Order on Information in Prospectuses for Danish UCITS

Order on Information in Prospectuses for Danish UCITS¹)

Pursuant to Section 102, paragraph 5, and Section 190, paragraph 5, of the Act on Investment Funds and the like, cf. Act Consolidation No. 1046 of 14 October 2019, as amended by Act No. 1563 of 27 December 2019, the following is prescribed:

Scope of Application

Section 1. This Order applies to investment funds, SIKAVs, and securities funds (hereinafter referred to as "Danish UCITS").

Paragraph 2. The board members and board referred to in this Order shall be understood as the board members and board of an investment fund, a SIKAV, or of the investment management company or administration company that administers a securities fund.

Disclosure Requirements for Prospectuses

Section 2. The board of a Danish UCITS shall ensure that the prospectus contains the information set out in Sections 3-6.

Paragraph 2. A Danish UCITS that has one or more feeder funds among its compartments shall, in its prospectus, in addition to the information specified in paragraph 1, provide the information mentioned in Section 7 for each feeder fund compartment.

Paragraph 3. A Danish UCITS that has one or more master funds among its compartments shall, in its prospectus, in addition to the information specified in paragraph 1, provide the information mentioned in Section 8 for each master fund compartment.

Paragraph 4. The prospectus of a Danish UCITS shall be drawn up in Danish or English.

Paragraph 5. The articles of association or fund rules of the Danish UCITS form an integral part of the prospectus and shall be attached as an appendix to the prospectus. However, the articles of association or fund rules need not be attached to the prospectus if the prospectus clearly refers to a website where investors can easily find them.

Paragraph 6. If the Danish UCITS draws up a separate prospectus for each individual compartment or for a group of compartments under the same UCITS, each prospectus must meet the disclosure requirements of Sections 3-6.

Requirements for Information on the Danish UCITS' Affairs

Section 3. The prospectus shall contain the following information regarding the Danish UCITS' affairs:

1. Names of the compartments and any share classes.
2. Address.
3. Registration number with the Danish Financial Supervisory Authority and CVR number for an investment fund and SIKAV.
4. The date of establishment and the date of creation of compartments and any share classes.
5. The date of publication of the prospectus.
6. Who the Danish UCITS receives funds from, including a profile of the typical investor from whom the Danish UCITS, its compartments, or any share classes receive funds.
7. Names of the board members and indication of the main business activity that the board members pursue outside the Danish UCITS, where this is significant.
8. Name of the investment fund's director or the name of the Danish UCITS' investment management company, address and CVR number, and name of the director of this company. If the Danish UCITS is managed by an administration company established in a country within the European Union or a country with which the Union has concluded an agreement in the financial sector, it must also be stated in which country the administration company is established and has its registered office.
9. Name(s), address(es), and CVR number(s) of the approved audit firm(s).
10. Name, address, and CVR number of the Danish UCITS' depositary and a description of the depositary's tasks and of any conflicts of interest that may arise.
11. A description of the custody tasks that the Danish UCITS' depositary has delegated to third parties, a list of the third parties to whom the depositary has delegated custody tasks, a list of the companies to which third parties have sub-delegated custody tasks, and a description of the conflicts of interest that may arise as a result of the delegation and sub-delegation.
12. Information on the content of the agreement with the Danish UCITS' depositary, including a description of the service and the price for the service. If the Danish UCITS' depositary holds shares in the Danish UCITS' investment management company or administration company, this must be stated with an indication of the size of the shareholding.
13. Names and addresses of companies advising on the investment of the Danish UCITS' assets, indication of their main business activity, and information on whether the advisor is the Danish UCITS' depositary or a company affiliated with the Danish UCITS' depositary, investment management company, or administration company. If the advisor is the Danish UCITS' depositary or a company affiliated with the Danish UCITS' depositary, investment management company, or administration company, the content of the agreement must be stated, including a description of the service and the price for the service.
14. Whether the Danish UCITS has entered into an agreement on marketing and distribution of shares in the Danish UCITS' compartments with the Danish UCITS' depositary or a company affiliated with the Danish UCITS' depositary, investment management company, or administration company. If the Danish UCITS has entered into an agreement covered by the first sentence, information on the content of the agreement must be provided. The information must include the price for the service and a description of the service.
15. All other tasks regarding the investment management of the Danish UCITS' compartments that the Danish UCITS, its investment management company, or administration company has sub-delegated to other companies.
16. Where annual reports and half-yearly reports are available.
17. The provision in the articles of association or fund rules regarding voting rights.
18. Information on the updated remuneration policy, including either: a) a description of how fixed and variable remuneration is calculated, the identity of the persons responsible for allocating fixed and variable remuneration, including the composition of the remuneration committee, if such a committee has been established, or b) a summary of the remuneration policy, including a description of how fixed and variable remuneration is calculated and the identity of the persons responsible for allocating fixed and variable remuneration, including the composition of the remuneration committee, if such a committee has been established, and a declaration on whether the information on the updated remuneration policy is available free of charge on a website or on paper, along with a reference to the website.

Paragraph 2. Information on the updated remuneration policy under item 18 applies only to Danish UCITS that have not delegated day-to-day management to an investment management company or an administration company.

Requirements for Information on Danish UCITS Compartments and Share Classes

Section 4. The prospectus shall contain the following information regarding the Danish UCITS' compartments and share classes:

1. The compartment's investment objectives and investment policy, including a statement on which instruments the compartment's assets are invested in. The statement must contain a clear and understandable description of the compartment's risk profile. The statement must also include information on any benchmarks and any other elements included in the investment policy, and in which geographical areas, industrial sectors, and company sizes the compartment's assets are invested. If the instruments are selected based on their credit rating, the investment restrictions the compartment has regarding the rating must also be described in the statement.
2. That the Danish UCITS' investment management company, administration company, or investment fund is obliged, upon an investor's request, to provide supplementary information for the compartment regarding the quantitative limits applicable to the Danish UCITS' risk management and the methods chosen by the investment management company, administration company, or investment fund to ensure that these limits are always followed, as well as regarding the latest development in the main risks and returns for the categories of individual instruments in the compartment.
3. If the compartment invests primarily in financial instruments other than securities or money market instruments, the prospectus must contain a clear declaration to this effect.
4. If the compartment replicates an equity or bond index, including an index approved by the Danish Financial Supervisory Authority pursuant to Section 149, paragraph 2, of the Act on Investment Funds and the like, the prospectus must contain a clear declaration to this effect.
5. If share classes have been created in the compartment, the prospectus must provide information on each share class's characteristics, including all of the following: a) The currency in which the share class is denominated. b) Subscription premiums and redemption discounts. c) Administrative costs, advisory costs, and marketing costs. d) The price calculation method used. e) What portion of the share class's assets the fund may use for class-specific assets. f) Distribution profile. g) Minimum investment. h) Whether the compartment has class-specific assets, including the purpose and the significance for the investment policy of the individual share class.
6. Whether the compartment or share classes will use financial derivatives, including whether financial derivatives are used for risk hedging or to meet the compartment's investment objectives.
7. Whether the use of financial derivatives affects the compartment's risk profile.
8. The measures the compartment or share classes have taken to maintain its risk profile.
9. The risks associated with the compartment's or share classes' intended or already made investments, including whether significant fluctuations in the net asset value of the compartment's or share classes' assets are expected as a result of the portfolio composition or the investment strategy used. If the compartment's net asset value is expected to have significant fluctuations as a result of the compartment's asset composition or the management techniques used by the investment management company, administration company, or investment fund for the relevant compartment, the prospectus must contain a clear declaration to this effect.
10. The member state, local public authority, third country, or international institution of a public nature that issues or guarantees the securities in which a compartment intends to invest 35 percent of its assets, cf. Section 147, paragraph 1, item 4, of the Act on Investment Funds and the like.
11. Whether the compartments or share classes are certificate-issuing or account-keeping.
12. Whether the compartments or share classes issue physical certificates, or whether the certificates are issued through and registered in a securities central, when the compartments or share classes are certificate-issuing.
13. Whether the compartments or share classes are distributing or accumulating.
14. The tax and duty rules applicable to the compartments or share classes and a general description of how the returns of compartments or share classes are taxed for different investor types.
15. How often compartments or share classes pay dividends, including whether the compartments or share classes withhold tax on any dividends to investors.
16. Under what circumstances the general meeting of the investment fund or SIKAV or the board of the securities fund's investment management company or administration company may decide to wind up the Danish UCITS, compartments, or share classes.
17. How an investor can move their investment in a Danish UCITS from one compartment to another compartment or between share classes in the same compartment, and what costs are associated with such moves.

Section 5. The prospectus must at least contain the following information regarding the shares:

1. Where the shares can be acquired, and whether there is an initial subscription period, and whether the compartment or share class subsequently has continuous issuance without a set maximum amount, or whether the compartment or share class is not open to issuance.
2. Number of shares or a percentage of assets set by the board that triggers an adjustment of the net asset value upon issuance and redemption, as well as the size of the fee with which the net asset value can be adjusted if a compartment uses the modified single-price method in accordance with Section 6 of the Order on Calculation of Issue and Redemption Prices upon Subscription and Redemption of Shares in Danish UCITS.
3. The procedure for and terms of issuance and sale of shares.
4. Size of the shares and any minimum investment, if the minimum investment differs from the size of the shares.
5. Name of the regulated market(s) or other regulated market(s) on which the shares are listed for trading or will be sought to be listed for trading.
6. The share's fund code or ISIN.
7. Where shares can be registered in name, when compartments or share classes are certificate-issuing.
8. Investors' redemption rights, including in which cases redemption can be postponed in accordance with Section 74, paragraphs 2 and 6, of the Act on Investment Funds and the like.
9. Method for determining the redemption price in accordance with the Order on Calculation of Issue and Redemption Prices upon Subscription and Redemption of Shares in Danish UCITS.
10. Whether there are restrictions on investors' right to resell the shares.
11. What facilities are available for payments to investors or redemption of shares and distribution of information about the Danish UCITS, compartments, or share classes. If the shares are marketed in another member state within the European Union or countries with which the Union has concluded an agreement in the financial sector, the information mentioned above must be provided for that country, and the prospectus published there must contain this information.

Requirements for Information on Costs, Fees, and Prices

Section 6. The prospectus shall contain the following information regarding costs, fees, and prices:

1. The compartments' or share classes' total administrative costs to date, stated as a percentage of average assets (cost ratio) for the last 5 years.
2. The size, or the budgeted size, of remuneration to the board, management, investment management company, or administration company, and of fees to the Danish Financial Supervisory Authority, specified by individual items. Upon updating, the prospectus must also contain information on the size of the remuneration in the latest annual report, specified by individual items.
3. If a compartment invests a significant part of its assets in shares of other compartments or other investment institutions, cf. Section 154 of the Act on Investment Funds and the like, the Danish UCITS must state the maximum administrative fees that can be charged by the compartment or share class itself. The compartment must also state the maximum administrative fees for the other compartments or share classes that the compartment invests in.
4. The provision in the articles of association or fund rules regarding the administrative costs of the individual compartments.
5. How issue and redemption prices are determined, including how and how often these prices are calculated.
6. Expenses related to issuance and redemption, including which costs are associated with the compartment's or share class's purchase or sale of securities, administration, depositary functions, distribution, marketing, and the investor's brokerage costs, etc., specified by individual items.
7. Where the issue and redemption price is published.

Special Requirements for Feeder Funds

Section 7. In addition to what is mentioned in Sections 3-6, a feeder fund's prospectus must contain the following information:

1. A declaration that the compartment is a feeder fund and the name of the master fund that the compartment invests in. The declaration must state that the compartment always invests at least 85 percent of its assets in the master fund.
2. The information on the compartment's investment objectives and investment policy, cf. Section 5, item 1, must be supplemented with information on the following: a) Whether the compartment's and the master fund's results are identical. If the compartment's risk profile does not correspond to the master fund's risk profile, the prospectus must contain information on the extent to which the risk profiles differ and a justification for this. b) A description of the master fund, its organization, its investment policy and objectives, including the master fund's risk profile, and how the master fund's latest prospectus can be obtained, including a reference to the fact that investors can obtain the master fund's prospectus free of charge from the feeder fund. c) A summary of the agreement between the compartment and the master fund, cf. Section 104, paragraph 1, of the Act on Investment Funds and the like, and information on how investors can obtain the agreement. If both the feeder and master funds are managed by the same investment management company or administration company, a description of the company's internal rules for good business practice in relation to the master/feeder structure must be added, along with information on how investors can obtain further information about the master fund. d) A description of all remuneration in the form of money or other benefits that must be paid by the compartment as a result of the compartment's investment in the master fund, and the total fees investors must pay in the compartment and in the master fund as a result of investments in the compartment. e) A description of the tax and duty consequences for the compartment's investments in the master fund.
3. That investors can obtain the master fund's annual and half-yearly reports free of charge from the feeder fund.

Special Requirements for Master Funds

Section 8. In addition to what is mentioned in Sections 3-6, a master fund's prospectus must contain information on which feeder fund(s) the master fund receives funds from.

Penalties

Section 9. Board members of a Danish UCITS whose prospectus does not meet the requirements of Section 2, cf. Sections 4-9, or Section 3, cf. Sections 8 or 9, shall be punished with a fine.

Entry into Force and Transitional Provisions

Section 10. This Order enters into force on 1 July 2020.

Paragraph 2. This Order does not apply to prospectuses for Danish UCITS drawn up before the entry into force of this Order, cf. however paragraph 3. For such prospectuses, the previously applicable rules apply.

Paragraph 3. Danish UCITS covered by this Order must bring the prospectus into compliance with this Order no later than at the first revision of the prospectus after 1 July 2020.

Paragraph 4. Order No. 138 of 17 February 2016 on Information in Prospectuses for Danish UCITS is repealed.

Danish Financial Supervisory Authority, 11 May 2020 JESPER BERG / Sean Hove

¹) The Order contains provisions implementing parts of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), OJ 2009, No. L 302, p. 32, and parts of Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions, OJ 2014, No. L 257, p. 186.