Limits for Fund Management Companies and Fundraisers
-Trading of investment shares in collective investment undertakings-
CMVM discloses the conditions and limits applicable to Management Companies (MC) and to the increasing use of fundraisers in the process of raising capital for Venture Capital Funds (VCF), under the legal regime of commercialisation and prospecting, issuing CIRCULAR 013/2023 following the publication of the Asset Management Regime and the Circular on Asset Management, in the past months of April and May respectively.
This new Circular underlines the responsibility of MCs in respect of the commercialisation and information provided about collective investment undertakings, recommending the execution completion of written agreements with the fundraisers, the purpose of which is limited to the mere referral of potential investors to the MCs, consequently prohibiting prospecting and commercialisation (pre-commercialisation), as well as advertising and promotion of collective investment undertakings.
It is worth noting the extension of the “appropriateness” requirement to venture capital companies, which should define and implement procedures for the assessment of the adequacy of knowledge and experience of the non-professional investors in relation to the investment in alternative investment undertakings whose units it commercializes.
Also, it is recommended that MCs implement procedures to ensure compliance with the regime applicable to public offers regarding the demand, requirements, and exemption situations for the submission of prospectuses, as well as the prior assessment and monitoring of the evolution of the units of closed-end OICs.
[Photo by: Lukas Blazek, available at unsplash.com]