3.A management company or an investment company the management of whose assets has not been delegated to the management company must notify the Securities Commission of suspension of distribution not later than within 3 working days from the passing of an appropriate resolution.
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SECTION TWO UNDERTAKINGS FOR COLLECTIVE INVESTMENT IN TRANSFERABLE SECURITIES
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Article 71Peculiarities of Undertakings for Collective Investment in Transferable Securities
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1.Undertakings for collective investment in transferable securities and their management companies shall be subject to all requirements set forth by this Law in respect of harmonised collective investment undertakings and their management companies, with the exception of the exceptions stipulated in this Article.
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2.Undertakings for collective investment in transferable securities with the restrictions provided for in this Article shall not be subject to provisions of paragraphs 4 and 5 of Article 13, shall be exempted from the prohibition to lend or pledge the assets comprising an investment fund or an investment company as stipulated in paragraph 3 of Article 13, and provisions of paragraphs 1 and 2 of Article 58, paragraphs 2, 3 and 4 of Article 66, and Articles 67, 68, 70 and 99 of this Law. It shall be prohibited to use the assets of an undertaking for collective investment in transferable securities to guarantee or secure the obligations of other persons.
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3.An undertaking for collective investment in transferable securities may invest in the transferable securities or money market instruments of a single issuing body up to 20 % of its net assets, with the exception of the cases established in paragraphs 5 and 6 of Article 58 of this Law. With the consent of the Securities Commission and where that proves to be necessary due to exceptional market conditions in a regulated market where a single issuing body is dominant, up to 35% of the net assets may be invested in its shares, bonds or non-equity securities of other forms.
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4.An investment company of an undertaking for collective investment in transferable securities or a management company managing the assets of a collective investment undertaking may borrow up to 15 % of the value of net assets as of the date of a loan contract conclusion for the term laid down in advance in the instruments of incorporation of the collective investment undertaking.
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5.The assets of an undertaking for collective investment in transferable securities may be lent solely to licensed financial institutions. The value of the assets thus lent may not exceed 10% of the value of net assets of the undertaking for collective investment in transferable securities. The investment company of the undertaking for collective investment in transferable securities or the management company managing the assets of a collective investment undertaking may, subject to the requirements set forth in this paragraph, lend the assets of the collective investment undertaking for a period not longer than 30 days. The requirement regarding the longest lending term as set forth in this paragraph may be waived only where a loan agreement provides for the right of the management company or the investment company for collective investment in transferable securities to claim at any time to repay the lent assets of the collective investment undertaking.
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SECTION THREE IMMOVABLE PROPERTY COLLECTIVE INVESTMENT UNDERTAKINGS
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Article 72Valuation of Immovable Property
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1.The management company of an immovable property collective investment undertaking or an immovable property investment company the management of whose assets has not been delegated to the management company must ensure that the objects of immovable property comprising the investment portfolio of the collective investment undertaking or the immovable property objects intended to be acquired are valued by at least two independent valuators authorised to engage in the activity of immovable property valuation, with the exception of the property valuator assistants who would produce individual reports. The objects of immovable property comprising the investment portfolio of an immovable property collective investment undertaking whose participants, in accordance with its instruments of incorporation, may be only professional investors or the objects of immovable property intended to be acquired may be valued by a single independent immovable property valuator authorised to engage in the activity of valuation of immovable property.
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2.A management company or an investment company must ensure that the objects of immovable property comprising the investment portfolio of a collective investment undertaking or the objects of immovable property intended to be acquired and located outside the Republic of Lithuania are valued by at least one immovable property valuator complying with the requirements set forth for immovable property valuators in the legal acts of that state.
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3.The duty to prove that a foreign immovable property valuator complies with the requirements specified in paragraph 2 of this Article shall fall upon a management company or an investment company.
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4.An immovable property valuator may not be the head of administration, the deputy head of administration, member of the board or an employee of the same management company, investment company or the depository safekeeping the assets of an immovable property collective investment undertaking. The same immovable property valuator may perform valuation of the property of the same collective investment undertaking for not longer than three successive years.
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5.An independent immovable property valuator must:
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1)perform valuation of each object of immovable property comprising the assets of a collective investment undertaking constituting a basis for calculation of the value of net assets;
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2)not earlier than one month prior to conclusion of a contract for the purchase or sale of an object of immovable property, perform valuation of the object of immovable property intended to be acquired using the assets of a collective investment undertaking or intended to be sold, with the exception of the cases stipulated in paragraph 2 of Article 76 of this Law.
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6.The Securities Commission shall have the right to require an additional independent immovable property valuation to be conducted in the absence of the valuator(s) performing the previous property valuation where:
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1)the performed property valuation fails to comply with the requirements stipulated in the instruments of incorporation of a collective investment undertaking;
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2)there are grounds for believing that the performed valuation was not objective, which may harm the interests of participants in the collective investment undertaking.
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Article 73Principal Investment Rules and Peculiarities of Immovable Property Collective Investment Undertakings
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1.Unless this Section provides otherwise, property investment by an immovable property collective investment undertaking shall not be subject to the restrictions stipulated in paragraphs 4 and 5 of Article 13, Article 57, with the exception of the prohibition provided for in paragraph 5 of that Article, Article 58 and paragraph 2 of Article 64, provisions of Article 99, and the prohibition to pledge the assets comprising an investment fund or the assets of an investment company as stipulated in paragraph 3 of Article 13 of this Law. It shall be prohibited to lend the assets of the immovable property collective investment undertaking, use the assets to guarantee or secure the obligations of other persons. The immovable property collective investment undertaking shall not be under the obligation to use the benchmark index.
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2.The price of acquisition of an object of immovable property may not significantly exceed, and the sale price may not significantly fall below, the price established by the immovable property valuators complying with the requirements set forth in Article 72 of this Law. A significant difference in the price shall be the price which differs by more than 15% from the value of the object of immovable property as established by the property valuator(s). Having concluded a transaction on the purchase or sale of an object of immovable property whose price exceeds the largest difference specified in this paragraph, an immovable property investment company or a management company managing an immovable property collective investment undertaking must, in exceptional cases and provided that interests of participants of the collective investment undertaking are not harmed, notify the Securities Commission thereof immediately, but in any case not later than within 5 working days from the conclusion of the transaction. The notification must indicate the price of the concluded transaction, the value of the object of immovable property established by the immovable property valuator(s) and the reasons for the conclusion of the transaction.
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3.An immovable property investment company or a management company managing an immovable property collective investment undertaking may, on account of the collective investment undertaking, borrow up to 75 % of the value of net assets as of the day of the loan contract conclusion for a term laid down in advance in the instruments of incorporation of the collective investment undertaking.
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Article 74Investment Objects of Immovable Property Collective Investment Undertakings
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1.The assets of an immovable property collective investment undertaking may comprise:
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1)the land representing an individual object of immovable property, buildings and/or premises registered in the name of the immovable property collective investment undertaking;
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2)the objects of immovable property planned to be constructed within a reasonable period of time;
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3)transferable securities and money market instruments of the companies whose main activity is the acquisition, reconstruction, leasing, trade and/or development of immovable property (immovable property companies), where the assets of such companies are invested in the immovable property complying with the requirements set forth in this Article;
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4)units or shares of the immovable property collective investment undertakings incorporated in the Member States whose supervision regulations are at least as stringent as in the Republic of Lithuania;
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5)the movable property and equipment necessary for the operation of the object of immovable property included in the investment portfolio of the collective investment undertaking;
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6)other investment instruments listed in Articles 57, 61 and 62 of this Law.
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2.The assets of an immovable property collective investment undertaking may not be used to acquire the objects listed in paragraph 1 of this Law where:
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1)they are planned to be acquired into common partial ownership without specifying the shares of the co-owners;
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2)the right of ownership to an object is restricted and this could result in the loss of the right of ownership;
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3)an object is not registered in a public register;
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3.The assets of an immovable property collective investment undertaking, with the exception of the period referred to in paragraph 8 of Article 75 of this Law, must be comprised of at least four individual objects of immovable property.
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Article 75Diversification of the Investment Portfolio of Immovable Property Collective Investment Undertakings
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1.The assets of an immovable property collective investment undertaking shall be considered sufficiently diversified where they are invested in compliance with the requirements stipulated in this Article. For the purpose of calculation of the maximum allowable investment limits, the premises located in the same building shall be considered a single object of immovable property.
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2.Net assets comprising not more than 20% of the assets of an immovable property collective investment undertaking may be invested in the instruments referred to in Article 57 of this Law provided that the requirements set forth in Articles 58, 59, 61 and 62 of this Law are complied with.
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3.Net assets comprising not more than 30% of the assets of an immovable property collective investment undertaking may be invested in one object of immovable property and/or an immovable property company.
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4.The total amount of investment in the objects of immovable property provided for in subparagraph 2 of paragraph 1 of Article 74 of this Law may not exceed 20% of the net assets comprising the assets of an immovable property collective investment undertaking.
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5.The total amount of investment in the objects of immovable property and the movable property and/or the equipment necessary for operation thereof shall not exceed 40% of the net assets comprising the assets of an immovable property collective investment undertaking.
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6.The total amount of investment in the transferable securities and money market instruments issued by the same immovable property company and the amount of the liabilities arising in respect of a collective investment undertaking as a result of transactions in derivative financial instruments with that company may not exceed 30% of the net assets comprising the assets of an immovable property collective investment undertaking.
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7.The total amount of investment in the investment instruments indicated in paragraph 6 of this Article and the investment objects indicated in paragraph 5 of this Article that are objects of investment of such an immovable property company and the immovable property collective investment undertaking investing in such company may not exceed 30% of the net assets comprising the assets of an immovable property collective investment undertaking.
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8.The investment portfolio of a newly incorporated immovable property collective investment undertaking shall be allowed, for four years from the approval of its instruments of incorporation and prospectuses by the Securities Commission, not to comply with the diversification requirements set forth in this Article. In all cases, this shall not waive the obligation of a management company and an investment company to invest the assets of an immovable property collective investment undertaking in compliance with the requirements set forth by Articles 66 and 74 of this Law.
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9.In the event of infringement of requirements of investment rules for the reasons beyond the control of a management company or an investment company, such incompliance must be eliminated within the shortest possible time, but in any case not later than within one year.
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10.Upon the expiry of the time limit laid down in paragraph 8 of this Article, a management company or an investment company the management of whose assets has not been delegated to the management company infringing requirements of investment rules must immediately notify the Securities Commission in writing of the infringement indicating the reasons for the infringement, the measures it intends to take to rectify the situation and the anticipated time limit for elimination of the infringement.
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Article 76Establishment of the Value of Net Assets of Immovable Property Collective Investment Undertakings
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1.The value of net assets of an immovable property collective investment undertaking shall be established on the basis of the market price of the assets of the collective investment undertaking and in compliance with the principles of establishment of the value of net assets as specified in this Law and legal acts of the Securities Commission as well as rules for the establishment of the value of net assets specified in the instruments of incorporation. The value of net assets of an immovable property collective investment undertaking shall be established at least once in three months. In all cases, the value of net assets must be established at the close of the financial year.
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2.The objects of immovable property comprising the assets of an immovable property collective investment undertaking shall be considered as valued where the value thereof was established not earlier than six months ago and only provided there were no material economic changes or changes in the market price of the immovable property changes necessitating a repeated valuation.
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Article 77Contents of the Annual Report of Immovable Property Collective Investment Undertakings
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1.In addition to the information provided for in paragraphs 3 and 6 of Article 22 of this Law, the annual report of an immovable property collective investment undertaking must be accompanied with:
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1)information on profit and/or loss during the financial year on the sale of each object of immovable property;
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2)information on the immovable property agencies whose services have been used by the management company of a collective investment undertaking or an investment company for the purposes of management of the assets of the undertaking;
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3)the most recent value of each object of immovable property comprising the investment portfolio of a collective investment undertaking as established by immovable property valuators.
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SECTION FOUR PRIVATE CAPITAL COLLECTIVE INVESTMENT UNDERTAKINGS
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Article 78Principal Rules for and Peculiarities of Investment by Private Capital Collective Investment Undertakings
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1.Unless otherwise specified in this Section, private capital collective investment undertakings and their management companies shall not be subject to the restrictions established in paragraphs 4 and 5 of Article 13, paragraphs 1, 2 and 4 of Article 57, Articles 58 and 59, and paragraph 2 of Article 64, Article 99, and the prohibition as stipulated in paragraph 3 of Article 13 of this Law to pledge the assets constituting an investment fund or the assets of an investment company. It shall be prohibited to lend the assets of a private capital collective investment undertaking or to use such assets to guarantee or secure the discharge of liabilities of other persons. The prohibition to lend shall not apply only to a collective investment undertaking intended for professional investors, however, the value of the assets lent may not exceed 50% of the value of net assets of the private capital collective investment undertaking. The private capital collective investment undertaking shall not be under the obligation to use the benchmark index.
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2.A private capital investment company or a management company managing the assets of a collective investment undertaking may borrow, on the account of the collective investment undertaking, up to 80% of the value of net assets as of the date of the loan contract conclusion for the term laid down in advance in the instruments of incorporation of the collective investment undertaking.
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3.Only private capital collective investment undertaking intended for professional investors may be comprised of the units or shares of different classes. In this case, the different classes of the units or shares as well as the scope of rights and duties of the investors holding them must be disclosed in the rules of a collective investment undertaking, or, where applicable, in the prospectuses thereof.
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Article 79Investment Objects of Private Capital Collective Investment Undertakings
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The assets of a private collective investment undertaking may be comprised of:
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1)securities of newly incorporated and/or operating companies whose transferable securities have not been admitted to trading on the markets specified in subparagraphs 1, 2 and 3 of paragraph 1 of Article 57 of this Law;
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2)the money market instruments issued by the companies indicated in paragraph 1 of this Article whose transferable securities have been acquired by a private capital collective investment undertaking, provided they have not been admitted to trading on the markets specified in subparagraphs 1, 2 and 3 of paragraph 1 Article 57 of this Law;
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3)other investment instruments listed in Articles 57, 61 and 62 of this Law.
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Article 80Diversification of the Investment Portfolio of Private Capital Collective Investment Undertakings
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1.The assets of a private capital collective investment undertaking shall be considered sufficiently diversified where they have been invested in compliance with the requirements set forth in this Article.
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2.Investment in transferable securities or money market instruments of a single company may not exceed 30% of the net assets comprising the assets of a private capital collective investment undertaking.
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3.The investment portfolio of a newly incorporated private capital collective investment undertaking shall be allowed, for four years from the approval of its instruments of incorporation and prospectuses by the Securities Commission, not to comply with the diversification requirements set forth in this Article. In all cases, this shall not waive the obligation of a management company and an investment company to invest the assets of the private capital collective investment undertaking in compliance with the requirements of Articles 66 and 79 of this Law.
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4.In the event of infringement of the requirements of investment rules for the reasons beyond the control of a management company or an investment company, the incompliance must be eliminated within the shortest possible time, but in any case not later than within one year. This time limit may be extended only in exceptional circumstances, where the management company or the investment company is not in a position to rectify the situation for the reasons beyond its control. In this case, upon the expiry of the time limit of one year the management company or the investment company must immediately notify the Securities Commission of the resulting situation and the reasons therefor. The notification must also specify the anticipated time limit for complying with the requirement.
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5.Upon the expiry of the time limit laid down in paragraph 4 of this Article, a management company or an investment company the management of whose assets has not been delegated to the management company infringing requirements of investment rules must in all cases immediately notify the Securities Commission in writing of the infringement indicating the reasons for the infringement, the measures it intends to take to rectify the situation and the anticipated reasonable time limit for elimination of the infringement.
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6.The requirements set forth in this Article shall be waived only in respect of the collective investment undertakings intended for professional investors. The latter shall be under the obligation to manage the investment portfolio risk. The rules of such collective investment undertakings and, where applicable, their prospectuses must indicate that these undertakings are not subject to the investment portfolio diversification requirements applicable to other private capital collective investment undertakings and that investment in a private capital collective investment undertaking intended for professional investors is related to a risk rating greater than medium.
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Article 81Establishment of the Value of Net Assets of Private Capital Collective Investment Undertakings
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1.The value of net assets of private capital collective investment undertakings shall be established on the basis of the market price of the assets of a collective investment undertaking and in compliance with the principles of establishment of the value of net assets specified in legal acts of the Securities Commission and rules for the establishment of the value of net assets specified in the instruments of incorporation. The value of net assets of a private capital collective investment undertaking shall be established at least once in three months. In all cases, it must be established at the close of the financial year.
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2.The value of net assets of a collective investment undertaking intended solely for professional investors shall be established at least once in six months. In all cases, it must be established at the close of the financial year
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Article 82Contents of the Annual Report of Private Capital Collective Investment Undertakings
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1.In addition to the information provided for in paragraphs 3and 6 of Article 22 of this Law, the annual report of a private capital collective investment undertaking must be accompanied with:
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1)information on the performance results of each company referred to in subparagraphs 1 and 2 of Article 79 of this Law in whose transferable securities and money market instruments the assets of the undertaking have been invested;
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2)information on profit and/or loss during the financial year on the sale of the transferable securities and money market instruments issued by the individual companies referred to in subparagraphs 1 and 2 of Article 79 of this Law.
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SECTION FIVE COLLECTIVE INVESTMENT UNDERTAKINGS INVESTING IN OTHER COLLECTIVE INVESTMENT UNDERTAKINGS
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Article 83Principal Rules for and Peculiarities of Investment by Collective Investment Undertakings Investing in Other Collective Investment Undertakings
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1.Unless otherwise specified in this Section, the investment of the assets of the collective investment undertakings investing in other collective investment undertakings shall not be subject to the restrictions specified in paragraphs 4 and 5 of Article 13, paragraphs 1, 2 and 4 of Article 57, and Articles 58 and 61, Article 99 and the prohibition stipulated in paragraph 3 of Article 13 of this Law to pledge the assets comprising an investment fund or the assets of an investment company. It shall be prohibited to lend the assets of such collective investment undertakings or to use the assets to guarantee or secure the discharge of liabilities of other persons. The collective investment undertakings of this sort shall not be under the obligation to use the benchmark index.
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2.A management company managing a collective investment undertaking of this sort or an investment company may borrow, on the account of such a collective investment undertaking, up to 15% of the value of net assets as of the date of the loan contract conclusion for the time limit laid down in advance in the instruments of incorporation of the collective investment undertaking, which in all cases may not exceed 6 months.
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Article 84Investment Objects of Collective Investment Undertakings Investing in Other Collective Investment Undertakings
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1.The assets of a collective investment undertaking investing in other collective investment undertakings may be comprised of:
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1)units or shares of the harmonised collective investment undertakings incorporated in Member States;
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2)units or shares of the collective investment undertaking incorporated in a Member States and/or another state and not complying with the requirements of EU legal acts, provided such undertakings and/or their management companies are subject to licensing and/or supervision for the purposes of protection of investor interests, and the Securities Commission and the foreign supervisory authority have concluded an agreement ensuring an appropriate supervision of operations of such collective investment undertakings and provision of information;
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3)other investment instruments listed in Articles 57 and 62 of this Law.
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2.The duty of proof that a collective investment undertaking in whose units or shares it is planned to invest complies with the requirements set forth in paragraph 1 of this Article shall fall upon a management company or an investment company.
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Article 85Diversification of the Investment Portfolio of the Collective Investment Undertakings Investing in Other Collective Investment Undertakings
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1.The assets of a collective investment undertaking of this sort shall be considered sufficiently diversified where they have been invested in compliance with the requirements set forth in this Article.
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2.Not more than 50% of the value of net assets of a collective investment undertaking may be invested in units or shares of a single collective investment undertaking not more than 10% of whose net assets have been invested in units or shares of other collective investment undertakings.
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3.Not more than 20% of the value of net assets of a collective investment undertaking may be invested in units or shares of a single collective investment undertaking more than 10% of whose net assets have been invested in units or shares of other collective investment undertakings.
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4.Not more than 20% of the net assets comprising the assets of an undertaking may be invested in the instruments referred to in Article 57 of this Law in compliance with the requirements set forth in Articles 58, 59, 61 and 62 of this Law.
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5.Not more than 20% of the value of net assets of a collective investment undertaking may be invested in units or shares of the hedge collective investment undertakings or identical collective investment undertakings complying with the requirements set forth in subparagraph 2 of paragraph 1 of Article 84 of this Law.
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6.The total investment in the collective investment undertakings provided for in paragraph 3 of this Article may not exceed 60% of the net assets of a collective investment undertaking.
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7.The investment limits provided for in paragraphs 2 and 3 of this Article may be extended up to 100 and 50% respectively where a collective investment undertakings in whose units or shares a higher share of net assets is intended to be invested is indicated in advance in the instruments of incorporation or prospectuses of the collective investment undertaking when disclosing its investment policy and the amounts of all investment-related fees and expenses. In this case, for the purpose of obtaining the approval of the Securities Commission for the instruments of incorporation and prospectuses of a collective investment undertaking investing in other collective investment undertakings or for amendments of such documents, the Securities Commission shall be furnished with the instruments of incorporation and prospectuses of the relevant collective investment undertaking in which a higher share of net assets is intended to be invested.
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8.In all cases, an investment company or a management company managing a collective investment undertaking of this sort must comply with the restrictions specified in Article 59 of this Law.
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9.The share of liabilities per one credit institution in the investment portfolio of a collective investment undertaking may not exceed 10% of the value of net assets of the collective investment undertaking.
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10.The shares of investment in units or shares of individual sub-funds of another collective investment undertaking must be accumulated, and in all cases the aggregate amount may not exceed the limits specified in paragraphs 2, 3 and 7 of this Article.
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11.The investment portfolio of a newly incorporated collective investment undertaking of this sort shall be allowed, for six months from the approval of its instruments of incorporation and prospectuses by the Securities Commission, not to comply with the diversification requirements set forth in this Article. The investment portfolio of such an undertaking shall also be subject to the requirements set forth in Article paragraphs 1 and 3 of Article 64 of this Law.
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Article 86Contents of the Annual Report of the Collective Investment Undertakings Investing in Other Collective Investment Undertakings
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1.In addition to the information provided for in paragraphs 3 and 6 of Article 22 of this Law, the annual report of a collective investment undertaking investing in other collective investment undertakings shall be accompanied with:
\n
1)information on profit and/or loss during the financial year on the sale or purchase, on the account of the assets of the undertaking, of the units or shares of each collective investment undertaking specified in paragraph 7 of Article 85 of this Law;
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2)information on the performance results of each collective investment undertaking whose units or shares were comprising the investment portfolio of the undertaking at the close of the financial year.
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SECTION SIX HEDGE COLLECTIVE INVESTMENT UNDERTAKINGS
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Article 87Principal Rules of Operation of Hedge Collective Investment Undertakings
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1.On the basis of this Law, only the hedge collective investment undertakings whose participants, in accordance with the instruments of incorporation of a collective investment undertaking, may be solely professional investors may be established in the Republic of Lithuania.
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2.The name of a hedge collective investment undertaking must reflect its investment policy. Its name must contain the word “hedge”.
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3.The assets of a hedge collective investment undertaking may be invested in all investment objects considered as eligible for investing by harmonised or special collective investment undertakings as specified in this Law in compliance with the special requirements set forth in this Section and the investment policy of a collective investment undertaking.
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4.Hedge collective investment undertakings and their management companies shall not be subject to provisions of paragraphs 3, 4 and 5 of Article, the investment restrictions specified in Articles 57, 58 and 59 of this Law, and provisions of Sections Two, Three, Four and Five of Chapter VII of this Law. A hedge collective investment undertaking shall not be under the obligation to use the benchmark index.
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5.A management company managing an investment fund of a hedge collective investment investment fund or a hedge collective investment investment company whose assets are intended to be invested in immovable property shall be mutandis mutandis subject to requirements of subparagraph 3 of paragraph 2 of Article 65 and of Article 72 of this Law. The objects of immovable property comprising the investment portfolio of a hedge investment collective investment undertaking or intended to be acquired must be valued by at least one immovable property valuator.
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6.The management company of a hedge collective investment undertaking or a hedge collective investment investment company the management of whose assets has not been delegated to the management company must ensure that the assets of the collective investment undertaking are invested in strict compliance with the investment policy defined in its instruments of incorporation.
\n
7.The investment portfolio of a hedge collective investment undertaking must in all cases be diversified to the extent capable of ensuring a proper investment risk-spreading.
\n
8.A hedge collective investment investment company or a management company managing the assets of a hedge collective investment undertaking may borrow, on the account of the hedge collective investment undertaking, up to 200 % of the value of net assets as of the day of the loan contract conclusion for a term laid down in advance in the instruments of incorporation of the collective investment undertaking.
\n
9.The assets of a hedge collective investment undertaking may be lent only to licensed financial institutions. The value of the assets lent may not exceed 50% of the value of net assets value of the hedge collective investment undertaking. A hedge collective investment investment company or a management company managing the assets of the hedge collective investment undertaking may, in compliance with the requirements set forth in this paragraph, lend the assets of a collective investment undertaking for a period not exceeding 30 days. The requirement of the maximum duration of the lending period as specified in this paragraph may be waived only where, under the terms of the loan contract, the management company or the hedge collective investment investment company has the right to claim a return of the lent assets of the collective investment undertaking at any time.
\n
10.The advertising of a hedge collective investment undertaking must provide explicit information about the restrictions imposed upon investors under this Law in respect of the acquisition of units or shares of such undertakings.
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Article 88Provisions Applicable to the Instruments of incorporation of Hedge Collective Investment Undertakings
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1.The instruments of incorporation of a hedge collective investment undertaking must explicitly disclose the investment policy of the undertaking, a finite list of eligible investment objects and the limits of investment.
\n
2.The instruments of incorporation of a hedge collective investment undertaking must indicate that only professional investors may be its participants.
\n
3.The requirements set forth in subparagraphs 2 and 3 of paragraph 2 of Article 65 of this Law shall apply mutandis mutandis to the rules of a hedge collective investment investment fund.
\n
4.The articles of association of a hedge collective investment investment company shall be subject to requirements of Article 54 of this Law.
\n
5.The instruments of incorporation of a hedge collective investment undertaking must also indicate the types of risk related to investment in the collective investment undertakings of this sort and description thereof, with an indication that investment in a hedge collective investment undertaking is related to a risk rating greater than medium.
\n
Article 89Establishment of the Value of Net Assets of Hedge Collective Investment Undertakings
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The value of net assets of hedge collective investment undertakings shall be established on the basis of the market value of the assets of a collective investment undertaking and in compliance with the principles of establishment of the value of net assets specified in legal acts of the Securities Commission and rules for the establishment of the value of net assets specified in the instruments of incorporation. The value of net assets of a hedge collective investment undertaking shall be established at least once in six months. In all cases, it must be established at the close of the financial year.
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SECTION SEVEN COLLECTIVE INVESTMENT UNDERTAKINGS OF THE CLOSED-ENDED TYPE
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Article 90Peculiarities of a Closed-Ended Investment Company
\n
1.A closed-ended investment company shall be subject to the same requirements as an investment company with variable capital, unless this Article indicates otherwise.
\n
2.In addition to the information provided for in paragraph 1 of Article 54 of this Law, the articles of association of a closed-ended investment company must indicate:
\n
1)type of the company (a closed-ended investment company) and the term for which it is established;
\n
2)that the shares of the company shall not be redeemed upon a request of a shareholder;
\n
3)the procedure for allocating dividends to shareholders of the company;
\n
4)the procedure for issuing new shares of the company and the time limits for settlement for such shares;
\n
5)information on whether the shares of the new issue of the company may be offered to the persons other than shareholders of the company where the current shareholders of the company fail to subscribe to all shares of the company to be issued within the time limit laid down in this Article.
\n
3.The duration of operation of a closed-ended investment company whose articles of association provide for the issue of shares may not exceed ten years.
\n
4.The par value of all ordinary registered shares issued by a company must be equal.
\n
5.A company shall be prohibited from having its own shares or redeeming them from shareholders of the company.
\n
6.The authorised capital of a company may be increased only from share premium account or by additional contributions upon a decision of the general meeting of shareholders.
\n
7.When increasing the authorised capital by additional contributions the shares being issued may be acquired only by shareholders of a company in proportion to the number of shares held thereby. The shares may be offered to non-shareholders of the company only where the current shareholders of the company have failed to subscribe to all shares to be issued by the company within the time limit that may not be less than 10 days and not more than 30 calendar days as laid down in the articles of association. The shares of the new issue of shares must be paid in cash within the time limit laid down in a share subscription agreement that may not exceed 30 working days.
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8.Where at least one issue of shares of a closed-ended investment company has been distributed in accordance with the procedure laid down in paragraph 13 of Article 2 of this Law, distribution of other issues of shares of the same company must be conducted in accordance with the same procedure.
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9.The prospectus of the issue of shares of a closed-ended investment company type must be drawn up in compliance with the requirements set forth by the Securities Commission. A closed-ended investment company shall not be under the obligation to draw up a simplified share issue prospectus.
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10.The financial statements of a company must be drawn up and audited not earlier than 30 days prior to the passing of a decision on the allocation of dividends. This requirement may be waived where the decision to pay dividends is passed at the annual general meeting of shareholders. The dividends shall be paid to the shareholders of the company within the time limits and in accordance with the procedure laid down by the articles of association of the company.
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11.The transferable securities, money market and derivative financial instruments comprising the investment portfolio of a company must be assessed at least once in two weeks. Other assets must be assessed on a regular basis at the frequency specified in the articles of association of the company, but in any case at least once a year. The company must conduct a new assessment of the assets comprising the investment portfolio at each occasion of the new issue of shares.
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12.The amount of the net assets of a company and the net value of a share shall be announced in accordance with the procedure and at the frequency laid down in the articles of association, but in any case at least once a year.
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13.Upon the expiry of the term of operation of a closed-ended investment company as laid down in the articles of association of the company, the assets of the company shall be sold, and the funds remaining upon discharge of liabilities shall be distributed to shareholders of the company in proportion to the number of shares held thereby.
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Article 91Peculiarities of a Closed-Ended Investment Fund
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1.A closed-ended investment fund shall be subject to the same requirements as special open-ended investment funds unless this Article indicates otherwise.
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2.The name of an investment fund of the closed-ended type must contain the word combination “closed-ended”.
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3.In addition to the information referred to in Article 46 of this Law, the rules of an investment fund must explicitly indicate the type of the fund, the duration for which the fund has been established, and a warning that units of the fund are not redeemed at the request of a participant. In compliance with the requirements set forth in this Law for the offering of units or shares, the rules of the fund may establish a limited number of participants and/or units of the fund.
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4.The period of operation of a closed-ended investment fund the rules whereof provide for the issue of units not entitling to a share in investment proceeds may not exceed ten years.
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5.The management company of a closed-ended investment fund shall not be under the obligation to draw up a simplified prospectus of the fund.
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6.A closed-ended investment fund shall be liquidated by a decision of its management company only upon redemption of all units owned by participants in the fund and settlement with the participants in the fund in cash.
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Article 92Offering and Advertising of Collective Investment Undertakings of the Closed-Ended Type
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In addition to the information to be included in a mandatory manner in advertising as provided for in this Law, the advertising of collective investment undertakings of the closed-ended type must contain an explicit and comprehensible indication that the investor's right to redeem the units or shares held by him shall be restricted.
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CHAPTER VIII
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ADMISSION OF UNITS OR SHARES TO TRADING ON A REGULATED MARKET OPERATING IN THE REPUBLIC OF LITHUANIA
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Article 93Admission of Units or Shares to Trading on a Regulated Market
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1.The units or shares of a collective investment undertaking established according to this Law may be admitted to trading on a regulated market operating in the Republic of Lithuania in compliance with the rules provided for in this Law and in paragraph 1 of Article 54 of the Law on Markets in Financial Instruments governing the admission of financial instruments to trading on a regulated market. It shall be prohibited to admit to trading on a regulated market operating in the Republic of Lithuania the units or shares of hedge collective investment undertakings.
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2.The admission of units or shares of collective investment undertakings of the closed-ended type to trading on a regulated market shall be subject to provisions of this Law to the extent these relations are not regulated by the Law on Securities.
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3.A decision of the management body of a management company or the general meeting of shareholders of an investment company to admit the shares of the investment company or units of an investment fund to trading on a regulated market shall be applied to all units or shares of the collective investment undertaking (including those issued after the admission to trading on the regulated market).
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Article 94Trading in Units or Shares on a Regulated market
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Trading in units or shares of a collective investment undertaking on a regulated market shall be conducted in accordance with rules of the regulated market.
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Article 95Disclosure of Information
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1.The information concerning admission of units or shares of a collective investment undertaking to trading on a regulated market must be provided in the instruments of incorporation and prospectuses of the collective investment undertaking by indicating the name of the respective regulated market.
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2.The full prospectus of a collective investment undertaking, with the exception of a collective investment undertaking of the closed-ended type whose units or shares are to be admitted to trading on a regulated market and the subsequent amendments thereto must be published in accordance with the procedure laid down by the Law on Securities. The Securities Commission shall have the right to provide for exceptions to the duty stipulated in this paragraph to additionally publish the full prospectus.
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3.The drawing up, approval and publication of the prospectus of a collective investment undertaking of the closed-ended type whose units or shares are to be admitted to trading on a regulated market and the prospectus for the issue of shares of a closed-ended investment company shall be subject to provisions of this Law to the extent the mentioned relations are not governed by the Law on Securities.
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4.A management company or an investment company shall notify the operator of a regulated market of the following:
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1)the price of the units or shares calculated in accordance with the procedure laid down in Article 35 of this Law;
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2)the number of units or shares issued, redeemed or admitted to trading on the regulated market, in the event of change thereof;
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3)any changes in the composition of the financial instrument portfolio of an index-replicating collective investment undertaking;
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4)other information indicated in the rules of the regulated market;
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5.The notifications referred to in subparagraphs 1 and 2 of paragraph 4 of this Article must be submitted on each day of trading on a regulated market.
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6.With a view to providing an investor with a possibility to properly and timely compare the price of units or shares on a market with the price of the units or shares calculated in accordance with the procedure laid down in Article 35 of this Law, the operator of the regulated market must publish the information referred to in subparagraphs 1, 2 and 3 of paragraph 4 of this Article on each day of trading on the regulated market.
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7.Any additional requirements for the notification and publication on a regulated market of the information stipulated in paragraph 4 of this Article shall be set forth by rules of the operator of the regulated market.
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Article 96Accounting of Units or Shares
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The units or shares of a collective investment undertaking admitted to trading on a regulated market or offered by technical organisational means of the operator of the regulated market and/ or a settlement system must be accounted for in accordance with the rules drawn up by the Central Securities Depository of Lithuania and approved by the Lithuanian Securities Commission.
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CHAPTER IX
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SECTION ONE ACTIVITIES OF MANAGEMENT COMPANIES AND INVESTMENT COMPANIES WITH VARIABLE CAPITAL LICENSED IN THE REPUBLIC OF LITHUANIA IN FOREIGN STATES
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Article 97Right of Management Companies of the Republic of Lithuania to Provide Services in Foreign States
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1.This Article shall set forth the requirements to be complied with by a management company establishing a branch in a Member State or providing services in such a state without establishing a branch. In a non-Member State, the management company shall have the right to establish a branch or to provide services without establishing a branch in accordance with the procedure laid down in this Article, provided the agreements concluded between the Securities Commission and the foreign supervisory authority are sufficient to ensure adequate supervision of activities and provision of information. Where the management company already has at least one branch in a foreign state, the procedure laid down in this Article shall not apply to the establishment of its other branches in that state.
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2.Prior to establishing a branch in a foreign state, a management company must communicate a notice thereof to the Securities Commission enclosing its programme of operations, specifying the types of business and the services intended to be provided, the proposed structure of the branch, the contact location for applying for documents and the full names of heads of the branch.
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3.The Securities Commission must, within three months, communicate the information specified in paragraph 2 of this Article to the foreign supervisory authority enclosing thereto the information regarding the scheme of insurance of liabilities to investors. The Securities Commission shall have the right to refuse to grant authorisation for the establishment of a branch and to refuse, within two months, to communicate the specified information only where the structure of the proposed branch or the company's financial position does not meet the requirements set forth by the Securities Commission for the pursuit of such activities. A management company must be notified of the communication of information or the refusal to communicate it.
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4.In order to provide services in a foreign state without establishing a branch, a management company must give a notice thereof to the Securities Commission indicating the foreign State. The company must also provide its programme of operations indicating the services which it intends to provide. The Securities Commission must also be communicated such a notice where distribution of units or shares is planned to be effected through intermediaries. The Securities Commission must, within one month, communicate this notice to the foreign supervisory authority alongside with the information regarding the scheme of insurance of liabilities to investors and notify the management company thereof.
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5.In the event of changes to the information communicated by a management company together with a notice of the establishment of a branch, it must give a prior notice thereof to the Securities Commission and the foreign supervisory authority at least one month in advance. In such a case, where there are reasons provided for in paragraph 3 of this Article, the Securities Commission must instruct to cease the activities of the branch. The Securities Commission must notify the foreign supervisory authority of any changes in the scheme of insurance of liabilities to investors or changes in other communicated information. In the event of any changes in the programme of operations of a company providing services without establishing a branch, it must give a prior notice thereof to the Securities Commission and the foreign supervisory authority.
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Article 98Supervision of Activities of Management Companies of the Republic of Lithuania in a Foreign State
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1.The Securities Commission shall supervise the compliance with prudential requirements by the management companies of the Republic of Lithuania providing investment services in a foreign state. Where the foreign supervisory authority notifies of the infringements committed by a management company, the Securities Commission must apply sanctions and inform the foreign supervisory authority thereof.
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2.The Securities Commission shall have the right to request that the foreign supervisory authority carry out an inspection of activities of a branch of a management company or to carry out the inspection itself upon giving a prior notice thereof to the foreign supervisory authority.
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3.In the event of revocation of a licence of a management company providing services in a foreign state, the Securities Commission must give a notice thereof to the foreign supervisory authority without delay.
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Article 99Distribution of Units or Shares in a Foreign State
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1.A management company or an investment company with variable capital wishing to carry out distribution of units or shares in a foreign state must give a notice thereof to the Securities Commission.
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2.The Securities Commission must forthwith notify the supervisory authority of a foreign state where units or shares are distributed of revocation of the licence of a management company or an investment company with variable capital, suspension of redemption of units or shares or appointment of a temporary representative of the Securities Commission for the supervision of activities of the management company or the investment company with variable capital.
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SECTION TWO ACTIVITIES OF FOREIGN MANAGEMENT COMPANIES AND INVESTMENT COMPANIES WITH VARIABLE CAPITAL IN THE REPUBLIC OF LITHUANIA
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Article 59Right of Foreign Management Companies to Provide Services in the Republic of Lithuania
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1.A management company licensed in a Member State may establish a branch in the Republic of Lithuania provided that the foreign supervisory authority has communicated to the Securities Commission the company's programme of operations specifying the services it plans to provide, the intended structure of the branch, the contact location for applying for documents, and the full names of heads of the branch. Upon receipt of such a communication, the Securities Commission shall prepare for the exercise of supervision and, where necessary, notify the management company of the operation requirements which, in general interests, it will be under the obligation to comply with.
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2.A branch may be established upon receipt by a management company of a notification of the Securities Commission provided for in paragraph 1 of this Article, and in the absence of the notification – after the lapse of two months from the day when the foreign supervisory authority communicated to the Securities Commission the information provided for in paragraph 1 of this Article. As of this moment, the management company shall acquire the right to provide services in the Republic of Lithuania and, subject to compliance with the requirements laid down in Article 102 of this Law, to distribute the units or shares of the collective investment undertakings managed by it and complying with requirements of the European Union legal acts, unless the Securities Commission establishes within the said period that there is a ground as specified in paragraph 3 of Article 102 for refusing appropriate authorisation.
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3.If a management company referred to in paragraph 1 of this Article has already established at least one branch in the Republic of Lithuania, the procedure laid down in this Article shall be waived for the establishment of its other branches.
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4.A management company licensed in a Member State may commence provision of services in the Republic of Lithuania without establishing a branch upon the lapse of one month from the date of communication by the foreign supervisory authority of its programme of operations to the Securities Commission. As of this moment, the management company shall acquire the right to provide services in the Republic of Lithuania and, subject to compliance with the requirements set forth in Article 102 of this Law, to distribute the units or shares of the collective investment undertakings managed by it, unless the Securities Commission establishes within the said period that there are the grounds specified in paragraph 3 of Article 102. The Securities Commission shall have the right to instruct the management company about the requirements of operation which, in general interests, it will be under the obligation to comply. The procedure laid down above shall also apply where the management company distributes units or shares through intermediaries.
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5.In the event of any changes in the information about a management company provided for in paragraph 1 of this Article, the company must give a prior notice thereof to the Securities Commission at least one month in advance. A management company which provides services without establishing a branch must give a prior notice to the Securities Commission of any changes in its programme of operations.
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6.A management company licensed in a non-Member State shall have the right to provide services in the Republic of Lithuania in accordance with the same procedure as laid down for the companies licensed in Member States provided there is agreement concluded between the Securities Commission and the foreign supervisory authority to ensure proper supervision of activities and provision of information.
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Article 101Supervision of Activities of the Foreign Management Companies Providing Services in the Republic of Lithuania
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1.The foreign management companies providing services in the Republic of Lithuania must act in compliance with the rules of conduct laid down in the legal acts of the Republic of Lithuania governing general interests. Their branches must be organised in such a way as to comply with the requirements set forth by the Securities Commission seeking to minimise the risk of conflicts of interest between participants in and clients of a collective investment undertaking and the management company as well as their managers or members of the management bodies.
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2.The Securities Commission shall have the right to require the foreign management companies providing services in the Republic of Lithuania to provide the same notifications and/or reports specified under this Law as required from the management companies licensed in the Republic of Lithuania. The Securities Commission may additionally require periodic reports of a branch drawn up for statistical purposes.
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3.The foreign supervisory institution or the persons authorised by it shall have the right to carry out inspections of a branch of a foreign management companies upon giving a prior notice to the Securities Commission.
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4.Where a foreign management company operating in the Republic of Lithuania infringes legal acts, the Securities Commission must require it to eliminate the infringements. Where the situation is not remedied within the established time period, the Securities Commission must give a notice thereof to the foreign supervisory authority. Where the management company persists in infringing, the Securities Commission shall have the right, upon informing the foreign supervisory authority, apply the following sanctions:
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1)impose administrative penalties or the pecuniary penalties stipulated by this Law upon employees, the head of the administration, his deputy or managers of the Board of the management company;
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2)prohibit from effecting further transactions in the Republic of Lithuania.
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5.The Securities Commission shall not be under the obligation to follow the procedure for applying sanctions as laid down in paragraph 4 of this Article where a foreign management company infringes the rules of conduct relating to general interests. The Securities Commission shall forthwith notify the foreign supervisory authority of the sanctions applied. Where the company infringes other rules non-compliance wherewith poses a threat to the interests of investors and recipients of services, the Securities Commission shall have the right to diverge from the procedure laid down in paragraph 4 of this Article and must communicate the sanctions applied to the foreign supervisory authority without delay, where the sanctions have been applied to a management company licensed in a Member State – also to the Commission of the European Communities.
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6.Upon receipt of the information about revocation of a foreign management company’s licence, the Securities Commission must forthwith take the steps provided for by laws to terminate its activities in the Republic of Lithuania.
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Article 102
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Right to Distribute the Units or Shares of a Collective Investment Undertakings Complying with Requirements of the Directives Referred to in the Annex to This Law 1. A management company or an investment company with variable capital licensed in a Member State, where it wishes to distribute units or shares in the Republic of Lithuania, must give a notice thereof to the Securities Commission.
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2.A notification must also include:
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1)a confirmation of the foreign supervisory authority that the collective investment undertaking whose units or shares will be distributed complies with requirements of the directives referred to in the Annex to this Law;
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2)the instruments of incorporation of the collective investment undertaking;
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3)the full and simplified prospectuses;
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4)the most recent annual report and a half-year report, where it was drawn up following the annual report;
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5)the procedure for distributing and redeeming the units or shares in the Republic of Lithuania.
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3.A management company or an investment company with variable capital may commence distribution of units or shares after the lapse of two months following communication of the information specified in paragraph 2 of this Article, with the exception of the case when the Securities Commission decides within the said period that:
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1)the procedure for distributing the units or shares contravenes legal acts of the Republic of Lithuania or does not guarantee proper payment for the units or shares being redeemed or furnishing of information;
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2)supervision of a management company or an investment company with variable capital licensed in a non-Member State does not comply with the European Union legislation or the Securities Commission has not concluded agreements with the foreign supervisory authority ensuring adequate supervision of activities and provision of information.
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4.The rules for submission of the documents listed in this Article shall be established by the Securities Commission.
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5.In the event of violation of the procedure of public distribution or redemption, the Securities Commission shall have the right to prohibit distribution of units or shares.
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Article 103Procedure for Terminating Public Distribution of Units or Shares of Foreign Collective Investment Undertakings
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1.A management company or an investment company with variable capital licensed in a foreign state and wishing to terminate the public distribution of units or shares of a collective investment undertaking complying with requirements of the directives referred to in the Annex to this Law must, not later than two months in advance prior the planned termination of the distribution, notify the Securities Commission thereof in writing and make a public announcement to that effect in at least one national daily newspaper or notify thereof in writing each Lithuanian investor holding the units or shares of the collective investment undertaking.
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2.The notices to investors and the Securities Commission as indicated in paragraph 1 of this Article must indicate:
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1)the planned date of termination of public distribution of the units or shares in the Republic of Lithuania;
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2)the consequences of termination of public distribution of the units or shares for current investors of the collective investment undertaking;
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3)contact data of the undertaking to which the current investors may apply concerning the redemption of their units or shares prior to termination of public distribution thereof;
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4)contact data of the undertaking to which the current investors may apply concerning the redemption of their units or shares following termination of public distribution thereof;
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5)the venue at which the investors who have failed to exercise the possibility to require redemption of the units or shares prior to termination of public distribution thereof will be able to familiarise themselves with the information published by the management company or an investment company with variable capital about the collective investment undertaking;
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3.A foreign management company or an investment company with variable capital must fulfil the duty stipulated in Article 104 of this Law to publish and provide to investors the information about the activities of a collective investment undertaking for a period not shorter than two months from the proper discharge of the duty provided for in paragraph 1 of this Article.
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Article 104Information Published by a Foreign Management Company or an Investment Company with Variable Capital
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1.A foreign management company or an investment company with variable capital distributing units or shares in the Republic of Lithuania must publish and submit to the Securities Commission, in the Lithuanian language or in any other language prescribed by the Securities Commission and in accordance with the procedure laid down in a state of its registered office, its full and simplified prospectuses and amendments thereto, annual and half-yearly reports and the instruments of incorporation.
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2.If the name of a foreign collective investment undertaking may be misleading, the Securities Commission shall have the right to request concurrent publication of its explanation.
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CHAPTER TEN STATE SUPERVISION OF ACTIVITIES OF MANAGEMENT COMPANIES, INVESTMENT COMPANIES WITH VARIABLE CAPITAL AND DEPOSITORIES
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Article 105Accounting and Reporting
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1.The accounting of a management company, investment company and investment fund, the organisation and management of accounting, the procedure for drawing up of financial statements shall be established by laws and other legal acts.
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2.A depository with which a management company or an investment company has concluded an agreement on safe-keeping of assets of the investment fund or the investment company must furnish to the management company or the investment company the management of whose assets has not been delegated to the management company all documents necessary for the management of accounting and drawing up of financial statements.
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Article 106Securities Commission
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1.The activities of management companies, investment companies and depositories shall be supervised by the Securities Commission.
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2.The Securities Commission shall perform supervisory functions in compliance with this Law and the Law on Markets in Financial Instruments and shall possess the rights and duties specified in this Law and other laws.
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3.The acts or omission committed by the Securities Commission may be appealed against in accordance with the procedure laid down in the Law on Administrative Proceedings.
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Article 107Functions of the Securities Commission Relating to Supervision of Activities of Management Companies, Investment Companies and Depositories
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The Securities Commission shall:
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1)draft, approve, amend or repeal the legal acts assigned to its sphere of competence under this Law;
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2)submit clarifications and recommendations on the issues of application of this Law and the implementing legislation;
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3)issue licences to management companies, investment companies with variable capital and closed-ended investment companies and revoke them, apply other sanctions;
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4)approve the rules of investment funds, articles of association of investment companies and amendments thereto, grant the authorisations specified in this Law;
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5)inspect the activities of management companies, investment companies and depositories;
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6)give the instructions binding on management companies, investment companies and depositories on the elimination of infringements of legal acts;
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7)have the right to obtain, in accordance with the procedure laid down by laws, data about the persons who, under this Law, must be of sufficiently good repute;
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8)co-operate with foreign supervisory authorities and exchange with them the information necessary for the exercise of supervision;
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9)perform other functions set out in this Law and other laws.
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Article 108Duty of Members and Employees of the Securities Commission to Protect Confidential Information
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1.Members and employees of the Securities Commission must, in accordance with the procedure laid down by the Law on Markets in Financial Instruments, protect the confidential information which came to their knowledge while performing the functions specified by this Law. The contents of confidential information shall be specified by the Securities Commission.
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2.The right of the Securities Commission to communicate confidential information in accordance with the procedure laid down in the Law on Markets in Financial Instruments shall also apply to the information obtained in the performance of the functions specified by this Law.
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Article 109Right of the Securities Commission Members to Carry out Inspections
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1.With a view to determining compliance of management companies, investment companies and depositories with this Law and the legal acts adopted on the basis thereof, the Securities Commission shall have the right to organise and carry out inspections.
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2.To this end, employees of the Securities Commission may, upon notifying the administration of an enterprise, freely enter the premises of a management company, investment company or depository, temporarily seize documents subject to leaving a list of such documents or copy them, also place questions to heads of the administration of these enterprises, their deputies, members of the management bodies or employees.
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Article 110Pecuniary Penalties for an Infringement of the Law
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In compliance with the procedure laid down in the Law on Markets in Financial Instruments, the Securities Commission shall have the right to impose the following pecuniary penalties:
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1)on the legal persons engaged in the business of a management company, investment company with variable capital and closed-ended investment company without the licence specified in this Law – in the amount of up to LTL 200 000;
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2)on the legal persons in breach of the regulatory provisions of this Law – in the amount of up to LTL 100 000.
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Article 111Recovery of Pecuniary Penalties
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Pecuniary penalties shall be paid into the State budget not later than within one month of the receipt by a person of a decision of the Securities Commission on the imposition of a pecuniary penalty. When the pecuniary penalty has not been paid voluntarily, the decision of the Securities Commission on the imposition of the penalty shall be enforced in accordance with the procedure laid down by the Civil Code of the Republic of Lithuania.
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CHAPTER XI
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FINAL PROVISIONS
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Article 112Provisions Relating to Membership in the European Union
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1.The Securities Commission must inform the Commission of the European Communities:
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1)that the Securities Commission shall be responsible for the supervision of collective investment undertakings in the Republic of Lithuania;
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2)which institutions of the Republic of Lithuania may be communicated confidential information relating to the activities of collective investment undertakings;
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3)which credit institutions meet the requirements listed in paragraph 6 of Article 58 of this Law, also specify the bonds issued by such credit institutions and the instruments safeguarding the interests of bond-holders;
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4)the procedure to be followed by management companies and investment companies with variable capital when assessing the liabilities arising from transactions in derivative financial instruments;
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5)about the cases when the licence is issued to a management company which is, or becomes, a subsidiary of an entity with its registered office established in a non-Member State ;
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6)about the cases when the management companies licensed in the Republic of Lithuania are prevented from providing services or distributing units in non-Member States;
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7)about the cases where the Securities Commission refuses to grant the management companies licensed in the Republic of Lithuania an authorisation for establishing a branch in a Member State or imposes sanctions against the management companies licensed in a Member State;
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8)the indices recognised by the Securities Commission in compliance with paragraph 1 of Article 60 of this Law.
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I promulgate this Law passed by the Seimas of the Republic of Lithuania.
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PRESIDENT OF THE REPUBLIC ROLANDAS PAKSAS Annex to the Republic of Lithuania Law on Collective Investment Undertakings IMPLEMENTED EU LEGAL ACTS 1. Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ 2004 special edition, Chapter 6, Volume 1, p. 139 (as last amended by Directive of the European Parliament and of the Council of 21 April 2004 (OJ 2004 special edition, Chapter 6, Volume 7, p. 263).
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2.Commission Directive 2006/73/EC of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (OJ 2006, L 241, p. 26).