Regulatory Alerts2017-04-10
Amendment of Decision 14 on Collective Investment Schemes
The Capital Markets Authority has amended Article 13 of Decision No. 14 to impose strict diversification and segregation rules on collective investment scheme administrators. The revised provisions prohibit fund managers from holding or investing more than 15 percent of assets in a single issuer or source, while mandating the complete separation of scheme investments from those of the managing company. Additionally, investment-related borrowing is capped at 20 percent of the fund's estimated value, with higher limits permissible upon prior Capital Markets Authority Board approval.
Announcement no 21 On the amendment of Decision no 14 taken on February 10, 2014 (on the collective investment schemes) Pursuant to the Law No 161 dated 17/8/2011 on capital markets, Pursuant to the decision of the Capital Markets Authority’s Board No 1/3/17 taken in its meeting held on February 13, 2017, We inform you of the following: First: Article 13 of the above mentioned Decision no 14 was repealed and replaced with the following text: “The administrators of the collective investment scheme’s management must not: 1- Own more than 15% of the transferable securities issued by one issuer, and invest more than 15% of the fund’s assets in one source, except for the Lebanese Treasury Bonds, and the bonds issued by major countries. 2- Mix the investments made on behalf of the “Scheme” with those made by the company that established the fund, or is in charge of managing it. 3- Borrow money, for the purpose of investing the borrowed sum in the purchase of financial securities and instruments, including the re-purchase of open end capital company stocks, except up to 20% of the estimated value of the collective investment fund or company, whether the financial securities and instruments scheduled for a purchase were listed or not on one of the regulated financial markets. The percentage of 20% stated in this sub-paragraph can be exceeded only after prior approval by the CMA’s Board, based on a justified request in this regard.” Third: Hereto attached is decision no 14 taken on February 10, 2014 (on Collective Investment Schemes) after the aforementioned amendment. Beirut, April 10, 2017 Chair of the Capital Markets Authority/ Governor of Banque du Liban Riad Salame