Cross-border marketing of Czech UCITS or EU UCITS

I. Introduction

1. In this Opinion, the Czech National Bank summarises the conditions for the marketing of the units of a Czech UCITS in another Member State and the marketing of the units of an EU UCITS in the Czech Republic pursuant to the AMCIF^[1] and specifies key technical aspects thereof.

Definitions of some terms

2. For the purposes of this Opinion

• “units” also means dematerialised securities or other forms of shares of an EU UCITS (“units” within the meaning of the UCITS Directive),
• “notification” means the notification and, as the case may be, also the notification procedure of an intention to market the units of an EU UCITS in the Czech Republic or of a Czech UCITS in another Member State,
• “notification letter” means a standardised form pursuant to Annex I of the Notifications Regulation,
• “attestation” means an attestation pursuant to Annex II of the Notifications Regulation,
• “UCITS” means a domestic or EU UCITS,
• “EU UCITS” means an investment fund from another Member State meeting the requirements of the UCITS Directive,
• “Member State” means a Member State of the European Union or another contracting state of the Agreement on the European Economic Area (Article 623(a) of the AMCIF).

II. Distribution in the Czech Republic

3. The distribution of the units of an EU UCITS is a core investment service pursuant to Article 4(2)(a) of the CMUA which can only be performed as business activity by an entity authorised to provide such investment services (the receipt and transmission of orders in relation to investment instruments) in the territory of Czech Republic or authorised to provide the core investment service of underwriting or placing of issues of investment instruments (Article 4(2)(h) or (i) of the CMUA) or, depending on the scope of its authorisation, an investment company, a comparable foreign entity from another Member State or an entity with authorisation pursuant to Article 481 of the AMCIF (Article 11(1)e of the AMCIF).
4. Distribution may also be provided by the EU UCITS itself (or its “manager”).^[2] The establishment of an organisational unit (a branch) or a notification of the intention to provide services in the Czech Republic is not required in this case (Articles 16 and 91(2) of the UCITS Directive).^[3]
5. Public marketing of an EU UCITS in the Czech Republic is allowed only if it has been duly notified by such EU UCITS and the information about the notification has been submitted to the Czech National Bank (Article 305 of the AMCIF). It is also necessary for the EU UCITS to have ensured the provision of information to investors (Article 307 of the AMCIF) and the fulfilment of obligations pursuant to Article 306 of the AMCIF. A distributor different from the EU UCITS (or its manager) may not make notification by itself and on its own behalf.
6. The fulfilment of obligations pursuant to Article 306 of the AMCIF (“services provided to investors and the public administration”) means (a) the execution of orders relating to the issuance, subscription and redemption of units issued by this fund in the Czech Republic and the related payments, (b) the provision of information for investors about the possible manner of executing the orders referred to in (a), and about the division and payment of profit shares and other income on the fund’s assets in the Czech Republic, (c) the setting of suitable procedures and measures to ensure proper handling of investors’ complaints and the removal of restrictions for investors in enforcing their rights, (d) the provision of access to information and documents for investors, (e) the provision of information to investors relating to the services provided to investors and the public administration on a durable information medium, and (f) the provision of a contact point for communication with the Czech National Bank. Contact with investors and the public administration can also be made by means of remote communication. A physical presence is not required.
7. A distributor that is different from the EU UCITS (or its manager) shall follow the relevant rules of the CMUA when marketing the units of an EU UCITS (see point 3). All distributors shall comply with the rules governing promotion and at the same time with the Consumer Protection Act, the Advertising Act, etc.

III. Notification of an EU UCITS

When notification is necessary

8. Notification is required in the Czech Republic in the case of an intention to market the units of an EU UCITS to the public^[4] (Article 305 et seq. of the AMCIF). Notification is also required in the case of renewed marketing of the units of an EU UCITS which previously ceased marketing its units within the territory of the Czech Republic and was deleted from the register of EU UCITS whose units may be marketed (Article 597(d) of the AMCIF).
9. Notification is not required in the case of private placement (as Article 305(1) of the AMCIF requires notification solely for cases of marketing to the public), including cases of offering the units of an EU UCITS to investment firms for the purposes of acquisition for the client’s portfolio when providing the investment service of portfolio management.^[5] Notification is also not required in the case of a master EU UCITS if it raises capital in the Czech Republic from feeder UCITS only. Notification is not required if an investor decides to invest in an EU UCITS on its own initiative (Article 295 of the AMCIF).
10. Notification in the Czech Republic shall be submitted only once, even if the units of an EU UCITS are marketed in the Czech Republic by more than one distributor.
11. Rules for the concurrent notification of multiple UCITS and for the notification of investment compartments and classes of units are described in more detail below (points 34 et seq.).

Requirements for the notification letter

12. An EU UCITS which intends to market units in the Czech Republic shall give notice of its intention by means of a notification letter, i.e. using the standardised form pursuant to Annex I to the Notifications Regulation.
13. An EU UCITS shall complete all parts (A, B and C) of the notification letter in the language customary in the sphere of international finance (i.e. in English^[6]). The notification letter may also be accepted in Czech and Slovak.
14. In Part A of the notification letter “Additional information about the UCITS (if necessary)”, the EU UCITS shall state, if the situation requires it, that the founding documents (fund rules/instruments of incorporation) and the prospectus^[7] have been consolidated into a single document, and thus the set of attachments to the notification letter is limited.
15. In Part B.2 of the notification letter “Arrangements for the provision of facilities to unit-holders in accordance with Article 92 of Directive 2009/65/EC”, the EU UCITS shall give notice of the arrangements for making payments to unit-holders (e.g. dividends), for repurchasing or redeeming units (e.g. in the event of liquidation) and for making available the information required pursuant to Article 92 of the UCITS Directive. In the Czech Republic, such arrangements consist in the obligation to ensure the fulfilment of obligations pursuant to Article 306 of the AMCIF. Thus, especially information about how the EU UCITS ensures services provided to investors and the public administration shall be given in Part B.2 of the notification letter.
16. An agreement with a bank, an investment firm or a similar foreign entity authorised to provide services in the Czech Republic through a branch via which services are possibly provided to investors and the public administration (Article 306 of the AMCIF) shall not be attached to the notification letter.^[8]
17. No information in relation to Part B.3 of the notification letter “Additional information required by the competent authorities of the host Member State in accordance with Article 91(3) of Directive 2009/65/EC” is required in the Czech Republic.
18. The EU UCITS shall submit the notification letter with the following attachments:

• the latest version of the prospectus,^[9]
• the latest version of the fund rules/instruments of incorporation if they are not part of the prospectus,
• the latest version of the annual or half-yearly report,
• the latest version of the key investor information document (KIID).^[10]

19. The following rules apply to the different language versions of the attachments to the notification letter:

• the KIID of the EU UCITS shall be attached in Czech,
• the fund rules/instruments of incorporation and the prospectus (statute) and the annual and half-yearly reports of the EU UCITS shall be attached in Czech, Slovak or English.^[11]

20. The form of the notification letter (paper or electronic) and the format of the attachments to the notification letter of the EU UCITS shall be determined by the competent authority of the home Member State.

Procedure for the notification

21. The EU UCITS shall make the notification through the competent authority of its home Member State (Article 93(1) of the UCITS Directive), to which it shall submit the notification letter together with the attachments.
22. The competent authority of the home Member State shall attach the attestation to the notification letter and transmit all documentation to the Czech National Bank no later than 10 working days of the date of the receipt of the complete notification letter including the required attachments.
23. A notification of an EU UCITS submitted directly to the Czech National Bank shall not be effective (Article 93(1) of UCITS Directive and Article 4(1) of the Notifications Regulation). In such case, the Czech National Bank will inform the applicant that it is not the competent authority and that the supervisory authority of the home Member State is the competent authority.
24. The competent authority of the home Member State shall transmit all documentation to the Czech National Bank exclusively in electronic form to passport.ucits@cnb.cz. The size of the e-mail message (including the attachment) is limited to 15 MB. The attachments shall be provided in a format that the Czech National Bank is capable of viewing and printing, such as doc, docx, xls, xlsx or pdf. The documents may be compressed into the zip, 7z or rar format. Instead of attachments, the competent authority of the home Member State may send a link to a repository where the required documents are stored and from where the Czech National Bank can download them. No special identification in the subject line is required for such an e-mail message.
25. An EU UCITS may start marketing its units in the Czech Republic immediately after it has been informed by the competent authority of the home Member State that the notification letter has been transmitted to the Czech National Bank (Article 305(1) of the AMCIF).

Additional information regarding the procedure following the receipt of the notification letter and regarding the consequences of deficient notification

26. The Czech National Bank will first automatically inform the sender, i.e. the foreign authority, of the delivery of the e-mail message by means of which the competent authority of the home Member State has transmitted all documentation. Subsequently, the Czech National Bank will confirm to the authority of the home Member State in electronic form no later than five working days of the date of the receipt of the e-mail message that it has received all the documentation and that the attachments can be viewed and printed (Article 5(1) of the Notifications Regulation).
27. If the notification letter or any of the attachments are missing, incomplete or in a different format, the Czech National Bank will not issue the confirmation referred to in the previous point and will instead inform the competent authority of the home Member State that the transmitted documentation shows deficiencies within the meaning of Article 4(1)(a) of the Notifications Regulation.
28. If the attestation is missing, the Czech National Bank will request the competent authority of the home Member State to provide it.
29. In case of other deficiencies of the notification letter other than incompleteness or an unpermitted technical format, the Czech National Bank will confirm the receipt of the notification letter and subsequently discuss the rectification of such deficiencies with the competent authority of the home Member State of the EU UCITS.
30. The competent authority of the home Member State should inform the EU UCITS that it has transmitted the notification letter to the Czech National Bank either after it receives the confirmation from the Czech National Bank or after it has received an automatic read receipt and has carefully verified that the transmitted documentation is complete and in the prescribed language and technical format. Should these conditions not be met, the notification letter shall not be regarded as transmitted, as implied by the Notifications Regulation.^[12]
31. Although under European Union law an EU UCITS has no right to market its units in the Czech Republic until the deficiencies of the notification letter or its attachments have been rectified, such marketing is acceptable if the deficiencies are rectified promptly. This is without prejudice to the obligation to fulfil legal duties when marketing the units of an EU UCITS, for example to fulfil the obligations relating to the services provided to investors and the public administration pursuant to Article 306 if the AMCIF.
32. Once the EU UCITS has been informed by the competent authority of its home Member State of the transmission of the notification letter to the Czech National Bank, the Czech National Bank will add the EU UCITS to the register maintained pursuant to Article 597(d) of the AMCIF.^[13] The register is available to the public on the Czech National Bank website. Entry in the register is for information purposes only.

Administrative fees

33. The entry of an EU UCITS in the register maintained by the Czech National Bank pursuant to Article 597 of the AMCIF made on the basis of a notification pursuant to Article 93 of the UCITS Directive is not subject to administrative fees. More detailed information on administrative fees can be found here.

Notification of multiple funds, investment compartments and classes of units

34. An intention to market the units of multiple EU UCITS in the Czech Republic requires a separate notification for each such fund. This is primarily because of technical limitations of the notification letter and the attestation which preclude the listing of multiple foreign UCITS on the relevant form.
35. Notification of the marketing of the units of one or more investment compartments of an EU UCITS, or of one or more classes of units of an EU UCITS or investment compartment which issues multiple classes of units, may also be made using a single joint notification letter. An EU UCITS may also use a separate notification letter for each investment compartment. In the case of an intention to market in the Czech Republic an additional class of units of an EU UCITS or its investment compartment which were not listed in the notification letter, the EU UCITS shall notify the Czech National Bank directly in the manner for reporting changes (the reporting of changes is described in detail in point 40 et seq.).
36. In compliance with the rules set out in Articles 25 and 26 of the Key Information Regulation, however, a separate KIID is required for each investment compartment and for each class of units. This will be applied mutatis mutandis to the PRIIPs KID, which will be mandatory for UCITS from 1 January 2023. Under the conditions set out in Article 26 of the Key Information Regulation, it is permitted in exceptional cases to combine the investor information pertinent to the individual classes of units. If the notification letter applies to certain investment compartments only, it is sufficient to attach to the notification letter only the part of the prospectus of the EU UCITS that relates to the investment compartment given in the notification letter (i.e. the main section of the prospectus and the additional section relating to the investment compartments).
37. Notification of an additional investment compartment or compartments of an EU UCITS requires the submission of a new notification letter through the competent authority of the home Member State. It is possible again to notify multiple additional investment compartments in the Czech Republic using a single notification letter. Regardless of potential overlaps with the previous notification of other investment compartments, it is necessary to attach all the documents required by European Union law (e.g. the prospectus) again.

IV. Obligations of an EU UCITS related to the marketing of its units in the Czech Republic

Common rules

38. The rules on the activities of an EU UCITS in the Czech Republic, as set out in this part of the Opinion, apply equally to all EU UCITS.
39. An EU UCITS may perform its obligations in relation to the marketing of its units either individually or through a bank or an investment firm or a similar foreign entity that is authorised to carry on business within the territory of the Czech Republic (Article 306(3) of the AMCIF). Activities beyond the provision of services to investors and the public administration (see point 6 above) may also be provided through other entities, where a trade authorisation, for example, is also sufficient. Such delegation needs to be proved to the Czech National Bank only when it is requested.

Information duties of an EU UCITS to the Czech National Bank

40. An EU UCITS has no regular information duties to the Czech National Bank.^[14]
41. An EU UCITS shall inform the Czech National Bank in writing of a planned change in the notification letter (for example, a increase or decrease of the number of classes of units marketed in the Czech Republic, a change relating to the provision of services to investors and the public administration pursuant to Article 306 of the AMCIF, and a merger, inclusion in the master-feeder structure, a transfer of management, or its liquidation) directly and not through the supervisory authority of the home Member State (mutatis mutandis, Article 302(7) of the AMCIF). It shall give notice of the change no later than one month before the change is to be made. The EU UCITS shall also notify its home supervisor of this change (Article 93(8) of the UCITS Directive).
42. The preferred form of sending information about changes is via e-mail to podatelna@cnb.cz. No special identification in the subject line is required for such an e-mail message. In the body of the e-mail message the EU UCITS shall identify the document to be affected by the change, briefly characterise the change^[15] (indicating separately any change that must be included the register of EU UCITS, such as a change of the EU UCITS’ name), including the date on which the change is to be made, and specify the location (usually an internet address) where the updated electronic version of the changed document will be available. Where a change is being notified for the first time by a representative not specified in the notification letter, the representative shall attach a copy of the power of attorney to the e-mail. An authenticated copy is not required.
43. The Czech National Bank accepts information about changes in Czech, Slovak, or English.
44. Where a change has to be included in the register of EU UCITS, it is necessary to explicitly inform the Czech National Bank of this fact and specify the date as of which the change should be made. The Czech National Bank will promptly incorporate the change.
45. If the EU UCITS concerned would no longer be compliant with legal regulations due to the change, the supervisory authority of its home Member State shall notify the Czech National Bank and the EU UCITS within 15 working days of receipt of the information about the change that it is not permitted make the change.

Provision of information to investors

46. The manner of providing information in the Czech Republic shall not deviate from the requirements imposed by the UCITS Directive.
47. An EU UCITS shall make its prospectus (including the fund rules/ instruments of incorporation), the annual and half-yearly reports, the KIID and the prices at which it issues or repurchases or redeems its units available to investors in the Czech Republic on its website.^[16] All such documents and information must be up-to-date (Article 307(1) of the AMCIF). In technical terms, it is irrelevant whether such information is being made available from the Czech Republic or from abroad, or who is responsible for making the information available. However, if a central repository or access point is used to provide such information, technical measures must be taken to prevent the marketing of any EU UCITS or alternative funds whose marketing is not allowed in the Czech Republic.
48. More detailed rules on the provision of information (e.g. the content of the individual information duties, the procedure for their performance, the format of the information provided and the time limits, particularly the time limit for the publication of the price for which the EU UCITS issues or repurchases or redeems its units) are defined in the regulatory provisions of the home Member State, in accordance with Chapter IX of the UCITS Directive.
49. The language regime for the provision of information is within the limits of Article 94(1) of the UCITS Directive stipulated in Article 307(4) and (5) of the AMCIF and specified in Article 46 of the Decree No. 244/2013 Coll.^[17] The language regime allows an EU UCITS to publish the documents in another language as well.
50. The rules governing the marketing communications of a collective investment fund imply that marketing communications addressed to investors must be identifiable as such and must describe the risks and rewards of purchasing units or shares of an investment fund in an equally prominent manner, and that all information included in marketing communications must be fair, clear and not misleading. The name of an EU UCITS should be translated into Czech neither in the prospectus nor in the KIID, as this would give a false impression of the fund’s origin and would make it difficult to identify the fund. A translation is acceptable if it accompanies the original name of the fund in a form of an explanatory note; however, it must always be clear from the way the information is presented which name is the official one and which is merely a translation into Czech. In addition, it is not acceptable to use so called “commercial names” or “marketing names”, i.e. divergences from the official name, other than abbreviations derived directly from it. Also when performing distribution, only the fund’s original name or any common abbreviations derived from it, or the fund’s original name along with the Czech name used in such a way that it is clear which name is the official one and which is merely a translation into Czech, may be used (for more on the requirements for marketing communications, see Article 4 of the CBDF Regulation).
51. The information of an EU UCITS must be made accessible to final investors, i.e. in the case of both direct investment and investment intermediated by an investment firm which acquires units for the investor in its own name (as the nominee) and keeps them on a special client securities account (the nominee account). Intermediated investment must not lead to abuse of investors’ rights to obtain information in the extent guaranteed by European law, for example as regards the conditions for the provision of information in electronic form or for the conversion of units into a security that would provide the investor with a narrower scope of rights than guaranteed by the UCITS Directive.
52. An EU UCITS that has notified the Czech National Bank through the competent authority of its home Member State of its intention to market the units only of some of its investment compartments in the Czech Republic shall publish information solely in relation to these investment compartments. Where information relating to an investment compartment cannot be separated without adversely affecting its information value, the EU UCITS should supplement the information with a clear message that the units of the remaining investment compartments are not addressed and offered to investors in the Czech Republic.

Provision of services to investors and the public administration

53. If the units of an EU UCITS are marketed in the Czech Republic, an EU UCITS, a bank, an investment firm or a similar foreign entity authorised to provide services in the Czech Republic through a branch individually or jointly based on an agreement in writing shall ensure the provision of services to investors and the public administration in the Czech Republic in compliance with Article 306 of the AMCIF (see point 6 above). It can be inferred from the law that these activities may be provided individually only by an EU UCITS. Other authorised entities may only provide these activities based on an agreement with the fund.
54. The agreement, if any, should specify which tasks are not performed by the EU UCITS and contain the duty of the EU UCITS to submit all relevant information and documents to the counterparty to the agreement. All related communication must be provided in Czech or in a language the use of which for these purposes is specified by the Czech National Bank in a decree (Article 306(5) of the AMCIF). Pursuant to Article 461(2) of the AMCIF, the administrator of an EU UCITS should notify the Czech National Bank of any changes to this agreement.
55. The purpose of the above activities is to provide investors with certainty that any issues relating to the EU UCITS can be handled in Czech and in the Czech Republic, e.g. complaints regarding uncredited dividends, the repurchase of units or their redemption upon the fund’s liquidation, or the availability of information. These activities also constitute a minimum standard for the services that the EU UICTS must provide to Czech investors. Pursuant to Article 306(2) of the AMCIF, these activities may be provided electronically or in a manner allowing remote access.
56. The investor should also retain the option to assert its rights directly with the EU UCITS.

V.    Cessation of activities of an EU UCITS in the Czech Republic

Conditions for cessation of activities (de-notification)

57. If an EU UCITS intends to cease marketing in the Czech Republic, it shall send notification of the cancellation of the notification letter to the competent authority of the home state in accordance with the legislation of the home state based on Article 93a of the UCITS Directive. The EU UCITS shall specify in this notification in what manner it will ensure compliance with the following conditions:

1. 1. an offer^[18] is made to repurchase or redeem, free of any charges or deductions, all the units issued by the EU UCITS, is publicly available for at least 30 working days, and is addressed, directly or indirectly, to all holders of these units who are based or reside in the Czech Republic;
   2. the intention to terminate arrangements made for marketing the units of this UCITS in the Czech Republic is made public by means of a publicly available media, including by electronic means, which is customary for marketing the units of EU UCITS^[19] in the Czech Republic and suitable for a typical investor investing in such funds; and
   3. any contractual arrangements with distributors which allow them to market the units of the EU UCITS in the Czech Republic are modified or terminated at the latest on the date of de-notification so that such offering is no longer possible after this date.

58. The published information must contain a description of the consequences for holders of units issued by the EU UCITS if they do not accept the purchase offer, and must be published in Czech or Slovak.
59. Upon de-notification, the EU UCITS shall cease any new or further, direct and indirect, offering or placement of units which were the subject of de-notification in the Czech Republic (see the following point).
60. The competent authorities of the home Member State of the EU UCITS shall verify whether the notification is complete and, no later than 15 working days from the receipt of a complete notification, transmit that notification of the cancellation of the notification letter to the Czech National Bank and the ESMA. The competent authorities of the home Member State of the EU UCITS shall promptly notify the manager of this EU UCITS of this transmission. De-notification occurs on the date on which the manager of the EU UCITS receives notification from the competent authority of the home Member State of the transmission of the information to the Czech National Bank.^[20]
61. An investment compartment of an EU UCITS shall cease its activities in the same manner as an EU UCITS itself. If unit classes are offered, the cessation of activities shall pertain to the last unit class. Until then, the cessation of the marketing of one unit class shall be notified to the Czech National Bank pursuant to the point regarding the reporting of changes.

Deletion from the register of the Czech National Bank

62. The Czech National Bank will delete an EU UCITS whose units may be marketed in the Czech Republic from the register of EU UCITS maintained pursuant to Article 597(d) of the AMCIF if the EU UCITS has applied for deletion in accordance with Article 506(1)(a) of the AMCIF. In such case, the EU UCITS shall inform the Czech National Bank on how it fulfilled the conditions arising from the AMCIF in connection with the cessation of its activities in the Czech Republic. The date of deletion shall be the same as the date of de-notification (see point 59). The recommended form of an application for the deletion of an EU UCITS from the register of the Czech National Bank is available on the CNB website under Supervision, regulation/Conduct of supervision/Licensing and approval proceedings (in Czech only).
63. The application for deletion may be submitted to the Czech National Bank directly or through the competent authority of the home Member State of the EU UCITS in accordance with the legal regulations of the home Member State (Article 93a(2) of the UCITS Directive).
64. The Czech National Bank will also delete a UCITS from the register maintained by the Czech National Bank pursuant to Article 597 of the AMCIF upon the expiry of the registration (Article 598(5) of the AMCIF) if the renewal administrative fee is not paid. More detailed information on administrative fees can be found here.
65. The Czech National Bank will inform the EU UCITS of the deletion from the register.

Other rules relating to cessation of activities

66. The deletion of an EU UCITS from the register is without prejudice to the ability of the fund to keep making information available to investors, making payments to investors and repurchasing or redeeming units for investors in the Czech Republic. Pursuant to Article 93a(4) of the UCITS Directive, after de-notification, the EU UCITS shall provide investors who remain invested in that EU UCITS and are based or reside in the Czech Republic with up-to-date documents pursuant to Articles 68 to 82 and pursuant to Article 94 (analogously, pursuant to Article 304(1)(a) to (d) of the AMCIF and information pursuant to Article 304(1)(e) of the AMCIF for a Czech manager of a UCITS offered in another Member State) by means of remote communication in Czech or Slovak. For the Czech National Bank, “provision” means making documents available in the same manner as before de-notification.

After de-notification, the EU UCITS thus has only basic, limited information duties to investors who remain invested as compared to the period when the EU UCITS is marketed in the Czech Republic (cf. compliance with the duties pursuant to Article 306 of the AMCIF described, among other things, in point 6 of this Opinion).

VI. Notification of a Czech UCITS

Basic rules

67. A manager that intends to market the units of a Czech UCITS in another Member State shall give notice of its intention through the Czech National Bank by means of a notification letter (Article 302 of the AMCIF).
68. The notification is assessed by the Czech National Bank in terms of compliance with the formal requirements (completeness and the permissible language of the notification letter and the attached documents). The Czech National Bank does not investigate whether the notification letter is necessary for the UCITS to perform its activities abroad.

Requirements for the notification letter

69. A manager of a Czech UCITS shall complete all parts of the notification letter (A, B and C) in English.^[21]
70. In Part A of the notification letter “Legal form of the UCITS”, the Czech UCITS shall indicate that the legal form of the fund corresponds to the type “common fund” or that the legal form of the joint-stock company with variable capital corresponds to the type “investment company”.^[22] (No other form is considered for a UCITS.)
71. In the list of classes of units given in Part A, the Czech UCITS shall state the types of units or investment shares of a Czech UCITS/compartment to which different rights of unit-holders are attached within the limits of Article 120(1) and (2) or Article 167 of the AMCIF and within the limits of the statute of the Czech UCITS. Simultaneously, the Czech UCITS shall give the identification of the relevant type of units or investment shares.
72. The Czech UCITS may provide “Additional information about the UCITS (if necessary)” in Part A. For the time being, however, the Czech National Bank has not identified any information that needs be given in this part.
73. Information shall be provided about the manner of fulfilment of the tasks referred to in Article 92 of the UCITS Directive in Part B.2.
74. Information required in Part B.3 shall be given in accordance with the requirements imposed by the host Member State.
75. The manager shall attach the statute, the latest annual and half-yearly report and the KIID (Article 93(2)(a) of the UCITS Directive and Article 302(3) of the AMCIF) to the notification letter.
76. The statute and the annual and half-yearly report shall be submitted at the fund’s choice in the language customary in the sphere of international finance (i.e. in English), in the official language of the Member State, to which the notification letter is addressed (i.e. the host state), or in a language approved by the supervisory authority of the host state. The KIID shall be attached translated into the official language or one of the official languages of the host Member State, or into a language approved by the competent authority of the host Member State.
77. The Czech National Bank will refuse to transmit any notification letter that is incomplete or lacks the prescribed attachments or any notification letter or attachments that are written in an obviously inadmissible language. However, the Czech National Bank is not obliged to examine the detailed language regimes of host Member States. Any consequences of transmitting a notification letter or its attachments in an inadmissible language shall be borne by the manager of the notifying Czech UCITS.

Manner of notification

78. A manager that intends to market the units of a Czech UCITS in another Member State shall notify its intention via the Czech National Bank. A notification submitted directly to the competent authority of the target Member State shall not be effective.
79. The notification letter and attachments thereto shall be submitted by the manager of the Czech UCITS to the Czech National Bank to the e-mail address podatelna@cnb.cz in electronic form, with a guaranteed electronic signature attached, in the doc, docx, xls, xlsx or pdf format, capable of being printed.
80. The size of the e-mail message must not exceed 15 MB. The documents may be compressed into the zip, 7z or rar format.
81. If the documentation is incomplete or has other deficiencies, the Czech National Bank will call on the manager of the Czech UCITS to rectify the deficiencies.
82. The Czech National Bank will attach the attestation to the complete documentation (i.e. to the notification letter and the attachments thereto) and will transmit the documents to the competent authority of the host Member State no later than 10 working days of the date of the receipt of the complete documentation (Article 303 of the AMCIF).
83. The manager or its contractual distributor may start marketing the units of the Czech UCITS in the Member State which it is notifying of its intention immediately after it has been informed by the Czech National Bank that the notification letter has been transmitted to the competent authority of the host Member State.
84. The Czech National Bank will inform the manager of the transmission of the notification letter in an e-mail addressed to the contact person to the address given in Part A of the notification letter. Should this be impossible (i.e. should the e-mail message be returned as undeliverable), the Czech National Bank will inform the manager to the e-mail address from which the application for notification was submitted to the Czech National Bank or to the physical address of the manager’s registered office.
85. If the Czech National Bank receives no confirmation within five working days of the transmission of the notification to the foreign authority pursuant to Article 93(3) of the UCITS Directive, it will contact the foreign supervisory authority and verify whether the complete documentation has been transmitted and inform the manager of the further procedure.
86. If, instead of receiving confirmation, the Czech National Bank is informed by the foreign supervisory authority that the transmitted documentation is not regarded as complete, the Czech National Bank will promptly call on the manager to rectify the deficiencies and will transmit the compliant documentation to the competent foreign authority. The details will be specified in the call.

Notification of multiple funds or classes of units

87. An intention to market the units of multiple UCITS in another Member State requires a separate notification for each UCITS. This is primarily because of technical limitations of the notification letter and the attestation which preclude the listing of multiple foreign UCITS on the relevant form.
88. Notification of the marketing of the units of one or more investment compartments of a UCITS, or of one or more classes of units of a UCITS or investment compartment which issues multiple classes of units may also be made by a manager using a single joint notification letter. The manager may also use a separate notification letter for each investment compartment. However, no separate notification for each unit class is required. In the case of an intention to market an additional class of units of a Czech UCITS in the host Member State, the Czech UCITS should, in reference to Article 93(8) of the UCITS Directive, proceed appropriately in compliance with the section relating to the reporting of changes.
89. In compliance with the rules set out in Articles 25 and 26 of the Key Information Regulation, however, a separate KIID is required for each investment compartment and for each class of units. This will be applied mutatis mutandis to the PRIIPs KID, which will be mandatory for UCITS from 1 January 2023. Under the conditions set out in Article 26 of the Key Information Regulation, it is permitted in exceptional cases to combine the investor information pertinent to the individual classes of units. If the notification letter applies to certain investment compartments only, it is sufficient to attach to the notification letter only the part of the statute of the Czech UCITS that relates to the investment compartment given in the notification letter (i.e. the main section of the statute and the additional section relating to investment compartments).
90. Notification of an additional investment compartment or compartments of a Czech UCITS requires a new notification letter. It is possible again to notify multiple additional investment compartments using a single notification letter. Regardless of potential overlaps with the previous notification of other investment compartments, it is necessary to attach all the documents required by European Union law again.
91. The manager shall notify directly the supervisory authority of the host Member State of the marketing of another class or classes of units of a UCITS or its investment compartment which were not given in the notification letter in another Member State in the manner determined by that supervisory authority.

Reporting changes in information in the notification letter

92. In the event of a change in the information in the notification letter, the manager of the UCITS shall notify both the Czech National Bank and the supervisory authority of the other Member State in which the units are to be marketed of this change in writing, no later than one month before the change is to be made (Article 302(7) of the AMCIF).
93. If the UCITS concerned is no longer compliant with legal regulations due to the change, the Czech National Bank will notify the UCITS and the supervisory authority of the other Member State in which the units are to be marketed within 15 working days of receipt of all the documents that it is not permitted to make the change.
94. If the change was made after the information referred to in the previous paragraph was submitted and the UCITS concerned is no longer compliant with legal regulations due to the change, the Czech National Bank will take all suitable measures, including an express prohibition of offering this UCITS, if necessary, and will notify the supervisory authority of the other Member State in which the units in this UCITS are to be marketed of this fact, including the measures taken (Article 302(7) to (9) of the AMCIF).

Cessation of activities of a UCITS abroad

95. If the manager of a UCITS wishes to cease activities in a host Member State, it shall proceed in accordance with Article 304a of the AMCIF.
96. After de-notification pursuant to Article 302(1) of the AMCIF, the units of the UCITS concerned may not be marketed in the host Member State (Article 304a(4) of the AMCIF).
97. After de-notification pursuant to Article 302(1) of the AMCIF, investors who remain invested in the UCITS concerned and are based or reside in the host Member State must be provided with up-to-date documents pursuant to Article 304(1)(a) to (d) and information pursuant to Article 304(1)(e) of the AMCIF, i.e.:
    1. the KIID of this UCITS and any changes thereto,
    2. the statute of the UCITS and any changes thereto,
    3. the annual report of this UCITS and any changes thereto,
    4. the half-yearly report of this UCITS and any changes thereto, and
    5. information about the amounts at which units and shares issued by this UCITS are issued and redeemed,

by means of remote communication in the official language of the Member State concerned or in the language in which documents may be submitted to the supervisory authority of the Member State concerned. These documents and information must also be sent to the Czech National Bank. The Czech National Bank will send these documents and information to the supervisory authority of the Member State concerned (Article 304a of the AMCIF).

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[1] Under the AMCIF and this Opinion, the “marketing of units” means an offer of securities issued by an investment fund or a foreign investment fund, or another offer of investment in such a fund.

[2] The term “manager” of a UCITS refers to the person pursuant to Article 6 of the AMCIF. In the case of an externally managed UCITS, the “manager” is the fund management company within the meaning of Article 2(1)b of the UCITS Directive. For self-managed investment funds, the manager is the UCITS itself (“an investment company that has not designated a management company” pursuant to Chapter V, Article 27 et seq. of the UCITS Directive).

[3] This is without prejudice to the obligation to notify the marketing of an EU UCITS – see Section III of this Opinion. Nonetheless, a separate notification is not required in respect of an external manager of a UCITS.

[4] See the Opinion of the Czech National Bank The term “public” in financial market regulations (in Czech only).

[5] See the Opinion of the Czech National Bank Marketing of securities acquired into managed assets (in Czech only).

[6] If so agreed by and between the home and the host authorities, the notification letter and the attestation may be made out in the official languages of both Member States. Currently, however, no such agreement has been made by the Czech National Bank.

[7] In some jurisdictions, this is also referred to as the statute. The statute of a collective investment fund pursuant to Article 219 of the AMCIF has a broader meaning and also includes the prospectus of the fund within the meaning of Part A of Annex I to the UCITS Directive.

[8] The Czech National Bank may request this agreement in the course of conducting supervision later.

[9] The prospectus means the document within the meaning of Article 69 in conjunction with Part A of Annex I to the UCITS Directive. This document is not the same as the prospectus pursuant to Directive 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market. In the Czech Republic, the prospectus in the former sense and the fund rules/instruments of incorporation are contained in the single document named the “statute”. As in the Czech Republic, any document of an EU UCITS containing the prospectus of the UCITS may also, partly or fully, fulfil the function mentioned in Article 93 of the UCITS Directive (i.e., the function of an instrument of incorporation).

[10] The UCITS KIID until 31 December 2022 and the PRIIPS KID from 1 January 2023.

[11] Cf. Article 307(5) and Article 638(3) of the AMCIF and Article 46 of the Decree No. 244/2013 Coll.

[12] Pursuant to Article 93(3) third sub-paragraph of the UCITS Directive, the EU UCITS may access the market of the UCITS host Member State as from the date of the notification by the home supervisory authority of the transmission of the documentation. Pursuant to Article 4(2) of the Notifications Regulation, the documentation shall not be regarded as transmitted (the Directive loosely, yet equivalently uses the terms “to transmit” and “to transmit completely”) if a document is missing, if the competent authority of the home Member State does not use the designated e-mail address, or if a technical failure has occurred.

[13] An application for registration in the register pursuant to Article 503(1) of the AMCIF is not required.

[14] This does not apply to a domestic manager of an EU UCITS due to supervision of the manager’s compliance with the prudential requirements and to the reporting duty of a domestic manager or a domestic administrator of an EU UCITS pursuant to Article 455 of the AMCIF.

[15] For example a change of name, a change of manager or administrator, a change of investment policy, a change of depositary, changes to fees, a regular update of the KIID, and changes to the KIID required by a change of prospectus.

[16] Pursuant to Article 638(2) of the AMCIF, the information must be published until three years has passed since the date on which the published document or information ceases to be relevant.

[17] Pursuant to Article 46 of the Decree No. 244/2013 Coll., the KIID or comparable document of an EU UCITS shall be provided or published in the Czech Republic in Czech. The statute, the annual and half-yearly reports or comparable document of an EU UCITS and the amounts at which units or investment shares issued by a standard fund are issued and redeemed, or comparable information relating to the issuance and redemption of securities or dematerialised securities issued by an EU UCITS, shall be provided or published in the Czech Republic in Czech, Slovak or English. The rules in paragraphs 1 and 2 are without prejudice to the right of a UCITS or an EU UCITS to provide or publish the designated documents in an additional language.

[18] The AMCIF in Article 304a(1)(a) imposes a condition to publish a blanket offer, which implies a requirement to publish the same offer for all addressees.

[19] For example, Hospodářské noviny.

[20] Pursuant to Article 305(3) of the AMCIF, it is prohibited to market the units of an EU UCITS comparable to a UCITS in the Czech Republic as from this date.

[21] If so agreed by and between the home and the host supervisory authorities, the notification letter (and the attestation) may be made out in the official languages of both Member States. Currently, however, no such agreement has been made by the Czech National Bank.

[22] In the terminology of European law, “investment company” corresponds to an investment fund which is “constituted in accordance with statute” (Article 1(3) of the UCITS Directive), hence in the form of a legal person. Even such a UCITS must redeem its units at the request of unit-holders. Pursuant to the AMCIF, it is therefore a UCITS in the form of a joint-stock company with variable capital.