Order ECC/2682/2012 of 5 December amending Order EHA/2688/2006 on collaboration agreements for State Debt Investment Funds

BOLETÍN OFICIAL DEL ESTADO
Núm. 301 Sábado 15 de diciembre de 2012 Sec. III. Pág. 85656
III. OTHER DISPOSITIONS
MINISTRY OF ECONOMY AND COMPETITIVENESS
15181 Order ECC/2682/2012, of 5 December, amending Order EHA/2688/2006, of 28 July, on collaboration agreements relating to Investment Funds in State Debt.

Order EHA/2688/2006, of 28 July, on collaboration agreements relating to investment funds in State Debt, establishes a series of requirements that investment funds constituted under the corresponding agreements must meet. These agreements may be signed by the Ministry of Economy and Competitiveness, through the General Secretariat of the Treasury and Financial Policy, and by Management Companies of Collective Investment Institutions, with the aim of promoting the best placement of State Debt.

With this order, Fondtesoro is permitted to expand the range of assets in which it can invest, equating, for the purposes of defining the investment criteria established by Order EHA/2688/2006, of 28 July, the issuances of the Bank Orderly Restructuring Fund (FROB), the issuances of the Electricity Deficit Amortization Fund (FADE), the Debt issued directly by the Official Credit Institute (ICO), and the credits of the Fund to Finance Payment to Suppliers (FFPP) when they convert into bonds, to the Asset Securitization Funds for Small and Medium-sized Enterprises (FTPymes) that have a State guarantee, and to the bonds issued by the Asset Securitization Funds for Protected Housing (FTVPO) that have an ICO guarantee, taking into account that they are similar in nature and credit quality. The maximum investment limit in these assets is also increased up to 30 percent of the fund compartment's net asset value. In this way, the operational possibilities of the Fund Managers are increased, enhancing the attractiveness of these products for investors without compromising their security.

On the other hand, taking into account the current situation of downgrades in the credit ratings of fixed-income securities, it is considered necessary to modify the obligation that a maximum percentage of 30 percent of the net asset value of Fondtesoro that can be invested in other fixed-income securities other than State Debt must have a credit rating equivalent to or higher than A+ or A1. Thus, this order replaces such obligation with the requirement to have at least a solvency rating no lower than that of the Kingdom of Spain, issued or endorsed by a credit rating agency. It is also permitted to maintain such investments on which, having possessed the legally established rating level at the time of acquisition and losing it at a later moment, the management entity determines an adequate solvency level after performing a credit risk analysis of the asset. The objective is to maintain the viability of the "Fondtesoro" and ensure that the collaboration agreements signed by the Ministry of Economy and Competitiveness and the Fund Management Companies remain in line with market trends in aspects such as the credit rating of the assets in which they can invest.

Finally, this reform also seeks to achieve:
Adapt the content of the informational documents of Fondtesoro to what is established in Law 35/2003, of 4 November, on Collective Investment Institutions, modified by Law 31/2011, of 4 October, on Collective Investment Institutions, which regulates a new informational instrument of collective investment institutions called "Key Investor Information Document".

cve: BOE-A-2012-15181

BOLETÍN OFICIAL DEL ESTADO
Núm. 301 Sábado 15 de diciembre de 2012 Sec. III. Pág. 85657 Replace the reference to "organized secondary market" with "regulated market" as this is the terminology used by the Directive on Markets in Financial Instruments (MiFID).
Redraft the limits in which the fund compartment must be invested in terms of "exposure" instead of "net asset value" to maintain consistency with the Circular on Investment Vocations of the National Securities Market Commission (CNMV), clarifying, however, that the investment limit to be maintained in State Debt in euros must be complied with in terms of net asset value.

This order is issued under Article 102.4 of Law 47/2003, of 26 November, General Budgetary Law, which empowers the Minister of Economy, currently the Minister of Economy and Competitiveness, to enter into collaboration agreements with financial entities to promote the placement of State Debt.

In virtue thereof, I order:
Single Article. Modification of Order EHA/2688/2006, of 28 July, on collaboration agreements relating to Investment Funds in State Debt.

One. Clause two of the standard agreement appearing as Annex I in the aforementioned order is drafted as follows:

"Second.- The investment fund compartment shall have the following specifications which must be expressly stated in its prospectus, except for the options established in brackets. In the Key Investor Information Documents, at a minimum, the investment criteria and the remuneration system for participants must be expressly stated. Any increase in the applied commissions must be communicated previously to the Public Treasury and will require its express consent to be applicable.

a) Investment criteria:
1.º Seventy percent (70%) of the total exposure of the fund compartment must be invested in State Debt in euros, in any of its modalities. In any case, seventy percent (70%) of the net asset value of the fund compartment will be invested in State Debt in euros, in any of its modalities, also counting, for the purposes of this section, the bonds issued by the "FTPymes" that have a State guarantee, the bonds issued by the "FTVPO" that have an ICO guarantee, the issuances of the Bank Orderly Restructuring Fund (FROB), the issuances of the Electricity Deficit Amortization Fund (FADE), the Debt issued directly by the ICO, and the credits of the Fund to Finance Payment to Suppliers (FFPP) when they convert into bonds, up to the limit of 30 percent (30%) of the net asset value of the fund compartment.

The fund compartment may invest a maximum percentage of 30 percent (30%) of the total exposure of the fund compartment in other fixed-income securities other than State Debt traded on a regulated market and that have a solvency rating no lower than that of the Kingdom of Spain issued or endorsed by a credit rating agency, as well as in deposits in credit institutions that have recognized that minimum rating and in money market instruments that meet that requirement, all of them denominated in euros. For these purposes, the ratings must be issued or endorsed by an agency established in the European Union and registered in accordance with what is provided in Regulation (EC) No 1060/2009 of the European Parliament and of the Council, of 16 September 2009, on credit rating agencies or, regarding ratings of entities established or financial instruments issued outside the European Union, that have been issued by a credit rating agency established in a State not a member of the European Union, that has obtained certification based on equivalence according to the aforementioned Regulation. Investments will also be eligible in which, having possessed the legally established rating level at the time of acquisition and losing it at a later moment, the management entity determines an adequate solvency level after performing a credit risk analysis of the asset, using appropriate methodologies and considering different indicators or parameters of usual use in the market.

2.º The fund compartment will define its investment policy as fixed-income with a target duration of its portfolio greater than twelve months [it can be specified more].

3.º The fund compartment may use financial derivative instruments with the purpose of ensuring adequate coverage of the risks assumed in all or part of the portfolio, as an investment to manage the portfolio more effectively or within the framework of a management aimed at achieving a specific profitability objective, in accordance with the management objectives provided for in the informational prospectus and in the fund regulations. Derivative instruments must have as underlying fixed-income securities, interest rates, or fixed-income indices, all of them in euros and in accordance with the general regulatory framework for these investments for Collective Investment Institutions.

b) Minimum contribution of participants:
There must be at least one class of participations in the fund compartment in which the minimum investment initially required from potential participants is not higher than 300 euros.

c) Commissions and expenses:
The sum of the management and depositary commissions charged annually to the fund compartment will not exceed 1.25 percent (1.25%) [a lower commission can be included in the prospectus] of the value of its average daily net asset value during the fiscal year.

[Optional: The Management Company may individually charge participants a redemption commission not higher than 1 percent (1%) [in its case, a lower figure can be included in the prospectus] of the value of the redeemed participations, which will apply exclusively to redemptions that occur during the first year of the participant's stay in the fund compartment.]

[Optional: Without prejudice to what is provided in the preceding paragraph, a discount in favor of the fund compartment of 2 percent (2%) [in its case, a lower figure can be included in the prospectus] of the value of the redeemed participations will be applied to the redemption value of participations that have been acquired within the 30 days prior to said redemptions. For these purposes, it will be understood that the redeemed participations are the oldest ones.]

d) Remuneration system for participants:
The fund compartment will act under a capitalization regime, through the continuous reinvestment of the income obtained."

Two. Clause two of the standard agreement appearing as Annex II in the aforementioned order is drafted as follows:

"Second. The investment fund compartment shall have the following specifications which must be expressly stated in its prospectus, except for the options established in brackets. In the Key Investor Information Documents, at a minimum, the investment criteria and the remuneration system for participants must be expressly stated. Any increase in the applied commissions must be communicated previously to the Public Treasury and will require its express consent to be applicable.

cve: BOE-A-2012-15181

BOLETÍN OFICIAL DEL ESTADO
Núm. 301 Sábado 15 de diciembre de 2012 Sec. III. Pág. 85659

a) Investment criteria:
1.º Seventy percent (70%) of the total exposure of the fund compartment must be invested in State Debt in euros, in any of its modalities. In any case, seventy percent (70%) of the net asset value of the fund compartment will be invested in State Debt in euros, in any of its modalities, also counting, for the purposes of this section, the bonds issued by the "FTPymes" that have a State guarantee, the bonds issued by the "FTVPO" that have an ICO guarantee, the issuances of the Bank Orderly Restructuring Fund (FROB), the issuances of the Electricity Deficit Amortization Fund (FADE), the Debt issued directly by the ICO, and the credits of the Fund to Finance Payment to Suppliers (FFPP) when they convert into bonds, up to the limit of 30 percent (30%) of the net asset value of the fund compartment.

The fund compartment may invest a maximum percentage of 30 percent (30%) of the total exposure of the fund compartment in other fixed-income securities other than State Debt traded on a regulated market and that have a solvency rating no lower than that of the Kingdom of Spain issued or endorsed by a credit rating agency, as well as in deposits in credit institutions that have recognized that minimum rating and in money market instruments that meet that requirement, all of them denominated in euros. For these purposes, the ratings must be issued or endorsed by an agency established in the European Union and registered in accordance with what is provided in Regulation (EC) No 1060/2009 of the European Parliament and of the Council, of 16 September 2009, on credit rating agencies or, regarding ratings of entities established or financial instruments issued outside the European Union, that have been issued by a credit rating agency established in a State not a member of the European Union, that has obtained certification based on equivalence according to the aforementioned Regulation. Investments will also be eligible in which, having possessed the legally established rating level at the time of acquisition and losing it at a later moment, the management entity determines an adequate solvency level after performing a credit risk analysis of the asset, using appropriate methodologies and considering different indicators or parameters of usual use in the market.

2.º The fund compartment will define its investment policy as fixed-income with a target duration of its portfolio not higher than twelve months [it can be specified more].

3.º The fund compartment may use financial derivative instruments with the purpose of ensuring adequate coverage of the risks assumed in all or part of the portfolio, as an investment to manage the portfolio more effectively or within the framework of a management aimed at achieving a specific profitability objective, in accordance with the management objectives provided for in the informational prospectus and in the fund regulations. Derivative instruments must have as underlying fixed-income securities, interest rates, or fixed-income indices, all of them in euros and in accordance with the general regulatory framework for these investments for Collective Investment Institutions.

b) Minimum contribution of participants:
There must be at least one class of participations in the fund compartment in which the minimum investment initially required from potential participants is not higher than 300 euros.

c) Commissions and expenses:
The sum of the management and depositary commissions charged annually to the fund compartment will not exceed 1.05 percent (1.05%) [a lower commission can be included in the prospectus]

cve: BOE-A-2012-15181

BOLETÍN OFICIAL DEL ESTADO
Núm. 301 Sábado 15 de diciembre de 2012 Sec. III. Pág. 85660 of the value of its average daily net asset value during the fiscal year.

d) Remuneration system for participants:
The fund compartment will act under a capitalization regime, through the continuous reinvestment of the income obtained."

Three. Clause two of the standard agreement appearing as Annex III in the aforementioned order is drafted as follows:

"Second. The investment fund compartment shall have the following specifications which must be expressly stated in its prospectus, except for the options established in brackets. In the Key Investor Information Documents, at a minimum, the investment criteria and the remuneration system for participants must be expressly stated. Any increase in the applied commissions must be communicated previously to the Public Treasury and will require its express consent to be applicable.

a) Investment criteria:
1.º Seventy percent (70%) of the total exposure of the fund compartment must be invested in State Debt in euros, in any of its modalities. In any case, seventy percent (70%) of the net asset value of the fund compartment will be invested in State Debt in euros, in any of its modalities, also counting, solely for the purposes of this section, the bonds issued by the "FTPymes" that have a State guarantee, the bonds issued by the "FTVPO" that have an ICO guarantee, the issuances of the Bank Orderly Restructuring Fund (FROB), the issuances of the Electricity Deficit Amortization Fund (FADE), the Debt issued directly by the ICO, and the credits of the Fund to Finance Payment to Suppliers (FFPP) when they convert into bonds, up to the limit of 30 percent (30%) of the net asset value of the fund compartment.

The fund compartment may invest a maximum percentage of 30 percent (30%) of the total exposure of the fund compartment in other fixed-income securities other than State Debt traded on a regulated market and that have a solvency rating no lower than that of the Kingdom of Spain issued or endorsed by a credit rating agency, as well as in deposits in credit institutions that have recognized that minimum rating and in money market instruments that meet that requirement, and in variable-income securities traded on a regulated market of the European Union, all of them denominated in currencies of European Union countries. In any case, the value of the net positions in spot and derivatives on variable income and currencies cannot exceed 30 percent (30%) [it can be reduced] of the net asset value of the fund compartment. For these purposes, the ratings must be issued or endorsed by an agency established in the European Union and registered in accordance with what is provided in Regulation (EC) No 1060/2009 of the European Parliament and of the Council, of 16 September 2009, on credit rating agencies or, regarding ratings of entities established or financial instruments issued outside the European Union, that have been issued by a credit rating agency established in a State not a member of the European Union, that has obtained certification based on equivalence according to the aforementioned Regulation. Investments will also be eligible in which, having possessed the legally established rating level at the time of acquisition and losing it at a later moment, the management entity determines an adequate solvency level after performing a credit risk analysis of the asset, using appropriate methodologies and considering different indicators or parameters of usual use in the market.

2.º The fund compartment may use financial derivative instruments with the purpose of ensuring adequate coverage of the risks assumed in all or part of the portfolio, as an investment to manage the portfolio more effectively or within the framework of a management aimed at achieving a specific profitability objective, in accordance with the management objectives provided for in the informational prospectus and in the fund regulations. Derivative instruments must have as underlying fixed-income or variable-income securities, interest rates, fixed-income or variable-income indices, all of them denominated in euros, or currencies of European Union countries and in accordance with the general regulatory framework for these investments for Collective Investment Institutions.

b) Minimum contribution of participants:
There must be at least one class of participations in the fund compartment in which the minimum investment initially required from potential participants is not higher than 300 euros.

c) Commissions and expenses:
The sum of the management and depositary commissions charged annually to the fund compartment will not exceed 1.35 percent (1.35%) [a lower commission can be included in the prospectus] of the value of its average daily net asset value during the fiscal year.

[Optional: The Management Company may individually charge participants a redemption commission not higher than 1 percent (1%) [in its case, a lower figure can be included in the prospectus] of the value of the redeemed participations, which will apply exclusively to redemptions that occur during the first year of the participant's stay in the fund compartment.]

[Optional: Without prejudice to what is provided in the preceding paragraph, a discount in favor of the fund compartment of 2 percent (2%) [in its case, a lower figure can be included in the prospectus] of the value of the redeemed participations will be applied to the redemption value of participations that have been acquired within the 30 days prior to said redemptions. For these purposes, it will be understood that the redeemed participations are the oldest ones.]

d) Remuneration system for participants:
The fund compartment will act under a capitalization regime, through the continuous reinvestment of the income obtained."

Four. Information obligations.
The modifications that must occur in the prospectus and in the Key Investor Information Documents of the investment fund compartment as a consequence of what is established in this order, as well as the inclusion of that information for the first time in them, will not be considered changes in the investment policy for the purposes of Article 14.2 of the Regulation developing Law 35/2003, of 4 November, on Collective Investment Institutions, approved by Royal Decree 1309/2005, of 4 November, which approves the Regulation of Law 35/2003, of 4 November.

Single Transitional Provision. Transitional period.
The collaboration agreements celebrated by the General Secretariat of the Treasury and Financial Policy and the Management Companies of Collective Investment Institutions under

cve: BOE-A-2012-15181

BOLETÍN OFICIAL DEL ESTADO
Núm. 301 Sábado 15 de diciembre de 2012 Sec. III. Pág. 85662 the auspices of Order EHA/2688/2006, of 28 July, on collaboration agreements relating to Investment Funds in State Debt, prior to the date from which this order takes effect, must adapt to the new provisions established by it within a period of six months from the date of publication of this order. Otherwise, as provided in the standard agreements included in the corresponding Annexes of Order EHA/2688/2006, of 28 July, the General Secretariat of the Treasury and Financial Policy will resolve the collaboration agreements through written notice with immediate effect. Subsequently, the Management Companies must adapt the prospectuses and the Key Investor Information Documents of the Fo