Law 69/2017, which governs Debt Recovery Funds("DRF"),
was published on 11 August 2017 and came into force on the
following day. The aim of DRFs is to mitigate the losses incurred
(only) by non-qualified investors who acquire financial instruments
representing the debt of entities that are insolvent or in a
difficult financial situation, when the instruments have been
mis-sold by credit institutions subject to resolution actions, or
by other entities in a group or control relationship with the
entity that is insolvent or in financial difficulty.
This mechanism was created in the wake of the conclusions
appearing in the Parliamentary Commission of Inquiry Report on the
management of Banco Espírito Santo ("BES") and the
Espírito Santo Group ("GES"). Furthermore, the
mechanism has the more or less self-confessed objective of being a
solution for non-qualified investors in commercial papers issued by
GES companies and acquired from the network of branches of the
banks
