Legislation

The Unit Trusts Act 1990 and Part XIII of the Companies Act 1990, brought in on 20 December 1990 and 1 February 1991 respectively, allow Irish unit trusts and open-ended investment companies to invest in futures and options, not just for hedging purposes but also as investments in their own right.

Authorization of Managed Futures Funds

Managed futures funds must be authorized by the Central Bank of Ireland and fulfil conditions including restrictions on investment, contents of their prospectuses, supervisory requirements and reporting requirements.

Funds for Professional Investors

The Central Bank may lift its investment restrictions in the case of funds which sell to professional investors only, and these are deemed to be funds which have a minimum subscription of IRf£ 200 000. Read more »

Posted: February 7th, 2008 under Future Fund, Future Investing.
Comments: 4

Selling Offshore Funds in Germany

This is governed by the Foreign Investment Fund Act of 1969 (the Act) which applies to funds whose shares are distributed to the public, in its widest sense, in Germany and which invest in securities or real estate with the aim of spreading investment risk.

As a result an offshore fund which invests in futures, and options and is specifically excluded from investing in securities or real estate falls outside the Act. This means that an offshore managed futures fund can be sold widely in Germany as long as it complies with the domestic marketing rules laid out in the Act against Unfair Competition.

`Securities‘ are not defined in the Foreign Investment Fund Act but are interpreted, under general principles, as meaning ‘transferable certificates’ of any sort. Thus, it is not the nature of the underlying instruments but the nature of the document representing the relevant instrument which needs to be considered. Since German futures contracts are not in fact transferable (because the contracts are traded on a back-to-back basis as in the US and the UK), they would not be considered to be securities. Read more »

Posted: February 7th, 2008 under Future Fund, Futures Contracts.
Comments: 3

Listing a FCIMT’s Shares

In theory a FCIMT’s shares can be listed on the Paris stock exchange but so far the decree needed to set out the conditions with which an application must comply has not been issued.

Advertising and the FCIMT

The rules on advertising FCIMTs are particularly strict. Article 23 of the 1988 law specifically prohibits advertising of any kind designed to raise subscriptions for shares in a FCIMT which invests in futures and options.

Financial canvassing, as defined in Law 72-6 of 3 January 1972, is also forbidden. The term includes going to visit people at their homes, businesses or in a public place on a regular basis to recommend, that they subscribe, purchase, exchange or sell shares or take part in share transactions. Writing or telephoning them or sending them circulars is also forbidden. Read more »

Posted: February 7th, 2008 under Future Fund.
Comments: 5

The Rules for Intermediaries

There are no requirements for an intermediary selling an offshore futures fund in Denmark to have a licence or other approval.

Legislation

There are no regulations for domestic managed futures funds in Finland and under the Investment Funds Act of 1987, Finnish funds generally are not allowed to invest in futures or options contracts. A revision of the Investment Funds Act is being worked on at the moment which would allow investment funds to invest in futures and options for efficient portfolio management purposes.

Selling Offshore Managed Futures Funds

The Investment Funds Act does not apply to offshore funds and consequently not to offshore managed futures funds and so the sale of such funds is subject only to compliance with the provisions of the Securities Market Act of 1989.

This regulates the marketing of shares; it prohibits, in particular, the giving of false or misleading information and requires that investors be given enough information for them to be able to judge the merits of an investment in a fund. Read more »

Posted: February 7th, 2008 under Future Fund, Future Investing.
Comments: 5

The Structure of Belgian Funds

The law refers to both open-ended and closed-ended investment funds, whether `fonds commun de placement’ (FCPs) which have a contractual form, or the corporate `societe d’investissement’. (A more detailed definition of FCPs is provided in the section on France.)

When formed, these funds have to choose one of seven categories of allowed investments. As individual categories, these include investments in futures and options contracts on commodities, or on securities, stock exchange indexes and currencies. This means that as yet, there is no regulation for a fund investing in all types of futures and options.

A royal decree is required for the provisions of the law relating to domestic futures funds to be implemented and, at the time of writing, there seems to be no particular pressure to get this decree adopted. The decree would provide for the setting-up of managed futures funds, but probably only in the corporate structure in view of the equal protection afforded to creditors under the bankruptcy law, which would apply to companies, but not to other types of fund structure. Read more »

Posted: February 7th, 2008 under Future Fund.
Comments: 6