Fund Reporting

Registration of Investment Corporate Funds and Mutual Investment Funds in Ukraine

The registration of an Investment Corporate Fund (ICF) in Ukraine became possible following the adoption of a law governing the operation of collective investment institutions (CII). Simultaneously, Mutual Investment Funds (MIFs) emerged, which are now highly sought after by company employees and the general population. Investment Corporate Funds are also gaining popularity, raising the logical question: “MIF or ICF? What are the differences?”

Features of an Investment Corporate Fund (ICF) at LLC “AMC “Cross River Capital”

An ICF is a legal entity engaged in a single type of activity: collective investment. It can only be registered in the form of a joint-stock company. According to Ukrainian law, an ICF is a financial organization and can only operate after being included in the Unified State Register of Collective Investment Institutions.

An ICF cannot function independently and must sign an asset management agreement with an Asset Management Company (AMC). All actions undertaken by the AMC must be approved by the fund’s shareholders. A participant of an ICF is any person who has acquired the fund’s securities. Participants earn profit from the ICF’s operations and have the right to participate in the distribution of dividends.

Both legal entities and individuals can register an ICF. Important: A founding legal entity must have no more than a 25% share of state ownership.

Registration of a Mutual Investment Fund (MIF) at LLC “AMC “Cross River Capital”

A MIF differs from an ICF in that it is not a standalone legal entity. Instead, it is established as a separate subdivision and represents a pool of assets managed by an AMC. Only an AMC is authorized to register a MIF, meaning that you must either collaborate with an external AMC or create your own.

Registration Process for a MIF:

  1. Conduct a founding meeting, make decisions, and prepare the minutes.
  2. Develop the MIF’s operating regulations.
  3. Submit an application and required documents to the National Securities and Stock Market Commission (NSSMC). The NSSMC thoroughly reviews and approves the regulations, including the MIF in the Unified State Register of Collective Investment Institutions.
  4. Sign service agreements for the MIF with an underwriter, asset custodian, auditor, and depository.
  5. Prepare a project for the issuance of investment certificates and secure approval from the AMC.
  6. Submit the finalized documentation to the NSSMC, which approves the issuance prospectus and the release of investment certificates.
  7. Obtain an international securities identification number (ISIN) for the MIF’s financial instruments.

Current legislation sets a minimum asset management threshold for MIFs at 1,250 minimum wages.

If you have questions or need support, the consultants at LLC “AMC “Cross River Capital” are available to provide expert guidance. Let us help you navigate the complex processes of establishing and managing investment funds effectively!