RULEBOOK ON AIF SHARES

Croatian Financial Services Agency (HANFA), 10000 Zagreb, Franje Račkoga 6, P.O. Box 164, Croatia t: 01 6173 200, f: 01 4811 507, e: info@hanfa.hr, OIB: 49376181407, MB: 02016419, w: www.hanfa.hr RULEBOOK ON AIF SHARES (Official Gazette, 26/19 and 132/20 – Unofficial Consolidated Text) I. INTRODUCTORY PROVISIONS Article 1 (OG 132/20) This Rulebook prescribes:

1. classes of shares in an AIF and the method of their introduction;
2. establishment, management, and publication of data from the register of shares of an AIF without legal personality;
3. method and deadlines for submitting notices to HANFA on concluded business cooperation contracts pursuant to Article 148(2) of the Act;
4. content of applications for authorization by a UAIF from Croatia or another Member State to distribute shares of an AIF intended for retail investors in Croatia, and the documentation attached;
5. criteria that AIFs must meet to be considered as a type of AIF whose shares are permitted to be distributed to retail investors in Croatia;
6. criteria taken into account when assessing the level of investor protection in an AIF from a third country;
7. method for receiving applications for acquisition or redemption of shares during the suspension of issue and redemption of shares in an AIF without legal personality;
8. method for determining the price of shares in an AIF without legal personality and payment deadlines;
9. suspension and resumption of issue and redemption of shares in an open-ended AIF;
10. "in specie" redemption;
11. exchange of shares in one open-ended AIF for shares in another open-ended AIF managed by the same UAIF;
12. rules for the initial offer of shares of an AIF without legal personality;
13. conditions for payment into an AIF without legal personality in financial instruments. II. INITIAL OFFER OF SHARES OF AN AIF WITHOUT LEGAL PERSONALITY Rules for the initial offer of shares of an AIF without legal personality. Article 2 . (1) The conditions, start date, and end date of the initial offer of shares in an open-ended AIF with a private placement and a closed-ended AIF without legal personality with a private placement are determined by the rules of the AIF, in accordance with Article 212 of the Act. (2) The initial offer of shares in an open-ended AIF with a public placement and a closed-ended AIF without legal personality with a public placement may commence only after the publication of the prospectus of the AIF with a public placement. (3) The initial offer of shares in an open-ended AIF with a public placement and a closed-ended AIF without legal personality with a public placement must be publicly announced in one of the following ways:
14. on the website of the UAIF;
15. by publication in one or more daily newspapers distributed throughout or predominantly across Croatia, or the state where the shares will be offered to the public;
16. in printed form, freely available in the official premises of the UAIF and in offices of legal entities with which the UAIF has concluded business cooperation contracts for performing share offering services. (4) When announcing the initial offer of shares, the UAIF must state the start and end dates of the initial offer, as well as the date until which investors will receive a refund of paid funds if, upon conclusion of the initial offer period, funds are not collected in accordance with the AIF rules or prospectus. Payment into an AIF without legal personality in financial instruments Article 3. (1) Payment into an AIF without legal personality with a public placement in financial instruments, pursuant to Article 213(3)(a) of the Act, may be made exclusively in transferable securities or money market instruments, provided that such transferable securities or money market instruments are: a) listed or traded on a regulated market within the meaning of the capital markets Act in Croatia and/or a Member State, or b) traded on another regulated market in Croatia and/or a Member State that operates regularly, is recognized, and is open to the public, or c) listed in the official stock exchange listing of a third country or traded on another regulated market in a third country that operates regularly, is recognized, and is open to the public, provided that such investment is foreseen in the prospectus of the AIF with a public placement. (2) Payments into an AIF without legal personality with a public placement may be made exclusively in transferable securities or money market instruments into which the AIF is permitted to invest pursuant to the prospectus and/or rules, and whose prices are immediately and regularly available on active markets in accordance with the Rulebook governing the net asset value of an AIF and the price of AIF shares, on which they are listed or traded, in accordance with the investment objectives, investment strategy, and investment restrictions of the AIF. (3) Allocation of shares in an AIF without legal personality with a public placement based on payment in financial instruments, in accordance with this Article, is executed at prices at which the financial instruments are valued pursuant to the Rulebook governing the net asset value of an AIF and the price of AIF shares, after all financial instruments subject to payment have been deposited by the depositary into custody in accordance with Article 192(1)(1) of the Act. (4) The possibility for payments in financial instruments or other forms of assets into an AIF without legal personality with a private placement, pursuant to Article 213(3)(a) and (b) of the Act, is specified by the UAIF in the AIF rules. (5) The UAIF must document compliance with the conditions for payment into an AIF without legal personality in financial instruments under this Article and keep documentation as prescribed by the Act and regulations adopted pursuant to it. (6) The costs of payment into an AIF without legal personality in financial instruments are borne by the investor. III. REDEMPTION AND EXCHANGE OF SHARES IN AN AIF WITHOUT LEGAL PERSONALITY "In specie" redemption in an AIF without legal personality Article 4. "In specie" redemption, i.e., redemption by transferring a corresponding proportion of each type of asset of the AIF without legal personality in total value equal to the value of the shares being redeemed, is possible only if the following conditions are met:
17. the possibility of such redemption and all essential details (e.g., frequency of redemption) are provided for in the prospectus and/or AIF rules;
18. the shareholder has consented to such redemption;
19. the application for redemption of shares represents at least 5 percent of the net asset value of the AIF;
20. the difference between the total value of the corresponding proportion of each type of asset transferred and the total value of the shares being redeemed is paid in cash;
21. the transfer of a corresponding proportion of each type of asset to the applicant is controlled by the AIF depositary. Exchange of shares in open-ended AIFs Article 5. (1) In accordance with the Act, regulations adopted pursuant to it, prospectus, and/or rules of an open-ended AIF, a UAIF managing multiple open-ended AIFs may, upon investor request, allow the exchange of all or part of the shares in an open-ended AIF for shares in other open-ended AIFs managed by it. (2) The UAIF may not execute the share exchange under paragraph 1 if the calculation of net asset value is prevented for any of the open-ended AIFs whose shares are intended to be exchanged. (3) The UAIF may, if foreseen in the prospectus and/or rules of the open-ended AIFs it manages, charge an exit fee for the open-ended AIF whose shares are being redeemed, or an entry fee for the open-ended AIF whose shares are being issued, upon exchange. (4) The exchange of shares in open-ended AIFs must not last longer nor financially burden the investor more than the execution of selling shares in one and buying shares in another open-ended AIF managed by the same UAIF. (5) Share exchange is carried out upon submission of a share exchange application, which simultaneously constitutes an application for redemption of shares in an open-ended AIF and an application for issuance of shares in another open-ended AIF managed by the same UAIF, by the same investor, for funds paid to the investor as redemption proceeds, whereby the funds are transferred directly to the benefit of the second open-ended AIF in which share issuance is requested. The same rules prescribed by the Act, regulations adopted pursuant to it, prospectus, and/or AIF rules with public placement apply to share exchange as apply to individual redemption and issuance transactions. (6) Exchange of shares in an open-ended AIF with a public placement is possible only for shares in another open-ended AIF with a public placement managed by the same UAIF. (7) Exchange of shares in an open-ended AIF with a private placement is possible only for shares in another open-ended AIF with a private placement managed by the same UAIF. IV. SUSPENSION OF ISSUE AND REDEMPTION OF SHARES IN AN OPEN-ENDED AIF Article 6. (1) The UAIF managing an open-ended AIF with a public placement, when fulfilling obligations under Article 162(3) and (5) of the Act, must notify HANFA in writing of the reasons leading to the suspension of issue and redemption of shares, and promptly inform the public on its website. (2) During the suspension of issue and redemption, the UAIF managing an open-ended AIF with a public placement must publish on its website data enabling average investors to understand the circumstances of the suspension, as well as the type and significance of risks arising therefrom. (3) The UAIF managing an open-ended AIF with a private placement shall specify in the AIF rules the method of notifying investors about the suspension of issue and redemption. Calculation of net asset value and share price during suspension Article 7. (1) Where applicable, the UAIF must calculate the net asset value and share price of the AIF for the entire duration of the suspension in accordance with Article 152 of the Act. (2) If circumstances arise during suspension that would prevent calculation of net asset value and share price, the UAIF must promptly notify HANFA and investors, stating the reasons why accurate net asset value and share price cannot be calculated. (3) The notice to HANFA under paragraph 2 may be submitted by the UAIF in accordance with the Technical Instruction for using the WEB form input service and electronic document submission, and the Instructions for filling out WEB forms for UAIFs. (4) The UAIF is deemed to have submitted the notice under paragraph 2 at the moment it is recorded on the server for sending such documentation. Determination of share price for redemption applications received during suspension and payment deadlines Article 8. (1) The UAIF will execute redemption applications received during suspension at the AIF share price determined for the day of cessation of suspension. (2) Upon occurrence of suspension, the UAIF must, where applicable, promptly publish on its website that investors submitting redemption applications during suspension may withdraw their requests or have them executed in accordance with paragraph 1. (3) The deadline for payment of redemption amounts from Article 117(3) of the Act is determined by AIF rules and prospectus, where applicable. (4) The UAIF must inform investors about the conditions under paragraph 2 within the notice under Article 162(5) of the Act. Method for receiving applications for issuance or redemption during suspension Article 9. (1) The UAIF must refuse to conclude investment contracts for share issuance applications received during suspension, except for AIFs established as joint-stock companies, and promptly refund any received payments to investors. (2) The UAIF must record redemption applications during suspension in the order of receipt, ensuring no shareholder is placed in a preferential position. (3) The rights of AIF shareholders prescribed by Article 114(1) of the Act, as well as rights and encumbrances on AIF shares in favor of third parties prescribed by Article 116(1) of the Act, are suspended during suspension until the date of cessation. (4) During suspension, offering AIF shares is prohibited. V. CLASSES OF SHARES OF AIFS Classes of shares and their introduction Article 10. (1) The management company may provide in AIF rules for different classes of shares in an AIF, differing from each other regarding rights attached to shareholders, e.g., but not exclusively: a) possibility of income and/or profit distribution according to prescribed conditions; b) denomination of shares (different currencies); c) right to issue and/or redeem shares; d) amount, method, and calculation of fees payable to the UAIF; e) initial share price. (2) Details regarding rights granted by each class of shares must be clearly explained to all investors and potential investors in the rules and/or prospectus at the time of acquiring shares. (3) If classes are introduced subsequently, investors must be informed in a timely and appropriate manner, with their rights and any changes to them or their status relative to the situation at acquisition clearly explained. Calculation of share price for a specific class Article 11. (1) Rights from a specific class of shares must comply with AIF rules and/or prospectus and must not cause harm to holders of other classes in the same AIF. (2) When rights from a specific class result in different share prices, the price is calculated separately for each class, taking into account specific rights arising from that class in accordance with the Act and regulations adopted pursuant to it governing AIF share price calculation. VI. REGISTER OF SHARES OF AN AIF WITHOUT LEGAL PERSONALITY Article 12. (1) A share in an AIF without legal personality, other than a bearer share, may be registered to an investment company or credit institution providing custody and administration services for financial instruments on behalf of a client, including custody and related portfolio management services, or a management company performing portfolio management, with the register noting that the investment company, credit institution, or management company holds the share on behalf of a third party. (2) Data entered in the register must enable unambiguous identification of the person to whom shares are registered (shareholder or other persons under paragraph 1), and must include at least:
22. For legal entities: – company name, – address (registered office), place, country, – data on the legal representative (same as for natural persons under point 2), – data on the person authorized to submit issuance or redemption requests, – if held by an investment company or credit institution on behalf of third parties, a note indicating shares are held for third parties.
23. For natural persons: – name and surname, – address (domicile), place, country. Article 13. (1) The UAIF, or register keeper for an AIF without legal personality, must record at least the following data for each shareholder in the register, where applicable: – date and time of receiving issuance or redemption request; – execution date; – type of request (issuance or redemption); – number of issued or redeemed shares; – share price at which the request was executed; – date of share price; – rights or encumbrances on the share in favor of third parties; – total amount of the request (including entry fee for issuance or deducting exit fee for redemption); – total fees charged upon issuance or redemption; – conversion amount, if shares are denominated in a currency different from the payment currency; – share balance after each issuance or redemption. (2) The UAIF or register keeper must maintain the register electronically in a manner enabling determination of paragraph 1 data for each shareholder. (3) In addition to minimum data, the UAIF or register keeper must ensure possession of other data necessary for uninterrupted issuance and redemption, and ensuring payment to shareholders. Article 14. The UAIF will process register data in accordance with regulations governing personal data protection. Article 15. The UAIF may publish only register data relating to the total assets of the AIF, total number of shareholders, and general data on shareholder structure in a specific AIF. VII. SUBMISSION OF NOTICES ON CONCLUDED BUSINESS COOPERATION CONTRACTS List of persons offering shares of an AIF with private placement Article 16. (OG 132/20) (1) The UAIF must submit annually to HANFA by the end of January of the current year a list of legal entities with which it has concluded business cooperation contracts under Article 148(2) of the Act, as of December 31 of the previous year. (2) The list must contain data on company name and registered office, contract conclusion date, and indication of one or more AIFs with private placement whose shares will be distributed under the contract. Article 17. (OG 132/20) Deleted. Article 18. (OG 132/20) Deleted. Article 19. (OG 132/20) Deleted. Article 20. (OG 132/20) Deleted. VIII. UAIF INTENDING TO OFFER SHARES OF AN AIF ESTABLISHED IN CROATIA OR ANOTHER MEMBER STATE TO RETAIL INVESTORS IN CROATIA Application for authorization to offer shares Article 17. (1) A UAIF from Croatia or another Member State intending to offer shares of an AIF established in Croatia or another Member State to retail investors in Croatia must obtain prior authorization from HANFA in accordance with Article 151(1) of the Act. (2) The application for authorization under Article 151(1) must be accompanied by: a) AIF prospectus; b) AIF rules; c) key investor information; d) detailed description of planned share trading activities, covering all services and activities related to distribution from UAIF to investors, including advertising, information, and offering; e) for AIFs from other Member States, confirmation by the competent authority that shares may be offered to retail investors in that state, and the latest audited annual reports for the AIF, where applicable; f) where applicable, a statement that existing investors are aware of the intention to offer shares to retail investors; g) other documentation requested by HANFA. (3) The UAIF must translate the documentation and all amendments into Croatian for the purpose of offering shares in Croatia. (4) The UAIF is responsible for the authenticity and accuracy of translations under paragraph 3. Article 18. When AIF shares are offered to retail investors in Croatia, the AIF must meet conditions prescribed by the Rulebook governing types and characteristics of alternative investment funds, investment restrictions, and conditions for offering certain AIF types to retail investors. Article 19. When shares of an AIF established in Croatia or another Member State are offered to retail investors in Croatia, provisions of the Act governing establishment and operation of open-ended investment funds with public placement and related regulations apply accordingly, regarding preparation and publication of prospectus and rules, submission to investors, offering and advertising, and preparation, publication, and delivery of all information, reports, and data made available to investors. IX. UAIF INTENDING TO OFFER SHARES OF AN AIF ESTABLISHED IN A THIRD COUNTRY TO RETAIL INVESTORS IN CROATIA Conditions for offering shares Article 20. (1) A UAIF from Croatia or another Member State intending to offer shares of an AIF established in a third country to retail investors in Croatia must obtain prior authorization from HANFA in accordance with Article 151(1) of the Act. (2) When assessing the protection level under Article 151(4), HANFA may consider third-country regulations governing: a) obligation to act in the best interest of investors; b) existence of an independent depositary with similar duties and responsibilities regarding AIF asset custody and control functions; c) segregation of assets; d) availability of share price information and obligation to report to investors; e) possibility and frequency of share redemption; f) restrictions on trading with related parties; g) borrowing, lending, and sale of uncovered transferable securities and money market instruments. Application for authorization to offer shares Article 21. (1) The application for authorization under Article 151(1) for offering shares of an AIF established in a third country to retail investors must be accompanied by: a) AIF prospectus; b) AIF rules; c) audited annual financial reports of the UAIF, audited annual reports of the AIF for the last 2 business years; d) key investor information, or equivalent documents where applicable; e) detailed description of planned share trading activities, covering all services and activities related to distribution from UAIF to investors, including advertising, information, and offering, plus other data showing the UAIF meets conditions under Article 151(3) for offering shares from a third country in Croatia; f) data on UAIF activities delegated to a third party, and identity of the third party; g) other documentation specified by HANFA, from which it can be determined that investors in the third-country AIF receive at least an equivalent level of protection as investors in open-ended investment funds with public placement under the Act governing establishment and operation of such funds. (2) HANFA will issue authorization for offering shares of a third-country AIF to retail investors if it determines, based on available data and documentation, that: a) investors in the third-country AIF receive at least an equivalent level of protection as investors in open-ended investment funds with public placement; b) the prohibition on offering shares to retail investors in the state where that AIF is established does not apply; (3) HANFA will refuse authorization for offering shares of third-country AIFs to retail investors in Croatia if it determines that...