The Law on Investment Undertakings (IUA) – together with the Ordinance on Investment Undertakings (IUO) – came into force on September 1, 2005. It is one of the most modern fund laws in Europe. Due to the EEA-membership of Liechtenstein the IUA is based on the latest version of the EU Directive 85/611/EWG.
The material appointments are composite hereafter, whereby two distinctions are displayed:
Appointment according to EU Directive 85/611/EWG in the latest version
National appointments of Liechtenstein in addition to the EU appointments
Art. 5 to 10 IUA (Duty Fund prospectus)
For each investment undertaking a full and simplified prospectus must be drawn up, allowing the investor to evaluate the envisaged investments in detail, to assess the associated risks and to learn about the costs that are debited to the fund.
Art. 12 and 18 IUA (Promotion & Distribution)
Promotion for the investment undertaking is generally permitted, but specific regulations have to be complied with. This applies accordingly to the distribution obligee.
Art. 14 IUA (Reporting)
For each investment undertaking a business report and a half-yearly report has to be published after a specific period of time. The management company is obliged to report to the FMA quarterly on the development of the investment untertakings it manages.
Art. 23 IUA (Investment undertaking for qualified investors)
As special form of the investment undertaking for other values it is possible to launch a fund for qualified investors. This form is, as a result of the lower protection requirements of the investors (institutional clients but also experienced private investors), not subject to authorisation through FMA and contains further facilitation.
Art. 24 IUA (Management Company)
The field of activity of a management company shall consist exclusively the management of investment undertakings (including all the related responsibilities). With approval by the FMA, a management company may additionally assume the management of individual portfolios and provide investment advice (Permittance as Asset Management Company according to the Law on Asset Management).
Art. 26 IUA (Valuation regulations)
The valuation of the fund’s assets and the pricing need to comply with defined criteria.
Art. 27 IUA (Obligation of external audit)
The investment undertaking as well as the management company must submit to an audit of their conduct of business by an independent auditing company recognized by the FMA.
Art. 29 IUA (Reporting requirements)
The management company has to adhere specific reporting requirements to the FMA.
Art. 30 to 31 IUA (Depositary bank)
The safekeeping of the fund’s assets is to be carried out through the depositary bank. The duties of the depositary bank are specified in detail by law.
Art. 33 to 39 IUA (Investment company)
An investment undertaking can be launched under the legal form of a trusteeship (FCP) or an investment company (SICAV / SICAF). The structure of an investment company can be differenciated in fixed or variable capital. Furthermore the investment company can be managed by itself or third-party managed.
Art. 40 IUA (Investment undertaking for transferable securities)
Investment undertakings for transferable securities need to comply with clearly defined guidelines concerning the investments of the fund and investment limits. These guidelines comply to 100% with the regulations of the directive of the European Union.
Art. 42 IUA (Investment undertaking for other values)
For investment undertakings for other values there are no legal regulations defined concerning investments and investment limits. This fact allows the foundation of innovative solutions.
Art. 43 IUA (Investment undertaking for other values with increased risk)
Investment undertakings for other values with increased risk allow solutions in special risk categories. Investment policy, structure, investment techniques and investment restrictions may contain a considerable higher risk profile.
Art. 56 to 58 IUA (Licencing requirement)
The FMA is obliged to decide about the conferral of an approval for the management company and the investment undertaking within a specified period of time.
Art. 59 IUA (Minimum net assets)
The net assets of an investment undertaking must reach at least 2 million Swiss Francs not later than six months after the licence has been granted.
Art. 76 and 87 to 88 IUA (EU passport)
Liechtenstein domiciled management companies and investment undertakings for transferable securities may engage in certain business activities respectively may be marketed in the whole EEA without any additional licence (=european passport for the management company / for the investment undertaking). The management company just has to notify the competent authority of the relevant countries and submit specified information and documents.
Art. 95 to 96 IUA (FMA Financial Market Authority Liechtenstein)
Liechtenstein domiciled investment undertakings are subject to a strict governmental audit. The surveillance authority FMA Financial Market Authority Liechtenstein complies in all points to the European requirements and is recognised as an equivalent surveillance authority in Europe.