• The risk control, liquidity and conflicts of interest requirements of the management companies are reinforced.
  • They may 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 regulating Collective Investment Institutions (IIC). The rule complements the reform undertaken in November last year with Law 22/2014 of venture capital entities and collective investment entities and managers. This Royal Decree completes the transposition of the Directive of Managers of Alternative Investment Funds to set the framework for conditions of authorization, commercialization, rules of conduct and organization of this type of funds at European level. The objective of 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 case of loss of the securities held.
  • IIC marketing and cross-border management regime. The so-called are incorporated passports to manage and market European and non-European investment funds by non-EU managers, which will be effective after the adoption of the corresponding delegated acts by the European Commission.
  • Manager's requirements. The structure and organization of the management company is detailed to guarantee the control of risks, liquidity and avoid the 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 own resources of the managers are compared with those of most of the 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.
  • Information Obligations. The information obligations of the management companies to the CNMV and to the investors are increased.
  • Assets eligible to invest. 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 grant loans . In these cases, risk control is reinforced and its commercialization is restricted to professional investors. The active marketing of free investment IICs to qualified retailers is allowed, provided that a minimum disbursement of 100,000 euros is made and they record in writing that they know the risks inherent in the investment.



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