Establishment of a corporate investment fund

A corporate investment fund (CIF) is a joint investment institution (hereinafter referred to as CII), which is created in the form of an open joint stock company and carries out exclusively joint investment activities. A corporate investment fund operates if 60 percent or more of the average annual value of assets owned by it are invested in securities, corporate rights and real estate. A corporate investment fund cannot be founded by legal entities in whose authorized capital (fund) the share of the state or local governments exceeds 25 percent. The governing bodies of a corporate investment fund are the general meeting of shareholders and the supervisory board. The formation of other bodies of a corporate investment fund, not provided for by this Law, is prohibited. The supreme body of a corporate investment fund is the general meeting of shareholders. The general meeting of shareholders elects members of the supervisory board of the corporate investment fund. The size of the initial authorized capital (fund) of a corporate investment fund cannot be less than 1,250 minimum wages.

The initial authorized capital (fund) of a corporate investment fund is formed from:

money;
government securities;
securities of other issuers admitted to trading on the stock exchange;
real estate objects necessary to ensure the statutory activities.

The increase in the authorized capital (fund) of a corporate investment fund is carried out exclusively at the expense of the funds of shareholders contributed by acquiring shares. Shares of a corporate investment fund must be only ordinary registered shares.

The corporate investment fund is not entitled to:

issue and place securities other than shares;
attract loans or credit in excess of 10 percent of its assets;
provide assets on security in the interests of third parties;
place shares at a price below par value;
place shares at a price below the net asset value of the corporate investment fund per share;
place shares more than the proclaimed number;
refuse to buy back their own shares on grounds not specified in this Law or in the regulatory legal acts of the Commission;
create any special or reserve funds.

CIF is registered in the manner prescribed for open joint stock companies.

The procedure for creating a CIF:

Adoption by the meeting of founders of the decision on: creation of the CIF, closed (private) placement of CIF shares and approval of the draft charter of the CIF;
Formation of the initial authorized capital of the CIF;
Submission to the Commission of an application and all necessary documents for the approval of the draft charter of the CIF and registration of the issue of shares in order to form the initial authorized capital of the CIF. For this purpose, the following documents are submitted to the Commission:
- an application for approval of the draft charter of the CIF and registration of the issue of shares in order to form the initial authorized capital of the CIF;
- minutes of the meeting of the CIF founders, certified by the signatures of the CIF founders, and if the founders are legal entities, by their seals;
- draft charter of the CIF, approved by the decision of the meeting of founders;
- an extract from a banking institution confirming that the founders of the CIF deposited funds to a temporary account (submitted if the shares were paid for in cash);
- a copy of the property valuation report or a property valuation report, certified by the signature of an authorized person, and a copy of the review of the property valuation report (property valuation report) (submitted if the shares were paid for by real estate);
- a certificate from the trade organizer on the results of exchange trading on the range of prices for the largest offer to buy and the lowest offer to sell securities registered on this trade organizer, which form the initial authorized capital of the CIF on the last business day before the day the decision to establish the CIF is made (submitted in the event that if the shares were paid for with securities).
Approval by the Commission of the draft charter and registration of the issue of shares in order to form the initial authorized capital of the CIF. Registration of an issue of shares in order to form the initial authorized capital of a CIF and the issuance of a temporary certificate of registration of this issue are the basis for entering the issue of shares in the register of issues of securities of joint investment institutions;
Assignment to CIF shares of an international identification number of securities;
Conclusion with the securities depository of an agreement on servicing the issue of securities;
Issuance of a global certificate;
Closed (private) placement of shares among the founders of the CIF;
Approval by the constituent assembly of the CIF of the results of a closed (private) placement of shares among the founders of the CIF, approval of the charter, election of members of the supervisory board of the CIF, approval of draft agreements with the AMC;
Registration of the CIF and its charter with state registration authorities;
Conclusion of agreements with the AMC and the custodian;
Submission to the Commission of all necessary documents for registration of a report on the results of a closed (private) placement of CIF shares, CIF regulations and entering the CIF into the Unified State Register of Joint Investment Institutions (hereinafter - USRISI).

Please note that violation of the above procedure entails a refusal to register by the competent authorities. Within six months from the date of state registration of a corporate investment fund as a legal entity, the corporate investment fund must register the regulation. The total registration period is 50-60 working days.

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