Basic information

The rules governing collective investment, the activities and operation of management companies and foreign management companies in the territory of the Slovak Republic, the establishment and management of common funds, the activities of depositaries, the cross-border distribution of the unit certificates in common funds and securities of foreign collective investment undertakings, the protection of investors in collective investment schemes, the activities of other entities involved in collective investment schemes, and supervision in the field of collective investment are laid down in Act No 203/2011 Coll. on collective investment (hereinafter referred to as “the CIA”).

Collective investment means business activities whose purpose is to raise funds from investors in order to invest them in accordance with a predetermined investment policy, based on the principle of risk spreading and limitation, for the benefit of the investors.

A management company is a joint-stock company established in the territory of the Slovak Republic for the purpose of establishing and managing common funds or European funds under a licence granted by Národná banka Slovenska; it is registered in the Commercial Register.

The management of common funds is understood to mean managing investments in the common funds, administering the common funds, distributing unit certificates of the common funds, and promoting the common funds. Apart from establishing common funds and performing the activities mentioned in Article 27(2) of the CIA, a management company may perform the following services provided that they are included in its licence:

1. financial instrument portfolio management or investment management for funds established under a separate regulation;
2. investment consultancy;
3. custody and management of unit certificates issued by management companies and securities issued by foreign collective investment undertakings, including holder’s management, consisting at a minimum of the management of cash and financial collaterals.

A management company may not perform activities other than those permitted under the CIA and it may not perform an activity mentioned in Article 27(3)(b) or (c) of the CIA unless its licence includes these activities together with the activity mentioned in Article 27(3)(a) of the CIA.

Management company licences are granted by Národná banka Slovenska. They are granted for an unlimited period and may not be transferred to another entity, nor passed on to the legal successor of the management company.

A management company may issue shares only in the form of registered book-entry common shares.

The business name of a management company must include the designation “správcovská spoločnosť, akciová spoločnosť” or the abbreviation “správ. spol., a.s.”.

A management company may commence the activities stated in the licence only after the licensed activities have been registered in the Commercial Register and after the conditions stated in Article 30(4) of the CIA have been met.

A common fund is a fund consisting of common assets (held by fund unit holders) which a management company has raised through the issuance of unit certificates and their investments. The unit certificates represent the equity rights of fund unit holders.

A common fund is a collective investment undertaking which is not a legal entity and which is managed by a management company. Management companies establish common funds by issuing unit certificates.

The assets of a common fund comprise the common assets of its fund unit holders. A common fund’s assets are not included in the assets of the management company, nor are they subject to the provisions of Articles 136 and 137 of the Civil Code. Each fund unit holder may independently exercise his rights towards the management company.

A common fund may be established only on the basis of a licence granted in accordance with the CIA. A licence for the establishment of a common fund may only be granted after the management company has been established.

Every common fund must have its own fund rules. The fund rules constitute an integral part of the contract that each fund unit holder enters into with the management company. By acquiring unit certificates, the fund unit holder accepts the provisions of the fund rules.

A common fund may comprise two or more sub-funds, and in that case it is called an ‘umbrella fund’. A sub-fundcomprises a part of the assets and liabilities of the umbrella fund which for the purposes of accounting is separate from the rest. Each sub-fund must differ from other sub-funds of the same umbrella fund in one or more of the ways specified in the fund rules of the umbrella fund.

A unit certificate is a security that carries a fund unit holder’s right to a corresponding share in the assets of a common fund, and a right to a proportion of the returns on these assets. Unit certificates are issued for one or more units.

An open-ended common fund is a common fund in which the fund unit holders may redeem their unit certificates on request; it may be established for a definite or indefinite period.

A closed-ended common fund is a common fund in which the fund unit holders may not redeem their unit certificates on request; it is established for a definite period not exceeding ten years.

A standard common fund is a common fund in which money raised from investors (fund unit holders) on the basis of a public offering is invested in transferable securities and other liquid financial assets referred to in Article 88 of the CIA on the principle of risk spreading and limitation. The principle of risk spreading and limitation does not apply to a standard common fund, or sub-fund of a standard common fund, which is a feeder fund. All standard common funds are open-ended common funds.

A standard common fund that meets the conditions of the CIA is deemed to be a fund that meets the conditions of the European Union’s legally binding act governing collective investment.

A special common fund is a common fund which is not a standard common fund and in which money raised on the basis of a public or private offering is invested in assets specified in the CIA or in the rules of the special common fund. Special common funds are either open-ended common funds or closed-ended common funds.

The different types of special common funds are as follows:

1. public special funds:
   • special funds of securities,
   • special funds of alternative investments,
   • special funds of real estates,
2. special funds of professional investors, i.e. fund which raise money from professional investors through a private offering.

Every common fund must have a depositary. The depositary of a common fund ensures custody of the common fund’s assets and checks whether the management company is handling the common fund’s assets in accordance with the CIA.

The depositary of a common fund cannot be the management company or foreign management company which manages the fund.

A foreign management company is a legal entity which has its registered office in a country other than the Slovak Republic and which is licensed in that country to establish and manage collective investment undertakings. The branch of a foreign management company is an organisational unit of a foreign management company which is situated in the territory of the Slovak Republic; all the branches that a foreign management company based in an EU Member State establishes in the Slovak Republic are treated as a single branch in regard to their authorisation to conduct activities in the Slovak Republic.

A foreign collective investment undertaking may be either:

1. a foreign common fund, or
2. a foreign investment company.

A foreign common fund is a collective investment undertaking which is not a legal entity and which is established and managed by a foreign management company or by a management company referred to in Article 60(1) of the CIA in accordance with the law of the country in which the foreign common fund is established.

A foreign investment company is a foreign legal entity that is a collective investment undertaking according to the law of the country in which it has its registered office. A foreign investment company may be managed by a foreign management company or by a management company referred to in Article 60(1) of the CIA.

An open-ended foreign collective investment undertaking is a foreign collective investment undertaking which issues securities that may be redeemed by their owners on request.

A closed-ended foreign collective investment undertaking is a foreign collective investment undertaking which issues securities that may not be redeemed by their owners on request.

If a foreign collective investment undertaking meets the conditions laid down by the European Union’s legally binding act governing collective investment, it is deemed to be a European fund for the purposes of the CIA.