Comparative Guides

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4. Results: Answers
Alternative Investment Funds
Must alternative investment funds be authorised or licensed in your jurisdiction?

Answer ... Yes, before an alternative investment fund (AIF) can be established, the Croatian Financial Services Supervisory Agency (HANFA) must issue authorisation for its establishment and management. HANFA authorisation is a precondition for the incorporation of AIFs without legal personality (both closed-ended and open-ended). For the incorporation of closed-ended externally managed AIFs with legal personality, the provisions regulating the authorisation of AIFs without legal personality shall apply accordingly; but some additional documents must also be submitted, since such AIFs are incorporated in the form of a joint stock company or limited liability company. With respect to closed-ended internally managed AIFs with legal personality, provisions regulating the authorisation of AIFs and AIF managers (AIFMs) shall apply accordingly.

For more information about this answer please contact: Tena Tomek from Marohnic, Tomek & Gjoic
If so, what criteria must be satisfied to obtain authorisation? Do any restrictions apply in this regard?

Answer ... Before an AIF requests authorisation, all formalities necessary for its operation must be fulfilled. The documents to be submitted with the request include:

  • the AIF’s rules or prospectus;
  • its investment strategy;
  • the risk profile;
  • data on the master AIF, if the AIF to be incorporated is a feeder AIF;
  • the agreement with the depositary, including the depositary’s consent where this is required by law, and other documents as requested by special ordinance;
  • proof that the AIF complies with the organisational requirements set out in the AIF Act; and
  • details of capital maintenance.

In addition to the above, where a closed-ended AIF is externally managed, the AIFM must further submit:

  • the articles of association;
  • the decision on the appointment of supervisory board members, if applicable; and
  • the management agreement with the external AIFM.

The request for authorisation shall be rejected if:

  • the AIFM has not entered into an agreement with the depositary;
  • the AIF’s rules or prospectus is contrary to the provisions of the AIF Act;
  • the AIFM does not fulfil the conditions for management of the respective type of AIF; or
  • the AIFM does not have the appropriate organisational structure.

In the case of closed-ended AIFs with internal management, the requisite documentation for authorisation of an AIFM must be submitted simultaneously with the request for authorisation of the AIF. The request for authorisation shall be rejected if:

  • the AIF does not comply with the provisions that regulate its form, shares or capital;
  • there is a close link which makes supervision difficult or impossible; or
  • supervision is difficult due to the applicability of third-country provisions regulating one or more natural or legal persons with close links to the AIF.

For more information about this answer please contact: Tena Tomek from Marohnic, Tomek & Gjoic
What is the process for obtaining authorisation of alternative investment funds and how long does this usually take?

Answer ... Upon receipt of a request for authorisation, HANFA will review all documentation received and verify that all conditions have been fulfilled. If some documents have been omitted or if irregularities are determined, HANFA will specify an additional deadline for rectification thereof. In practice, HANFA reviews all documentation in detail and engages in negotiations with the AIFM or founders to amend the documents as necessary pursuant to the applicable statutory provisions. Once all documents have been harmonised with the statutory provisions, HANFA will decide whether to grant authorisation accordingly.

The AIF Act does not specify a deadline within which a decision must be issued. However, in accordance with the Croatian Financial Services Supervisory Agency Act, all issues not expressly regulated therein shall be governed by the General Administrative Procedure Act (Official Gazette 47/2009). Under that act, a decision should be issued and delivered to a party within 60 days of submission of a complete request containing everything prescribed by law. However, HANFA considers that this timeframe begins to run only once (in its opinion) the request and accompanying documents are complete and in accordance with the applicable provisions.

For more information about this answer please contact: Tena Tomek from Marohnic, Tomek & Gjoic
Alternative Investment Funds