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MTF-s eligible for UCITS funds

25.03.2008

Due to the amendments of the Investment Funds Act, as of 15 March 2008 the UCITS funds and other open-ended investment funds, which sell their units or shares to the public, are permitted to invest up to 100% of its assets also into securities admitted to trading on an alternative regulated market (e.g. an MTF) of an European Economic Area member state which operates regularly and is recognized and open to the public.

With the directive on markets in financial instruments (2004/39/EEC) it has been found necessary to recognize the emergence of new generation of organized trading systems alongside regulated markets which should be subject to obligations designed to preserve the efficient and orderly functioning of financial markets. These alternative trading facilities provide an alternative possibility also for the smaller undertakings to raise capital as usually the requirements for admitting shares to trading on an MTF are not as burdensome as in the case of regulated markets (e.g. stock exchanges). The above amendment of the Investment Funds Act is also in compliance with the requirements of the UCITS directive (85/611/EEC).

With the amendments to Investment Funds Act it is also clarified that the provisions of the Securities Market Act concerning the public offer of shares and for admitting the shares to trading on a regulated market applies only to investment funds the units or shares of which are not repurchased or redeemed out of the assets of the investment fund as established in the directive on the prospectus to be published when securities are offered to the public or admitted to trading (2003/71/EC).

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