Answer ... The marketing of the shares and units of alternative investment funds (AIFs) may be subject to further notification or authorisation by the Croatian Financial Services Supervisory Agency (HANFA), depending on whether the AIFs or the AIF manager (AIFM) is an EU or non-EU body and whether it operates under the European passport or another authorisation equivalent to the European passport.
Answer ... The criteria for marketing will vary on a case-by-case basis. Croatian AIFMs can market the shares of Croatian AIFs without further notification or authorisation.
However, Croatian AIFMs that intend to market the shares of EU AIFs must notify HANFA and submit:
- a programme of planned activities;
- the AIFs’ rules;
- information on the depositary; and
- mechanisms to prevent the marketing of shares to retail investors.
This information must be submitted to HANFA where a Croatian AIFM intends to market the shares of non-EU AIFs. In specified cases, HANFA will inform the AIFM of whether it can begin marketing shares; HANFA will forbid this where the management of the AIFs or the AIFM itself does not comply with the AIF Act.
A non-EU AIFM that intends to market the shares of AIFs must obtain authorisation from HANFA if Croatia is a state of reference. HANFA shall reject such authorisation if any of the following conditions is not fulfilled:
- Croatia is chosen as a state of reference;
- The AIFM has appointed a legal representative in Croatia;
- The legal representative, together with the AIFM, is the contact person for investors, the European Securities and Markets Authority, HANFA and supervisory bodies of other member states;
- The legal representative is qualified to perform the function of compliance with the AIF Act;
- Cooperation has been established between Croatia, and the home states of the AIFs and AIFM;
- The AIFM’s home state has not been listed as uncooperative;
- The AIFM’s home state has signed an agreement with Croatia regarding tax issues; and
- HANFA’s supervisory powers are not precluded by the laws of the third country.
Answer ... The provisions governing the authorisation of AIFMs incorporated in Croatia shall apply accordingly, meaning that the procedure must be completed within three months of submission of a full complete request; this deadline may be extended for an additional three months by decision of HANFA in specific circumstances.
In addition, where HANFA determines that Croatia has been chosen as a reference state, it must inform the European Securities and Markets Authority (ESMA) thereof and request advice on its assessment. The deadline for completion of the authorisation procedure shall be extended until HANFA receives this advice from ESMA.
Answer ... The types of investors that may be targeted by an AIF are determined on the basis of the type of AIF in question. AIFs with public offerings may be marketed to retail investors or professional investors, or to investors that request to be treated as professional investors. AIFs with private offerings may be marketed only to professional investors or qualified investors or investors that request to be treated as professional investors. Shares covered by those provisions of the AIF Act that have extraterritorial reach - that is, shares for which notification or authorisation is required as set out in question 5.2 - may be marketed to professional investors only.
Answer ... All marketing materials intended for investors or potential investors in AIFs for the purpose of raising capital must be clearly recognisable as marketing materials. The content of such marketing materials must be unambiguous, accurate and not misleading. The marketing materials cannot be contrary to the AIFs’ rules and prospectus, where applicable. The marketing materials must contain information as to where, how and in which language the AIFs’ rules and prospectus are available.
AIFs with private offerings cannot be publicly advertised for the purpose of attracting potential investors. Highlighting presentation material in public, whereby only the name and business activities of the AIFM are indicated, in order to refer potential investors to the AIFM is not considered to constitute a public advertisement.
The marketing materials for AIFs with private offerings and the AIFMs that manage them must be complete, unambiguous, accurate and not misleading. They must:
- contain up-to-date information on the business results of AIFs;
- reflect the business results as of the AIFs’ incorporation or at least for the last five years;
- be compiled on a consistent basis; and
- not be presented in a way that suggests the data is indicative of future business results.
Answer ... As explained in question 5.2, EU AIFMs can market the shares of EU or non-EU AIFs subject to further notification of HANFA; while non-EU AIFMs can market the shares of EU or non-EU AIFs subject to further authorisation by HANFA.
Answer ... Croatian or EU AIFMs intending to market the shares of AIFs under management to retail investors must obtain prior authorisation from HANFA. In each individual case HANFA must determine whether the AIFs may be regarded as AIFs whose shares can be marketed to retail investors under the Ordinance on the Types of AIFs. AIFMs intending to market to retail investors the units or shares of EU AIFs in Croatia must ensure that all conditions necessary for the following activities are satisfied:
- paying investors;
- transferring and redeeming shares or units;
- publishing documents and information with respect to the AIFs and their delivery to investors acquiring shares in Croatia; and
- settling investors’ claims.
The AIFM can distribute only the shares of non-EU AIFs whose investors have at least the same level of protection as investors in AIFs with public offerings incorporated in Croatia.
Only AIFs with public offerings can be marketed to retail investors.
The AIF Act provides that appropriate measures preventing marketing to retail investors must be implemented in the following cases:
- where Croatian AIFMs manage and market the shares and units of EU AIFs;
- where Croatian AIFMs manage and market the shares and units of non-EU AIFs or Croatian or EU feeder AIFs under the European passport;
- where non-EU AIFMs manage and market the shares and units of Croatian, EU or non-EU AIFs in Croatia as their state of reference; and
where non-EU AIFMs that have Croatia as their state of reference market the shares and units of EU or non-EU AIFs in the European Union.