Portugal will soon have a legal diploma foreseeing and
regulating undertakings for collective investments in transferable
securities (Ucits) under statute through the form of securities
investment companies with variable capital (SICAV) and securities
investment companies with fixed capital (SICAF).
There is a legal void regarding investment companies, or more
precisely, as regards Ucits under statute, as Ucits were only
foreseen in Portuguese law under the form of contract (investment
funds), as common funds (no separate legal entities) managed by
According to the preamble of the project for the new law, the
decision - to provide a legal framework for Ucits under statute -
comes from the wide acceptance, encountered by foreign SICAV and
SICAF already marketed in Portugal, with Portuguese investors.
Providing Portuguese economical agents with the same instruments as
those available to foreign ones was also significant.
For these reasons, a legal diploma is being prepared, which will
regulate the creation of SICAVs and SICAFs. Alongside the specific
regulation, which is being prepared - the investment fund's law,
the Portuguese Companies Code and the Portuguese Securities Code
will be also applicable, as the general legal framework.
Furthermore, the preamble of the new law project highlights that
given the similar "functional identity", between contractual Ucits
and Ucits under statute, will require the creation of specific
rules in order to avoid the favouring of a competitive unbalance as
regards one of the types of Ucits. These rules will cover risk
diversification, asset valuation and regulation and supervision by
the Portuguese Securities Market Commission (CMVM).
In order to set up a Ucits under statute, an authorization
process with the Portuguese Securities Market Comission (CMVM) -
pursuant to consultation with the Bank of Portugal - will have to
be undergone. The Bank of Portugal will also control the capacity
and experience of the members of the corporate bodies. Only
pursuant to the CMVM authorization (and Bank of Portugal
consultation) can the Ucits under statute be incorporated.
All alterations to the by-laws and management regulation of the
Ucits under statute must be previously approved by the CMVM.
The authorization process will be conducted by especially
designated persons called promotores who will assume the
responsibility set out in the new law project.
The preamble of the new law project also points out that by
being more specific than investment funds the investment companies
require special regulation on two aspects:
At a corporate level - unlike investment funds, investment
companies are legal entities, under the form of corporations
(sociedade anónima), and therefore all corporate aspects need to be
At a management level - as regards investment funds there is a
complete split between managers and management beneficiaries, as
regards investment companies that split is not so defined because
managers are at the same time beneficiaries, or at least have the
capacity of electing them.
Given the possibility of investment companies being
self-managed, the law qualifies them as financial intermediaries,
and therefore subjects them to the Portuguese Securities Code, in
order to ensure the thoroughness, competence, as well as the human
and technical means and the diligence patterns to which investment
fund management companies are subject.
Ucits under statute are supervised by the CMVM, which also
regulates the carrying out of their activity under a series of
aspects enumerated in the new law.
Sofia Gouveia Pereira