Abstract

The package of changes implementing EU legislation which came into force as of the end of the year, including Directive no. 2011/61/EU of 8.6.2011 (AIFM Directive) and Directive no. 2014/91/EU of 23.7.2014 (UCITS V Directive) initiated a number of transformation in the functioning of the capital market in Poland aimed at creating effective external and internal supervision of alternative investment fund managers (AIMFD), in which type the new legislation includes also CEFs.

In the first place, the introduced changes should be praised as in fact they shall make the investment fund market, in particular CEFs more effective monitored, supervised and managed, thus minimizing risks generated thereby for investors and clients, and therefore also shall contribute to the stability of the entire capital market. This end is to be served by the additional information duties with respect to CEFs – to the FSA, including the catalogue of reportable CEF operations, and introduction of a duty to elaborate standard information for clients. The same goal is pursued by the requirement to implement a risk management system relative to CEF operations, including the setting of a system of internal limits, in particular as concerns leverage, as well as setting methods and rules for determination of exposure.

However, the new legislation puts considerable challenges before the managers at the operative and regulative level. It is feared that in many cases the additional costs and work connected with increased regulative duties will turn out too high for the managers.