Seimas approved proposals by the Ministry of Finance that will help growing companies raise funds and reduce their dependence on banks
After the submission, the Seimas approved draft legislation prepared by the Ministry of Finance, designed to improve conditions for the smooth functioning of the market for collective investment undertakings. The package of amendments to the Law on the Managers of Alternative Collective Investment Undertakings and related laws will strengthen investor protection, ensure more uniform regulation at EU level and increase the competitiveness of the Lithuanian investment fund sector and create conditions for the development of alternative sources of financing, including loan-granting funds.
"Alternative investment funds serve as an important supplementary source of financing for the country’s businesses and strategic projects. They help attract private capital into small and medium-sized enterprises (SMEs), real estate, and infrastructure, while fostering innovation and contributing to national economic growth. These funds invest directly in private companies, venture capital, and loans. This provides vital funding to growing businesses that lack easy access to bank loans, reduces dependence on the traditional banking sector, and strengthens the resilience of the entire financial system," Minister of Finance Taurimas Valys emphasizes.
According to the Minister, these funds offer a way to attract capital for long-term projects requiring substantial investment, such as infrastructure development, renewable energy initiatives, or the development of commercial real estate. By investing in a diverse range of assets and economic sectors, these funds expand financing opportunities for companies and projects, while also helping to diversify investments.
The amendments also address practical issues regarding the availability of depositary services, with the aim of creating more favourable operating conditions for market participants.
Currently in Lithuania, the demand for depositary services significantly exceeds supply, creating challenges for market participants in accessing these services. Furthermore, limited options and a lack of competition drive up the cost of such services.
To address these issues, the proposed legislative amendments introduce provisions that will enable the supervisory authority to authorize managers of alternative investment funds (AIFs) to procure depositary services in other EU Member States.