Amendment to the ZISIF Act: Obligations of Alternative Fund Managers by the End of 2024

On 1 July 2024 an amendment to Act No. 240/2013 Coll., on Investment Companies and Investment Funds, as amended (“ZISIF”), entered into force. The amendment introduces several changes and new rules concerning the management of assets comparable to fund management. Below is a summary of the obligations that managers under § 15 ZISIF must meet by 31 December 2024:

1) CHANGE OF NAME = AMENDMENT OF THE ARTICLES OF ASSOCIATION

• An alternative fund manager must change its name so that the legal-entity name explicitly states that it is a venture-capital person (“osoba rizikového kapitálu”).

  Example formats:

  XY Investments a.s., osoba rizikového kapitálu XY Investments, osoba rizikového kapitálu, a.s.

• An alternative fund manager may no longer include the word fund (or any foreign-language equivalent such as fund) in its name. If your fund’s name contains fond/fund, it must be changed. Suitable alternatives include:

  • Investment

  • Capital

  • Equity

  • Financial

  • Asset

  • Asset Management

  • Portfolio

2) ADDING “MANAGEMENT OF ASSETS COMPARABLE TO FUND MANAGEMENT” TO THE COMMERCIAL REGISTER ENTRY

When changing the organisation’s (fund’s) name, it is also advisable to update the Commercial Register to reflect the correct business activity.

Many § 15 ZISIF managers currently list, incorrectly, a licensed-trade activity such as “Production, Trade and Services Not Elsewhere Classified.” We recommend stating expressly that the business activity is management of assets comparable to the management of an investment fund within the meaning of § 15 ZISIF.

Suggested wording for the Commercial Register:

• Scope of activities: Management of own assets

• Business activity: Management of assets comparable to the management of an investment fund pursuant to § 15 of Act No. 240/2013 Coll., on Investment Companies and Investment Funds Production, trade and services not listed in Annexes 1–3 of the Trade Licensing Act—Fields of activity: Brokerage of trade and services; Wholesale and retail trade; Provision of software, IT consultancy, data processing, hosting and related activities, web portals; Advisory and consultancy activities, preparation of expert studies and assessments; Administrative services and services of an organisational and economic nature; Extracurricular education and training, organisation of courses and seminars, including lecturing; Provision of services for legal entities and trusts.

(The listed trades are for illustration only, showing how the business activity is separated from licensed-trade activities.)

3) AUDIT REQUIREMENT FOR EXISTING MANAGERS – HOW DOES IT APPLY?

Managers under § 15 ZISIF who were entered in the CNB register before 1 July 2024 are subject to the audit obligation under § 15(6) ZISIF only after the transitional period ends—i.e. from 1 July 2026.