• The risk control, liquidity and conflict of interest requirements of the managers are reinforced.
  • They will be able to grant loans or acquire invoices through debt funds to become an alternative to the banking channel.

The Council of Ministers has approved a Royal Decree that modifies the current Regulation that regulates Collective Investment Institutions (IIC). The rule complements the reform undertaken in November last year with Law 22/2014 on venture capital entities and on collective investment entities and managers. This Royal Decree completes the transposition of the Directive of Alternative Investment Fund Managers to set the framework of conditions for authorization, commercialization, rules of conduct and organization of this type of funds at European level. The objective of the regulatory change is to promote this type of investment as a source of direct financing for companies and thus reduce the high dependence on bank credit.

The main modifications are:

  • Legal regime of the IIC depositary. The functions of the depositary are clarified and the liability regime is regulated in detail in the event of loss of the custodial securities.
  • IIC marketing and cross-border management regime. The so-called passports to manage and market European and non-European investment funds by non-community managers, which will be effective after the adoption of the corresponding delegated acts by the European Commission.
  • Manager requirements. The structure and organization of the manager are detailed to guarantee risk control, liquidity control and avoid conflict of interest. The remuneration policy for managers is also regulated to make it more transparent and to guarantee optimal risk management. Finally, the requirements of the managers' own resources are equated with those of most EU Member States, up to the minimum required by the Directive, which will allow them to compete on equal terms with the managers of the rest of the EU.
  • Disclosure obligations. The reporting obligations of the management companies to the CNMV and to investors are increased.
  • Assets suitable for investment. In order that debt funds can be created as an alternative to bank financing, free investment IICs are allowed to invest in invoices, loans and commercial effects commonly used in the commercial sphere, and they are allowed to make loans . In these cases, risk control is strengthened and marketing to professional investors is restricted. Active commercialization of free investment IICs to qualified retailers is permitted, provided that a minimum outlay of € 100,000 is made and they provide written evidence that they are aware of the risks inherent in the investment.

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