Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Investment funds sector in Poland Mirosław Jeżowski

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Legal basis – EU level (UCITS) Council Directive 85/611/WE (UCITS) Commision Directive 2007/16/UE implementing Council Directive 85/611/WE (eligible assets)

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Legal basis – national level (UCITS, non-UCITS) Act on Investment funds [non-exhaustive list, simplified titles] o Regulation on the business conduct of the management companies that manage individual portfolios o Regulation on current and periodic reports of the management funds and investment funds o Regulation on internal control, list of transactions, prevention of the conflicts of interest and documents being the base for investment decisions in the management companies o Regulation on the scope of prospectus and simplified prospectus of the open-end ans specialized open-end fund [soon KID] o Regulation on agreements on derivatives in open-end funds o Regulation on liquidation of the investment funds o Regulation on the criteria of the cost of distribution used to calculate the capital requirements of the management company o Regulation on the conditions applicable for money market funds

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Act on investment funds Article 1. This Act defines the rules for the creation and operation of investment funds registered in the Republic of Poland and the rules according to which foreign funds and foreign management companies may operate in the Republic of Poland.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Act on investment funds 5 Scope of the regulation Foreign funds Foreign management companies Investment funds registered in the Republic of Poland

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 6 Supervision of investment funds 31 employees working in 3 Units responsible for licensing and supervision over investment funds Financial Services Licensing and Functional Supervision Department Capital Market Supervision PFSA Closed-ended Investment Funds Licensing Unit Supervision over the Investment Funds Unit Open-ended Investment Funds Licensing Unit

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 77 Supervision of investment funds 50 management companies managing 417 investment funds (out of them 49 umbrella funds with 298 subfunds)

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 8 Investment funds sector in numbers

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 9 Investment fund environment Management Company Specialised open-end investment fund Closed-end investment fund Open-end investment fund units investment certificates

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 10 Investment fund activities Portfolio manager Management company Investment fund DepositoryUnitholder asset management Register of assets units (shares)

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 11 Investment fund environment Portfolio Management Services Provider Asset Valuation Services Provider Bookkeeping Services Provider Transfer Agent Depositary Management Company InvestmentFund

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 12 Investment fund - definition legal person its sole business is investing funds raised from investors in securities, money market instruments and other property rights is not a subsidiary of management company licensing process: MC provides the fund with the articles of association, MC concludes an agreement with the depositary, MC files an application with PFSA to create investment fund, PFSA grants an authorisation to create a fund MC collects payments to the fund Fund is entered in the register of investment funds kept by the registry court – the fund is given a legal personality

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 13 Management company a joint-stock company with a registered office in Poland faces necessary initial capital requirements of at least an equivalent in PLN of EURO creates investment funds, manages them and represents in relation with third parties must employ authorised investment advisors has special requirements with respect to: members of management board and supervisory board has organisational requirements: internal control unit, internal audit, compliance unit, risk management system, IT and technical requirements faces tight restrictions on trading for own account is liable to investors for any damage caused by non-performance or undue performance

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 14 Depositary Depositary can be a bank or branch of a credit institution whose equity amounts to at least PLN depositary's responsibilities include (above all) maintaining the register of the fund’s assets ensuring that units/certificates are sold/issued and redeemed in compliance with the law, ensuring that any transactions are settled without undue delay, monitoring timely settlement of agreements with investors, ensuring that NAV of the fund and the value of each unit is calculated in accordance with all applicable laws depositary has a function of a „second pair of eyes” - shall act independently of management company and in the interest of investors 10 entities acting as a depositary

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 15 Other entities Transfer agent Responsibilities include (above all) maintains register of investors, converts investors’ payments into fund’s units and calculates redemption proceeds, 9 entities acting as transfer agents Entities valuing assets of investment funds Entities managing portfolios of investment funds – entities that conduct brokerage activities, are authorised to manage securitised debt of a securitisation fund, other specialised entities (real estate funds, private equity funds) Entities providing bookkeeping services Distributors

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 16 Types of investment funds Open-end investment fund UCITS-type fund collects money publicly no restrictions on participation invests collected money in financial instruments on the risk-spreading basis (investment limits set out in the Act on Investment Funds and fund’s articles of association) sells and redeems units on demand of investors maintains minimum NAV of PLN values its assets at least once a week is designed for small retail investors

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 17 Types of investment funds Specialised open-end investment fund is more flexible vehicle, where articles of association determine (above all): conditions on participation investment policy – more flexible, on certain conditions can apply an investment policy of a closed-end investment fund conditions on redemptions presence of board of investors as a supervisory body values its assets at least once a week is designed for sophisticated investors, who wish not to give up liquidity

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 18 Types of investment funds Closed-end investment fund issues securities - investment certificates can be public and admitted to trading on a regulated market or traded in an alternative trading system has the most flexible investment policy – they can invest non-public financial instruments, private equity, real estate, derivatives, other collective investment schemes, use short selling values its assets at least once a quarter has board of investors or investors' meeting act as governing and supervisory bodies can be structured as an investment vehicle for particular investor’s needs

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 19 Types of investment funds

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 20 Special Structures of Investment Funds Umbrella fund fund comprises a number of subfunds, each subfund has a different investment policy, each subfund has its assets separated from other subfunds and register of investors, no tax is liable on transfers of units among subfunds of the same umbrella fund, the most popular fund structure in Poland

21 Special Structures of Investment Funds Investment Fund Issuing Units of Various Classes units are differentiated with respect to the method or amount of fees charged against the fund’s assets, Master and Feeder Investment Funds master fund sells units/issues certificates solely to feeder funds, feeder funds may only invest their assets in the units/investment certificates of the master fund, master fund and its feeder funds may be funds of different types,

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 22 Special Types of Investment Funds Money market fund fund is aimed at protection of the real value of fund’s assets has restrictive investment policy with respect to eligible assets Securitisation fund invests its assets in debts, also in debts of natural persons issues securities (investment certificates) on the basis of debts in their assets its income derives from sums of money received from debts Private equity fund invests 80 % or more of its assets in non-public securities is allowed to build their portfolio within 3 years

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Fund’s statutory document (1) the name and type of the investment fund; the company name, registered office and address of the management company; the governing bodies of the investment fund and the manner of its representation; the company name, registered office and address of the depositary; the rules of concluding and the scope of agreements with the fund’s depositary; the name, registered office and address of the entity commissioned by the management company to carry out the asset management responsibilities; the duration of the investment fund, if limited; the total amount of payments to the investment fund; the types of dematerialised securities and their classes that may be contributed as payment, and if such contributions can only be made in the form of securities issued by a specific issuer, the name of such issuer, the period in which payments in the form of securities will be accepted, and the principles for the valuation of securities used as payment;

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Fund’s statutory document (2) in the case of closed-end investment funds – the types of securities other than dematerialised securities and their classes, as well as shares in limited liability companies that can be contributed in consideration for investment certificates; the investment goal of the investment fund or sub-funds; principles underlying the investment policy adopted by the investment fund; rules governing distributions of the fund’s income to unit-holders; rules governing distributions of the fund’s income to unit-holders, if a closed-end investment fund’s statutory documents provide for such distributions; the types, maximum amount and method of calculating and charging the costs incurred by the investment fund, in particular the fees payable to the management company and the earliest dates on which particular types of costs may be covered; the frequency of valuation of an investment fund’s assets, determination of the net asset value of an investment fund and the net asset value per unit or investment certificate; methods and principles of the valuation of assets – in the case of a closed-end investment fund;

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Fund’s statutory document (3) information that the methods and principles used in the valuation of an investment fund’s assets, as described in the prospectus, comply with the accounting regulations applicable to investment funds – in the case of an open-end investment fund and a specialised open-end investment fund; the minimum amount of payments to an open-end investment fund; the rights of unit-holders other than rights provided for in the applicable laws; the method of making the information on the investment fund available to the public; the method of announcing introduction of amendments to the articles of association; the reasons for dissolution of the investment fund other than the reasons provided for in the Act on Investment Funds.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX Fund’s documents Open-end fund / specialized open-end fund: o statutory document o prospectus o simplified prospectus Close-end fund: o statutory document o prospectus Information for investors on demand.

Ukraine (nr 46514): Expert Mission on Supervision of Investment Funds` Activities - TAIEX 27 Opened part