(4)of the Law on Markets in Financial Instruments; 2) in the case of a special collective investment undertaking – as defined in Article 3

(4)of the Law on Markets in Financial Instruments.

1. Index of financial instruments means a statistical ratio used to express the changes of value of financial instruments.
2. Portfolio of financial instruments – as defined in the Law on Markets in Financial Instruments.
3. Master collective investment undertaking (hereinafter: ‘a master undertaking’) means a collective investment undertaking or its sub-fund which meets the following conditions: 1) has among holders of its units or shares at least one feeder collective investment undertaking (hereinafter: ‘a feeder undertaking’); 2) it is not itself a feeder undertaking; 3) does not hold units or shares of a feeder undertaking.
4. Feeder undertaking means a collective investment undertaking or its compartment which invests at least 85 % of its net assets into the master undertaking in observance of requirements laid down in Section Two of Chapter VI of this Law.
5. Close links means a situation as defined in Law on Markets in Financial Instruments.
6. Net assets means difference between the value of assets of the investment fund or the investment company and non-current and current liabilities of the investment fund or the investment company.
7. Investment company means a joint-stock company the shares of which are issued and redeemed in accordance with the procedure laid down by this Law. For the purposes of this Law the term ‘investment company’ covers the investment company with variable capital and closed-ended investment company, unless established otherwise in the particular article of the Law.
8. Investment company with variable capital means an investment company the shareholders of which have the right to request at any time the redemption of their shares and the amount of capital of which varies depending on the issue and redemption of shares. The investment company with variable capital may be only of an open-ended type.
9. Investment instruments means: 1) in the case of a harmonised collective investment undertaking – financial instruments specified in Points 1 to 4 of Article 3

(4)of the Law on Markets in Financial Instruments, also deposits, the immovable and movable property necessary for the direct activities of the investment company with variable capital; 2) in the case of a special collective investment undertaking – financial instruments indicated in Article 3

(4)of the Law on Markets in Financial Instruments, also deposits, the immovable and movable property and installations necessary for its operation.

1. Investment fund means an unincorporated fund the assets of which are held by legal or natural persons by right of common fractional ownership and managed by the management company of a collective investment undertaking by trust in accordance with the procedure and conditions laid down in this Law and in the rules of the investment fund. For the purposes of this Law the term ‘investment fund’ includes open-ended and closed-ended investment funds, unless a specific article of the Law establishes otherwise.
2. Unit means a transferable security certifying the title of the co-owner of an investment fund to a part of the assets comprising the investment fund.
3. Investor means an actual or potential participant in the collective investment undertaking.
4. Financial derivative means: 1) in case of a harmonised collective investment undertaking – financial instruments indicated in Points 1 to 4 of Article 3

(4)of the Law on Markets in Financial Instruments the value of which changes according to the interest rate, the price of transferable securities, a currency exchange ratio or the financial index; 2) in case of a special collective investment undertaking – financial instruments indicated in Points 4 to 10 of Article 3

(4)of the Law on Markets in Financial Instruments the value of which depends on the value of one or several financial instruments.

1. Company’s control (hereinafter: ‘control’) means direct or indirect decisive influence on the company as defined in the Law on Consolidated Accounts of the Groups of Undertakings.
2. Supervisory authority of a host Member State means a competent authority of another Member State carrying out the functions of supervision and authorising of management companies of collective investment undertakings and collective investment undertakings in such other Member State in accordance with the provisions of legal acts applicable therein.
3. Client means a natural or legal person, or any other undertaking (including a collective investment undertaking) using the services provided by the management company of a collective investment undertaking or the investment company that has not designated the management company of the collective investment undertaking.
4. Collective investment undertaking means an investment fund or the investment company the object of which is raising of capital from the public through public offering of units or shares and collective investment into the assets specified in this Law on the basis of risk-spreading in observance of investment requirements laid down by this Law.
5. Home Member State of a collective investment undertaking means a Member State in which a collective investment undertaking is established in accordance with the procedure laid down by this Law or respective legal acts of another Member State.
6. Participant in a collective investment undertaking means a co-owner of an investment fund or a shareholder of an investment company.
7. Host Member State of a collective investment undertaking means the Member State, other than the home Member State of a collective investment undertaking, on the territory of which units or shares of a collective investment undertaking are marketed.
8. Prospectus of a collective investment undertaking (hereinafter: ‘prospectus’) means the document providing to investors and the public the information about offered transferable securities of a collective investment undertaking.
9. Instruments of incorporation of a collective investment undertaking means rules of the investment fund or articles of association of the investment company.
10. Sub-fund of a collective investment undertaking means a part of assets of an umbrella collective investment undertaking managed separately from its other assets.
11. Management of a collective investment undertaking means: 1) management of investments of a collective investment undertaking; 2) administration of a collective investment undertaking: record-keeping, answers to clients’ questions, calculation of net assets, internal control of observance of legal acts, management of the register of the holders of units or shares, distribution of income, determination of the price of units or shares, their issue and redemption, settlement on the basis of transactions, keeping of data about completed operations; 3) marketing; 4) other activities related with the activities specified in Points 1, 2 and 3 of this Paragraph.
12. Management company of a collective investment undertaking (hereinafter: ‘management company’) means a company the regular working day of which is the management of investment funds or of investment companies.
13. Benchmark means a ratio chosen by a management company or an investment company that has not designated a management company against the value of which the return on investment of a collective investment undertaking is measured.
14. Persons of sufficiently good repute means persons as defined in the Law on Markets in Financial Instruments.
15. Retail investor means a non-professional client as defined in the Law on Markets in Financial Instruments.
16. Key investor information means a short document containing key information for investors about a collective investment undertaking and its management company.
17. Parent undertaking means a parent undertaking as defined in the Law on Consolidated Accounts of the Groups of Undertakings.
18. Durable medium means an instrument which enables an investor to store information addressed personally to that investor in a way that is accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored (computer disc, read-only memory compact disc (CD-ROM), universal digital (optical) disc (DVD), hard disc of an investor’s computer with installed e-mail, etc., excluding internet websites, if they do not conform to the features defining the term of durable medium).
19. Periodical report means a report addressed to investors and the public containing information on the performance of the management company and collective investment undertakings, their financial condition and other major events of a certain period.
20. Transferrable securities means the following negotiable securities: 1) shares in companies and other securities equivalent to shares in companies; 2) bonds and other forms of securitised debt; 3) any other negotiable securities which carry the right to acquire any such transferable securities specified in Points 1 and 2 above by subscription or exchange.
21. Money market instruments means: 1) for a harmonised collective investment undertaking – instruments normally dealt in on the money market which are liquid and have a value which can be accurately determined at any time; 2) for a special collective investment undertaking – money market instruments defined in Article 3

(28)of the Law on Markets in Financial Instruments that have a value which may be accurately determined at any time. 39. Supervisory authority means the Bank of Lithuania performing the functions of authorising and supervision of activities of management companies and collective investment undertakings in accordance with the procedure laid down by this Law and other laws. 40. Repealed on 18 June 2013. 40. Special collective investment undertaking means a collective investment undertaking the units or shares of which may not be marketed in another Member State in accordance with the procedure laid down by the legal acts referred to in the Annex to this Law and which is not subject to the requirements of the European Union law. 41. Harmonised collective investment undertaking means a collective investment undertaking regulated by the European Union law the sole objective of which is raising capital from the public through public offering of units or shares and its collective investment into the transferable securities and (

1. or)other liquid assets specified in Section One of Chapter VI of this Law according to the principle of risk-spreading in observance of investment requirements laid down by this Law and the units or shares of which are redeemable at any time upon request of their holder. 42. Umbrella collective investment undertaking means a collective investment undertaking the assets of which are divided into separate sub-funds. 43. Direct distribution of units or shares means marketing of units or shares of the collective investment undertaking performed directly by its management company without using the services of distributors on the initiative of the management company or investor and without consulting the investor on the matters of investment into other financial instruments. 44. Direct decisive influence on the company – as defined in the Law on Consolidated Accounts of the Groups of Undertakings. 45. Third country means a state other than a Member State of the European Union or of the European Economic Area. 46. Supervisory authority of a third country means a competent authority of a third country performing the functions of authorising and supervision of activities of management companies and collective investment undertakings in accordance with the provisions of legal acts applicable in that country. 47. Closed-ended type investment company means an investment company which issues a fixed number of shares redeemable at the end of period of the investment company’s activities provided for in its articles of association or at any other time fixed therein in advance. 48. Closed-ended type investment fund means an investment fund the units of which may be redeemed at the end of period of the fund’s activities provided for in its rules or at any other time fixed therein in advance. 49. Managers means the head of administration, members of the board and supervisory board of the management company, investment company and depositary. 50. Qualifying holding of the management company means any direct or indirect holding in the management company which represents at least 1/10 or more of the authorised capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the management company in which that holding subsists. For the purpose of calculating whether the holding of the company’s authorised capital or voting rights represents at least 1/10 of the authorised capital the obligations and procedure of the calculation of votes laid down in Articles 23 and 24 of the Republic of Lithuania Law on Securities (hereinafter: ‘the Law on Securities’) shall be taken into account. 51. Management company’s home Member State means a Member State, in which the management company’s registered office is situated. If in accordance with law of its Member State the management company has no registered office – a host Member State of the management company. 52. Management company’s host Member State means a Member State, other than a home Member State, within the territory of which the management company has a branch or provides services without setting up a branch. 53. Member State means a Member State of the European Union and a country of the European Economic Area. 54. Public offering of units or shares means offering of units or shares through the mass media, advertising or by other means when more than 100 persons are addressed. CHAPTER II SECTION ONE AUTHORISATION AND ACTIVITIES OF A management company AND AN investment company. ACTIVITIES OF A COLLECTIVE INVESTMENT UNDERTAKING Article 3. Right to pursue activities of a management company or an investment company 1. Only a private or public limited liability company holding an authorisation for the activities of the management company issued by the supervisory authority shall have the right to engage in the management company’s activities. A company holding such authorisation shall be referred to as the management company. Only management companies shall have the right to use the words ‘investment fund management company’, ‘management company of investment companies’ or other combinations or derivatives of these words in their names and advertisements. 2. The management of harmonised collective investment undertakings may also be carried out by a private or public limited liability company or an entity of other legal form holding an authorisation for the activities of the management company issued by the supervisory authority of another Member State, which grants the right to engage in the management of harmonised collective investment undertakings. 3. Only a public limited liability company holding an authorisation for the activities of the investment company with variable capital issued by the supervisory authority may engage in the activities of the investment company with variable capital. Only investment companies with variable capital may use in their name the words ‘investicinė kintamojo kapitalo bendrovė’ (investment company with variable capital) or the acronym IKKB. The use of the words ‘akcinė bendrovė (public limited liability company) or their acronym AB in the name of the investment company with variable capital shall be optional. 4. Only a public limited liability company holding an authorisation for the activities of a closed-ended type investment company issued by the supervisory authority may engage in the activities of a closed-ended type investment company. Only closed-ended type investment companies may use in their name the words ‘uždarojo tipo investicinė bendrovė’ (closed-ended type investment company) or their acronym UTIB. The use of the words ‘akcinė bendrovė (public limited liability company) or their acronym AB in the name of a closed-ended type investment company with variable capital shall be optional. Article 4. Activities of management companies and investment companies 1. A management company shall have the right to engage in the principal activities – management of investment funds and (
2. or)investment companies captured by this Law and provision of the following services, if they have been specified in the authorisation issued to the company and if the company engages in the principal activity: 1) management of other persons’ portfolios of financial instruments; 2) management of pension funds, if the management company complies with the requirements laid down by laws regulating the pension accumulation activities; 3) provision of auxiliary services: advising on issues relating to investment in financial instruments; safe-keeping and management of units or shares of collective investment undertakings. 2. A management company may not provide the auxiliary services indicated in Paragraph 1

(3)of this Article, unless it is entitled to provide the services indicated in Paragraph 1

(1)and

(2)of this Article.

1. An investment company may not manage the assets of other persons or engage in the activities not covered by this Law.
2. A management company managing at least one harmonised collective investment undertaking or pension fund may not engage in other activities not covered by this Law.
3. Chapter VII of this Law shall not apply to management companies which do not manage harmonised collective investment undertakings.
4. A management company authorised to pursue activities covered by Paragraph 1

(1),

(2)and

(3)of this Article mutandis mutandis shall be subject to the requirements set forth in Articles 13 and 22 of the Law on Markets in Financial Instruments and the implementing regulations of the supervisory authority. Requirements of the Law on Markets in Financial Instruments shall apply taking account of the provisions of Article 2

(5)of the Law on Markets in Financial Instruments.

1. A management company which has obtained an authorisation for activities of a management company under this Law shall also have the right to manage collective investment undertakings established under the Law of the Republic of Lithuania on Collective Investment Undertakings for Informed Investors, provided that such right is stipulated in the authorisation for the activities of the management company. Article
2. Procedure of authorisation of a management company or an investment company
3. A public limited liability company or a private limited liability company intending to pursue activities of the management company or a public limited liability company intending to pursue activities of the investment company with variable capital or as a closed-ended type investment company shall file an application with the supervisory authority. The application shall be accompanied by a programme of operations envisaged, containing, inter alia, the description of areas of planned activities, the organisational chart of the company, particulars of the legal person, its participants, managers, activities, fulfilment of capital and other prudential requirements and other information specified in the authorisation rules approved by the supervisory authority, upon considering which the supervisory authority might conclude that the company complies with the requirements for the authorised activities laid down by this Law. The list of the required documents to be furnished for obtaining the authorisation and their submission procedure shall be set forth by the supervisory authority.
4. Upon request of the supervisory authority the state and municipal institutions and bodies must furnish all available information about the shareholders of the company applying for the authorisation, their financial condition, activities, identified infringements of laws and other legal acts, conclusions of performed inspections and other information relevant for the adoption of the decision on the authorisation.
5. The supervisory authority shall grant the authorisation when the following conditions are met: 1) data (documents) comply with the established requirements, produced documents and data are complete and accurate, and the plan of intended activities is sufficiently justified; 2) the initial capital of a management company or an investment company applying for the authorisation, that has not designated a management company, or the authorised capital of a company applying for the authorisation of activities of a closed-ended type investment company is not smaller than the minimum amount set by the supervisory authority and the capital adequacy and other prudential requirements of the management company are complied with; 3) a management company or an investment company provides the information specified in the authorising rules about the shareholders of a management company or an investment company and the qualifying holdings directly or indirectly managed by them (including information about the size of these qualifying holdings); 4) there are no grounds to believe that holders of the qualifying holding of a management company or an investment company will not ensure the sound and transparent management of a management company or an investment company; 5) not a single employee of a management company or an investment company is an employee of the operator of the regulated market operating in the Republic of Lithuania and (or) of a multilateral trading facility whose functions are directly related to the operation of the regulated market and (or) of the multilateral trading facility, or an employee of the supervisory authority or the Central Securities Depositary of Lithuania; 6) heads of a management company or an investment company are of sufficiently good repute and have the qualification and work experience specified by the supervisory authority; 7) a management company or an investment company is incorporated and its permanent management body is seated in the territory of the Republic of Lithuania; 8) there is no close link between a management company or an investment company and another legal and natural person, which might prevent the supervisory authority from exercising effective supervisory functions; 9) there is no close link between a management company or an investment company and a person from any third country the legal acts of which regulating the activities of such person or the enforcement of such legal acts might prevent the supervisory authority from exercising effective supervisory functions; 10) the articles of association of a management company or an investment company do not specify that shares or the units of the collective investment undertaking to be established will not be marketed in the Republic of Lithuania; 11) the articles of association of a public limited liability company applying for the authorisation of the investment company with variable capital or of a closed-ended type investment company do not comply with the requirements of laws; 12) a management company, its heads or shareholders have been rated as eligible in accordance with the evaluation criteria laid down in Article 9

(10)of this Law; 13) the risk management process of a management company or an investment company that has not designated a management company is adequate and effective.

1. The supervisory authority shall notify the applicant of its consent or refusal to issue the authorisation within six months from the filing of all documents, data and explanations. The time limit for considering an application shall be calculated from the filing of the last documents or data. A refusal to issue the authorisation shall be motivated in writing and may be appealed against in accordance with the procedure set by the Republic of Lithuania Law on Administrative Proceedings (hereinafter: ‘Law on Administrative Proceedings’).
2. The supervisory authority must seek the opinion of a supervisory authority of another Member State, if: 1) the applicant is a subsidiary of the management company, financial brokerage firm, credit institution or insurance company authorised in another Member State; 2) the applicant is a subsidiary of a parent company of the management company, financial brokerage firm, credit institution or insurance company authorised in another Member State; 3) the applicant is controlled by the same persons who control the management company, financial brokerage firm, credit institution or insurance company authorised in another Member State.
3. For the purpose of assessing the eligibility of owners of the qualifying holding of a management company or an investment company and the repute and experience of the heads of companies belonging to the same group, the supervisory authority must seek the opinion of the supervisory authority of another Member State referred to in Paragraph 5 of this Article.
4. The supervisory authority shall notify about the issuance, suspension or revocation of an authorisation of a management company or an investment company the registrar of the Register of legal entities, institutions specified in other legal acts and on the website of the supervisory authority. The supervisory authority shall notify the European Securities and Markets Authority about the issuance suspension or revocation of the authorisation of the management company. Article
5. Activities of a collective investment undertaking
6. No collective investment undertaking shall pursue activities unless a collective investment undertaking or its management company has been authorised beforehand by the supervisory authority to approve instruments of incorporation of a collective investment undertaking and a choice of depositary. Alongside the application for authorisation a collective investment undertaking or its management company shall submit to the supervisory authority instruments of incorporation, prospectus, key investor information document and information about managers (their representatives) of a depositary of a collective investment undertaking.
7. Where the management of a harmonised collective investment undertaking established in the Republic of Lithuania is to be delegated to a management company authorised in another Member State, a collective investment undertaking may pursue its activities only when the management company has been authorised beforehand by the supervisory authority to approve the instruments of incorporation of a collective investment undertaking, a choice of depositary and an application of a designated management company for pursuing working day of management of that collective investment undertaking. When applying for the authorisation a management company shall provide to the supervisory authority instruments of incorporation of a collective investment undertaking, application of a management company for pursuing working day of management of a collective investment undertaking, prospectus, key investor information document and information about managers (their representatives) of a depositary. Article
8. Granting or refusing an authorisation to approve instruments of incorporation of a collective investment undertaking, a choice of depositary, application of a management company for pursuing working day of management of a harmonised collective investment undertaking
9. The supervisory authority shall grant the authorisation to approve the instruments of incorporation of a collective investment undertaking, a choice of depositary, the management company’s application for pursuing working day of management of a harmonised collective investment undertaking, if: 1) documents and information specified in Article 6

(1)or

(2)of this Law have been submitted; 2) a collective investment undertaking and documents and information referred to in Article 6 paragraphs

(1)or

(2)of this Law comply with requirements of this Law and legal acts adopted on its basis; 3) the management company is authorised to manage a given collective investment undertaking; 4) managers of a collective investment undertaking’s depositary are of sufficiently good repute, possess required qualification and work experience; 5) there are no grounds to believe that the chosen depositary will not fulfil the duties imposed thereon by virtue of this Law; 6) the process of risk management of a collective investment undertaking and its management company is adequate and effective.

1. A management company or an investment company that has not designated a management company who have applied for authorisation shall be notified by the supervisory authority about its granting or refusal within two months of submission of all required documents, data and explanations to the supervisory authority. Article
2. Withdrawal of authorisation The supervisory authority may withdraw the authorisation issued to a management company or an investment company, if: 1) the authorisation holder has expressly renounced the authorisation in writing; 2) the authorisation holder does not make use of the authorisation within 12 months of the day of granting the authorisation or has ceased the activities more than six months previously; 3) the period of activities indicated in the investment company’s articles of association ends and the authorisation holder fails to apply in writing for the cancellation of the authorisation; 4) it appears that the authorisation holder had obtained the authorisation having submitted the documents or information which do not correspond to reality or for the purpose of obtaining the authorisation had acted in infringement of laws or other legal acts of the Republic of Lithuania; 5) the authorisation holder no longer fulfils the conditions for granting the authorisation of the management company or the investment company; 6) the authorisation holder has seriously and (or) systematically infringed the requirements laid down in this and (or) other legal acts regulating the activities of management companies or collective investment undertakings; 7) the authorisation holder no longer complies with the requirements provided for by this Law and (or) other legal acts or the available information shows that the authorisation holder will not be able to do that in future; 8) in other cases established by laws. Article
3. Management and managers of management companies and investment companies
4. A management company and an investment company that has not designated a management company shall have the board and the administration.
5. An investment company that has designated a management company shall not form any management bodies. A management company designated to manage an investment company shall be liable for the performance of actions covered by Article 2.82

(3)of the Civil Code of the Republic of Lithuania (hereinafter: ‘the Civil Code’).

1. A general meeting of shareholders of an investment company may adopt resolutions irrespective of the number of voting rights awarded by shares held by the participating shareholders.
2. Managers of a management company or an investment company that has not designated a management company must be of sufficiently good repute and have sufficient work experience to ensure sound and transparent management of a management company or an investment company.
3. A management company or an investment company that has not designated a management company must notify in advance the supervisory authority about all pending changes of managers of a management company or an investment company concurrently providing the information requested by the supervisory authority for determining whether managers that have been newly elected or are planned to be elected comply with requirements of sufficiently good repute and sufficient work experience. The newly elected managers of a management company or an investment company that has not designated a management company may start working in their position only when their candidatures are approved by the supervisory authority.
4. The supervisory authority shall have the right to reject the newly nominated managers if they are not of sufficiently good repute, do not possess sufficient experience, or if there are other objective grounds to believe that planned changes of managers pose threat to sound and transparent management of the management company or the investment company. Detailed requirements for candidate managers and the procedure for coordination of their candidatures with the supervisory authority shall be laid down in legal acts of the supervisory authority.
5. The supervisory authority shall decide on the eligibility of the newly elected managers no later than within one month of the receipt of all required documents.
6. Where an investment company that has designated a management company has a supervisory board, the requirements of Paragraphs 4, 5, 6 and 7 of this Article shall apply mutatis mutandis to the supervisory board. Article
7. Acquisition and disposal of a qualifying holding of the management company
8. A natural or legal person or persons acting in concert, who have taken a decision either to acquire, directly or indirectly, or to further increase, directly or indirectly, a qualifying holding of the management company already held by them (hereinafter: ‘the acquirer’), if as a result of the planned increase of the company’s qualifying holding the proportion of the voting rights or of the authorised capital of a person would reach or exceed, in ascending order, 20%, 30% or 50%, or the company would become a subsidiary of that legal person (hereinafter: ‘proposed acquisition’), must obtain a decision of the supervisory authority not to oppose the proposed acquisition. Non-compliance with the requirement to obtain the decision of the supervisory authority not to oppose the proposed acquisition shall not invalidate a transaction; however it shall give rise to consequences specified in paragraph 21 of this Article. For the purpose of this Article ‘persons acting in concert’ shall mean two or more persons who on the basis of their explicit or implicit verbal or written arrangement exercise or seek to exercise their rights awarded by their qualifying holding in the management company.
9. The acquirer must communicate to the supervisory authority a written notification of a proposed acquisition indicating the size of the qualifying holding of the management company planned to be acquired and also submit the supporting documents and other information and particulars specified by the supervisory authority.
10. A person, who has taken a decision to directly or indirectly dispose of or reduce a qualifying holding in the management company held by him, if as a result of a planned loss of the management company’s shares the proportion of the voting rights or of the authorised capital held by a person would reach or exceed, in descending order, 20%, 30% or 50% or the company would cease being a subsidiary of that legal person, shall communicate to the supervisory authority a written notification indicating the size of the qualifying holding in the management company intended to be disposed or reduced.
11. The supervisory authority shall establish the list of documents and data enclosed with the notification of the proposed acquisition and necessary for the assessment of the acquirer and the proposed acquisition. The documents and data indicated in the list must be proportionate and adapted to the acquirer and the proposed acquisition. The list may not contain the documents and data which are not necessary for the assessment of the acquirer and the proposed acquisition in accordance with the criteria laid down in paragraph 9 of this Article.
12. Upon receipt of the acquirer’s notification about the proposed acquisition and of all documents and data indicated in the list specified in paragraph 4 of this Article and of the additional documents and data in accordance with paragraph 7 of this Article the supervisory authority shall without undue delay, no later than within two working days, acknowledge their receipt in writing and notify the acquirer about the date of expiration of the assessment period laid down in paragraph 6 of this Article.
13. The supervisory authority shall carry out the assessment no later than within 60 working days of sending a written acknowledgement of receipt of the notification about the proposed acquisition and of all documents and data indicated in the list referred to in paragraph 4 of this Article.
14. Where appropriate, during the assessment period, no later than on the fiftieth working day of the assessment period, the supervisory authority may request additional documents and data necessary for completion of the assessment. Such request shall be submitted in writing and shall specify the required additional documents and data. Calculation of duration of the assessment period shall be interrupted from the day on which the supervisory authority requests the additional documents and data and shall be resumed on the day on which the acquirer’s response to the request is received. Calculation of duration of the assessment period may be suspended for maximum 20 working days. Moreover, the supervisory authority shall have the right to repeatedly request, at its own discretion, the submission of additional documents and data or their adjustment, but this may not result in the interruption of calculation of the duration of the assessment period.
15. The supervisory authority may extend the interruption of the calculation of duration of the assessment period referred to in paragraph 7 of this Article for maximum 30 working days when the place of establishment or regulation of the acquirer’s activities is in a third country or when the acquirer is not subject to supervision under legal acts of other Member States regulating the activities of management companies of harmonised collective investment undertakings, financial brokerage firms, credit institutions, insurance undertakings or reinsurance undertakings.
16. Considering the notification about the proposed acquisition referred to in paragraph 2 of this Article, documents and data necessary for the assessment of the acquirer and proposed acquisition, the supervisory authority shall, in order to ensure the sound and transparent management of the management company the acquisition or increase of the qualifying holding of which is proposed, and having regard to the possibility of the acquirer’s influence on the management company, assess the eligibility of the acquirer and financial soundness of the acquisition against all of the following criteria: 1) sufficiently good repute of the acquirer; 2) sufficiently good repute and work experience of a person who will be the manager of the management company after the proposed acquisition. The supervisory authority shall assess the sufficiently good repute and work experience of the person who will be the manager of the management company after the proposed acquisition having regard to provisions of Article 9 of this Law; 3) the financial soundness of the acquirer, in particular in relation to the type of activity pursued or envisaged by the management company the acquisition or increase of the qualifying holding of which is proposed; 4) whether the management company will be able to comply on a regular basis with prudential requirements, whether the structure of the group the part of which the management company will become after the proposed acquisition facilitates the effective supervision, effective exchange of information between the supervisory authority and supervisory authorities of other Member States and define the distribution of responsibility of the supervisory authority and supervisory authorities of other Member States; 5) whether there are grounds to suspect that for the purpose of implementing the proposed acquisition, money laundering or terrorist financing acts within the meaning of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing are being or were perpetrated or attempted, or that the proposed acquisition is likely to increase the risk of such acts.
17. The supervisory authority shall have no right to establish any preconditions for size of the qualifying holding of the management company which must be acquired and shall not examine the proposed acquisition in terms of the economic needs of the market.
18. The supervisory authority may disagree with the proposed acquisition only on the basis of criteria set out in paragraph 9 of this Article or when the acquirer has provided not all documents and data specified in paragraph 4 or 7 of this Article.
19. The supervisory authority shall decide on the proposed acquisition after having consulted the supervisory authorities of other Member States, when the acquirer is a management company authorised in a Member State, a financial brokerage firm, a credit institution, an insurance undertaking, a reinsurance undertaking or a parent or controlling undertaking of any of these undertakings. For the purpose of consulting the supervisory authority shall request the supervisory authorities of other Member States to provide all information relevant for the assessment of eligibility of the acquirer and the financial soundness of the proposed acquisition and without undue delay shall communicate to the supervisory authorities of other Member States on their request the information relevant for the assessment being conducted and shall provide on its own initiative all information which is essential for the assessment being conducted.
20. If the supervisory authority does not decide to disapprove the proposed acquisition within the assessment period indicated in paragraph 6 of this Article, it shall be deemed that the supervisory authority has approved the proposed acquisition. Having decided to approve the proposed acquisition before expiration of the assessment period the supervisory authority shall notify the acquirer to the effect in writing within two working days.
21. If the supervisory authority decides to approve the proposed acquisition, it may establish and, where appropriate, extend the time limit for the implementation of the person’s intention to acquire or increase the qualifying holding of the management company.
22. Having decided to disapprove the proposed acquisition the supervisory authority shall, within two working days from adoption of such decision and without exceeding the assessment period, inform the acquirer to the effect in writing, specifying the motives of the decision.
23. The supervisory authority’s decision on the proposed acquisition shall contain all opinions and reservations received from supervisory authorities of other Member States after consultations under paragraph 12 of this Article. The supervisory authority’s decision to disapprove the proposed acquisition may be appealed against in accordance with the procedure set by the Law on Administrative Proceedings. The supervisory authority shall publicise the decision and its motives on its website irrespective of whether the acquirer’s consent has been obtained. The supervisory authority shall have the right not to publicise the decision and its motives on its website in those cases when such publicising would be detrimental to the market or cause disproportionate damage to the parties concerned.
24. If the supervisory authority receives more than one notification about the proposed acquisition in the same management company all notifications shall be examined in accordance with the same procedure without discriminating the acquirers.
25. If the management company becomes aware of the acquisition or loss of its shares as a result of which the qualifying holdings of shareholders of the management company exceed the thresholds specified in paragraph 1 of this Article in ascending or descending order, the management company must notify to the effect the supervisory authority without undue delay.
26. The management company must at least once a year communicate to the supervisory authority a notification specifying in it the management company’s shareholders who possess the qualifying holding of the management company and the size of their qualified holdings. The information shall be provided on the basis of data available on the day of the ordinary general meeting of shareholders and if the company’s shares are admitted to trading on a regulated market – in observance of requirements of legal acts applicable to the companies the securities of which are traded on a regulated market.
27. Where the influence exercised by acquirers poses threat to the sound and transparent management of the management company, the supervisory authority must take measures to rectify the situation. To that end the supervisory authority shall have the right to issue compulsory instructions and impose sanctions specified in this Law on managers and other persons responsible for the management of the management company.
28. All shares held by a person who has acquired or increased the qualifying holding of the management company exceeding the thresholds specified in this Article without having obtained the supervisory authority’s decision to approve the proposed acquisition or before expiration of the time limit laid down in paragraph 6 of this Article (save as in cases when the supervisory authority’s decision to approve the proposed acquisition has been made earlier) shall lose the voting right at the general meeting of shareholders. The voting right shall be resumed on the day on which the decision of the supervisory authority not to oppose the proposed acquisition is received or if the supervisory authority does not decide on the disapproval of the proposed acquisition within the assessment period. Article
29. Operating conditions and prudential requirements
30. A management company or an investment company that has not designated a management company must at all times comply with the following requirements: 1) act honestly and fairly in conducting its working day activities in the best interests of the collective investment undertaking and its participants and the integrity of the market; 2) act with due skill, care and diligence; 3) have and employ the resources and procedures that are necessary for the working day activities; 4) disclose to the client sufficient information related and necessary to the client; 5) have sound administrative and accounting procedures, control and safeguard arrangements for electronic data processing and adequate internal control mechanisms including, in particular, rules for personal transactions by its employees or for the holding or management of investments in financial instruments in order to invest on its own account and ensuring that each transaction involving the collective investment undertaking managed by the management company may be reconstructed according to its origin, the parties to it, its nature, and the time and place at which it was effected and that the assets are invested according to the requirements set by the collective investment undertaking’s instruments of incorporation and the legal provisions in force; 6) ensure that data, documents and information of adopted investment decisions, concluded transactions, applications filed by investors for the acquisition or redemption of units or shares, or of other performed operations are kept for at least 10 years of the day of adoption of an investment decision, completion of a transaction, filing of a respective application or performance of an operation, unless other legal acts establish a longer term for the keeping of documents; 7) have in place the organisational structure which allows avoiding the conflicts of interest between the management company or the investment company and its clients, between several clients of the management company or the investment company, between the collective investment undertaking managed by the management company and its clients or between several collective investment undertakings; 8) ensure that persons who make investment management decisions possess the qualification and experience specified by the supervisory authority and are of sufficiently good repute; 9) have in place the description of procedures for making investment decisions which, inter alia, establishes the structure of a body making investment decisions, and comply with the requirements of the description of procedures; 10) ensure that investment decisions are recorded in writing and registered in the register of investment decisions; 11) comply with the capital requirements, prudential requirements and other requirements applicable to working day activities set by the supervisory authority; 12) approve and implement the employee remuneration policy conforming to requirements set by the supervisory authority; 13) fulfil instructions of the supervisory authority.
31. The management company authorised to render the services referred to in Article 4

(1)or

(2)of this Law may invest the clients’ funds in the investment funds or investment companies managed by the management company only with due regard to the requirements for the management of the conflicts of interest laid down by this Law and legal acts of the supervisory authority implementing it and having obtained from the client an advance and explicit written consent. 3. Liabilities to investors of the management company authorised to render the service referred to in Article 4

(1)of this Law shall be insured in accordance with the procedure laid down by the Republic of Lithuania Law on Insurance of Deposits and Liabilities to Investors. Article 12. Duty to implement investment decisions acting in best interests for the collective investment undertaking 1. The management company on account of a collective investment undertaking managed by it, or the investment company that has not designated a management company, when implementing itself the investment decision made or delegating its implementation to another undertaking must act in the best interests of the collective investment undertaking. 2. The management company on account of a collective investment undertaking managed by it, or the investment company that has not designated a management company, when implementing itself the investment decision made or delegating its implementation to another undertaking must act so as to achieve the best possible outcome for the collective investment undertaking, considering the price of investment objects, the costs and speed of implementation of the investment decision, the probability of implementation of the investment decision and the probability of settlements, the amount and nature of the investment decision and other circumstances relevant for the implementation of the investment decision. 3. For the purpose of fulfilling the duty laid down in paragraph 2 of this Article a management company or an investment company that has not designated a management company, shall approve and introduce the effective measures, including the investment decisions’ implementation policy allowing to achieve the best possible result for the collective investment undertaking in implementing the investment decision on account of the undertaking and also to have in place and use the effective measures aimed at the realisation of the policy of investment decisions. 4. The undertakings to which the implementation of investment decisions with regard to the respective financial instruments may be delegated shall be specified in the investment decisions’ implementation policy near each class of financial instruments. A management company or an investment company that has not designated a management company may delegate the implementation of investment decisions only in observance of all requirements laid down in this Article. 5. Before starting to implement investment decisions on account of a collective investment undertaking, a management company shall seek from the investment company managed by it an advance approval of the investment decisions’ implementation policy. 6. A management company or an investment company that has not designated a management company must: 1) ensure that the investment decisions’ implementation policy and all essential changes thereof are available to the participants of a collective investment undertaking; 2) monitor on a regular basis the effectiveness of the applied measures and the investment decisions’ implementation policy, the quality of investment decisions of other undertakings, which are specified in the policy and implement investment decisions, and having identified any weaknesses of the applied measures and (

1. or)the investment decisions’ implementation policy – rectify them without delay; 3) revise the investment decisions’ implementation policy at least once a year and after each essential change, which is likely to affect the ability of a management company or an investment company that has not designated a management company to achieve the best result for the collective investment undertaking; 4) act in the manner which allows proving at any time that an investment decision on the account of the collective investment undertaking has been implemented or that its implementation has been delegated to another undertaking in accordance with the investment decisions’ implementation policy. Article 13. Requirements for risk management 1. A management company or an investment company that has not designated a management company, taking account of the nature, scope and complexity of the pursued working day activities and of the managed collective investment undertaking must: 1) approve, implement and maintain due and effective measures, processes and methods guaranteeing the continuous calculation and management of risks to which a collective investment undertaking managed by a management company or an investment company that has not designated a management company is or might be exposed; 2) approve, implement and maintain due and documented risk management policy, providing for the types of risks to which a collective investment undertaking managed by a management company or an investment company that has not designated a management company is or might be exposed; 3) appoint (form) a hierarchically and functionally independent person or subdivision performing the risk management function and ensure that his (its) functions are duly fulfilled and that he (
2. it)possesses the requisite competence and has the right to obtain all information necessary for the proper functioning. 2. A management company or an investment company that has not designated a management company must without undue delay notify the supervisory authority in writing about all essential changes of the risk management process. Article 14. Accounting and audit of a management company, collective investment undertakings managed by it or of an investment company that has not designated a management company 1. Financial accounting and reporting of the management company shall be carried out in accordance with laws and other legal acts of the Republic of Lithuania and the international accounting standards. 2. Financial accounting and reporting of a collective investment undertaking shall be carried out in accordance with laws and other legal acts of the Republic of Lithuania. 3. The procedure of appropriation of the management company’s profit shall be regulated by the Republic of Lithuania Law on financial institutions (hereinafter: ‘Law on Financial Institutions’). 4. The audit of the set of financial statements and of the set of consolidated financial statements of a management company, collective investment undertakings managed by it or of an investment company that has not designated a management company and the procedure of such audit shall be subject to requirements laid down in the Republic of Lithuania Law on audit (hereinafter: ‘Law on Audit’), the Law on Financial Institutions and this Article. 5. The data of the set of annual financial statements of the management company, collective investment undertakings managed thereby or of the investment company that has not designated a management company must be audited. An audit firm which audits the set of annual financial statements of the collective investment undertaking shall issue an auditor’s opinion on such set of annual financial statements and a report on audit thereof. An auditor shall specify in the collective investment undertaking’s audit report all infringements of this Law and other legal acts identified in the course of audit and provide the following information specifying whether: 1) the net asset value is calculated correctly; 2) assets are invested in accordance with the instruments of incorporation of a collective investment undertaking; 3) effectiveness of internal control and risk management systems and measures related to a collective investment undertaking approved by a management company or an investment company that has not designated a management company has been assessed; 4) effectiveness of internal control and risk management systems and measures of a management company related to the management of a collective investment undertaking approved by has been assessed. 6. If a collective investment undertaking is closed down or liquidated, an auditor shall provide the following information to show that: 1) during the period from drafting of the last report on audit until closure or liquidation of a collective investment undertaking (if such period is longer than one month) the net asset value was calculated correctly; 2) assets were invested in accordance with the instruments of incorporation of a collective investment undertaking; 3) a collective investment undertaking was closed down or liquidated in compliance with requirements of this Law and other legal acts. 7. At request of the supervisory authority, a management company or an investment company that has not designated a management company must provide explanations with regard to its own financial statements or the financial statements of a collective investment undertaking managed by it, an investment company that has not designated a management company – with regard to its own financial statements, and an auditor – explanations concerning the identified breaches of this Law and (
3. or)other legal acts. 8. An auditor auditing a management company or a collective investment undertaking or carrying out any other activity provided for in the Law on Audit must immediately give written notice to the supervisory authority of the identified circumstances or facts which may: 1) result in an essential infringement of laws and other legal acts that establish conditions for the granting of authorisations or specifically regulate the activities of management companies or collective investment undertakings, or 2) interfere with continuous operation of a management company or an investment company that has not designated a management company, or 3) serve the basis for refusal to issue an opinion about the set of financial statements or formulate a qualified opinion. 9. An auditor must also immediately notify to the supervisory authority in writing all facts and circumstances captured by paragraph 8 of this Article, which come to light in the process of audit of an undertaking which is closely linked with a management company or with an investment company that has not designated a management company. 10. The abovementioned notification of the supervisory authority shall not be considered as an infringement of the prohibition to disclose confidential information laid down in legal acts or agreement and therefore shall not give rise to any negative consequences in respect of an auditor. 11. An auditor must carry out an audit of a management company, its managed collective investment undertaking or an investment company that has not designated a management company in accordance with the procedure set by legal acts implementing this Law adopted by the supervisory authority on the basis of Article 15 thereof. Article 15. Right of the supervisory authority to adopt legal acts implementing this Law The supervisory authority shall define: 1) the procedure for protecting the confidential information; 2) the procedure for organising and carrying out the internal control of management companies and the investment companies that have not designated management companies; 3) the contents and form of periodical reports, other reports meant for supervision, prospectus, key investor information document and other mandatory information to be submitted, as well as the procedure of presentation of their financial statements; 4) the contents of and procedure of presentation of reports on liquidation of an investment company and closure of an investment fund; 5) requirements for determining and calculating the amount and value of net assets; 6) capital and other prudential requirements for management companies and investment companies; 7) the procedure for measuring the counterparty risk when verifying the compliance with diversification requirements; 8) the procedure for granting, suspension and withdrawal of authorisations and authorisations specified in this Law; 9) the procedure for using financial derivatives of collective investment undertakings and assessing the related risks; 10) requirements for management and assessment of risks of a management company or an investment company that has not designated a management company; 11) the procedure for distributing units or shares of collective investment undertakings; 12) rules of merger and master-feeder structures of collective investment undertakings; 13) the procedure for organising and pursuing activities of management companies and investment companies; 14) requirements for the employee remuneration policy of management companies and investment companies that have not designated management companies; 15) the procedure for notifying the collective investment undertaking’s participants about essential amendments to the instruments of incorporation and prospectus and a representative list of major amendments; 16) requirements for the qualification and work experience applicable to managers of a management company, an investment company and a depositary. Article 16. Duty to obtain the supervisory authority’s authorisation 1. An advance authorisation of the supervisory authority shall be required for: 1) approval of, and amendments or supplements to, instruments of incorporation; 2) selection or change of a depositary or a management company; 3) delegation of the investment fund’s management to another management company; 4) merger of special collective investment undertakings or harmonised collective investment undertakings set up in the Republic of Lithuania the units or shares of which are distributed only in the Republic of Lithuania; 5) merger of a collective investment undertaking set up in the Republic of Lithuania that will cease to exist on the entry into effect of the merger (in cases of merger of harmonised collective investment undertakings set up in the Republic of Lithuania and in one or more Member States, or harmonised collective investment undertakings set up in the Republic of Lithuania the units or shares of which are distributed in another Member State); 6) reorganisation, separation or restructuring of a management company; 7) management by a management company authorised in another Member State of a harmonised collective investment undertaking set up in the Republic of Lithuania; 8) exceeding the investment threshold stipulates in Article 79

(2)of this Law by a collective investment undertaking set up in the Republic of Lithuania and intending to become a feeder undertaking; 9) investment of at least 85% of net assets of a feeder undertaking set up in the Republic of Lithuania in units or shares of another chosen master undertaking upon closure or liquidation, merger or division of a master undertaking; 10) a feeder undertaking set up in the Republic of Lithuania intending to continue as a feeder undertaking of a master undertaking or of any other chosen collective investment undertaking after merger or division of a master undertaking.

1. The supervisory authority may refuse issuing the authorisation only where this would contradict legal acts or would prejudice the interests of participants of a collective investment undertaking.
2. Where having received a respective request the supervisory authority does not produce a reasoned objection within 20 working days, the authorisation shall be deemed to be issued, unless this Law establishes otherwise. Article
3. Right of a management company or an investment company that has not designated a management company to delegate part of its functions to another company
4. For the purpose of a more effective conduct of working day, a management company or an investment company that has not designated a management company may delegate to carry out on its behalf one or more of its own management functions to a company authorised to provide appropriate services immediately notifying in writing the supervisory authority to the effect. Such notification must specify the name of the company that will accept the delegation (the agent) and the list of functions to be delegated to it. Where a management company manages at least one harmonised collective investment undertaking set up in another Member State, the supervisory authority, having received the notification from the management company, shall immediately inform the supervisory authority of the harmonised collective investment undertaking’s home Member State about the intention to delegate one or more of the management functions to another company.
5. The carrying out of one or more of the management functions may be delegated only when all of the following preconditions are complied with: 1) the mandate must not prevent the effectiveness of supervision of a management company or an investment company and must not prevent from acting in the best interests of investors; 2) the supervisory authority must have concluded an agreement on the exchange of information with an appropriate supervisory authority of a third country in which one or more functions have been delegated to an authorised management company; 3) the managers of the management company are authorised to monitor the activity the agent at any time; 4) the mandate must not prevent the managers of the management company from giving further instructions to the agent at any time or from withdrawing the mandate with immediate effect when this is in the interest of investors; 5) the agent must have the qualifications specified by the supervisory authority and be capable of carrying out the functions in question; 6) prospectuses of an investment fund or an investment company must list the functions which the management company has been allowed to delegate.
6. A management company or an investment company that has not designated a management company shall not delegate its functions to the extent that it becomes a letter-box entity. A mandate with regard to making investment decisions must not be given to the depositary keeping assets which constitute investment funds managed by that investment company or the assets of investment companies, or to any other undertakings whose interests may conflict with those of the management company, the investment company or the unit-holders.
7. The liability of a management company or an investment company shall not be affected by delegation by the management company of any functions to third parties. Article
8. Prohibition to dispose assets constituting an investment fund or owned by an investment company
9. Assets constituting an investment fund or owned by an investment company may not be disposed to its management company, managers of such company, its employees and their spouses. A management company on account of a collective investment undertaking managed by it or an investment company shall also be prohibited from acquiring assets of the persons referred to in this paragraph.
10. Prohibitions provided for in paragraph 1 of this Article shall apply to the investment company’s managers, employees and their spouses.
11. Assets constituting an investment fund or owned by an investment company may not be lent, pledged or provided as a guarantee or surety to secure obligations of other persons. The prohibition shall not apply to the acquisition of not fully paid up transferable securities, money market instruments or other instruments specified in points

(7)or

(8)in Article 75

(1)of this Law.

1. Assets of an investment fund or an investment company may not be used for concluding short-sale transactions in transferrable securities, money market instruments or other investment instruments.
2. An investment company or a management company which manages assets of an investment fund may not borrow on account of the investment fund, except for loans accounting for up to 10% of its net asset value with maturity of up to three months necessary for maintaining of its liquidity. The prohibition shall not apply to loans in foreign currency obtained for acquisition of transferable securities or money market instruments, if the lender receives at least an equivalent amount in other currency to secure loan repayment.
3. Prohibitions stipulated in this Article shall apply to special collective investment undertakings and their management companies to the extent laid down in Chapter VIII of this Law. Article
4. Approval of the investment company’s agreement with a management company and a depositary
5. A management agreement concluded by an investment company with a management company and an agreement with a depositary shall be approved by a general meeting of shareholders of an investment company. A general meeting of shareholders may adopt such decision by at least 2/3 majority vote awarded by shares held by shareholders present at the meeting. The company’s articles of association may establish a larger majority vote for the adoption of such decision.
6. A general meeting of shareholders may delegate the right to adopt the decision referred to in paragraph 1 of this Article to the supervisory board, but for a period not exceeding three years, provided that the company's articles of association stipulate the maximum fee payable to the management company and to the depositary. The supervisory board shall have the right to adopt the decision by a 2/3 majority vote of all members of the supervisory board. Article
7. Specifics of bankruptcy proceedings of a management company or an investment company
8. Bankruptcy proceedings of a management company or an investment company may be heard only in court.
9. In addition to other entities specified in the Republic of Lithuania Law on Enterprise Bankruptcy, the supervisory authority shall have the right to file a petition with court for the institution of bankruptcy proceedings against a management company or an investment company.
10. A court, having received from the supervisory authority a petition for the institution of bankruptcy proceedings, must, on the same day, prohibit a management company or an investment company from using bank accounts and investment instruments.
11. Not later than within 15 days of the receipt of the petition, a court shall pass an order on the institution of or refusal to institute bankruptcy proceedings.
12. The administrator of a management company or an investment company shall repay the funds owned by participants of collective investment undertakings managed by a management company or shareholders of an investment company or shall delegate the management of collective investment undertakings managed by a management company to another management company. The administrator of a management company or an investment company shall pass the respective decision acting under the best conditions and in the best interests of participants of collective investment undertakings. Article
13. Specifics of reorganisation, separation and transformation of a management company
14. Reorganisation, separation and transformation of a management company shall be authorised beforehand by the supervisory authority.
15. A management company may not be reorganised or transformed into a company which is not captured by this Law.
16. In addition to other information required by the Civil Code and the Law on Companies, the reorganisation conditions of a management company shall specify the number of collective investment undertakings managed by a management company and the number of their participants, provide the particulars of collective investment undertakings transferred and received for management and their assets, own assets of a management company, depositary, conditions and terms of transfer and receipt of obligations of a management company, the property and non-property rights of participants of collective investment undertakings after reorganisation, time limits for the acquisition of such rights and responsibilities.
17. A management company must publish a notification about the reorganisation or transformation in accordance with the procedure set by laws. In such notification a management company must specify the property and non-property rights of participants of collective investment undertakings after reorganisation, time limits for the acquisition of such rights and responsibilities.
18. A management company under reorganisation or transformation must create conditions for the participants of its managed collective investment undertakings for at least one month following their notification about the reorganisation or transformation of a management company request them to redeem units or shares held by them without any deductions.
19. Information about the progress and time limits of the reorganisation or transformation shall be provided to each shareholder of a management company, participant of a collective investment undertaking or supervisory authority who had requested that.
20. A management company under reorganisation, having received the authorisation of the supervisory authority, may delegate the management of collective investment undertakings to another management company without consent of participants of collective investment undertakings, after having created conditions for the proper enforcement of the rights of participants of its managed collective investment undertakings specified in paragraph 5 of this Article.
21. The authorisation of a management company which ceases to exist after reorganisation shall be cancelled by the supervisory authority upon request of the management company or on its own initiative.
22. Where reorganisation of a management company results in the establishment of a new company such newly set up company must obtain the authorisation of a management company in accordance with the procedure laid down by this Law and by the supervisory authority.
23. A part of a management company, which continues in operation, may be separated and on the basis of assets, rights and responsibilities assigned to such part one or more new management companies of the same legal form may be set up. Provisions of this Law regulating the reorganisation of a management company and provisions of the Civil Code regulating the reorganisation by way division shall apply mutatis mutandis to the separation of a management company. Article
24. Specifics of liquidation of a management company or an investment company
25. A management company may be liquidated on the initiative of a general meeting of shareholders only when the management company has designated another management company for all collective investment undertakings or has wound-up all its managed collective investment undertakings intending to liquidate a management company and where the management company’s authorisation has been withdrawn by decision of the supervisory authority.
26. In the event of a forced liquidation of a management company in accordance with the procedure laid down by legal acts of the Republic of Lithuania, a liquidator of the management company going into liquidation must enable the participants of collective investment undertakings managed by the management company under liquidation to file an application in accordance with the procedure laid down by this Law for the redemption of units or shares held by them without any deductions. A liquidator of the management company going into liquidation shall be responsible for ensuring the compliance of the management company’s actions during the process of liquidation with the requirements of this Law.
27. From the day of adoption of the decision to liquidate an investment company the sale and redemption of the investment company’s shares shall be discontinued.
28. Upon adoption of the decision to liquidate an investment company, the liquidator must without undue delay furnish the supervisory authority with a set of financial statements of such investment company prepared on the basis of data of the day of adoption of the decision to liquidate an investment company, the auditor’s opinion with regard to such set of financial statements and the report on audit.
29. Assets of an investment company under liquidation shall be sold under the best conditions for and acting in the best interests of shareholders of the investment company. The settlement with shareholders shall be made in cash. A detailed procedure for the sales of assets of an investment company under liquidation shall be laid down by the supervisory authority.
30. The investment company’s liquidator must provide to the supervisory authority the information about the progress of liquidation and the information referred to Article 14

(6)of this Law. SECTION TWO OBLIGATIONS of a Management company or an investment company CONCERNING THE PROVISION OF information Article

1. Duty to draw up a prospectus, key investor information and periodical reports A management company, for each collective investment undertaking it manages, and an investment company that has not designated a management company shall draw up: 1) a prospectus; 2) a key investor information document; 3) a report of each financial year (hereinafter: ‘annual report’); 4) a report covering the first six months of each financial year (hereafter: ‘half-yearly report’). Article
2. Prospectus and periodical reports
3. The prospectus shall provide sufficient information for investors to be able to make an informed judgement on the proposed investment and the related risks. The prospectus shall include a clear and comprehensive explanation of the nature of risks.
4. The annual report shall contain the information specified by the supervisory authority for investors to be able to make an informed judgement on the activities of a collective investment undertaking and their results. Where interim dividends are paid, they must be indicated in a half-yearly report.
5. The instruments of incorporation of a collective investment undertaking shall be provided in the form of annexes to the prospectus. The instruments of incorporation of a collective investment undertaking need not be annexed to the prospectus if investors are informed that on their request the instruments will be sent to them personally or they will be notified where to obtain them in the territory of the Republic of Lithuania.
6. If the information published in the prospectus changes, the prospectus shall be amended no later than within 7 days of the day of occurrence of such changes and furnished to the supervisory authority without undue delay.
7. The supervisory authority shall lay down other requirements for the prospectus, the contents and form of yearly and half-yearly reports and the procedure of their submission to the supervisory authority.
8. Where a management company authorised in the Republic of Lithuania manages a harmonised collective investment undertaking set up in another Member State, the management company shall furnish the supervisory authority with the prospectus of such collective investment undertaking, all amendments to the prospectus as well as the annual and half-yearly reports. Article
9. Procedure of publication of prospectuses and periodical reports
10. A management company for each collective investment undertaking it manages or an investment company that has not designated a management company must publish the prospectus, the annual report and the half-yearly report.
11. The annual and half-yearly reports must be published and submitted to the supervisory authority within the following time limits: 1) the annual report – within four months following the end of the reporting financial year; 2) the half-yearly report – within two months from the end of the reporting half-year period.
12. Copies of the prospectus, the most recent annual report and half-yearly report following it shall be provided free of charge to investors who request them. The prospectus shall be provided in a durable medium or by reference to the website, and a printed hard copy of the prospectus shall be issued free of charge to investors on their request.
13. Repealed on 18 June
15. Repealed on 18 June
17. Printed hard copies of the annual and half-yearly reports shall be provided to investors on their request free of charge.
18. The annual and half-yearly reports must be made available to investors in the manner specified in the prospectus and key investor information document. Article
19. Key investor information
20. The key investor information shall include prominently displayed words ‘key investor information’ and all information necessary for investors about the essential characteristics of a collective investment so that they are reasonably able to understand the nature and the risks of the investment product that is being offered to them and, consequently, to take investment decisions on an informed basis.
21. In order to be able to compare the information, the key investor information document shall be drawn up in accordance with the form approved by the European Commission. Also, the key investor information document shall be drawn up in observance of Commission Regulation (EU) No 583/2010 of 1 July 2010 implementing Directive 2009/65/EC of the European Parliament and of the Council as regards key investor information and conditions to be met when providing key investor information or the prospectus in a durable medium other than paper or by means of a website and requirements for the contents and form of the key investor information document laid down by the supervisory authority.
22. If a harmonised collective investment undertaking set up in another Member State or in a third country or its management company have been notified in accordance with Article 120

(1)of this Law about the transfer of documents to the supervisory authority, investors of the Republic of Lithuania shall be provided with a translation of the key investor information document from the original language to the Lithuanian language without any amendments or supplements. 4. Key investor information shall constitute pre-contractual information. It shall be fair, clear, not misleading and consistent with the relevant information contained in the prospectus. 5. A management company or an investment company shall not incur civil liability solely on the basis of the key investor information, including any translation thereof, unless it is misleading, inaccurate or inconsistent with the relevant information contained in the prospectus. Key investor information shall contain a clear warning in this respect. 6. The supervisory authority shall lay down detailed requirements for the content and form of the key investor information document and for the procedure of providing it to investors. Article 27. Procedure of provision of key investor information 1. Before concluding with the investor an agreement on sale of units or shares of a collective investment undertaking a management company or an investment company that has not designated a management company must provide the investor with the key investor information of a respective collective investment undertaking. If units or shares of a collective investment undertaking are marketed through intermediaries on behalf of a management company or an investment company that has not designated a management company, a management company or an investment company that has not designated a management company must ensure that the key investor information of a respective collective investment undertaking is provided to the investor before the subscription by the investor of units or shares in a collective investment undertaking. 2. A management company or investment company that has not designated a management company must, upon request of investment product manufacturers and intermediaries selling units or shares of a respective collective investment undertaking not on behalf of a management company or investment company that has not designated a management company or advising investors on potential investments in such collective investment undertakings or in products offering exposure to such collective investment undertakings, provide them with the key investor information document of the respective collective investment undertaking. 3. Intermediaries referred to in paragraph 2 of this Article must provide the investors with the key investor information document in accordance with the procedure laid down in this Article. 4. A management company or an investment company that has not designated a management company shall provide the key investor information free of charge to the investor in a durable medium by giving reference to the website, or deliver the key investor information printed on paper free of charge on request of the investor. 5. An up-to-date version of the key investor information shall be made available on the website of a management company or an investment company that has not designated a management company. 6. A management company or an investment company that has not designated a management company must promptly send to the supervisory authority the key investor information document and any amendments thereto. Article 28. Notification about essential changes of instruments of incorporation and prospectus of a collective investment undertaking 1. All essential changes in the instruments of incorporation and (

1. or)prospectus of a collective investment undertaking relevant for the interests of participants of a collective investment undertaking must be notified in writing by a management company or an investment company that has not designated a management company to each participant of a collective investment undertaking, enabling a participant of a collective investment undertaking in accordance with the procedure laid down by the supervisory authority to redeem the units or shares of a collective investment undertaking owned by the participant without any deductions. 2. The procedure of notification of the collective investment undertaking’s participants about the essential changes in the instruments of incorporation and (
2. or)prospectus of a collective investment undertaking and a model list of essential changes shall be defined by the supervisory authority. Article 29. Publication of the price 1. A management company and an investment company that has not designated a management company must make public in accordance with the procedure laid down in the instruments of incorporation of a collective investment undertaking the prices of units or shares each time it sells or redeems them. 2. A management company of a harmonised management company or an investment company with variable capital that has not designated a management company must make public the prices of units or shares at least twice a month. The supervisory authority may, however, permit a collective investment undertaking to reduce the frequency of the publication of prices on condition that such derogation does not prejudice the interests of a collective investment undertaking’s participants. 3. Prices of units or shares of special collective investment undertakings shall be published in compliance with requirements of the articles of this Law regulating the activities of the special collective investment undertakings of a respective nature and type. Article 30. Public offering and advertising 1. All marketing communications to investors shall be clearly identifiable as such. They shall be fair, clear and not misleading. In particular, any marketing communication comprising an invitation to purchase units or shares of a collective investment undertaking that contains specific information about a collective investment undertaking shall make no statement that contradicts or diminishes the significance of the information contained in the prospectus and the key investor information referred. It shall indicate that a prospectus exists and that the key investor information is available. It shall specify where and in which language such information or documents may be obtained by investors or potential investors or how they may obtain access to them. 2. The operating results of a collective investment undertaking presented in marketing communications of a collective investment undertaking must be compared to a benchmark of such collective investment undertaking. This requirement shall not apply to collective investment undertakings which are not required by this Law to use a benchmark. CHAPTER III DEPOSITARY Article 31. Obligation to transfer assets to a depositary 1. The assets of a collective investment undertaking shall be entrusted to one depositary for safe-keeping. A depositary of a collective investment undertaking established in the Republic of Lithuania may be only a bank authorised to provide investment services in the Republic of Lithuania which has either a registered office or a branch in the Republic of Lithuania or is established in the Republic of Lithuania. A depositary of a collective investment undertaking established in another Member State and managed by a management company authorised in the Republic of Lithuania may be only an entity which is authorised to provide investment services in such other Member State and either has its registered office or branch in that Member State or is established in that Member State. 2. A depositary’s liability shall not be affected by the fact that it may have entrusted all or part of its functions to other depositaries. Article 32. Obligations of a depositary 1. A depositary shall have in place and use the means and procedures necessary for its activities. 2. Depositary shall act solely in the interest of a collective investment undertaking’s participants and: 1) ensure that the sale, issue, redemption, and cancellation of units or shares is effected in accordance with the requirements of applicable legal acts and instruments of incorporation of a collective investment undertaking; 2) ensure that the value of units or shares is calculated in accordance with the requirements of applicable legal acts and instruments of incorporation of a collective investment undertaking; 3) carry out the instructions of a management company or an investment company, unless they conflict with the requirements of applicable legal acts and instruments of incorporation of a collective investment undertaking; 4) ensure that consideration for transferred assets is credited to the account of an investment fund or to an investment company is remitted within the usual time limits; 5) ensure that income of an investment fund or an investment company is applied in accordance with the requirements of applicable legal acts and instruments of incorporation of a collective investment undertaking. 3. A depositary shall make available to a management company or an investment company that has not designated a management company all documents necessary for the financial accounting and reporting purposes. 4. Prior to each valuation of an object of immovable property, a depositary of an immovable property collective investment undertaking shall verify whether the immovable property valuator (valuators) meets (meet) the applicable requirements of independence and the selection criteria laid down in the instruments of incorporation of a collective investment undertaking and whether the valuation of immovable property conforms to the requirements of Article 134

(4)of this Law.

1. A depositary shall communicate a written notification to the supervisory authority and the supervisory board or board of a management company or an investment company about all identified infringements of legal acts or instruments of incorporation of a collective investment undertaking.
2. On request of the supervisory authority, a depositary shall provide all information obtained when performing the depositary’s functions and necessary for the supervisory authority to carry out the supervision of a collective investment undertaking and (or) management company.
3. If a management company of a harmonised collective investment undertaking established in the Republic of Lithuania is authorised in another Member State, a depositary, in order to ensure the proper fulfilment of the functions laid down in this Law and other legal acts shall conclude with such management company a written agreement, inter alia, including the information-sharing provisions. Provisions of this paragraph shall apply mutatis mutandis to a management company authorised in the Republic of Lithuania and managing a collective investment undertaking established in the Republic of Lithuania.
4. The fee for the services of a depositary may not exceed the amount laid down in the instruments of incorporation of a collective investment undertaking.
5. A depositary shall be liable to the participants of a collective investment undertaking or to a management company for any loss suffered by them as a result of its unjustifiable failure to perform its obligations, or its improper performance of them.
6. A depositary shall act in accordance with the requirements of legal acts adopted by the supervisory authority on the basis of Article 15 of this Law. Article
7. Delegation of management to a depositary
8. Where the right of a management company to manage a collective investment undertaking is suspended or expires and management of a collective investment undertaking is not delegated to another management company, a management company shall notify a depositary about the suspension or expiry of the right to manage assets. In such a case, the management of a collective investment undertaking shall be temporarily taken over by a depositary that has all rights and duties of the management company, unless laws or instruments of incorporation of a collective investment undertaking establish otherwise.
9. A depositary shall take over the management of a collective investment undertaking for a period of suspension of the management company’s right to manage a collective investment undertaking. When the management company’s right to manage a collective investment undertaking expires, a depositary shall delegate the management to another management company within three months of taking over of the management. A collective investment undertaking that has not been transferred to another management company within three months shall be liquidated. Article
10. Separation of a management company or an investment company from a depositary
11. No depositary shall act both as a management company or an investment company, except in case provided for in Article 33 of this Law.
12. Managers of a management company or an investment company, except for the supervisory board members, and employees may not be the managers or employees of a depositary to which the safe-keeping of assets comprising an investment fund managed by that company or assets held by an investment company is entrusted, whose functions are directly linked to activities of a depositary.
13. Managers of a depositary, to which the safe-keeping of assets comprising an investment fund managed by that company or assets held by an investment company is entrusted, whose functions are directly linked to activities of a depositary may constitute not more than 1/2 of members of the supervisory board of a management company or an investment company managing that investment fund. Employees of a depositary, to which the safe-keeping of assets comprising an investment fund managed by that company or assets held by an investment company is entrusted, whose functions are directly linked to activities of a depositary, may not be members of the supervisory board of a management company or an investment company managing that investment fund. Article
14. Replacement of a depositary
15. A management company or an investment company may replace a depositary only having obtained an advance approval of the supervisory authority.
16. If a depositary does not comply with the requirements of legal acts, fails to perform its obligations or performs them improperly, the supervisory authority shall have the right, with a view to ensuring rights of participants of a collective investment undertaking, to order a management company or an investment company to replace a depositary. CHAPTER IV SECTION ONE GENERAL PROVISIONS GOVERNING ACTIVITIES OF COLLECTIVE INVESTMENT UNDERTAKINGS Article
17. Working day forms, categories and types of collective investment undertakings
18. Pursuant to this Law, harmonised and special collective investment undertakings may be established in the Republic of Lithuania in the form of an investment company or an investment fund, unless this Article provides otherwise. Special collective investment undertakings shall be divided into categories and types.
19. Harmonised collective investment undertakings may be established only in the form of an investment fund or an investment company with variable capital. Formation of harmonised collective investment undertakings of the closed-ended type shall be prohibited.
20. Pursuant to this Law, the following special collective investment undertakings may be established: 1) undertakings for collective investment into transferable securities; 2) immovable property collective investment undertakings; 3) private capital collective investment undertakings; 4) collective investment undertakings investing into other collective investment undertakings; 5) Repealed on 18 June
22. Special collective investment undertakings may be of open-ended type (open-ended type investment funds and investment companies with variable capital) of the closed-ended type (closed-ended type investment funds or closed-ended type investment companies). Article
23. Amount of net assets of collective investment undertakings
24. Net assets of a collective investment undertaking, except in cases referred to in paragraph 3 of this Article, may not be less than: 1) in the case of an investment fund – LTL 1 000 000; 2) in the case of an investment company – LTL 2 000
26. In the case of an umbrella collective investment undertaking net assets of each sub-fund may not be smaller than the net assets specified in paragraph 1 of this Article.
27. Requirements of paragraph 1 of this Article shall not apply for: 1) six months from the beginning of operations of an investment fund, as specified in Article 6

(1)or

(2)of this Law; 2) 12 months from the day of granting a working day authorisation to an investment company. 4. If a newly established collective investment undertaking does not accumulate the required amount of the net assets within the time limit set forth in paragraph 3 of this Article, its management company or an investment company that has not designated a management company must immediately take measures of winding-up or liquidation of such collective investment undertaking. 5. If the net assets of an investment fund fall below LTL 1 100 000 and of an investment company – below LTL 2 200 000, the supervisory authority shall be immediately notified to the effect in writing. The notification shall lay down the reasons for the reduction of the net asset value and the corrective measures. 6. If the situation is not rectified within six months of the day on which net assets had fallen below the requirement, a management company or an investment company that has not designated a management company shall take prompt measures of winding-up or liquidation of such collective investment undertaking. 7. If a management company or an investment company that has not designated a management company fails to take actions specified in paragraph 4, 5 or 6 of this Article or to wind-up or liquidate a collective investment undertaking within a reasonable time limit, the supervisory authority shall have the right to decide either on the winding-up of an investment fund or withdrawal of an investment company’s authorisation. Article 38. Classes and (

1. or)series of units or shares 1. A collective investment undertaking may hold units or shares of different classes and (
2. or)series. The classification of units or shares into classes and (
3. or)series shall be based on the objective criteria and shall not discriminate the investors and participants of a collective investment undertaking. 2. Information about different classes or units or shares, rights and obligations of investors holding them and applicable restrictions shall be disclosed in the collective investment undertaking’s instruments of incorporation, prospectus and key investor information document. 3. One share of an investment company, irrespective of its value, class and (
4. or)series shall award one vote at the general meeting of the company’s shareholders. 4. Each class and (
5. or)series or units of a collective investment undertaking shall be recorded in the accounting separately from other classes and (
6. or)series of units of such undertaking. Article 39. Investment fund 1. Assets constituting an investment fund shall be common partial ownership of its participants. The participant’s share of common partial ownership shall be determined on the basis of the number of units entered into his personal unit account. 2. A management company shall manage, use and dispose of the assets constituting an investment fund on a fiduciary basis. 3. It shall be prohibited to levy the recovery against the assets constituting an investment fund according to the obligations of a management company or participants of a fund. Creditors of an investment fund’s participant shall have the right to levy their claims in respect of a fund’s participant only against the investment fund’s units held by a participant. A participant of an investment fund shall be held liable for the obligations assumed on behalf of an investment fund only to the extent of the value of the investment fund’s units held by him. 4. The assets constituting each investment fund shall be separated from assets held by a management company and other collective investment undertaking managed by it and recorded in the accounting separately. Article 40. Benchmark 1. Harmonised collective investment undertakings and undertakings for collective investment in transferrable securities shall use a benchmark. 2. A benchmark of a collective investment undertaking shall enable the public to properly assess the operating results of a collective investment undertaking. A benchmark of a collective investment undertaking must be selected with reference to the investment policy of a specific collective investment undertaking. 3. The supervisory authority shall lay down the requirements for a benchmark. 4. When making public the operating results of a collective investment undertaking, a management company or an investment company that has not designated a management company shall compare them with a benchmark in accordance with the procedure laid down by the supervisory authority. This requirement shall not apply to the operating results of a collective investment undertaking published in the key investor information document. A benchmark of a collective investment undertaking shall also be specified in the annual report of a collective investment undertaking. 5. A management company or an investment company that has not designated a management company shall approve the rules laying down the criteria and procedure of the selection and change of a benchmark of a collective investment undertaking. Article 41. Change of investment policy of a collective investment undertaking 1. As a result of changes of an investment policy of a harmonised collective investment undertaking such collective investment undertaking may not become a special collective investment undertaking. 2. As a result of changes of an investment policy of a harmonised collective investment undertaking and a special collective investment undertaking they may not become a collective investment undertaking which is excluded from the field of application of this Law. 3. When changes made in a collective investment undertaking’s policy are essential or when they result in the change of the undertaking’s type or category, the participants shall be notified to the effect in advance in accordance with the procedure laid down in the incorporation documents or prospectus of an undertaking. 4. In cases specified in paragraph 3 of this Article a management company shall provide the participants of a collective investment undertaking with a possibility to request the redemption, without additional charge, of units or shares of a collective investment undertaking held by them within a reasonable time limit, which may not be shorter than two months of the due notification of participants about the envisaged change of of a collective investment undertaking. The participants shall be informed about this right by the notification specified in paragraph 3 of this Article. SECTION TWO PROCEDURE OF SALE OR REDEMPTION OF UNITS OR SHARES OF COLLECTIVE INVESTMENT UNDERTAKINGS Article 42. Sale of units or shares 1. An investor shall acquire units or shares by concluding a simple written contract with a management company, an investment company or a distributor of units or shares. 2. Units or shares may be issued only when funds are received to the account of a collective investment undertaking. The right of ownership to units or shares shall be acquired upon making an entry in a personal account of units or shares. The entry in a personal account of units or shares shall be made not later than within one working day of the day on which funds are received to the account of a collective investment undertaking. If units or shares are issued not every day, the entry in a personal account of units or shares shall be made immediately after issue of units or shares. Upon allocation of additional units or shares as a result of profit distribution, the right of ownership shall be acquired when the entry is made in a personal account of units or shares. 3. Units or shares of collective investment undertakings set up pursuant to this Law shall be marketed by technical organisational means of an operator of a regulated market or of a multilateral trading facility and (
7. or)a settlement system in accordance with the procedure laid down by the supervisory authority. Article 43. Direct distribution of units or shares 1. A management company, before offering to an investor to acquire units or shares of a collective investment undertaking, shall propose to the investor to provide information about his investment knowledge and experience relating to units or shares of a particular collective investment undertaking. 2. Considering the information provided by an investor, a management company shall assess whether units or shares of a particular collective investment undertaking are suitable for such investor. Having considered the information provided by an investor and found that units or shares of a particular collective investment undertaking are unsuitable for a given investor, a management company must warn the investor about that. The warning may also be provided in a standardised form. 3. If an investor refuses to provide the information specified in paragraph 1 of this Article or provides insufficient information about his investment knowledge and experience, a management company must warn such investor that his refusal to provide the required information or provision of insufficient required information prevents a management company from determining whether units or shares of a particular collective investment undertaking are suitable for the investor. The warning may also be provided in a standardised form. 4. A management company may also accept an application for the acquisition of units or shares without having gathered the information about the investment knowledge and experience of an investor and without having assessed whether units or shares of a particular collective investment undertaking are suitable for an investor, provided that all following conditions are met: 1) distribution of units or shares of a particular collective investment undertaking is carried out on the initiative of an investor; 2) an investor has been warned that a management company distributing units or shares of a particular collective investment undertaking has no obligation to assess the suitability of units or shares of a particular collective investment undertaking for an investor, and therefore an investor does not benefit from the protection of investor’s interests laid down by this Law which is offered in providing other services. The warning may also be provided in a standardised form; 3) a management company avoids the conflicts of interests. 5. Provisions of this article shall apply mutatis mutandis to investment companies that have not designated a management company. 6. The supervisory authority shall lay down detailed requirements for the direct marketing of units or shares. Article 44. Price of units or shares 1. The price of units or shares shall be determined by dividing the net asset value by the number of all units or shares in circulation. 2. The price referred to in paragraph 1 of this Article may be increased by an amount corresponding to the deductions related to the sale of units or shares of a collective investment undertaking (where this is provided for in instruments of incorporation) only provided that the net asset value has not been reduced by the amount of these deductions. The redemption price of redeemable units or shares may be reduced by the amount of the deductions related to their redemption only provided that the net asset value has not been reduced and the selling price has not been increased by this deduction amount. Article 45. Calculation of net asset value The net assets value shall be established on the basis of the market price of assets of a collective investment undertaking and principles of establishing the net asset value laid down in legal acts of the supervisory authority and in the instruments of incorporation of a collective investment undertaking. Article 46. Redemption of units or shares 1. On request of a participant of a collective investment undertaking, a management company or an investment company must shall redeem its units or shares at the price of the day of filing a request to redeem units or shares, provided that such request is filed before the end of term fixed for acceptance of requests by a management or an investment company that has not designated a management company. If a request is submitted after the specified term the units or shares must be redeemed at the price of the working day following the day of filing a request, except for requests to redeem units or shares of an immovable property, private capital and (
8. or)collective investment undertaking investing in other collective investment undertakings (such requests shall be cancelled). 2. Actions taken by a management company or investment company that has not designated a management company to ensure that the market value of units or shares of a collective investment undertaking does not considerably differ from the net asset value of a given undertaking shall be attributed to the redemption of units or shares specified in paragraph 1 of this Article. 3. Settlement for the redeemed units or shares of a harmonised collective investment undertaking shall be made no later than within seven days of the day of filing a request to redeem units or shares. 4. The procedure of settlement for the redeemed units or shares of special collective investment undertakings shall be laid down by other Articles of this Law regulating the activities of special collective undertakings of an appropriate category and type. 5. A request to redeem units or shares held by spouses by the right of fractional ownership may be filed by one of the spouses holding the other spouse’s authorisation which may be executed in a simple written form. Article 47. Suspension of redemption of units or shares 1. The right to suspend redemption of units or shares shall be vested in a management company, an investment company and the supervisory authority. 2. The redemption may be suspended for a period not exceeding three months per year. 3. The redemption may be suspended, when: 1) it necessary for protecting the interests of the public and participants against potential insolvency of a collective investment undertaking or reduction of the redemption price in the event of unfavourable situation in the market of investment instruments and reduction in the value of portfolio of investment instruments; 2) funds are insufficient to pay for units or shares to be redeemed and the sale (realisation) of held investment instruments would be unprofitable; 3) such sanction is imposed by the supervisory authority in accordance with the procedure laid down by this Law. 4. From the moment of adoption of a decision to suspend the redemption of units or shares it shall be prohibited to: 1) accept the requests for redemption of units or shares; 2) pay for units or shares the redemption of which was requested before deciding to suspend the redemption. 5. A written notice of suspension of redemption shall be communicated without delay to persons who are intermediaries in the process of redemption and when units or shares are distributed in other Member States or third countries – also to supervisory authorities of other Member States or third countries, and shall also be announced through mass media, and investors intending to file a request to acquire units or shares of such collective investment undertaking, shall be notified about suspended redemption in writing by a management company or investment company that has not designated a management company. Article 48. Renewal of redemption 1. The redemption suspended by decision of the supervisory authority may be renewed only by decision of the supervisory authority or by a court or an administrative disputes commission, having annulled such decision. In other cases, this right shall also be vested in a management company or an investment company. 2. A notice of the decision to renew the redemption of units or shares shall be communicated in the same manner as the redemption suspension notice. Article 49. Specifics of marketing of shares of an investment company with variable capital 1. Upon sale of shares of an investment company with variable capital the provisions of the Law on Companies regulating subscription of and payment for shares of public limited liability companies shall not apply. Marketing of shares of investment companies with variable capital may be started when a company obtains an authorisation to pursue the activities of an investment company with variable capital and is authorised by the supervisory authority to approve the articles of association of an investment company with variable capital, to choose a depositary and where applicable the authorisation for a management company authorised in another Member State to manage an investment company with variable capital esta