established before the effective date of this Law shall within no later than two months from the effective date of this Law, submit to the supervisory authority an application to be issued a management company licence according to Article 7 of this Law.
Article 60. Coming into effect of the Law
2. The current version of Article 34(3), Article 38(1) and (2), Article 39(1) shall be effective until 2 July 2015.
3. The following version of Article 3(34) of this Law shall come into effect as of 3 July 2015:
'34. Host Member State of the management company of a collective investment undertaking intended for professional investors – a Member State in which the collective investment undertakings intended for professional investors are being managed, or in which investment units or shares of such collective investment undertakings are marketed, or the services referred to in Items 4 and 5 of Article 5(2) of this Law are provided, but which is not the home Member State of the management company, and in the cases the management company is not established in the European Union or the European Economic Area – a Member State which is not a Member State of reference.
4. The following version of Article 38(1) of this Law shall come into effect as of 3 July 2015:
'1. A management company that has received licence in the Republic of Lithuania may directly or through a branch:
1) manage a collective investment undertaking established in another member State provided the licence of the management company provides for a possibility to manage collective investment undertakings of the type;
5. The following version of Article 38(2) of this Law shall come into effect as of 3 July 2015:
'2. A management company licensed in the Republic of Lithuania that is for the first time intending to manage a collective investment undertaking established in another Member State and/or provide the services referred to in Items 4 and 5 of Article 5(2) of this Law, shall submit to the supervisory authority:
1)the information in which Member State it intends, directly or through a branch, to manage a collective investment undertaking and/or provide the services referred to in Items 4 and 5 of Article 5(2) of this Law.
6. The following version of Article 39(1) of this Law shall come into effect as of 3 July 2015:
'1. A management company that has received licence in another Member State may directly or through a branch:
1) manage a collective investment undertaking established in the Republic of Lithuania provided the licence of the management company provides for a possibility to manage collective investment undertakings of the type;
Article 61. Implementation of the Law
The supervisory authority shall pass the legal acts implementing the present Law.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
President Dalia Grybauskaitė
The Law on Management Companies
of Collective Investment Undertakings
Intended for Professional Investors
of the Republic of Lithuania
ANNEX
LEGAL ACTS OF THE EUROPEAN UNION BEING IMPLEMENTED
1. Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ 2009 L 302, p.1) with the amendments made by Regulation of the European Parliament and the Council (EU) No. 462/2013 (OL 2013 L 146, p. 1)
2. Directive 2011/61/EU of 8 June 2011 of the European Parliament and the Council on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OL 2011, L 174, p.1),with amendment made by Directive of 15May 2014 of the European Parliament and the Council 2014/65/EU on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OL 2014 L 173, p. 349)
3. Regulation (EU) No 345/2013 of the European Parliament and the Council of 17 April 2013 on European venture capital funds (OL 2013 L 115, p.1).
4. Regulation (EU) No 346/2013 of the European Parliament and the Council of 17 April 2013 on European social entrepreneurship fund. (OL 2013 L 115, p.18).
5. Directive 2013/14/EU of the European Parliament and of the Council of 21 May 2013 amending Directive 2003/41/EC on the activities and supervision of institutions for occupational retirement provision, Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) and Directive 2011/61/EU on Alternative Investment Funds Managers in respect of over-reliance on credit ratings (OL 2013 L 145, p. 1).