Regulatory Alerts2005-09-24
Decree No. 2005-2603 of September 24, 2005
Issued by the President of the Republic on September 24, 2005, this Decree implements Article 2 of the July 18, 2005 Seed Funds Law by defining asset composition and deployment rules for Tunisian seed funds. It mandates that at least 50% of a fund's assets be invested in equity participations or equity-linked securities of companies executing specified projects, with current account advances to these companies capped at 15% and counted toward the 50% threshold. Furthermore, it restricts exposure to any single issuer to a maximum of 15% and requires all assets to be fully deployed within four years following subscription, with unutilized funds temporarily held in securities.
Decree No. 2005-2603 of September 24, 2005, implementing the provisions of Article 2 of Law No. 2005-58 of July 18, 2005, regarding seed funds.
The President of the Republic,
On the proposal of the Minister of Finance,
Having regard to the Collective Investment Undertakings Code promulgated by Law No. 2001-83 of July 24, 2001,
Having regard to Law No. 2005-58 of July 18, 2005, regarding seed funds and in particular its Article 2,
Having regard to Law No. 2005-59 of July 18, 2005, containing fiscal provisions aimed at encouraging the establishment of seed funds,
Having regard to Decree No. 75-316 of May 30, 1975, defining the powers of the Ministry of Finance,
Having regard to the opinion of the Administrative Court.
Decrees:
Article 1. - The assets of a seed fund shall consist, at least, of 50% in equity participations in companies that implement the projects provided for by Article 1 of the aforementioned Law No. 2005-58 of July 18, 2005, or in securities granting access to the equity of the aforementioned companies.
The assets of a seed fund may also be constituted in the form of current account advances to companies in which the fund holds a participation of at least 5%, provided that the total of these advances does not exceed 15% of the fund's assets. The advances are taken into account in the 50% rate provided for by the first paragraph of this Article.
Art. 2. - The seed fund may not allocate more than 15% of its assets to equity participations or securities granting access to equity, or in other marketable securities, or in the form of current account advances, with respect to a single issuer, unless such marketable securities are issued by the State or local authorities or guaranteed by the State.
Art. 3. - The assets of a seed fund must be deployed, according to the proportions provided for by Article 1 of this Decree, within a period not exceeding the end of the fourth year following that of subscription to the fund. The unutilized amounts must be temporarily invested in the acquisition of marketable securities.
Art. 4. - The Minister of Finance is charged with the execution of this Decree, which shall be published in the Official Journal of the Tunisian Republic.
Tunis, September 24, 2005.