Through Circular 4/2016 the Spanish Securities Market Authority develops the scope of the roles entrusted to the trustees of collective investment schemes, private equity companies and collective investment entities of a closed-ended type, as well as to establish the technical aspects necessary for the trustees to be able to perform their roles in an appropriate manner.
Previously, the obligation to appoint a trustee was required only in collective investment schemes of an open-ended type (“CIS“) under Act 35/2003 of 4 November on Collective Investment Schemes (“ACIS“). However, following the approval of Act 22/2014 of 12 November by which private equity entities, other collective investment entities of a closed-ended type and management companies of collective investment entities are regulated, and through which Act 35/2003 of 4 November on Collective Investment Schemes is modified (“Act 22/2014“), it is also applicable to management companies of collective investment entities of a closed-ended type subject to the general regime. In order words, those that exceed the thresholds set out in article 72 of Act 22/2014, that market to non-professional investors or that are below the aforementioned thresholds but voluntarily submit to the general scheme provided for in Chapter II of Title II of Act 22/2014 and communicate this to the Spanish Securities Market Authority (“SSMA“), shall designate a trustee for each entity that they manage through a written contract, whose legal framework and responsibility will be provided for in the aforementioned ACIS (article 50 of Act 22/2014).
Thus, the legislator decided to unify the trustee system for CIS and collective investment entities of a closed-ended type. Consequently, with the entry into force of Act 22/2014 the regulation applicable to the trustee is constituted by three elements, the first of which is articles 57 to 64 of the ACIS. The second is the new Title V of Royal Decree 1082/2012 of 13 July, by which Development Regulation of Act 25/2003 of 4 November on collective investment schemes is passed. Finally, on the basis of the principle of direct application, Delegated Regulation (EU) No 231/2013 of the Commission of 19 December 2012, supplementing Directive 2011/61/EU of the European Parliament and the Council concerning exemptions, general conditions of exercise of the activity, trustees, leverage, transparency and supervision, is also applicable.
As a matter of fact, on 12 July 2016 the SSMA Circular 4/2016 of 29 June on the roles of trustees of CIS and trustees of entities regulated by Act 22/2014 (the “Circular“) was published in the Official State Gazette. The Circular shall enter into force on 13 October 2016 and completes the regulation of trustees by developing (i) the roles of deposit, management and cash control, as well as the specifics and exceptions in the performance of these roles, and (ii) the technical aspects relating to the general regime applicable to the role of supervision and monitoring of the trustee, taking into account the specifics of the performance of said role in entities regulated by Act 22/2014.
The content of the Circular is highly technical and practical and is divided into 3 sections:
- The first section regulates the scope of application, covering both CIS trustees and trustees of entities covered by Act 22/2014
- The second section regulates the roles of custody, management and cash control, as well as the specifics and exceptions in the performance of these roles, applicable to the trustees of entities regulated by Act 22/2014 and CIS
- In the third section the technical aspects relating to the general framework applicable to the supervision and monitoring role, again taking into account the specifics of the performance of this role in entities regulated by Act 22/2014, are set out. In addition, for the purpose of unifying the regulations on trustees, the requirements contained in SSMA Circular 3/2009 of 25 March are incorporated. This Circular details the content of the six-monthly report on the role of supervision and monitoring of the CIS trustees, which is now repealed, the models contained in said Circular 3/2009 which detail the form and content of the reporting of incidents by CIS trustees being added as Annex A.
It should also be noted that the Circular (i) replaces the report model for investment funds as well as the statement of position model, both of which listed in Annexes 1 and 8 of the SSMA Circular 4/2008 of 11 September. This Circular discusses the content of the quarterly, six-monthly and yearly CIS reports and the statement of position, through the models contained in Annexes B and C of the Circular, and (ii) modifies certain aspects of the 7th Regulation of the aforementioned Circular 4/2008.
Finally, the Circular amends SSMA Circular 6/2008 of 26 November on the determination of the net asset value and operational aspects of the CIS, for the purposes of calculating their minimum coefficient cash flow, as well as the categories of liquid assets in which this can materialise.
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