Lithuania Will Have More Business Financing Alternatives

Date

2018 10 18

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Lithuania creates one of the most favourable conditions in the European Union for the activities of the investment funds. The Government approved draft laws regulating the activities of collective investment undertakings (CIUs) aimed to reduce the administrative burden on investment funds and to create more favourable conditions for their activities, and, therefore – more business financing alternatives and investment opportunities in our country.

“This package of draft legislation will eliminate redundant restrictions on investment funds – clarity and flexibility of regulation will be significantly improved by offering new opportunities for investors. It is expected that this will create one of the most favourable conditions in the European Union (EU) for the activities of the investment funds and will boost their activities in Lithuania, thus contributing to the reinforcement of competitiveness of our country “, says Minister of Finance Vilius Šapoka.

In developing the package of draft legislation, good practice of other Member States was taken into consideration. In 2017 the Ministry of Finance together with the Bank of Lithuania carried out a legal regulatory review of collective investment undertakings and assessed the best regulatory practices in investment funds of the EU countries and market players’ offers.

The package of draft legislation proposes to simplify the processes for licensing and authorisation for the CIU managers (management companies and investment manager companies), to limit the requirements for the list of documents required to be submitted during the licensing process, to open up opportunity for distribution of units or shares of alternative CIUs in Lithuania by retail investors and to pay for acquired units (shares) of special CIUs by in-kind contribution.  

It is also proposed to enable greater flexibility for regulation of closed-end investment funds (in capital increase, own share buybacks, dividend allocation) and to expand the list of entities which are eligible to act as custodians and depositaries.

The package of legislation regulating activities of CIUs is one of one of the measures for ensuring the development of alternative financing sources under the Government Programme Implementation Plan.

 

Additional information:

Collective investment undertaking – an investment fund or investment company aimed at accumulating funds of individuals by the public offer of units or shares and their collective investment in assets by spreading out risk following the predefined investment requirements.