Marketing of Foreign UCITS Investment Schemes in Estonia
1. Public offering
If a UCITS of another Contracting State wishes to publicly offer its units or shares in Estonia the provisions of Chapter 6, Division 2 of the Investment Funds Act are applied.
According to Investment Funds Act § 228 (1) the public offer of units of a foreign fund means the communication of information concerning the conditions of the offer and the offered units in any format in order for these units to be acquired.
An offer specified above is not deemed to be public if the units of a fund are offered only under the conditions specified in § 12 (2) of the Securities Market Act, according to which an offer of securities is not deemed to be public if the securities are offered solely:
• to qualified investors, or
• to fewer that 150 persons per Contracting State, other than qualified investors, or
• to investors who acquire securities for a total consideration of at least 100 000 euros per investor, for each separate offer, or
• an offer of securities with the nominal value or book value of at least 100 000 euros per security, or
• an offer of securities with a total consideration of less than 100 000 euros per all Contracting States in total calculated in a one-year period of the offer of securities.
Also, units of a foreign fund are deemed as being publicly offered in Estonia if the fund is advertised in Estonia or if the manner of the offer or the contents thereof, including the language of the offer, enable the conclusion to be made that the offer is aimed at persons whose residence or seat is in Estonia.
2. Notification procedure
Units of a UCITS of a Member State may be offered in Estonia after the completion of the notification procedure as described here.
3. Requirements for the public offering of the UCITS units
According to Investment Funds Act § 234 (1) units of a UCITS of a Member State may be offered in Estonia if the offer complies with the requirements of the Investment Funds Act concerning a UCITS, including requirements set for the advertising of the fund, and the following is ensured:
• the possibility to pay dividends or make distributions to unit-holders from the UCITS of the Member State and the ability of unit-holders to demand redemption and re-purchase of units and payment of an amount which corresponds to the unit;
• publication of information concerning the UCITS of the Member State pursuant to the procedure and to the extent provided for in this Act concerning a UCITS.
4. Marketing rules
• all requirements set for the advertising of the investment funds apply (Investment Funds Act § 234 (1));
• the ability of unit-holders to demand redemption and re-purchase of units and payment of an amount which corresponds to the unit must be ensured (Investment Funds Act § 234 (1));
• publication of information concerning the UCITS of the Member State pursuant to the procedure and to the extent provided for in Investment Funds Act concerning a UCITS (Investment Funds Act § 234 (1));
• prospectus must be disclosed and available free of charge (Investment Funds Act § 234 (4));
• fund rules, prospectus, the last semi-annual and annual report of the UCITS must be disclosed (Investment Funds Act § 234 (4)).
5. Obligation to keep the documents and information up-to-date
According to Investment Funds Act § 225 (1) if significant information contained in prospectuses is changed, a management company shall send the amended prospectuses promptly to the EFSA for its information and at the same time shall publish these pursuant to the procedure provided for in § 224 of Investment Funds Act.
Foreign UCITS shall, in accordance with the laws, regulations and administrative provisions in force in Estonia, take the measures necessary to ensure that facilities are available in Estonia for making payments to unit-holders, repurchasing or redeeming units and making available the information which UCITS are required to provide.
In addition, when a UCITS markets its units in Estonia, it shall provide to investors within the territory Estonia all information and documents which it is required pursuant to Chapter IX of the Directive 2009/65/EC to provide to investors in its home Member State.
6. Conditions for ending marketing/registration
The renouncement of the distribution of fund shares does not require any specific administrative proceedings or permits form EFSA. Still, the fund management company has to assure that the rights of the existing unit holders, who have acquired units of a foreign fund on the course of public offering in Estonia, are secured.
As mentioned above in section 3, these requirements have to be fulfilled also after the renouncement of distribution of fund shares if after the renouncement there are existing shareholders who have acquired units of a foreign fund on the course of public offering in Estonia. These obligations are to be enforced as long as the contractual relationship exists between the parties.