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Editorial

Regulation on Investment Fund Mergers

Based on the authority granted under the 2005 Investment Funds Act, on 14 December 2006, the Croatian Agency for Supervision of Financial Services ("Agency") adopted the Regulation on Open Investment Fund Merger. The Regulation sets out a number of rules related to procedure, conditions and methods for merger of open investment funds in Croatia. The Regulation will come into effect on 30 December 2006.

Under the Regulation, two or more open investment funds may be merged either: (i) by acquisition of one fund (absorbed fund) by another (absorbing fund); or (ii) by consolidation of the existing investment funds into a new one. In addition, the Regulation provides that the funds may be merged regardless of whether they are managed by a single or different investment fund management companies. The following general requirements shall apply to both types of merger: 

  • The investment fund management company or the companies, as the case may be, must execute the Resolution on merger and the Merger Agreement;
  • The merger is subject to the prior Agency's approval. In this regard, the investment fund management company(ies) must file with the Agency a merger notification along with the various enclosures, including the Resolution on merger and the Merger Agreement;
  • In case the merger is approved, the entire assets of the absorbed fund are transferred to absorbing fund (in case of merger by acquisition) or the consolidated funds' assets are transferred to new fund (in case of consolidation) without liquidation procedure;
  • Following the Agency's approval, the merger will be registered with the Register of Funds kept by the Agency;
  • After completion of the merger procedure, the investment fund management company must notify any and all shareholders of the value and number of shares they hold upon completion of the merger procedure.

 

Contributed by Marija Gregorić, Partner at Babić & Partners 

 

BABIĆ & PARTNERS

Law Firm
Nova cesta 60/ 1st floor
10000 Zagreb, Croatia

Phone: +385 (0) 1 3821 124
Phone/Fax: +385 (0) 1 3820 451
E-mail: marija.gregoric@babic-partners.hr  

 

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