Open-ended Collective Investment Undertakings (ICC) and open-ended ICC of ICC (ICC of ICC) are regulated by Articles 43 and 44 of the Regulations implementing Law 35/2003 on Collective Investment Undertakings, approved by Royal Decree 1309/2005 of 4 November and subsequently amended by Royal Decree 362/2007 of 16 March.
How Does It Work?
It is governed by the Trading Rules set out in Market Circular 5/2016, with the following specific provisions:
- References to SICAVs shall be understood to refer to securities issued by open-ended UCITS and UCITS of open-ended UCITS, as defined in Articles 43 and 44 of the Regulations implementing Law 35/2003.
- In the case of shares or units issued by open-ended UCITS, it shall be the responsibility of market members or participating entities to establish the necessary controls to ensure that, when their clients subscribe for or acquire such securities, the minimum initial investment of 50,000 euros referred to in Article 43 of the Regulations on Collective Investment Undertakings is observed.
- At the start of each trading session, the closing price of the previous session shall be taken as the reference price, unless the latest net asset value of each free investment collective investment undertaking (CIU) or CIU of free investment collective investment undertakings has been reported, in which case that value shall be used.
If a security sets a price at the opening auction, this may become the new static price for the closing auction, around which the aforementioned static range will be based.
When a security with no previous quotation on another market is admitted to trading, the reference price shall be that which corresponds to actual bid or ask positions. If the security has previously been quoted on another market, the reference price shall be the closing price on the market where it was most recently quoted.
The price resulting from the closing auction shall be the session’s closing price. In the event that there is no auction price, or if fewer than 200 trading units are traded in the auction, the closing price shall be, from among the prices corresponding to the last 200 trading units traded, the one closest to their weighted average price; and, should two prices be equidistant from that weighted average price, the one traded most recently. If fewer than 200 trading units have been traded during the session, the closing price shall be that of the previous session or the net asset value if this was received after the close of that session.
- The market model is based on a price-setting system through the convergence of supply and demand during an auction or ‘fixing’ period, within a separate trading segment, and on a procedure for carrying out subscription and redemption transactions at net asset value.
The condition is that the net asset value must have been received beforehand and that the transaction must be carried out at that price.
Prior to this, the SGIIC or, where applicable, the open-ended investment fund or the open-ended investment fund of investment funds must have carried out the necessary checks to ensure compliance with the specific requirements set out in Articles 43 and 44 of the Collective Investment Undertakings Regulation.
How to Be Admitted
Market Circular 4/2016 shall apply, subject to the following specific provisions:
- References to SICAVs shall be understood to refer to securities issued by open-ended investment funds and open-ended investment funds of investment funds, as defined in Articles 43 and 44 of the Regulations under Law 35/2003.
- In order for securities issued by open-ended UCITS and UCITS of open-ended UCITS to be admitted to the Market, their respective issuers must first be registered in the special register maintained for this purpose by the CNMV
