What is important to know about Collective Investment Schemes?
A collective investment scheme (CIS) is a collective investment enterprise that meets certain conditions regulated in Art. 4 of the Collective Investment Schemes and Other Undertakings for Collective Investments Act (CISOUCIA). It is established as a mutual fund (MF) or as an investment company (IC).
The activity of the collective investment scheme is managed only by a management company (MC) according to a concluded contract, respectively according to the rules of the mutual fund.
The investment company is a joint stock company with a one-tier management system and with a seat in the Republic of Bulgaria, which is established only at a constituent assembly.
To operate as a collective investment scheme, a license to operate as an investment company is required, as well as a permit for organization and management of a mutual fund by the Financial Supervision Commission (FSC). The obtained license, respectively the permit, entitles the collective investment scheme to operate on the territory of all EU Member States.
When issuing a license for carrying out activity as an investment company, respectively a permit for organization and management of a mutual fund, the investment company, respectively the mutual fund, shall be entered in the register kept by the FSC under Art. 30, para. 1 of the Financial Supervision Commission Act.
Simultaneously with the issuance of the investment company’s license and the management company’s permission to organize and manage a mutual fund, the FSC confirms the prospectus and the key information document for the investors of the collective investment scheme.
No one has the right to carry out activity under Art. 4, para. 1 of the Collective Investment Schemes and Other Undertakings for Collective Investments Act without having received a license or a permit from the FSC.
The prospectus contains the information necessary for investors to make an informed assessment of the proposed investment, incl. of the risks arising from it. The prospectus also contains information on the risk profile of the collective investment scheme, as well as information on the categories of assets in which the collective investment scheme may invest.
A document with key information for investors is attached to the CIS prospectus. In case the collective investment scheme consists of separate sub-funds, a separate document with key information for investors is prepared for each sub-fund.
The key information for investors document presents the main features of the respective collective investment scheme so that investors can be aware the nature and risks of the investment product offered to them and subsequently make investment decisions based on the information.
The key information for investors is pre-contractual information that is true, clear and not misleading and corresponds to the relevant parts of the prospectus.
An up-to-date version of the key investor information document is published on the website of the management and the investment company and must be available until the next update.
At the request of an investor, the management company is obliged to provide free of charge: the prospectus, the key information for investors document and the latest published annual and 6-month statement of a collective investment scheme managed by it.
The CIS Management Company shall publish in an appropriate manner, determined in the prospectus, the issue value and the redemption price of its units at each determination thereof by the end of the business day following the day of their calculation.
The key information for investors contains the following elements:
– information about the CIS and the competent authority of the Member State the CIS originates from;
– a brief description of the investment objectives and the investment policy of the CIS;
– historical presentation of the results of the activity or forecasts of the expected results of the activity, where applicable;
– charges and fees;
– risk profile and return on investment, including warnings regarding the risks associated with investments in the respective CIS.
Before approaching an investment in CIS, investors need to be aware of the type and amount of all fees, commissions and charges that are directly or indirectly borne by them.
Useful information for investors on the FSC website, in connection with CISs, MCs and ICs: Information on Collective Investment Schemes
Information on Collective Investment Schemes
⇒ Section Registers and References / Subsection Electronic Register and Records / Collective Investment Schemes
CISs and MCs from the EU – Key information for investors
⇒ Section Registers and References / Subsection CISs and MCs from the EU
Information about Management Companies
Telephone, email and address of the MC
⇒ Section Supervised Persons / Subsection Lists / Managing Companies
Subject of activity, management, control and representation bodies, accounting statement, statutes, etc.
⇒ Section Registers and References / Subsection Electronic Register and Records / Management Companies
Addresses of MCs, general information and statements
⇒ Section Registers and References / Subsection Electronic Register and Records / References/ References for Management Companies
Information about Investment Companies
Addresses of ICs, general information and statements
⇒ Section Registers and References / Subsection Electronic Register and Records / References / References for Investment Companies
Collective Investment Schemes and Other Undertakings for Collective Investments Act
⇒ Menu Markets / Capital Market / Regulatory Framework / Laws / Collective Investment Schemes and Other Undertakings for Collective Investments Act