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Portuguese Securities Investment Companies for Economy Improvement (SIMFE) - News


The legal regime of Portuguese Securities Investment Companies for Economy Improvement – more commonly known as SIMFE- has been amended once more.

Created under Decree-Law no. 77/2017, as of June 30, the legal framework that governed the incorporation and activity of the SIMFE had already been amended by the Decree-Law no. 56/2018, as of July 9, with a view to adjust the minimum investment limit for these companies and to define which elements of the registration request had to be communicated to the Portuguese Securities and Exchange Commission (CMVM).

Decree-Law no. 19/2019, enacted on the 28th of January and with effect from 1 February 2019 onwards, intends to tackle some doubts on the scope of the Legal Regime of Collective Investment Schemes (RGOIC) with regards to SIMFE that manage assets below the threshold referred in article 9(2) of Decree-Law no. 77/2017.

Accordingly, all SIMFE that manage assets below the EUR 100,000.00 threshold (for SIMFE whose portfolio includes leveraged assets) or the EUR 500,000.00 threshold (for SIMFE whose portfolio does not include leveraged assets nor are assets subject to reimbursement rights that may be exercised for a period of five years as of the initial investment) it is thereby clarified that some RGOIC rules foreseen for collective investment schemes organized as companies and self-managed are equally applicable to these SIMFE, provided that such rules do not go against the SIMFE’s legal regime.

Hence the following provisions are deemed applicable:

        (i)        Chapter I (general provisions applicable to all types of collective investment schemes), chapter III (amendments such as mergers, demerges, transformations, winding-ups and liquidations of collective investment schemes), chapter IV (provisions targeting specifically collective investment schemets organized as companies) and chapter V (rules governing closed collective investment schemes), all belonging to title I of the diploma;

        (ii)        Article 19(4) of chapter II, title I, whereas the relevant incorporation dates for SIMFE are defined;

        (iii)       Article 66 (covering the role of the management entity of the collective investment scheme), article 73 (on the duty to act upon the participants’ best interests), article 74 (on the duty of care), article 76 (on outsourcing) and article 88 (about archive duties) all under title II of the diploma;

        (iv)       Article 139, which lists the SIMFE’s costs and revenues;

        (v)        Article 241 (establishing the supervision competencies of the relevant authorities), article 243 (on the possibility of temporary compliance waiver of supervision requirements) and article 254 (granting powers to the supervisor to further regulate SIMFE’s topics) all belonging to title III; and, finally,

        (vi)       Title V, therefore extending the administrative offences regime of the collective investment schemes to SIMFE.

Finally, it should be noted that the Portuguese Securities and Exchange Commission (CMVM) the SIMFE’s supervisory authority, has launched a public consultation on the Regulation Project on SIMFE (under Public Consultation no. 10/2018). This public consultation – which remains open for any interested party until the 12th of February – asks the public to examine and comment on the regulation project addressing the minimum content of the internal regulation that each SIMFE needs to submit to the Portuguese Securities and Exchange Commission (CMVM) for registration purposes.

Furthermore, this regulation project states that the reporting information rules applicable to venture capital company (as established in CMVM Instruction no. 8/2016) are also applicable to SIMFE’s reporting obligations. Accordingly, this regulation enables a SIMFE to use a system that is already put in place for a very similar purpose, thus complying with its annual reporting obligations on the main instruments traded by such SIMFE, its risk positions and any relevant risk concentration of its own portfolio.

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Inês Palma Ramalho