keshillikonsultativ.qeverisjavendore.gov.al · Web viewArticle 1. Paragraph 1,2,Point (a,b) CHAPTER I. SUBJECT MATTER, SCOPE AND DEFINITIONS. Article 1. 1. This Directive applies

Table of concordance UCITS

32009L0065

Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS).

L 302 , 17.11.2009 p. 32

Draft law "On Collective Investment Undertakings" "

P - partially compliant

1 2 3 4 5 6 7Article Text Reference Article Text Conformity Remarks

Article 1

Paragraph 1,2,Point (a,b)

CHAPTER I

SUBJECT MATTER, SCOPE AND DEFINITIONSArticle 11. This Directive applies to undertakings for collective investment in transferable securities (UCITS) established within

Article 1 Point c

c)the establishment, constitution and operation of collective investment undertakings in the Republic of Albania;

Fully compliant

the territories of the Member States.2. For the purposes of this Directive, and subject to Article 3, UCITS means an undertaking:(a) with the sole object of collective investment in transferable securities or in other liquid financial assets referred to in Article 50(1) of capital raised from the public and which operate on the principle of risk-spreading; and

Article 2Para 1

Article 2Para 1Subection c)

For the purpose of this Law:

1.A collective investment undertaking means any arrangement with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangement (the “participants”), whether by becoming owners of the property or any part of it or otherwise, to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.

c)the condition referred to in subsection 1 a) iii) is that the property belongs beneficially to, and is managed by or

Fully compliant(but see note)

Overall, the Albanian law is more descriptive of what a collective undertaking is. It does not explicitly use the term ‘SOLE OBJECT’ as found in UCITS 2 (a). Instead it states what activities fund management companies may perform and then has a clause stating fund management companies must not engage in activities other than those stated.

Article 11Paras 11 and 12

on behalf of, a company or investors in a contractual pool or other entity or arrangement having as its purpose the investment of its funds with the aim of spreading investment risk and giving its members the benefit of the results of the management of those funds by or on behalf of that company, trust, entity or management;

11.A fund management company licensed under subsection 2 to manage publicly offered collective investment undertakings must not engage in activities other than those stated in subsections 3, 4, 5, 7, 8 and 9 and those activities necessary to fulfil associated obligations.

12.A fund management company licensed under

Fully Compliant

(b) with units which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of those undertakings’ assets. Action taken by a UCITS to ensure that the stock exchange value of its units does not significantly vary from their net asset value shall be regarded as equivalent to such repurchase or redemption.

Article 107Paras 1 to 5

subsection 2 to manage alternative investment funds must not engage in activities other than those stated in subsections 3, 4, 5, 6, 7, 8 and 10 and those activities necessary to fulfil associated obligations.

1) The licensed or recognised management company of a publicly offered investment fund is responsible for sale, issue, repurchase, redemption and cancellation of units of that investment fund except in the case of units of Exchange Traded Funds that are listed and traded on a regulated market where the management company is responsible only for issue and cancellation of units.2) The board of directors of an investment company and the management company of an

Fully Compliant

Member States may allow UCITS to consist of several investment compartments.

Article 2Para 1Subsection d) and e)

investment company are jointly responsible for the sale, issue and cancellation of shares in a publicly offered investment company.3) The depositary of a publicly offered investment fund must issue or cancel units in a publicly offered investment fund when instructed by the licensed or recognised management company.4) Any instructions given by the licensed or recognised management company of an investment fund must state, for each class of unit to be issued or cancelled, the number to be issued or cancelled, expressed either as a number of units or as an amount in value (or as a combination of the two).5) The Authority may but is not obliged to make further provision by regulation for responsibility for sale and redemption of

Fully Compliant

publicly offered collective investment undertakings.

d)where any arrangements provide for such pooling as is mentioned in subsection 1 b) in relation to separate parts of the property, and each such part is maintained in a portfolio segregated in the books of the undertaking from the other assets of the undertaking (‘investment compartment’ or ‘sub-fund’), then the arrangements shall nevertheless be regarded as constituting a collective investment undertaking which shall be regarded as an umbrella undertaking on the condition that the participants are entitled to exchange rights in one part for rights in another part;

e)where each part of the undertaking

property is segregated in the books of the umbrella undertaking and is a sub-fund

Article 1Paragraph 3Point (a,b)

3. The undertakings referred to in paragraph 2 may be constituted in accordance with contract law (as common funds managed by management companies), trust law (as unit trusts), or statute (as investment companies).For the purposes of this Directive:(a) ‘common funds’ shall also include unit trusts;(b) ‘units’ of UCITS shall also include shares of UCITS.

Article 3Para 1Subsections a) to c)

1.A collective investment undertaking established in the Republic of Albania may be constituted as -a)an investment fund; or

b)a joint stock company under Law No 9901 on Entrepreneurs and Companies (‘investment company’);

c)a limited partnership under Law No 9901 on Entrepreneurs and Companies (‘collective investment undertaking partnership’).

Fully Compliant

Although fully compliant, there is a difference. The UCITS Directive operates at a level higher and talks about the type of law (contract law, trust law or statute) under which a fund may be constituted, while the Albanian Law gives specific references to the laws under which a fund may be constituted.

Article 1Paragraph 4

4. Investment companies, the assets of which are invested through the intermediary of subsidiary companies, mainly other than in transferable securities, shall not be subject to this Directive.

N/A This applies under UCITS to open ended companies which are not enabled under the draft CIU Law of Albania


5. The Member States shall prohibit UCITS which are subject to this Directive from transforming themselves into collective investment undertakings which are not covered by this Directive.

Article 6Paras 1-3

1.A publicly offered collective investment undertaking established under this Law shall not cease to be a publicly offered collective investment undertaking to which this Law applies except upon completion of the winding up of that undertaking and cancellation of its license or registration by the Authority.

2.A registered collective investment undertaking established under this Law shall not cease to be a registered collective investment undertaking to which this Law applies except upon completion of the

Fully compliant

winding up of that undertaking and cancellation of its registration by the Authority.

3.A collective investment undertaking which is a publicly offered undertaking for collective investment in transferable securities under this Law shall not cease to be a publicly offered undertaking for collective investment in transferable securities except upon completing of winding up of that undertaking and cancellation of its licence.


6. Subject to the provisions in Community law governing capital movements and subject to Articles 91 and 92 and the second subparagraph of Article 108(1), no Member State shall apply any other provisions in the field covered by this Directive to UCITS established in

Chapter IX

(There is no specific provision to quote, but the chapter covers cross-border sales of Albanian funds to other jurisditions and foreign funds into Albania in a way that is consistent with this provision.)

Fully compliant

The Albanian Law establishes the principle of reciprocity. The requirement for there to be a relationship between the home and host regulator does not contravene this provision.

another Member State or to the units issued by such UCITS, where those UCITS market their units within the territory of that Member State.


7. Without prejudice to this Chapter, a Member State may apply to UCITS established within its territory requirements which are stricter than or additional to those laid down in this Directive, provided that they are of general application and do not conflict with the provisions of this Directive.

N/A Not relevant – allows for variance in strength of regulation between Member States

Article 2Paragraph 1Point (a,b,c,d,e)

Article 2

1. For the purposes of this Directive the following definitions apply:(a)‘depositary’ means an institution entrusted with the duties set out in Articles 22 and 32 and subject to the other provisions laid down in Chapter IV and Section 3 of Chapter V;

Article 2Para 27

27.“Depositary” means a bank or investment firm licensed by a regulatory authority to whom the property subject to a publicly offered collective investment undertaking is entrusted for safekeeping that has the duties and

Fully compliant

(b)‘management company’ means a company, the regular business of which is the management of UCITS in the form of common funds or of investment companies (collective portfolio management of UCITS);

(c)‘management company’s home Member State’ means the Member State in which the management company has its registered office;

Article 2Para 63

Article 2Para 41Subsection a)

functions in relation to a publicly offered collective investment undertaking as set out in Section 2 of Chapter III of this Law;

63.“Management company” means an incorporated entity, the regular business of which is the management of publicly offered collective investment undertakings including undertakings for collective investment in transferable securities licensed under this Law or an equivalent foreign law;

41.“Home country” means: a) in the case of a management company or alternative investment manager or depositary of collective

Fully compliant

Fully compliant

(d)‘management company’s host Member State’ means a Member State, other than the home Member State, within the territory of which a management company has a branch or provides services;

(e)‘UCITS home Member State’ means the Member State in which the UCITS is authorised pursuant to Article 5;


Article 2Para 41Subsections b) and c)

investment undertakings, the country in which its registered office is situated or if the entity has, under its national law, no registered office, the country in which its head office is situated;

42.“Host country” means a) in relation to a management company of collective investment undertakings the country, other than the Home Country, within the territory of which the management company has a branch or manages collective investment undertakings or provides services or markets collective investment undertakings;

“Home country” means: b) in the case of a collective investment undertaking which is

Fully compliant

Fully compliant

publicly offered, the country in which the undertaking is licensed;c) in the case of an alternative investment fund, the country in which the fund is licensed or registered under applicable national law, or in case of multiple licences or registrations, the country in which the fund has been licensed or registered for the first time; or if the alternative investment fund is neither licensed nor registered in a country, the country in which the fund has its registered office and/or head office;

Article 2Paragraph 1Point (f,g,h,i,i,i)

(f) ‘UCITS host Member State’ means a Member State, other than the UCITS home Member State, in which the units of the UCITS are marketed;

Article 2Para 42Subsections b)

“Host country” means: b) in relation to a collective investment undertaking a country other than the Home Country in which the participations of the undertaking are marketed;

Fully compliant

Partially

(g) ‘branch’ means a place of business which is a part of the management company, which has no legal personality and which provides the services for which the management company has been authorised;

(h) ‘competent authorities’ means the authorities which each Member State designates under Article 97;

Article 2Para 13

Article 2Paras 12, and 88

Para 77

13. “Branch” in relation to a fund management company means a place of business activity which has the same legal personality as the fund management company

12."Authority" means the Financial Supervisory Authority established under Law 9572 of 2006 on the Financial Supervisory Authority;

88.“Regulatory authority” in relation to a collective investment undertaking or a management company or alternative investment manager or a depositary or alternative investment fund depositary of a collective investment undertaking is the entity empowered by law or regulation to register or licence and supervise

compliant

Fully compliant

Fully compliant

Law 9901 on Entrepreneurs and Companies defines a branch in this way so this definition has to be used not the UCITS definition

(i) ‘close links’ means a situation in which two or more natural or legal persons are linked by either:

and 89 subsections a) to n) and Para 90 subsection a) to e)

that undertaking, management company or manager or depositary;

77.“Ownership links” means a situation in which two or more persons are linked by:

89.“Related entity” in relation to a collective investment undertaking means, in relation to that publicly offered collective investment undertaking –a) The parent company of the management company; b) A subsidiary company of the parent company of the management company;c) The management company of the undertaking; d) The delegates of the management company;e) The depositary of the undertaking;

(definition of a related legal person)

Note in the Albanian Law ‘close links’ are known as ‘ownership links’

f) The delegates of the depositary;g) The external auditor of the undertaking;h) The legal adviser of the undertaking;i) Any broker that carries out transactions on behalf of the undertaking;j) Any investment bank or other entity that acts as underwriter of issue of shares or units in a collective investment undertaking;k) Any appointed agent or distributor under Article 102; m)In relation to an investment company, any company whose board of directors includes a director of that investment company;

n)Where any legal person is designated as a related entity the definition of related entity will also include any persons with ownership links to or


Article 2 Para 77 Subsections b) and c)

closely associated with the related entity or related physical persons as defined in this Law;

90.“Related physical person” in relation to a collective investment undertaking related entity is a key person of a related entity to that undertaking anda) His or her spouse, or/and the parents, brother or sister of his or her spouse;b) His or her child, parent, brother, sister, grandchild or a spouse of any of the foregoing;c) A relative of direct vertical lineage and horizontal lineage to the second level of kinship of that person,d) An adopter and adoptee, a spouse's relative to the first level of kinship; e) A director of any company in which the undertaking has an interest of more than 20%;and

Fully compliant

(definition of a related natural person)

Fully compliant

(i) ‘participation’, which means the ownership, direct or by way of control, of 20 % or more of the voting rights or capital of an undertaking; or

(ii) ‘control’, which means the relationship between a ‘parent undertaking’ and a ‘subsidiary’, as defined in Articles 1 and 2 of Seventh Council Directive 83/349/EEC of 13 June 1983 based on the Article 54(3)(g) of the Treaty on consolidated accounts ( 10 ) and in all the cases referred to in Article 1(1) and (2) of Directive 83/349/EEC, or a similar relationship between any natural or legal person and an undertaking;

f) An individual having the same home as the key person.

a) ‘participation’ in the form of ownership, direct or by way of control, of 20 % or more of the voting rights or capital of an entity;

b) ‘control’ which means the relationship between a parent entity and a subsidiary, or a similar relationship between any natural or legal person and an entity, any subsidiary entity of a subsidiary entity also being considered to be a subsidiary of the parent entity which is at the head of those entities; c) a permanent link of both or all of them to the same person by a control relationship;

Fully compliant

Article 2Paragraph (j) ‘qualifying holding’

means a direct or indirect Article 2Para 84

84.“Qualifying holding” means a direct or

Fully compliant

1Point (j,k,l,m)

holding in a management company which represents 10 % or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the management company in which that holding subsists;

(k) ‘initial capital’ means the funds as referred to in Article 57(a) and (b) of Directive 2006/48/EC;

(l) ‘own funds’ means own funds as referred to in Title V, Chapter 2, Section 1 of Directive 2006/48/EC;

(m) ‘durable medium’ means an instrument which enables an investor to store information

Article 2Para 50

Article 2Para 76

Article 2Para 29

indirect holding in a fund management company or alternative investment fund manager or alternative investment fund depositary or depositary which represents 10% or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of that entity;

50.“Initial capital” is paid up equity capital subscribed by shareholders or other owners excluding cumulative preference shares;

76.“Own funds” means financial resources required by this Law to be held by a fund management company or an alternative investment fund depositary or by a depositary;

Fully compliant

Fully compliant

Fully compliant

addressed personally to that investor in a way that is accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored;

29.“Durable medium” means an instrument that enables the recipient to store information addressed personally to that recipient in a way that is accessible for future reference for a period of time adequate for the purposes of the information and which allows unchanged reproduction of the information stored;

Article 2Paragraph 1Point (n,i,ii,ii,o)

(n) ‘transferable securities’ means:

(i) shares in companies and other securities equivalent to shares in companies (shares);

(ii) bonds and other forms of securitised debt (debt securities);

(iii) any other negotiable securities which carry the right to acquire any such transferable securities by subscription or exchange;


Subsection b)

Subsection c)

Article 2

95.“Transferable securities” means:

a) shares in companies and other securities equivalent to shares in companies (shares);

b) bonds and other forms of securitised debt (debt securities);

c) any other negotiable securities which carry the right to acquire any such transferable securities by subscription or

Fully compliant

This is the UCITS definition, which is not the same as the MiFID definition.

(o) ‘money market instruments’ means instruments normally dealt in on the money market which are liquid and have a value which can be accurately determined at any time;

Para 70 exchange;

70.“Money market instrument” in the context of this Law means a debt security that gives the owner the unconditional right to receive a stated, fixed sum of money on a specified date and is issued at a discount dependent upon the interest rate and the time remaining to maturity including treasury bills, commercial and financial paper, bankers’ acceptances and negotiable certificates of deposit with original maturities of one year or less, and short-term notes issued under note issuance facilities;

Partially compliant

Does not convey the sense of ready valuation and liquidity that the UCITS definition focuses on to allow for the nature of Albanian financial markets.

Article 2Paragraph 1Point (p,i,ii,iii)

(p) ‘mergers’ means an operation whereby:

(i) one or more UCITS or investment compartments thereof, the ‘merging UCITS’, on being dissolved

Article 2Para 68

68.“Merger” in the context of a collective investment undertaking means an operation whereby two or more collective investment undertakings or sub-funds thereof are

Partially compliant

The Albanian Law does not specify whether unit-holders in the merging funds may receive a combination of

without going into liquidation, transfer all of their assets and liabilities to another existing UCITS or an investment compartment thereof, the ‘receiving UCITS’, in exchange for the issue to their unit-holders of units of the receiving UCITS and, if applicable, a cash payment not exceeding 10 % of the net asset value of those units;

(ii) two or more UCITS or investment compartments thereof, the ‘merging UCITS’, on being dissolved without going into liquidation, transfer all of their assets and liabilities to a UCITS which they form or an investment compartment thereof, the ‘receiving UCITS’, in exchange for the issue to their unit-holders of units of the receiving UCITS and, if applicable, a cash payment not exceeding 10 % of the net asset value of those units;

combined either by absorption of one or more undertakings or sub-funds into another collective investment undertaking or sub-fund or by allocation of assets of existing undertakings into a new collective investment undertaking or sub-fund;

units in the merged entity plus a cash element.

(iii) one or more UCITS or investment compartments thereof, the ‘merging UCITS’, which continue to exist until the liabilities have been discharged, transfer their net assets to another investment compartment of the same UCITS, to a UCITS which they form or to another existing UCITS or an investment compartment thereof, the ‘receiving UCITS’;

Article 2Paragraph 1Point (q,i,ii,r)

(q) ‘cross-border merger’ means a merger of UCITS:

(i) at least two of which are established in different Member States; or

(ii) established in the same Member State into a newly constituted UCITS established in another Member State;

(r) ‘domestic merger’ means a merger between UCITS established in the

Article 2Para 23

“Cross-border merger” means a merger of collective investment undertakings – a) At least two of which are established in different countries, orb) Established in the same country into a newly constituted collective investment undertaking established in another country;

Partially compliant

Since Albania is not an EU member state cross border mergers are not possible

same Member State where at least one of the involved UCITS has been notified pursuant to Article 93;

Article 2 Paragraph 1Point (s)

(s) ‘management body’ means the body with ultimate decision-making authority in a management company, investment company or depositary, comprising the supervisory and the managerial functions, or only the managerial function if the two functions are separated. Where, according to national law, the management company, investment company or depositary has in place different bodies with specific functions, the requirements laid down in this Directive directed at the management body or at the management body in its supervisory function shall also, or shall instead, apply to those members of other bodies of the management company, investment company or

Article 2 paragraph 57


57 “Key persons” means those persons who, under the law or the instruments of incorporation, represent the operator or the depositary, or who effectively determine the policy of the operator or depositary including the members of the supervisory board or management board of that entity;

58 “Key personnel” means senior physical persons who are responsible for key functions of an operator or depositary of a collective investment undertaking including but not limited to in the case of an operator the

Partially compliant

No specific term and definition thereof for the combined elements of a fund management company that comprise the supervisory function within a fund management company.‘Management body’ is not a meaningful term in Albenian Law. But ‘key persons’ covers both management bvoard and supervisory board members so covers this ‘key personnel’

depositary to whom the applicable national law assigns the respective responsibility;

head of investment management, the head of marketing, the head of administration, the head of internal audit, the head of risk management and the head of compliance and in the case of the depositary the head of depositary services, the head of internal audit, the head of risk management and the head of compliance;

covers senor managers

Article 2 Paragraph 1Point (t)

(t) ‘financial instrument’ means a financial instrument specified in Section C of Annex I to Directive 2014/65/EU of the European Parliament and of the Council ( 11

Article 2Para 34Subsections a) to j)

34.“Financial instrument”’ means a) transferable securities; b) money-market instruments; c) units in collective investment undertakings; d) options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies,

Fully compliant

interest rates or yields, emission allowances or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash; e) options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event; f) options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a multilateral trading facility, or an organised

trading facility, except for wholesale energy products traded on an organised trading facility that must be physically settled; g) options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 6 of this Section and not being for commercial purposes, which have the characteristics of other derivative financial instruments; f) derivative instruments for the transfer of credit risk; g) financial contracts for differences; h) options, futures, [swaps, forward rate agreements] and any

other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, organised trading facility, or a multilateral

trading facility;Article 2 Paragraph 2,3

2. For the purposes of paragraph 1(b), the regular business of a management company shall include the functions referred to in Annex II.

Article 11Para 5Subsections a) to q)

The functions for which a management company is responsible in respect of publicly offered collective investment undertakings are:

a) ensuring that all property of a collective investment undertaking is clearly identified as the property of that undertaking and is held by a depositary separately, segregated from the property of the management company and from the property of other collective investment undertakings operated by the same management company and from other clients of the management company and the depositary;

b) provision of all administrative services required by the undertaking including

Fully compliant

record-keeping;c) if provided

for by the constituting instrument of an alternative investment fund for offer to professional clients only, creating and maintaining the register or participants and transfer facilities;

d) offering, marketing and distribution of the shares or units of the undertaking;

e) in the case of open ended and interval investment funds, dealing in participations of the undertaking including sale and redemption of units and instructing the depositary to issue and cancel units and make payments to unitholders upon redemption of units;

f) creating and maintaining complete and up to date accounting records of

the undertaking and accounting for the assets, income, and expenses of the undertaking which must be carried out in such a way that all assets and liabilities of an undertaking can be directly identified at all times;

g) valuing the undertaking and calculating the net asset value of the undertaking and the net asset value per share or unit of the undertaking and (except where shares or units of publicly offered collected investment undertakings are listed on a regulated market as permitted by this Law) the price per unit for sale and redemption of units;

h) making tax returns;

i) investment management specifically making decisions as to the constituents of undertaking property in

accordance with the constituting instrument and CIU prospectus of the undertaking and the stated investment objective and policy of the undertaking or sub-fund concerned and exercising voting rights attaching to financial instruments under its management;

j) risk management including monitoring and measuring at any time the risk of the positions of an undertaking or sub-fund particularly liquidity risk and their contribution to the overall risk profile of the portfolio of that undertaking or sub-fund and undertaking related stress tests and developing and implementing related contingency plans;

k) instructing the depositary in writing as to the exercise of rights attaching to undertaking property;

l) preparation Fully

3. For the purposes of paragraph 1(g), all the places of business established in the same Member State by a management company with its head office in

of all required disclosure of information concerning the undertaking and for the required content and dissemination of said information except as otherwise provided for in this Law;

m) monitoring ongoing compliance of the operation of a publicly offered collective investment undertaking with this Law;

n) dealing with any enquiries or complaints concerning an undertaking;

o) internal audit;

p) filing all required reports with the Authority concerning an undertaking except as otherwise provided for by this Law; and

q) any further functions established by the Authority by regulation, rule, codes of conduct and guidance under this Law or Law

compliant

another Member State shall be regarded as a single branch.

9879 on Securities.

Article 2 Paragraph 4Point (a,b)

4. For the purposes of point (i)(ii) of paragraph 1, the following shall apply:

(a) a subsidiary undertaking of a subsidiary undertaking shall also be considered to be a subsidiary of the parent undertaking which is at the head of those undertakings;

(b) situations in which two or more natural or legal persons are permanently linked to the same person by a control relationship shall also be regarded as constituting a close links between such persons.

Article 2Para 77Subsection b)

Article 2Para 77Subsection c)

b) ‘control’ which means the relationship between a parent entity and a subsidiary, or a similar relationship between any physical or legal person and an entity, any subsidiary entity of a subsidiary entity also being considered to be a subsidiary of the parent entity which is at the head of those entities;

c) a permanent link of both or all of them to the same person by a control relationship;

Fully compliant

Fully compliant

2.4.a. could be covered by 2.76.b. and 2.4.b could be covered by 2.76.c in the Albanian Law


5. For the purposes of paragraph 1(j), the voting rights referred to in Articles 9 and 10 of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market ( 12 ) shall be taken into account.


1. A management company acting in connection with all of the collective investment undertakings which it manages, must not acquire any shares carrying voting rights which exceed 20% of such voting rights.2. A publicly offered collective investment undertaking may acquire no more than:

a) 10% of the non-voting shares of the same issuer;

b) 10% of the debt securities of the same issuer;

c) 25% of the participations of any one collective investment undertaking;

d) 10% of the money-market instruments of any single issuer.

e) The limits laid down in subsections b) c)

Fully compliant

Concerns notification thresholds of major holdings

and d) may be disregarded at the time of acquisition if at that time the gross amount of bonds or of the money-market instruments, or the net amount of the instruments in issue cannot be calculated.

Article 2 Paragraph 6

6. For the purposes of paragraph 1(l), Articles 13 to 16 of Directive 2006/49/EC shall apply mutatis mutandis.

Article 13Para 7

Article 13Para 5

7.Own funds must be invested in assets meeting the requirements of the Authority established by the Authority by regulation.

5.Up to 50 per cent of the own funds requirement under subsection 4 a) that exceeds the paid up capital requirement under subsection 3 may be met by a guarantee from an entity holding a licence as a bank or insurance company.

Partially compliant

Concerns what is permitted to be considered as own funds –which will be set out in more detail by the Authority as a secondary legislative instrument. Albania lacks all the instrments referred to in the Directive


7. For the purposes of paragraph 1(n), transferable securities shall exclude the techniques and instruments Concerns use of derivative instruments referred to in Article 13 and Article 51.

N/A (NB: Replaced by DIRECTIVE 2013/36/EU)

Concerns use of & limits for derivative instruments.Note that the Law confers the power on the Authority to establish further requirements for permitted investments and borrowing, including in subsection (d) requirements for eligibility of derivative instruments and limits on their use.


Article 3 There is a difference here: since the

Point (a,b,c,d,)

The following undertakings are not subject to this Directive:(a) collective investment undertakings of the closed-ended type;(b) collective investment undertakings which raise capital without promoting the sale of their units to the public within the Community or any part of it;(c) collective investment undertakings the units of which, under the fund rules or the instruments of incorporation of the investment company, may be sold only to the public in third countries;

(d) categories of collective investment undertakings prescribed by the regulations of the Member States in which such collective investment undertakings are

N/A

N/A

N/A

N/A

Albanian Law is a universal law covering all types of funds, both publicly offered and those only available to qualified investors, closed-ended funds are envisaged.

However, throughout the law the differences between publicly offered UCITS and privately offered AIFs are clearly delineated and derogations for closed-ended funds are clearly sign-posted.

Concerns which UCITS are not permitted to

established, for which the rules laid down in Chapter VII and Article 83 are inappropriate in view of their investment and borrowing policies.

borrow

Note that the Albanian Law lists several types of arrangements that are not considered to to collective investment undertakings in Article 4.

Article 4 Article 4

For the purposes of this Directive, a UCITS shall be deemed to be established in its home Member State.

Possible GAP

May be tactily covered in that only UCITS authorised in their home Member State may be offered in Albania. (See Article 157.1.c)


CHAPTER II

AUTHORISATION OF UCITS

Article 5 Article 60Paras 1

1.An investment fund for public offer must only be created and established in the

Fully compliant

Note that in the Albanian Law,

1.No UCITS shall pursue activities as such unless it has been authorised in accordance with this Directive.

Such authorisation shall be valid for all Member States.

and 2

Article 5 para 2

Republic of Albania by –a) A management company licensed under this Law;

b) A management company licensed by a foreign regulatory authority or a branch of such a management company that is recognised by the Authority under this Law.

Article 5Unlicensed persons and collective investment undertakings

2.No person shall issue or cause to be issued an advertisement offering participations in a collective investment undertaking in the Republic of Albania unless that person is licensed or recognised by the Authority as required by this Law and Law No 9879 and the undertaking concerned has been licensed or recognised by the

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the intent of this provision is achieved by limiting the creation of funds to licensed fund management companies and banning the advertising of funds which are not licensed or recognised.

Authority under this Law .


2. A common fund shall be authorised only if the competent authorities of its home Member State have approved the application of the management company to manage that common fund, the fund rules and the choice of depositary. An investment company shall be authorised only if the competent authorities of its home Member State have approved both its instruments of incorporation and the choice of depositary, and, where relevant, the application of the designated management company to manage that investment company.

Article 60Para 1

1.An investment fund for public offer must only be created and established in the Republic of Albania by –a) A management company licensed under this Law;b) A management company licensed by a foreign regulatory authority or a branch of such a management company that is recognised by the Authority under this Law.

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3. Without prejudice to paragraph 2, if the UCITS is not established in the management company’s home Member State, the competent authorities of the UCITS home Member State shall decide, on the application of the

Article 60 para 1,

1. An investment fund for public offer must only be created and established in the Republic of Albania by –a) A management company licensed under this Law;

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management company, to manage the UCITS pursuant to Article 20. Authorisation shall not be subject either to a requirement that the UCITS be managed by a management company having its registered office in the UCITS home Member State or that the management company pursue or delegate any activities in the UCITS home Member State.

Article 68, para 1


1.An investment company for public offer must only be created and established in the Republic of Albania by persons who meet the requirements of Article 14 subsections 2 to 5. –

Article 5 Paragraph 4Point (a,b)

4. The competent authorities of the UCITS home Member State shall not authorise a UCITS if:

(a) they establish that the investment company does not comply with the preconditions laid down in Chapter V; or

Article 64Paras 1/a,b,c,d,e,f,g and 2

1.The Authority may refuse to grant a licence to an investment fund if –a) The application does not meet the requirements of this Law and regulations under this Law relating to publicly offered

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(b) the management company is not authorised for the management of UCITS in its home Member State.

collective investment undertakings or in the case of an application for a licence as a publicly offered undertaking for collective investment in transferable securities, the requirements of Chapter VII Section 3;b) The management company is not licensed or recognised as required by this Law;c) The management company and depositary are not legally and functionally independent of each other;d) The key persons and key personnel of the depositary are not fit and proper under Article 14 or are not sufficiently experienced in relation to the type of investment fund for which a licence is sought; ore) The key persons or key personnel of the management company are not fit and proper under Article 14 or are

Without prejudice to Article 29(2), the management company or, where applicable, the investment company, shall be informed, within two months of the submission of a complete application, whether or not authorisation of the UCITS has been granted.

The competent authorities of the UCITS home Member State shall not authorise a UCITS if the directors of the depositary are not of sufficiently good repute or are not sufficiently experienced also in relation to the type of UCITS to be managed.

Article 63Para 3

Article 64Para 1Subsection d)

not sufficiently experienced in relation to the type of investment fund for which a licence is sought; ore) If the investment fund is legally prevented from marketing of its units to the public in the Republic of Albania;f) if the required fee has not been paid.

2.The Authority shall state in writing its reasons for refusal to grant such a licence.

The Authority shall inform the applicant, within six months of receipt of a complete application, whether or not the licence has been granted.

Article 64

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Six months in the Albanian Law versus two months in the EU Directive (Note also dfference in terminology: in EU Directive funds are authorised; in Albanian Law they are licensed.)

To that end, the names of the directors of the depositary and of every person succeeding them in office shall be communicated forthwith to the competent authorities.Directors shall mean those persons who, under the law or the instruments of incorporation, represent the depositary, or who effectively determine the policy of the depositary.

Refusal of Licence

d) The key persons and key personnel of the depositary are not fit and proper under Article 14 or are not sufficiently experienced in relation to the type of investment fund for which a licence is sought; or


5. The competent authorities of the UCITS home Member State shall not grant authorisation if the UCITS is legally prevented (for example, through a provision in the fund rules or instruments of incorporation) from marketing its units in its home Member State

Article 64Para 1Subsection e)

e) If the investment fund is legally prevented from marketing of its units to the public in the Republic of Albania;

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6. neither the management company nor the depositary shall be replaced, nor shall the fund rules or the instruments of incorporation of the investment company be amended, without the

Article 65Subsection 1

1.The management company of a publicly offered investment fund must give prior written notice to the Authority of -

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approval of the competent authorities of the ucits home member state

a) any proposed change to the rules of the investment fund;

b) any proposed change to the investment objective and strategy of the fund;

c) any proposed change to the management company or depositary of the investment fund;

d) any additional charge to be made to the investment fund not previously stated in the CIU prospectus or any increase in stated charges in the CIU prospectus;

e) the addition of any new sub-fund to an umbrella investment fund or termination of an existing sub-fund;

f) any proposed reconstruction or merger involving the

Article 77Para.1

investment fund;g) any

proposal to wind up the investment fund.

1.The management company of a publicly offered investment company must give three months prior written notice to the Authority of any substantial change to the investment company or where advance notice is not possible, immediate notice. The following must be treated as an substantial change to a publicly offered investment company -

a) any proposed change to the statute of the investment company;

b) any proposed change to the investment

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objective and strategy of the company;

c) any proposed change to the management company or depositary of the investment company;

d) any additional charge to be made to the investment company not previously stated in the CIU prospectus or any increase in stated charges in the CIU prospectus;

e) any change to the CIU prospectus during the initial offer period;

f) any change in board membership;

g) any proposed reconstruction or merger involving the investment company;

h) any proposal to wind up the investment company.


7. The Member States shall ensure that complete information on the laws, regulations and administrative provisions implementing this Directive which relate to the constitution and functioning of the UCITS are easily accessible at a distance or by electronic means. Member States shall ensure that such information is available at least in a language customary in the sphere of international finance, provided in a clear and unambiguous manner, and kept up to date.

Article 195 para 1 e)

The Authority shall take effective measures for supervision by;e)Ensuring that complete information on this Law, regulations under this Law and administrative provisions implementing this Law are easily accessible at a distance or by electronic means at least in a language customary in the sphere of international finance, and that these are provided in a clear and unambiguous manner, and kept up to date.

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8. In order to ensure consistent harmonisation of this Article the European Supervisory Authority (European Securities and Markets Authority) (hereinafter ‘ESMA’),

N/A ESMA provision

established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council ( 13 ) may develop draft regulatory technical standards to specify the information to be provided to the competent authorities in the application for authorisation of a UCITS.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.


CHAPTER III

OBLIGATIONS REGARDING MANAGEMENT COMPANIESSECTION 1Conditions for taking up businessArticle 61.Access to the business Article

1. A foreign management Fully

of management companies shall be subject to prior authorisation to be granted by the competent authorities of the management company’s home Member State. Authorisation granted under this Directive to a management company shall be valid for all Member States.ESMA shall be notified of every authorisation granted and shall publish and keep up-to-date a list of authorised management companies on its website

96Paras 1 to 4

company or branch of a foreign management company must only undertake activity in the Republic of Albania in conformity with this Article.

2. A management company licensed in a foreign country to undertake management of publicly offered collective investment undertakings may be recognised by the Authority to carry on activity in relation to publicly offered collective investment undertakings in the Republic of Albania directly from its place of business or through the establishment of a branch. 3. Such recognition may only be granted if -a) The management company of the collective investment undertaking or its home

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country regulatory authority has transmitted to the Authority such information as the Authority prescribes or requires;b) Satisfactory supervisory cooperation has been established between the regulatory authority in the management company’s home country and the Authority in the Republic of Albania;c) The management company is subject to adequate supervision in their home country;d) The management company meets the requirements imposed for carrying on business in its home country and these requirements provide investors in the Republic of Albania with protection at least in line with the protection provided to them when investing with domestic management companies;

e) The management company of the undertaking makes the arrangements necessary to be able in the Republic of Albania to make payments to the participants, redeem participations and provide the information which the undertaking is required to prepare under the Law in its home country;f) The sale in the Republic of Albania of the undertaking takes place either directly from the head office of the management company of the undertaking, through a representative office in the Republic of Albania or through a management company licensed either in the Republic of Albania or in another country or of a management company recognised under this Article, or an agent under Article 102.4. The Authority may take into consideration

when deciding recognition of foreign management companies the existence of equivalent arrangements for recognition of foreign management companies in the legislation of the applicant undertaking’s home country.


2. No management company shall engage in activities other than the management of UCITS authorised under this Directive, with the exception of the additional management of other collective investment undertakings which are not covered by this Directive and for which the management company is subject to prudential supervision but the units of which cannot be marketed in other Member States under this Directive.

Article 11Subsections 1 and 4

Article 11 Scope

1.Management of publicly offered collective investment undertakings and alternative investment funds in the Republic of Albania must only be undertaken by a licensed or recognised fund management company in accordance with this Law and Law 9879 on Securities.4. A fund management company licensed under subsection 2 may also be licensed by the Authority as –a) a management

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The activity of management of UCITS shall include, for the purpose of this Directive, the functions referred to in Annex II.


company of voluntary pension funds under Law No 10197 on Voluntary Pension Funds;b) a manager of portfolios of investments, including those owned by pension funds, in accordance with mandates given by investors on a discretionary, client-by-client basis, under Law 9879 on Securities.

1.Management of publicly offered collective investment undertakings and alternative investment funds in the Republic of Albania must only be undertaken by a licensed or recognised fund management company in accordance with this Law and Law 9879 on Securities.

2.Licensing and recognition of a fund management company shall only be granted by the Authority if it is

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satisfied that the fund management company will meet the requirements of this Law.

3.A fund management company licensed under subsection 2 may be licensed as a management company to offer publicly offered collective investment undertakings or as an alternative investment fund management company to offer alternative investment funds for professional clients only or as both.

4.A fund management company licensed under subsection 2 may also be licensed by the Authority as –a) a management company of voluntary pension funds under Law No 10197 on Voluntary Pension Funds;b) a manager of portfolios of investments, including

those owned by pension funds, in accordance with mandates given by investors on a discretionary, client-by-client basis, under Law 9879 on Securities.

5.The functions for which a management company is responsible in respect of publicly offered collective investment undertakings are:

a) ensuring that a depositary is appointed to each undertaking under its management and that the depositary of the undertaking is required to clearly identify all property of that collective investment undertaking as the property of that undertaking and to ensure that that property is held by a

depositary separately, segregated from the property of the management company and from the property of other collective investment undertakings operated by the same management company and from other clients of the management company and the depositary;

b) provision of all administrative services required by the undertaking including record-keeping;c) if provided for by the constituting instrument of an alternative investment fund for offer to professional clients only, creating and maintaining the register or participants and transfer facilities;

d) offering, marketing and distribution of the shares or units of the undertaking;e) in the case of open ended and interval investment funds, dealing in participations of the undertaking including sale and redemption of units and instructing the depositary to issue and cancel units and make payments to unitholders upon redemption of units;f) creating and maintaining complete and up to date accounting records of the undertaking and accounting for the assets, income, and expenses of the undertaking which must be carried out in such a way that all assets and liabilities of an undertaking can be directly identified at all times;g) valuing the undertaking and calculating the net asset

value of the undertaking and the net asset value per share or unit of the undertaking and (except where shares or units of publicly offered collected investment undertakings are listed on a regulated market as permitted by this Law) the price per unit for sale and redemption of units;h) making tax returns;i) investment management specifically making decisions as to the constituents of undertaking property in accordance with the constituting instrument and CIU prospectus of the undertaking and the stated investment objective and policy of the undertaking or sub-fund concerned and exercising voting rights attaching to financial instruments under its management;j) risk management including monitoring and measuring at any

time the risk of the positions of an undertaking or sub-fund particularly liquidity risk and their contribution to the overall risk profile of the portfolio of that undertaking or sub-fund and undertaking related stress tests and developing and implementing related contingency plans;k) instructing the depositary in writing as to the exercise of rights attaching to undertaking property; l) preparation of all required disclosure of information concerning the undertaking and for the required content and dissemination of said information except as otherwise provided for in this Law; m) monitoring ongoing compliance of the operation of a publicly offered collective investment undertaking with this Law;n) dealing with any enquiries or complaints

concerning an undertaking;o) internal audit;p) filing all required reports with the Authority concerning an undertaking except as otherwise provided for by this Law; andq) any further functions established by the Authority by regulation, rule, codes of conduct and guidance under this Law or Law 9879 on Securities.

7.A fund management company must make and keep for each undertaking and sub-fund for which it acts such records as are necessary to –a) enable the undertaking and sub-fund and the management company to comply with this Law and regulations and rules under this Law; andb) demonstrate that such compliance has been achieved.

8. The records of an undertaking and sub-fund must be kept in such a way that the Authority is able to access them readily and it must be possible for any corrections or other amendments and the contents of such records prior to such corrections or amendments to be easily ascertained and it must not be possible for the records to be otherwise manipulated or altered. Such records must be kept for the period required by applicable legislation.

9. A fund management company licensed under subsection 2 to manage publicly offered collective investment undertakings or alternative investment funds may also be given permission by the Authority to undertake the following additional services –a) Investment advice

under Law 9879 on Securities;b) Safekeeping and administration in relation to shares or units in collective investment undertakings.

10. A fund management company licensed under subsection 2 to manage alternative investment funds may in addition to the activities in subsection 6 be given permission by the Authority to receive and transmit orders on behalf of clients in relation to one or more financial instruments.

Article 6Paragraph 3Point (a,b,i,ii)

3. By way of derogation from paragraph 2, Member States may authorise management companies to provide, in addition to the management of UCITS, the following services:

(a) management of portfolios of investments, including those owned by

Article 11Para 3,4

3. A fund management company licensed under subsection 2 may be licensed as a management company

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pension funds, in accordance with mandates given by investors on a discretionary, client-by-client basis, where such portfolios include one or more of the instruments listed in Annex I, Section C to Directive 2004/39/EC; and

(b) as non-core services:

Article 11Para 9Subsections a) and b)

to offer publicly offered collective investment undertakings or as an alternative investment fund management company to offer alternative investment funds for professional clients only or as both.4.A fund management company licensed under subsection 2 may also be licensed by the Authority as –a) a management company of voluntary pension funds under Law No 10197 on Voluntary Pension Funds;b) a manager of portfolios of investments, including those owned by pension funds, in accordance with mandates given by investors on a discretionary, client-by-client basis, under Law 9879 on Securities.

9. A fund management company licensed under subsection 2 to manage publicly offered

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(i) investment advice concerning one or more of the instruments listed in Annex I, Section C to Directive 2004/39/EC;

(ii) safekeeping and administration in relation to units of collective investment undertakings.

Management companies shall not be authorised under this Directive to provide only the services referred to in this paragraph, or to provide non-core services without being authorised for the services referred to in point (a) of the first subparagraph.

collective investment undertakings or alternative investment funds may also be given permission by the Authority to undertake the following additional services –

a) Investment advice under Law 9879 on Securities;

b) Safekeeping and administration in relation to shares or units in collective investment undertakings.


4. Article 2(2) and Articles 12, 13 and 19 of Directive 2004/39/EC shall apply to the provision of the services referred to in paragraph 3 of this Article by management companies.

Article 2(2) = rights conferred by this Directive don’t extend to certain counterparty activities

Article 12 = initial capital endowment

Article 13 = organisational requirements

Article 13Subsection 3


3. A fund management company must have paid up capital of not less than ALL 15,6250,000.

1.A fund management company must have –a) Adequate and appropriate resources for the management of activities under Article 11;b) Sound administrative and accounting procedures, control and safeguard arrangements and rules for personal transactions by its employees;c) Sound internal control mechanisms including

N/A

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procedures for ensuring that each transaction can be reconstructed and its origin documented, and that documentation is available showing that the assets of each fund and sub-fund are managed in accordance with the fund’s constituting instrument and legal provisions in force.2.In the case of publicly offered collective investment undertakings, the fund management company must:

a)Be organised in such a way as to minimise the risk of conflicts of interest between the management company and its clients, between two of its clients, between one of its clients and a publicly offered collective investment undertaking and between two or more publicly offered collective investment

Article 19 = conduct of business requirements

Article 23

undertakings;b)Not invest a client’s assets in the publicly offered collective investment undertakings managed by the company unless the client has consented to this in writing if the company provides portfolio management services under Article 11 subsection 4 b);c)Have internal procedures for client complaints.3.The key persons of the fund management company shall draw up internal procedures for ensuring that subsection 1 is complied with.

1.A fund management company must carry on its activity in accordance with this Law¸ regulations under this Law and regulations under this Law and Law No 9879 on Securities as applicable.

2.A fund management

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company shall promote the best interests of the investors and the collective investment undertakings it manages and the integrity of the market by –a) Acting in an orderly, correct and compliant manner in conducting their activities;b) Deploying the necessary skills and knowledge and acting diligently and with due care;c) Having in place and effectively utilising the resources and procedures needed in order to conduct their activities in a sound manner;d) Striving to avoid conflicts of interest by ensuring that the interests of the investors in any type of collective investment undertaking managed by the fund management company are paramount and rank above the interests of

the shareholders in the fund management company, their own interests and the interests of its employees or of any persons related to it;e) Ensuring fair, consistent and equal treatment of holders of participations in collective investment undertakings managed by them.3.All participations in a fund must carry an equal right to fund assets and returns, except as otherwise provided in constituting instruments.4.A fund management company that also undertakes portfolio management on an individual basis must not invest such assets in a fund it manages unless it has received prior general approval from the client to do so.5.In addition to their duties towards shareholders of the fund management company

as specified in Law 9901 on Entrepreneurs and Companies, subsections 1 and 2 of this Article shall apply to key persons and key personnel and employees of the fund management company. 6. Key persons, key personnel and employees of a fund management company shall treat as confidential any confidential information about the affairs of a participant to which a duty is owed which may come to their knowledge in the course of their work, except as otherwise prescribed by law and regulation. The duty of confidentiality also applies to any person who carries out assignments on behalf of the fund management company including entities to which delegation is made under Article 25 and their employees. The provisions of this

subsection shall not apply in the case that –

a) The holder of a share or unit in a fund expressly agrees in writing with the disclosure of certain confidential data;b) When the data is required by the Authority, a court of law or another regulatory authority for the purposes of a procedure carried out within its competences, and submits a request for information in writing;c) In cases where disclosure of data to parent companies in connection with supervision in compliance with this Law or in compliance with law governing financial conglomerates;d) In other cases prescribed by law.7.A management company is liable to the investors in a publicly offered collective investment undertaking

for failure to perform or failure to properly perform any activity or task for which it is responsible for under this Law, regulations under this Law and the constituting instrument and CIU prospectus and management agreement of a publicly offered collective investment undertaking. Limitation of liability in any manner shall be null and void.8.The Authority may but is not obliged to make further provision by way of regulation for the duties of fund management companies.

Article 7 Paragraph 1Point (a,i,ii,iii)

Article 7

1. Without prejudice to other conditions of general application laid down by national law, the competent authorities shall not grant authorisation to a management company unless the following

conditions are met:

(a) the management company has an initial capital of at least eur 125 000, taking into account the following:

(i) when the value of the portfolios of the management company exceeds eur 250 000 000, the management company must be required to provide an additional amount of own funds which is equal to 0,02 % of the amount by which the value of the portfolios of the management company exceeds eur 250 000 000 but the required total of the initial capital and the additional amount must not, however, exceed eur 10 000 000 ;

Article13Para 3


Article 13

3.A fund management company must have paid up capital of not less than [the ALL equivalent of EUR 125,000].

4.A fund management company must at all times have own funds that –

a) Are equivalent to at least ALL 15,625,000 and an amount that is equivalent to 0.02 per cent of the management company’s total assets under management above [the ALL equivalent of EUR 250 million] up to a maximum of [the ALL equivalent of EUR 10 million]; and

b) Are at least equivalent to 25 per cent of the fund management company’s fixed costs in the previous

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(ii) for the purposes of this paragraph, the following portfolios must be deemed to be the portfolios of the management company:

— common funds managed by the management company including portfolios for which it has delegated the management function but excluding portfolios that it is managing under delegation,

— investment companies for which the management company is the designated management company,

— other collective investment undertakings managed by the management company including portfolios for which it has delegated the management function but excluding portfolios that it is managing under

Para 4Subsection c


financial year.

c) For the purposes of subsection a) the value of assets under management is of the collective investment undertakings and alternative investment funds managed by the fund management company including collective investment undertakings and alternative investment funds for which the company has delegated functions in accordance with Article 25 but excluding collective investment undertakings that the company is managing under delegation.

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delegation;

(iii) irrespective of the amount of those requirements, the own funds of the management company must at no time be less than the amount prescribed in article 21 of directive 2006/49/ec;

See above under point (i)

Article 7Paragraph 1Point (b,c,d)

(b) the persons who effectively conduct the business of a management company are of sufficiently good repute and are sufficiently experienced also in relation to the type of UCITS managed by the management company, the names of those persons and of every person succeeding them in office being communicated forthwith to the competent authorities and the conduct of the business of a management company being decided by at least two persons meeting such conditions;


1.No person shall be granted a licence as to operate a fund management company unless the Authority has satisfied itself that the applicant, owners and those exercising a control function over the applicant are fit and proper persons to carry on that regulated activity.2.The Authority shall make an assessment as to whether a person is fit and proper on the following basis:

a) possession of the qualities required to fulfil the tasks and responsibilities of

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the particular position in the company;

b) having integrity, honesty and commitment in the fulfilment of his tasks;

c) possession of the necessary qualifications and professional experience in line with the responsibilities of the particular position;

d) maintenance of independence so that the company’s interests are not affected by any conflict of interests that might arise in the course of the person performing their duties.

3.The Authority shall also make an assessment of the past behaviour and business or financial activity of the person including but

not limited to considering whether there is any evidence showing that the person:

a) has been convicted by a final judgment of organising and operating fraudulent and pyramid borrowing schemes, money laundering and financing of terrorism;

b) is or has been engaged in, or associated with, any financial losses due to dishonesty, incompetence or malpractice in the provision of financial services or the management of other companies;

c) is or has been engaged in business practices which the Authority considers as fraudulent, oppressive or otherwise improper, or which in some

Article 15 Para 1 Subsections a) to c)

way reflect lack of personal values in the provision of financial services or other business transactions;

d) has had a licence refused or revoked by a financial regulatory authority or accreditation withdrawn by a professional association;

e) has been convicted of a financial crime in the past five years.

The fit and proper requirements apply on an initial and ongoing basis and shall be complied with by the abovementioned persons during all the time they hold their respective positions.

The key persons and key personnel of a fund management company

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(c) the application for authorisation is accompanied by a programme of activity setting out, at least, the organisational structure of the management

Article 17Para 2 Subsection d) points (i) to (ix)

must include not less than two physical persons who -

a) have a minimum of [3] years of working experience in a professional or managerial position in a licensed financial institution relating to portfolio analysis, portfolio management or asset liability management;

b) have an international or domestic qualification in investment analysis, investment management or fund management or fund administration that meets the requirements of the Authority established by regulation;

c) demonstrate knowledge and understanding of this Law and related laws in the manner

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company; and

(d) the head office and the registered office of the management company are located in the same Member State.

Article 12Para 1

Article 13Para 5

and to the standard established by the Authority by regulation;

d) do not currently hold a public service office.

d) Documents evidencing a programme of operations and a description of the fund management company’s organisation and a business and financial plan including provision for internal audit

A licence as a fund management company must only be granted by the Authority to a joint stock company that has

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For the purposes of point (a) of the first subparagraph, Member States may authorise management companies not to provide up to 50 % of the additional amount of own funds referred to in point (i) of point (a) if they benefit from a guarantee of the same amount given by a credit institution or an insurance undertaking which has its registered office in a Member State, or in a third country where it is subject to prudential rules considered by the competent authorities as equivalent to those laid down in Community law.

its registered office and head office in the Republic of Albania.

Up to 50 per cent of the own funds requirement under subsection 4 a) that exceeds the paid up capital requirement under subsection 3 may be met by a guarantee from an entity holding a licence as a bank or insurance company.


2. Where close links exist between the management company and other natural or legal persons, the competent authorities shall grant authorisation only if those close links do not prevent the effective exercise of their supervisory

Article 19Para 1Subsection c) Point (i)

[The Authority must not grant a license...] where the effective exercise of its supervisory functions is prevented by –(i) ownership links between the fund management company and other legal or

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functions.

The competent authorities shall also refuse authorisation if the laws, regulations or administrative provisions of a third country governing one or more natural or legal persons with which the management company has close links, or difficulties involved in their enforcement, prevent the effective exercise of their supervisory functions.

The competent authorities shall require management companies to provide them with the information they require to monitor compliance with the conditions referred to in this paragraph on a continuous basis.

Article 19Para 1Subsection c) Point ii)

Article 201Para 1

physicalpersons;

The Authority must not grant a license where the effective exercise of its supervisory functions is prevented by the laws, regulations or administrative provisions of another country or territory governing physicalor legal persons with whom the fund management company has ownership links

A fund management company must provide the Authority with such information as is required on matters related to the company’s business and the collective investment undertakings under its management. This also applies to tied agents of the management company and to depositaries and alternative investment fund depositaries in

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relation to their activities under this Law. The Authority shall request information as it deems important in the context of undertaking its supervisory tasks under this Law and Law 9572 on the Financial Supervisory Authority.


3. The competent authorities shall inform the applicant within six months of the submission of a complete application whether or not authorisation has been granted. Reasons shall be given where an authorisation is refused.

Article 18 Para 2

The Authority shall inform the applicant, within three months of receipt of a complete application, whether or not the licence has been granted.

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Article 7Paragraph4

4. A management company may start business as soon as authorisation has been granted.

Article 18Para 6

Article 63, para 6

A fund management company may start business as soon as a licence has been granted.Public offering of an investment fund may only commence once a licence has been granted.

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Article 7Paragraph 5. The competent

authorities may withdraw

5Point (a,b,c,d,e,f)

the authorisation issued to a management company subject to this Directive only where that company:(a) does not make use of the authorisation within 12 months, expressly renounces the authorisation or has ceased the activity covered by this Directive more than six months previously, unless the Member State concerned has provided for authorisation to lapse in such cases;

(b) has obtained the authorisation by making false statements or by any other irregular means;

(c) no longer fulfils the conditions under which authorisation was granted;

(d) no longer complies with Directive 2006/49/EC if its authorisation also covers the discretionary

Article 211 Para 1Subsection b)

Article 211 para 1 subsectoin m)

Article 211 para 1 subsection a)

Article 211 Para 1Subsection e)

Article 211 Para 1Subsection f)

The licensed person fails to make use of that licence within 12 months

The licensed person has failed to undertake regulated activity business for a period of more than 30 days unless it has obtained the prior approval of the Authority to do so

The licence was based on provision of misleading or incorrect information;

The licensed person fails to comply with the conditions under which its licence was issued;

The licensed person fails to comply with capital adequacy requirements of this Law or risk based

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Partially compliant

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Fully compliant

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Shorter period

Concerns initial capital

portfolio management service referred to in Article 6(3)(a) of this Directive;

(e) has seriously or systematically infringed the provisions adopted pursuant to this Directive; or

Article 211 Para 2Subsections a) and b)

capital requirements established by regulation under this Law for a period of more than 4 months

If it appears to the Authority that a person who is licensed or registered has contravened any provision of this Law or of any regulations made under it or, in compliance with any such provision, has furnished the Authority with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Law the Authority may make an Administrative Order in writing that:a) the person shall cease to be licensed or registered; or b) the person’s licence or registration shall be suspended for a specified period or until the occurrence of a

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Fully compliant

(f) falls within any of the cases where national law provides for withdrawal.

Article 211 Para 1Subsection g)

Article 211 Para 1Subsection h)

specified event or until specified conditions are complied with.

g) Akey person of the licensed person is convicted by a final judgement of property or economic criminal offences or criminal offences within companies or money laundering or terrorism financing offences;

h) There is reliable evidence of key persons of licensed persons being involved in transactions that are not compliant with the law, where their actions or omissions are not criminal offences;

Article 7Paragraph 6Point

6. In order to ensure consistent harmonisation of this Article, ESMA may develop draft regulatory

N/A Concerns areas of competence of ESMA

(a,b,c) technical standards to specify:

(a) the information to be provided to the competent authorities in the application for the authorisation of the management company, including the programme of activity;

(b) the requirements applicable to the management company under paragraph 2 and the information for the notification provided for in paragraph 3;

(c) the requirements applicable to shareholders and members with qualifying holdings, as well as obstacles which may prevent effective exercise of the supervisory functions of the competent authority, as provided for in Article 8(1) of this Directive and in Article 10(1) and (2) of Directive 2004/39/EC, in

accordance with Article 11 of this Directive.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to determine standard forms, templates and procedures for the notification or provision of information provided for in points (a) and (b) of the first subparagraph.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the third subparagraph in accordance with Article 15 of Regulation (EU) No

1095/2010.Article 8Paragraph 1

Article 81. The competent authorities shall not grant authorisation to take up the business of management companies until they have been informed of the identities of the shareholders or members, whether direct or indirect, natural or legal persons, that have qualifying holdings and of the amounts of those holdings.

The competent authorities shall refuse authorisation if, taking into account the need to ensure the sound and prudent management of a management company, they are not satisfied as to the

Article 17 para 2 subsectoin b)

Article 17 para 2 subsection c)

Article 12

2. The application for a licence to conduct activity as a fund management company shall be accompanied by the following... b)

Documents evidencing the ownership of the company, including information on any qualifying holdings and the sizes of those holdings;

c) Documents evidencing that the owners and key persons and key personnel of the fund management company individually and collectively are fit and proper including academic, professional and managerial qualifications; curriculum vitae and names and contact information for persons and that endorse the correctness of the information in the

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suitability of the shareholders or members referred to in the first subparagraph.

Para 3 curriculum vitae;

Owners of qualifying holdings in the fund management company must meet the requirements for fitness and properness set out in Article 14.


2. In the case of branches of management companies that have registered offices outside the Community and are taking up or pursuing business, the Member States shall not apply provisions that result in treatment more favourable than that accorded to branches of management companies that have registered offices in Member States.

N/A

Article 8Paragraph 3Point (a,b,c)

3. The competent authorities of the other Member State involved shall be consulted beforehand in relation to the authorisation of any management company which is one of the

following:

(a) a subsidiary of another management company, an investment firm, a credit institution or an insurance undertaking authorised in another Member State;

(b) a subsidiary of the parent undertaking of another management company, an investment firm, a credit institution or an insurance undertaking authorised in another Member State; or

(c) a company controlled by the same natural or legal persons as control another management company, an investment firm, a credit institution or an insurance undertaking authorised in another Member State.

Article 18Para 1

The Authority shall consult beforehand the domestic or foreign regulatory authority of any fund management company which is a subsidiary of a licensed domestic or foreign investment firm or bank or is controlled by a person who controls a licensed foreign investment firm or bank.

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SECTION 2Relations with third countries

N/A A ‘third country’ is any country not a member of the EU. At

Article 91.Relations with third countries shall be regulated in accordance with the relevant rules laid down in Article 15 of Directive 2004/39/EC.

For the purposes of this Directive, the terms ‘investment firm’ and ‘investment firms’ referred to in Article 15 of Directive 2004/39/EC shall mean, respectively, ‘management company’ and ‘management companies’; the term ‘providing investment services’ referred to in Article 15(1) of Directive 2004/39/EC shall mean ‘providing services’.

present time, that includes the Republic of Albania. The Albanian Law makes no difference between EU Member States and any other country.

2004/39/EU Gives EU Member States the right to refer other Member States who don’t respect the rules regarding cross-border operations to the EU Commission


2. Member States shall inform ESMA and the Commission of any general difficulties which UCITS encounter in marketing their units in any third country.

The Commission shall

N/A ESMA provision

examine such difficulties as quickly as possible in order to find an appropriate solution. ESMA shall assist it in discharging that task.


SECTION 3Operating conditionsArticle 101. The competent authorities of the management company’s home Member State shall require that the management company which they have authorised complies at all times with the conditions laid down in Article 6 and Article 7(1) and (2).


The Authority shall supervise collective investment undertakings and their marketing, fund management companies, depositaries, alternative investment fund depositaries, Albanian branches of foreign management companies and alternative investment fund managers, asales agents of collective investment undertakings and the activities of recognised management companies and

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The own funds of a management company shall not fall below the level specified in Article 7(1)(a). If they do, however, the competent authorities may, where the circumstances so justify, allow such firms a limited period in which to rectify their situations or cease their activities.

Article 13Para 4

alternative investment fund managers in the Republic of Albania and shall take measures for effective supervision to ensure compliance with this Law and regulation and rules under this Law in accordance with Law No 9572 On the Financial Supervisory Authority and this Law by...a) Monitoring activities and collecting and verifying reports and notifications filed by fund management companies, depositaries, alternative investment fund depositaries and other persons who, pursuant to the legislation in force, have the obligation to report to the Authority or inform it of any special facts and circumstances;

A fund management company must at all times have own funds that –Are equivalent to at

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least ALL 15,625,000 and an amount that is equivalent to 0.02 per cent of the management company’s total assets under management above [the ALL equivalent of EUR 250 million] up to a maximum of [the ALL equivalent of EUR 10 million]; andb) Are at least equivalent to 25 per cent of the fund management company’s fixed costs in the previous financial year.


2. The prudential supervision of a management company shall be the responsibility of the competent authorities of the management company’s home Member State, whether the management company establishes a branch or provides services in another Member State or not,

N/A Requirement at EU level for home supervisors to take the lead and main responsibility for supervision of those of their fund management companies who operate abroad

without prejudice to those provisions of this Directive which confer responsibility to the competent authorities of a management company’s host Member State.


Article 11

1.Qualifying holdings in management companies shall be subject to the same rules as those laid down in Articles 10, 10a and 10b of Directive 2004/39/EC.

Article 199 Para 2 Subsection f)

Approving changes in owners of qualifying holdings in licensed entities under this Law;

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Concerns identity of those with qualifying holdings


2. For the purposes of this Directive, the terms ‘investment firm’ and ‘investment firms’ referred to in Article 10 of Directive 2004/39/EC, mean, respectively, ‘management company’ and ‘management companies’.

Article 11Para 3

A fund management company licensed under subsection 2 may be licensed as a management company to offer publicly offered collective investment undertakings or as an alternative investment fund management company to offer alternative investment funds for professional clients only or as both.

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Article 11Paragraf 3 3. In order to ensure

consistent harmonisation of this Directive, ESMA may develop draft regulatory technical standards to establish an exhaustive list of information, as provided for in this Article, with reference to Article 10b(4) of Directive 2004/39/EC, to be included by proposed acquirers in their notification, without prejudice to Article 10a(2) of that Directive.


In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to establish

N/A ESMA provisiion

standard forms, templates and procedures for the modalities of the consultation process between the relevant competent authorities, as provided for in this Article, with reference to Article 10(4) of Directive 2004/39/EC.

Power is conferred to the Commission to adopt the implementing technical standards referred to in the third subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

Article 12Paragraph 1Point(a,b)

Article 12

1. Each Member State shall draw up prudential rules which management companies authorised in that Member State, with regard to the activity of management of UCITS authorised according to this Directive, shall observe at all times.

Article 16

A fund management company must have -a) Adequate and

appropriate resources for the management of activities under Article 11;

b) Sound administrative and accounting

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In particular, the competent authorities of the management company’s home Member State, having regard also to the nature of the UCITS managed by a management company, shall require that each such company:

(a) has sound administrative and accounting procedures, control and safeguard arrangements for electronic data processing and adequate internal control mechanisms including, in particular, rules for personal transactions by its employees or for the holding or management of investments in financial instruments in order to invest on its own account and ensuring, at least, that each transaction involving the UCITS may be reconstructed according to its origin, the parties to it, its nature, and the time and place at which it was effected and that the assets of the UCITS managed by

procedures, control and safeguard arrangements and rules for personal transactions by its employees;

c) Sound internal control mechanisms including procedures for ensuring that each transaction can be reconstructed and its origin documented, and that documentation is available showing that the assets of each fund and sub-fund are managed in accordance with the fund’s constituting instrument and legal provisions in force.

In the case of publicly offered collective investment undertakings, the fund management company must:a) Be organised in such

a way as to minimise the risk of conflicts of interest between the management

the management company are invested according to the fund rules or the instruments of incorporation and the legal provisions in force;

(b) is structured and organised in such a way as to minimise the risk of UCITS’ or clients’ interests being prejudiced by conflicts of interest between the company and its clients, between two of its clients, between one of its clients and a UCITS, or between two UCITS.

company and its clients, between two of its clients, between one of its clients and a publicly offered collective investment undertaking and between two or more publicly offered collective investment undertakings;

b) Not invest a client’s assets in the publicly offered collective investment undertakings managed by the company unless the client has consented to this in writing if the company provides portfolio management services under Article 11 subsection 4 b);

c) Have internal procedures for client complaints.

The key persons of the fund management company shall draw up internal procedures for

ensuring that subsection 1 is complied with.

The Authority may but is not obliged to provide further by regulation for requirements relating to procedures, systems and controls of fund management companies including requirements for dealing with complaints to the management company.


2. Each management company the authorisation of which also covers the discretionary portfolio management service referred to in Article 6(3)(a) shall:

(a) not be permitted to invest all or a part of the investor’s portfolio in units of collective investment undertakings it manages, unless it receives prior general approval from the client;

Article 16Para 2Subsection b

Not invest a client’s assets in the publicly offered collective investment undertakings managed by the company unless the client has consented to this in writing if the company provides portfolio management services under Article

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Article 137 Para 5

11 subsection 4 b);

A publicly offered undertaking must not invest in participations of another collective investment undertaking or sub-fund of a collective investment undertaking except as permitted by this Law and regulations under this Law. A sub-fund of a publicly offered collective investment undertaking must not invest in another sub-fund of the same collective investment undertaking.

Article 12Paragraph 2Point(b)

(b) be subject with regard to the services referred to in Article 6(3) to the provisions laid down in Directive 97/9/EC of the European Parliament and of the Council of 3 March

Not compliant Provision for an

investor compensation scheme is to be made in the new capital markets law

1997 on investor-compensation schemes ( 14 ).

and shoild not apply only to CIUs


3. Without prejudice to Article 116, the Commission shall adopt, by means of delegated acts in accordance with Article 112a , measures specifying the procedures and arrangements as referred to under point (a) of the second subparagraph of paragraph 1 and the structures and organisational requirements to minimise conflicts of interests as referred to under point (b) of the second subparagraph of paragraph 1.

N/A Obligation of the EU Commission to draw up standards.


4. In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to determine the conditions of applications of the delegated acts adopted by the Commission regarding the procedures, arrangements, structures

N/A Obligation of ESMA to draw up standards

and organisational requirements referred to in paragraph 3.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

Article 13Paragraph 1Point (a,b,c,d)

Article 13

1. If the law of the management company’s home Member State allows management companies to delegate to third parties for the purpose of a more efficient conduct of the companies’ business, to carry out on their behalf one or more of their own functions, all of the following preconditions shall be complied with:

Article 25Para 2

A fund management company may delegate to another party the provision of any of the functions for which it is responsible under Article 11 subsections 5 and 6 but the fund management company remains responsible for those functions and their proper performance and for oversight of any person to which it contracts such functions including their ongoing compliance with the requirements under

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(a) the management company must inform the competent authorities of its home Member State in an appropriate manner; the competent authorities of the management company’s home Member State must, without delay, transmit the information to the competent authorities of the UCITS home Member State;

Article 25Para 3

Article 196Para 2Subpointsa) to f)

subsections 4 b), c) and d) and ensuring that there is effective co-operation with the delegate and that effectiveness of supervision is not diminished by the delegation.

A fund management company must notify the Authority before any contract for the delegation of functions that cover fund portfolio management, risk management, valuation, administration and marketing is given effect.

The Authority may exchange with another domestic or foreign regulatory authority –a) Required information on issue of licences;b) Required information on supervised entities;c) Required information in relation to prevention of money laundering and financing of

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Partially compliant

The Albanian Law says the Authority ‘may’ share information, but does not create a specific duty to share information about delegation as Albania is not yet an EU member state

(b) the mandate must not prevent the effectiveness of supervision over the management company, and, in particular, must not prevent the management company from acting, or the UCITS from being managed, in the best interests of its investors;

(c) when the delegation concerns the investment

Article 25Para 1

Article 25Para 4Subsections d)

terrorism;d) Required information in relation to [criminal offences or economic crime] committed in the course of carrying out activity relating to collective investment undertakings;e) Financial and economic data;f) Information on key persons and key personnel of persons licensed under this Law.

A fund management company may delegate to a third party the operation of parts of its business, unless such delegation is on a scale or in a manner that is not considered prudent or it makes the supervision of the delegated business or the overall fund management company‘s business difficult or it prevents the fund management company from acting in the best interests of the investors in the

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management, the mandate must be given only to undertakings which are authorised or registered for the purpose of asset management and subject to prudential supervision; the delegation must be in accordance with investment-allocation criteria periodically laid down by the management companies;

(d) where the mandate concerns the investment management and is given to a third-country undertaking, cooperation between the

and e)

Article 25Para 4Subsection f)

collective investment undertakings it manages.

d) where the delegation concerns portfolio management or risk management, delegation may only be made to persons which are licensed or registered for the purpose of investment management and subject to supervision or, where that condition cannot be met, only subject to prior approval by the Authority;e) the fund management company must be able to demonstrate that the delegate is qualified and capable of undertaking the functions in question and that the fund management company is able at all times to monitor the delegated activity effectively, to give further instructions and to withdraw the delegation with

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supervisory authorities concerned must be ensured;

immediate effect if that is in the interests of investors;

f) where the mandate concerns investment management and is given to an undertaking in another country, co-operation between the regulatory authority in that country and the Authority must be ensured;

Article 13Paragraph 1Point(e,f,g,h,i)

(e) a mandate with regard to the core function of investment management must not be given to the depositary or to any other undertaking whose interests may conflict with those of the management company or the unit-holders;

Article 25Para 5Subsections a) and b)

No delegation of portfolio management or risk management shall be made to –a) The depositary or a delegate of the depositary; orb) Any other entity whose interests may conflict with those of the fund management company or collective investment undertaking investors, unless such entity has hierarchically and functionally separated the performance of its portfolio management and risk management

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(f) measures must exist which enable the persons who conduct the business of the management company to monitor effectively at any time the activity of the undertaking to which the mandate is given;

(g) the mandate must not prevent the persons who conduct the business of the management company from giving further instructions to


Para 4Subsection e)

tasks from its other potentially conflicting tasks, and the potential conflicts of interest are properly identified, managed, monitored and disclosed to the investors in collective investment undertakings the fund management company manages.

the fund management company must be able to demonstrate that the delegate is qualified and capable of undertaking the functions in question and that the fund management company is able at all times to monitor the delegated activity effectively, to give further instructions and to withdraw the delegation with immediate effect if that is in the interests of investors;

the fund management company must be able to demonstrate that the

Fully compliant

Fully compliant

the undertaking to which functions are delegated at any time or from withdrawing the mandate with immediate effect when this is in the interest of investors;

(h) having regard to the nature of the functions to be delegated, the undertaking to which functions will be delegated must be qualified and capable of undertaking the functions in question; and

(i) the UCITS’ prospectuses must list the functions which the management company has been allowed to delegate in accordance with this Article.


Article 25 para 4 subsection g)

delegate is qualified and capable of undertaking the functions in question and that the fund management company is able at all times to monitor the delegated activity effectively, to give further instructions and to withdraw the delegation with immediate effect if that is in the interests of investors;

the delegate must have sufficient resources to perform the respective tasks and the persons who effectively conduct the business of the delegate must be fit and proper and sufficiently experienced;

the CIU prospectus for collective investment undertakings under the management of the fund management company must list the functions that the fund management company has been permitted to

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delegate;


2.The liability of the management company or the depositary shall not be affected by delegation by the management company of any functions to third parties. The management company shall not delegate its functions to the extent that it becomes a letter-box entity.

Article 25Para 7

The liability of the fund management company towards a collective investment undertaking under its management and to its investors shall not be affected by delegation of functions to a third party or sub-delegation.

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Article 14Paragraph 1Point(a,b,c,d,e)

Article 14

1. Each Member State shall draw up rules of conduct which management companies authorised in that Member State shall observe at all times. Such rules shall implement at least the principles set out in this paragraph. Those principles shall ensure that a management company:


1. A fund management company must carry on its activity in accordance with this Law, regulations under this Law and regulations under this Law and Law No 9879 on Securities as applicable. and must act honestly, fairly, professionally, independently and solely in the interests of the collective investment undertaking’s investors.

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There is no requirement for a Code of Conduct in the Albanian Law since these behaviours are required in the Law in the sections quoted.

(a) acts honestly and fairly in conducting its business activities in the best interests of the UCITS it manages and the integrity of the market;

(b) acts with due skill, care and diligence, in the best interests of the UCITS it manages and the integrity of the market;

(c) has and employs effectively the resources and procedures that are necessary for the proper performance of its business activities;


Article 23Para 2Subsections a) to e)

b) having integrity, honesty and commitment in the fulfilment of his tasks;

A fund management company shall promote the best interests of the investors and the collective investment undertakings it manages and the integrity of the market by – e) Ensuring fair, consistent and equal treatment of holders of participations in collective investment undertakings managed by them.

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(d) tries to avoid conflicts of interests and, when they cannot be avoided, ensures that the UCITS it manages are fairly treated; and

(e) complies with all regulatory requirements applicable to the conduct of its business activities so as to promote the best interests of its investors and the integrity of the market.

b) Deploying the necessary skills and knowledge and acting diligently and with due care;

c) Having in place and effectively utilising the resources and procedures needed in order to conduct their activities in a sound manner;

d) Striving to avoid conflicts of interest by ensuring that the interests of the investors in any type of collective investment undertaking managed by the fund management company are paramount and rank above the interests of the shareholders in the fund management company, their own interests and the interests of its employees or of any persons related to it;

a) Acting in an orderly,

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correct and compliant manner in conducting their activities;

Article 14Paragraph 2Point(a.b.c)

2. Without prejudice to Article 116, the Commission shall adopt, by means of delegated acts in accordance with Article 112a , measures with a view to ensuring that the management company complies with the duties set out in paragraph 1, in particular to: (a) establish appropriate criteria for acting honestly and fairly and with due skill, care and diligence in the best interests of the UCITS;(b) specify the principles required to ensure that management companies employ effectively the resources and procedures that are necessary for the proper performance of their business activities;

N/A Obligation of the EU Commission to define criteria for testing principles

and(c) define the steps that management companies might reasonably be expected to take to identify, prevent, manage or disclose conflicts of interest as well as to establish appropriate criteria for determining the types of conflicts of interest whose existence may damage the interests of the UCITS.


3. In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to determine the delegated acts adopted by the Commission regarding the criteria, principles and steps referred to in paragraph 2.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15

N/A Obligation of ESMA to develop technical standards

of Regulation (EU) No 1095/2010.

Article 14aParagraph 1

Article 14a

1. Member States shall require management companies to establish and apply remuneration policies and practices that are consistent with, and promote, sound and effective risk management and that neither encourage risk taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the UCITS that they manage nor impair compliance with the management company’s duty to act in the best interest of the UCITS.

Article 26Para 1

1. A fund management company must establish and practice a remuneration policy that promotes sound management and control of the entity’s risk, and that aligns with its risk profile and its long-term strategy. The remuneration policy must not encourage excessive risk-taking which is inconsistent with the risk profiles, constituting instruments or CIU prospectuses of the collective investment undertakings they manage

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The Albanian Law contains minimal provisions concerning remuneration policy requirements since it is proposed that these be introduced later by way of regulation when the market is more developed


2. The remuneration policies and practices shall include fixed and variable components of salaries and discretionary pension benefits.

Article 26Para 5

The remuneration policy must cover both fixed and variable remuneration and any discretionary pension benefits and must be reviewed regularly.

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3. The remuneration policies and practices shall apply to those categories of staff, including senior management, risk takers, control functions and any employee receiving total remuneration that falls within the remuneration bracket of senior management and risk takers whose professional activities have a material impact on the risk profiles of the management companies or of the UCITS that they manage.

Article 26Para 3

The remuneration policy of all types of fund management company must cover key persons and key personnel and employees whose tasks are of material significance for the risk exposure of the fund management company or the collective investment undertakings it manages, and must also cover other employees with the same remuneration as key persons whose professional activities have a material impact on the risk profile of the fund management company or of the

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‘Key personnel’ includes ‘ risk takers whose professional activities have a material impact on the risk profiles of the management companies or of the UCITS that they manage.’

publicly offered collective investment undertakings that they manage .


4. In accordance with Article 16 of Regulation (EU) No 1095/2010, ESMA shall issue guidelines addressed to competent authorities or to financial market participants concerning the persons referred to in paragraph 3 of this Article and the application of the principles referred to in Article 14b. Those guidelines shall take into account the principles on sound remuneration policies set out in Commission Recommendation 2009/384/EC ( 15 ), the size of the management company and the size of the UCITS that they manage, their internal organisation, and the nature, scope and complexity of their activities. In the process of the development of those

N/A Obligation of ESMA to issue guidelines

guidelines, ESMA shall cooperate closely with the European Supervisory Authority (European Banking Authority) (‘EBA’), established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council ( 16 ), in order to ensure consistency with requirements developed for other financial services sectors, in particular credit institutions and investment firms.

Article 14bParagraph 1Point(a,b,c,d,e)

Article 14b

1.When establishing and applying the remuneration policies referred to in Article 14a, management companies shall comply with the following principles in a way and to the extent that is appropriate to their size, internal organisation and the nature, scope and complexity of their activities:

Article 26Para 2

In addition to subsection 1, management companies managing publicly offered collective investment undertakings must ensure the remuneration policy does not encourage risk-taking which is inconsistent with the risk profiles and constituting instruments and CIU prospectuses of the publicly offered collective investment

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(a) the remuneration policy is consistent with and promotes sound and effective risk management and does not encourage risk taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the UCITS that the management company manages;

(b) the remuneration policy is in line with the business strategy, objectives, values and interests of the

Article 26Para 4

Article 26Para 2

Article 26Para 4

undertaking and must not impair compliance with the management company’s duty to act in the interest of investors in publicly offered collective investment undertakings.

The remuneration policy shall be appropriate to the nature, scale and complexity of the of the fund management company’s activities.

(See Article 26 Para 2 in this section, above)

(See Article 26 Para 4 in this section, above)

Fully compliant

Partially compliant As mentioned in

relation to Article 2 Paragraph 1Point (s,t) of this Directive (see above), the concept of

management company and the UCITS that it manages and of the investors in such UCITS, and includes measures to avoid conflicts of interest;

(c) the remuneration policy is adopted by the management body of the management company in its supervisory function, and that body adopts, and reviews at least annually, the general principles of the remuneration policy and is responsible for, and oversees, their implementation; the tasks referred to in this point shall be undertaken only by members of the management body who do not perform any executive functions in the management company concerned and who have expertise in risk management and remuneration;

Not compliant

Not

‘management body’ is not used in the Albanian Law.

The Albanian Law does not impose a duty of annual review; only ‘regular’To be provided in future by regulation

To be provided in regulation in future

(d) the implementation of the remuneration policy is, at least annually, subject to central and independent internal review for compliance with policies and procedures for remuneration adopted by the management body in its supervisory function;

(e) staff engaged in control functions are compensated in accordance with the achievement of the objectives linked to their functions, independently of the performance of the business areas that they control;

complaint


Article 14bParagraph 1Point(f,g,h,i,j,k,l)

(f) the remuneration of the senior officers in the risk management and compliance functions is overseen directly by the remuneration committee, where such a committee exists;(g) where remuneration is performance-related, the total amount of

Not compliant All these to

be provided in regulation in future

remuneration is based on a combination of the assessment as to the performance of the individual and of the business unit or UCITS concerned and as to their risks and of the overall results of the management company when assessing individual performance, taking into account financial and non-financial criteria;(h) the assessment of performance is set in a multi-year framework appropriate to the holding period recommended to the investors of the UCITS managed by the management company in order to ensure that the assessment process is based on the longer-term performance of the UCITS and its investment risks and that the actual payment of performance-based components of remuneration is spread over the same period;(i) guaranteed variable remuneration is

exceptional, occurs only in the context of hiring new staff and is limited to the first year of engagement;(j) fixed and variable components of total remuneration are appropriately balanced and the fixed component represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration components, including the possibility to pay no variable remuneration component;(k) payments relating to the early termination of a contract reflect performance achieved over time and are designed in a way that does not reward failure;(l) the measurement of performance used to calculate variable remuneration components or pools of variable remuneration components includes a comprehensive adjustment mechanism to

integrate all relevant types of current and future risks;

Article 14bParagraph 1Point (m,n)

(m) subject to the legal structure of the UCITS and its fund rules or instruments of incorporation, a substantial portion, and in any event at least 50 %, of any variable remuneration component consists of units of the UCITS concerned, equivalent ownership interests, or share-linked instruments or equivalent non-cash instruments with equally effective incentives as any of the instruments referred to in this point, unless the management of UCITS accounts for less than 50 % of the total portfolio managed by the management company, in which case the minimum of 50 % does not apply.

The instruments referred to in this point shall be subject to an appropriate retention policy designed

Not compliant


to align incentives with the interests of the management company and the UCITS that it manages and the investors of such UCITS. Member States or their competent authorities may place restrictions on the types and designs of those instruments or ban certain instruments as appropriate. This point shall apply to both the portion of the variable remuneration component deferred in line with point (n) and the portion of the variable remuneration component not deferred;

(n) a substantial portion, and in any event at least 40 %, of the variable remuneration component, is deferred over a period which is appropriate in view of the holding period recommended to the investors of the UCITS concerned and is correctly aligned with the nature of the risks of the UCITS in question.

The period referred to in this point shall be at least three years; remuneration payable under deferral arrangements vests no faster than on a pro-rata basis; in the case of a variable remuneration component of a particularly high amount, at least 60 % of the amount shall be deferred;

Article14b Paragraf 1Point(o,p,q,r)

(o) the variable remuneration, including the deferred portion, is paid or vests only if it is sustainable according to the financial situation of the management company as a whole, and justified according to the performance of the business unit, the UCITS and the individual concerned.

The total variable remuneration shall generally be considerably contracted where subdued or negative financial

Not compliant

To be provided by regulation in future

performance of the management company or of the UCITS concerned occurs, taking into account both current compensation and reductions in payouts of amounts previously earned, including through malus or clawback arrangements;

(p) the pension policy is in line with the business strategy, objectives, values and long-term interests of the management company and the UCITS that it manages.

If the employee leaves the management company before retirement, discretionary pension benefits shall be held by the management company for a period of five years in the form of instruments referred to in point (m). In the case of an employee reaching retirement, discretionary

pension benefits shall be paid to the employee in the form of instruments referred to in point (m), subject to a five-year retention period;

(q) staff are required to undertake not to use personal hedging strategies or remuneration- and liability-related insurance to undermine the risk alignment effects embedded in their remuneration arrangements;

(r) variable remuneration is not paid through vehicles or methods that facilitate the avoidance of the requirements laid down in this Directive.

Article 14b Paragraf 2

2. In accordance with Article 35 of Regulation (EU) No 1095/2010, ESMA may request information from competent authorities on the remuneration policies and practices referred to in Article 14a of this Directive.

N/A Duties of ESMA

ESMA shall, in close cooperation with EBA, include in its guidelines on remuneration policies provisions on how different sectoral remuneration principles, such as those set out in Directive 2011/61/EU of the European Parliament and of the Council ( 17 ) and in Directive 2013/36/EU of the European Parliament and of the Council ( 18 ), are to be applied where employees or other categories of personnel perform services subject to different sectoral remuneration principles.

Article 14bParagraph 3

3. The principles set out in paragraph 1 shall apply to any benefit of any type paid by the management company, to any amount paid directly by the UCITS itself, including performance fees, and to any transfer of units or shares of the UCITS, made for the benefit of those categories of staff, including senior management, risk takers, control functions and any

Not compliant


employee receiving total remuneration that falls into the remuneration bracket of senior management and risk takers, whose professional activities have a material impact on their risk profile or the risk profile of the UCITS that they manage.

Article 14bParagraph 4

4. Management companies that are significant in terms of their size or of the size of the UCITS that they manage, their internal organisation and the nature, scope and complexity of their activities shall establish a remuneration committee. The remuneration committee shall be constituted in a way that enables it to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk.

The remuneration committee that is, where appropriate, set up in accordance with the ESMA guidelines referred to in

Not compliant


Article 14a(4) shall be responsible for the preparation of decisions regarding remuneration, including those which have implications for the risk and risk management of the management company or the UCITS concerned and which are to be taken by the management body in its supervisory function. The remuneration committee shall be chaired by a member of the management body who does not perform any executive functions in the management company concerned. The members of the remuneration committee shall be members of the management body who do not perform any executive functions in the management company concerned.

If employee representation on the management body is provided for by national law, the remuneration committee shall include one or more employee representatives. When preparing its

decisions, the remuneration committee shall take into account the long-term interest of investors and other stakeholders and the public interest.

Article 15 Article 15

Management companies or, where relevant, investment companies shall take measures in accordance with Article 92 and establish appropriate procedures and arrangements to ensure that they deal properly with investor complaints and that there are no restrictions on investors exercising their rights in the event that the management company is authorised in a Member State other than the UCITS home Member State. Those measures shall allow investors to file complaints in the official language or one of the official languages of their Member State.

Article 11Para 5Subsection n)

dealing with any enquiries or complaints concerning an undertaking

Partially compliant

The Albanian Law imposes a duty to deal with complaints but does not go into as extensive detail on the matter as the UCITS Directive. Further requiremtns will be set by regulation. Cross border complaints will not be feasible until Albania is an EU member state

Management companies shall also establish appropriate procedures and arrangements to make information available at the request of the public or the competent authorities of the UCITS home Member State.


SECTION 4

Freedom of establishment and freedom to provide servicesArticle 161. Member States shall ensure that a management company, authorised by its home Member State, may pursue within their territories the activity for which it has been authorised, either by the establishment of a branch or under the freedom to provide services.Where a management company so authorised

Article 96Para 2

Article 156Para 2 1

A management company licensed in a foreign country to undertake management of publicly offered collective investment undertakings may be recognised by the Authority to carry on activity in relation to publicly offered collective investment undertakings in the Republic of Albania directly from its place of business or through the establishment of a branch.

The Authority may take

Fully compliant

proposes, without establishing a branch, only to market the units of the UCITS it manages as provided for in Annex II in a Member State other than the UCITS home Member State, without proposing to pursue any other activities or services, such marketing shall be subject only to the requirements of Chapter XI.

Subsection g)

into consideration when deciding recognition of foreign undertakings under this Article the existence of equivalent arrangements for recognition1 of foreign undertakings in the legislation of the applicant undertaking’s home country.

The sale in the Republic of Albania of the undertaking takes place either directly from the head office of the management company or alternative investment manager of the undertaking, through a representative office in the Republic of Albania or through a management company or alternative investment fund manager in the Republic of Albania or through such entity as shall be defined by the Authority

1 Provision for reciprocity (‘mutual recognition’ by each country of undertakings from the other country

by regulation or an entity recognised under Article 96, or an agent under Article 102.


2. Member States shall not make the establishment of a branch or the provision of the services subject to any authorisation requirement, to any requirement to provide endowment capital or to any other measure having equivalent effect.

Article 156Para 1Subsections b) to e)

b) Satisfactory supervisory cooperation has been established between the regulatory authority in the management company or alternative investment fund manager’s home country and the Authority in the Republic of Albania;c) The foreign collective investment undertaking is licensed for public offer in its home country;d) The undertaking and its management company or alternative investment fund manager are subject to adequate supervision in their home country;e) The undertaking and the management of it meet the requirements imposed for carrying on business in the home

Fully compliant

country and these requirements provide investors in the Republic of Albania with protection at least in line with the protection provided to them when investing in domestic publicly offered undertakings;


3. Subject to the conditions set out in this Article, a UCITS shall be free to designate, or to be managed by a management company authorised in a Member State other than the UCITS home Member State in accordance with the relevant provisions of this Directive, provided that such a management company complies with the provisions of:

(a) Article 17 or Article 18; and

(b) Articles 19 and 20.

Article 60 Para 1 and Article 60 para 1Subsection b)

1. An investment fund for public offer must only be created and established in the Republic of Albania by –b) A management company licensed by a foreign regulatory authority or a branch of such a management company that is recognised by the Authority under this Law.;

Fully compliant

Article 17 Article 17 A management company licensed under

Paragraph 1 1. In addition to meeting

the conditions imposed in Articles 6 and 7, a management company wishing to establish a branch within the territory of another Member State to pursue the activities for which it has been authorised shall notify the competent authorities of its home Member State accordingly.


this Law that intends to manage a publicly offered collective investment undertaking in another country, either from the Republic of Albania or through the establishment of a branch, must notify the Authority in writing to this effect.

Fully compliant

Article 17Paragraph 2Point (a,b,c,d)

2. Member States shall require every management company wishing to establish a branch within the territory of another Member State to provide the following information and documents, when effecting the notification provided for in paragraph 1:

(a) the Member State within the territory of which the management company plans to establish a branch;

Article 95 paragraph 2 and 3

The notification must contain a programme of operations stating the country or countries in which it intends to operate and the publicly offered collective investment undertakings it proposes to manage. The programme of activities must include the services to be provided, the company’s risk management systems and what measures will be taken to be in a position to make payments to share or

Fully compliant

(b) a programme of operations setting out the activities and services according to Article 6(2) and (3) envisaged and the organisational structure of the branch, which shall include a description of the risk management process put in place by the management company. It shall also include a description of the procedures and arrangements taken in accordance with Article 15;

(c) the address in the management company’s host Member State from which documents may be obtained; and

(d) the names of those responsible for the management of the branch.

unitholders, redeem shares or units, make information available and deal with client complaints.3. The notification must in addition contain the following information:a) The organisational structure of the branch;b) The address in the Home Country of the publicly offered collective investment undertakings from which documents may be obtained;c) The name and contact details of the persons responsible for management of the branch.


3. Unless the competent authorities of the management company’s

Artiicle 95 paragaph 4

Unless the Authority has reason to doubt the adequacy of the administrative structure

Partially compliant

Compensation scheme detail information not covered since

home Member State have reason to doubt the adequacy of the administrative structure or the financial situation of a management company, taking into account the activities envisaged, they shall, within two months of receiving all the information referred to in paragraph 2, communicate that information to the competent authorities of the management company’s host Member State and shall inform the management company accordingly. They shall also communicate details of any compensation scheme intended to protect investors.

Where the competent authorities of the management company’s home Member State refuse to communicate the information referred to in paragraph 2 to the competent authorities of the management

or the financial situation of a management company, taking into account the activities envisaged, they shall, within two months of receipt of a complete notification under subsection 1, transmit the notification to the regulatory authority of the country or countries specified in the notification. The Authority shall enclose confirmation that the management company is licensed to carry on activity in accordance with this Law and any applicable restrictions. The Authority shall immediately inform the management company of the transmission notification in writing.

such a sheme is presently not fesasible in Albania

As Albanian is not a member state, requirements concerning refusal to provide information are

company’s host Member State, they shall give reasons for such refusal to the management company concerned within two months of receiving all the information. The refusal or any failure to reply shall be subject to the right to apply to the courts in the management company’s home Member State.

Where a management company wishes to pursue the activity of collective portfolio management referred to in Annex II, the competent authorities of the management company’s home Member State shall enclose with the documentation sent to the competent authorities of the management company’s host Member State an attestation that the management company has been authorised pursuant to the provisions of this Directive, a description of the scope of the

not applicable

management company’s authorisation and details of any restriction on the types of UCITS that the management company is authorised to manage.


4. A management company which pursues activities by a branch within the territory of the host Member State shall comply with the rules drawn up by the management company’s host Member State pursuant to Article 14.


The provisions of Chapters III, IV, V, VII, VIII and IX apply to foreign management companies and branches of foreign management companies that establish publicly offered collective investment undertakings in the Republic of Albania from their home country and the management company is responsible to the Authority for compliance with these requirements.

Partiallly compliant

The Albanian Law does not have a provision applying Albanian remuneration rules set out in the Law to the branches of foreign entities


5. The competent authorities of the management company’s host Member State shall be responsible for supervising compliance with paragraph 4.

Article 195 paragraphh 1

The Authority shall supervise collective investment undertakings and their marketing, fund management companies, depositaries, alternative investment

Fully compliant

fund depositaries, Albanian branches of foreign management companies and alternative investment fund managers, sales agents of collective investment undertakings and the activities of recognised management companies and alternative investment fund managers in the Republic of Albania and shall take measures for effective supervision to ensure compliance with this Law and regulation and rules under this Law in accordance with Law No 9572 On the Financial Supervisory Authority and this Law


6. Before the branch of a management company starts business, the competent authorities of the management company’s host Member State shall, within two

Article 95 paragraphh 6

6. Where notification is given of establishment of a branch the Authority shall within two months of receiving such notification forward it to

Partially compliant

Albania is not a member state so cannot apply these requirements fully

months of receiving the information referred to in paragraph 2, prepare for supervising the compliance of the management company with the rules under their responsibility.

the foreign regulatory authority in the Host Country accompanied by information and, if appropriate, confirmation as set out in subsections 4 and 5. The Authority shall inform the management company that forwarding has taken place. The branch may commence business once it receives word from the relevant regulatory authority in the Host Country, or two months after the notification of establishment of the branch has been forwarded to the Host Country authority.


7.On receipt of a communication from the competent authorities of the management company’s host Member State or on the expiry of the period provided for in paragraph 6 without receipt of any communication from those authorities, the branch may be established and start

N/A Albania is not an EU member State so cannot apply this

business.Article 17Paragraph 8

8. In the event of change of any particulars communicated in accordance with paragraph 2(b), (c) or (d), a management company shall give written notice of that change to the competent authorities of the management company’s home Member State and of the management company’s host Member State at least one month before implementing the change so that the competent authorities of the management company’s home Member State may take a decision on the change under paragraph 3 and the competent authorities of the management company’s host Member State may do so under paragraph 6.

Article 95Para 5

A management company must give the Authority written notice of a change to any of the information identified in subsections 2 and 3 at least one month before implementing those changes or immediately after an unplanned change occurs. If the change would affect the management company’s compliance with the provisions of this Law, the Authority shall without undue delay inform the regulatory authority of the management company’s host country of the change.

Partially compliant


9. In the event of a change in the particulars communicated in accordance with the first subparagraph of paragraph


A management company must give the Authority written notice of a change to any of the information identified in subsections

Partially compliant

3, the competent authorities of the management company’s home Member State shall inform the competent authorities of the management company’s host Member State accordingly.

The competent authorities of the management company’s home Member State shall update the information contained in the attestation referred to in the third subparagraph of paragraph 3 and inform the competent authorities of the management company’s host Member State whenever there is a change in the scope of the management company’s authorisation or in the details of any restriction on the types of UCITS that the management company is authorised to manage.

2 and 3 at least one month before implementing those changes or immediately after an unplanned change occurs. If the change would affect the management company’s compliance with the provisions of this Law, the Authority shall without undue delay inform the regulatory authority of the management company’s host country of the change.


10.In order to ensure consistent harmonisation of this Article ESMA may develop draft regulatory technical standards to

N/A ESMA provision

specify the information to be notified in accordance with paragraphs 1, 2, 3, 8 and 9.


In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to establish standard forms, templates and procedures for the transmission of information in accordance with paragraphs 3 and 9.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the third subparagraph in accordance with Article 15 of Regulation (EU) No

1095/2010.Article 18Paragraph 1Point (a,b)

Article 181. Any management company wishing to pursue the activities for which it has been authorised within the territory of another Member State for the first time under the freedom to provide services shall communicate the following information to the competent authorities of the management company’s home Member State:(a) the Member State within the territory of which the management company intends to operate; and

(b) a programme of operations stating the activities and services referred to in Article 6(2) and (3) envisaged which shall include a description of the risk management process put in place by the management company. It shall also include a description of the procedures and arrangements taken in accordance with Article 15

Article 95 Paras 1 to 3

1. A management company licensed under this Law that intends to manage a publicly offered collective investment undertaking in another country, either from the Republic of Albania or through the establishment of a branch, must notify the Authority in writing to this effect. 2. The notification must contain a programme of operations stating the country or countries in which it intends to operate and the publicly offered collective investment undertakings it proposes to manage. The programme of activities must include the services to be provided, the company’s risk management systems and what measures will be taken to be in a position to make

Fully compliant

Note there is no sense of “doing something for the first time” versus “conducting business in a host country in which it already operates” in the Albanian Law

payments to share or unitholders, redeem shares or units, make information available and deal with client complaints.3. The notification must in addition contain the following information:a) The organisational structure of the branch;b) The address in the Home Country of the publicly offered collective investment undertakings from which documents may be obtained;c) The name and contact details of the persons responsible for management of the branch.


2. The competent authorities of the management company’s home Member State shall, within one month of receiving the information referred to in paragraph 1, forward it to the competent authorities of the management

Article 134Para 4

The Authority shall within one month following receipt of a complete notification under subsection 1, transmit the notification to the regulatory authority of the country or countries specified in the notification. The Authority shall enclose

Partially compliant

Since Albanian is not an EU member state requirements for cross border business by management companies cannot be fully applied

company’s host Member State.

The competent authorities of the management company’s home Member State shall also communicate details of any applicable compensation scheme intended to protect investors.

Where a management company wishes to pursue the activity of collective portfolio management as referred to in Annex II, the competent authorities of the management company’s home Member State shall enclose with the documentation sent to

Article 134paragraph 4

confirmation that the alternative investment fund management company is licensed to carry on activity in accordance with this Law. The Authority shall immediately inform the alternative investment fund management company of the transmission notification in writing.

The Authority shall within one month following receipt of a complete notification under subsection 1, transmit the notification to the regulatory authority of the country or countries specified in the notification. The Authority shall enclose

Non compliant

Partially compliant

Provision is made for full UCITS remuneration requirements to be established by way of regualtoin in the future

the competent authorities of the management company’s host Member State an attestation that the management company has been authorised pursuant to the provisions of this Directive, a description of the scope of the management company’s authorisation and details of any restriction on the types of UCITS that the management company is authorised to manage.

Notwithstanding Articles 20 and 93, the management company may then start business in the management company’s host Member State.

confirmation that the alternative investment fund management company is licensed to carry on activity in accordance with this Law Non

compliant


3. A management company which pursues activities under the freedom to provide services shall comply with the rules drawn up by the management company’s home Member State pursuant to Article 14.


The provisions of Chapters III, IV, V, VII, VIII, X and XI apply to foreign management companies and branches of foreign management companies that establish publicly

Fully compliant

offered collective investment undertakings in the Republic of Albania from their home country and the management company is responsible to the Authority for compliance with these requirements.


4. Where the content of the information communicated in accordance with paragraph 1(b) is amended, the management company shall give notice of the amendment in writing to the competent authorities of the management company’s home Member State and of the management company’s host Member State before implementing the change. The competent authorities of the management company’s home Member State shall update the information contained in the attestation referred to in paragraph 2 and inform

Article 95Para 5

A management company must give the Authority written notice of a change to any of the information identified in subsections 2 and 3 at least one month before implementing those changes or immediately after an unplanned change occurs. If the change would affect the management company’s compliance with the provisions of this Law, the Authority shall without undue delay inform the regulatory authority of the management company’s host country of the change.

Fully compliant

the competent authorities of the management company’s host Member State whenever there is a change in the scope of the management company’s authorisation or in the details of any restriction on the types of UCITS that the management company is authorised to manage.


5. In order to ensure consistent harmonisation of this Article ESMA may develop draft regulatory technical standards to specify the information to be notified in accordance with paragraphs 1, 2 and 4.


In order to ensure uniform conditions of application of

N/A ESMA provisions

this Article, ESMA may develop draft implementing technical standards to establish standard forms, templates and procedures for the transmission of information in accordance with paragraphs 2 and 4.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the third subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.


Article 191. A management company which pursues the activity of collective portfolio management on a cross-border basis by establishing a branch or under the freedom to provide services shall comply with the rules of the management company’s home Member State which relate to the organisation of the management company,

Fully compliant

There is no provision to this effect in the Albanian law since no distinction is made between a management company operating funds only in Albania and an Albanian management company

including delegation arrangements, risk-management procedures, prudential rules and supervision, procedures referred to in Article 12 and the management company’s reporting requirements. Those rules shall be no stricter than those applicable to management companies conducting their activities only in their home Member State.

operating funds both in Albania and a third country Abania is not an EU member state so cannot fully apply this

Article 19 Paragraph 2.3 Point (a,b,c,d,e,f

2. The competent authorities of the management company’s

Article 195 paragrap

The Authority shall supervise collective investment undertakings and their

Fully compliant

Law does not specifically specifically say that Albanian

) home Member State shall be responsible for supervising compliance with paragraph 1.

3. A management company which pursues the activity of collective portfolio management on a cross-border basis by establishing a branch or in accordance with the freedom to provide services shall comply with the rules of the UCITS home

h 1

Article 60 , paragraph 1 a) and b)

marketing, fund management companies, depositaries, alternative investment fund depositaries, Albanian branches of foreign management companies and alternative investment fund managers, sales agents of collective investment undertakings and the activities of recognised management companies and alternative investment fund managers in the Republic of Albania and shall take measures for effective supervision to ensure compliance with this Law and regulation and rules under this Law

An investment fund for public offer must only be created and established in the Republic of Albania by –a) A management

Fully compliant

management companies operating abroad will be supervised by their home Authority but that is the effect of the law

A UCITS can only be created as an investment fund for public offer under the Law.

Chapters IV, V, VI, VII and VIII require an open ended publicly offered fund

Member State which relate to the constitution and functioning of the UCITS, namely the rules applicable to:

(a) the setting up and authorisation of the UCITS;

(b) the issuance and redemption of units and shares;

(c) investment policies and limits, including the calculation of total exposure and leverage;

(d) restrictions on borrowing, lending and uncovered sales;

(e) the valuation of assets and the accounting of the UCITS;

(f) the calculation of the issue or redemption price, and errors in the calculation of the net asset value and related investor compensation;

Article 1 c)

company licensed under this Law;


The purpose of this Law is to regulate –

c)the establishment, constitution and operation of collective investment undertakings in the Republic of Albania;

whether created by a domestic or foreign management company to comply with the requirements listed under UCITS Directive Article 19 pargraph 3 (a) to (f) but are too long to be inserted into this document

Article 19Paragraph 3 Point(g,h,i,j,l,m,n,o)

(g) the distribution or reinvestment of the income;

(h) the disclosure and reporting requirements of the UCITS, including the prospectus, key investor information and periodic reports;

(i) the arrangements made for marketing;

(j) the relationship with unit-holders;

(k)the merging and restructuring of the UCITS;

(l)the winding-up and liquidation of the UCITS;

(m) where applicable, the content of the unit-holder register;

(n) the licensing and

Refer comment above

supervision fees regarding the UCITS; and

(o) the exercise of unit-holders’ voting rights and other unit-holders’ rights in relation to points (a) to (m).


4. The management company shall comply with the obligations set out in the fund rules or in the instruments of incorporation, and the obligations set out in the prospectus, which shall be consistent with the applicable law as referred to in paragraphs 1 and 3.

Article 23 para 7

A management company is liable to the investors in a publicly offered collective investment undertaking for failure to perform or failure to properly perform any activity or task for which it is responsible for under this Law, regulations under this Law and the constituting instrument and CIU prospectus and management agreement of a publicly offered collective investment undertaking. Limitation of liability in any manner shall be null and void.

Fully compliant

Article 19 Paragraph 5,6

5. The competent authorities of the UCITS home Member State shall be responsible for

Article 195 para 1

The Authority shall supervise collective investment undertakings and their marketing, fund

Partially compliant

supervising compliance with paragraphs 3 and 4.

6. The management company shall decide and be responsible for adopting and implementing all the arrangements and organisational decisions which are necessary to ensure compliance with the rules which relate to

Article 23para 7

management companies, depositaries, alternative investment fund depositaries, Albanian branches of foreign management companies and alternative investment fund managers, and sales agents of collective investment undertakings and the activities of recognised management companies and alternative investment fund managers in the Republic of Albania and shall take measures for effective supervision to ensure compliance with this Law and regulation and rules under this Law in accordance with Law No 9572 On the Financial Supervisory Authority and this Law by:

A management company is liable to the investors in a publicly offered collective

Partially compliant

Not explicitly stated.

the constitution and functioning of the UCITS and with the obligations set out in the fund rules or in the instruments of incorporation, and with the obligations set out in the prospectus.

investment undertaking for failure to perform or failure to properly perform any activity or task for which it is responsible for under this Law, regulations under this Law and the constituting instrument and CIU prospectus and management agreement of a publicly offered collective investment undertaking. Limitation of liability in any manner shall be null and void.

Article 19Paragraph 7,8

7. The competent authorities of the management company’s home Member State shall be responsible for supervising the adequacy of the arrangements and organisation of the management company so that the management company is in a position to comply with the obligations and rules which relate to the constitution and functioning of all the

Article 195Para 1

The Authority shall supervise collective investment undertakings and their marketing, fund management companies, depositaries, alternative investment fund depositaries, Albanian branches of foreign management companies and alternative investment fund managers, sales agents of collective investment

Fully compliant

UCITS it manages.

8. Member States shall ensure that any management company authorised in a Member State is not subject to any additional requirement established in the UCITS home Member State in respect of the subject matter of this Directive, except in the cases expressly referred to in this Directive.

undertakings and the activities of recognised management companies and alternative investment fund managers in the Republic of Albania and shall take measures for effective supervision to ensure compliance with this Law and regulation and rules under this Law in accordance with Law No 9572 On the Financial Supervisory Authority and this Law

Not applicable

Albania is not an EU member state so cannot fully apply this

Article 20Paragraph 1Point

Article 20

1. Without prejudice to Article 1. A management Fully

(a,b) Article 5, a management company which applies to manage a UCITS established in another Member State shall provide the competent authorities of the UCITS home Member State with the following documentation: (a) the written contract with the depositary referred to in Article 22(2);

(b) information on delegation arrangements regarding functions of investment management and administration referred to in Annex II.

95 Paras 1 to 3

company licensed under this Law that intends to manage a publicly offered collective investment undertaking in another country, either from the Republic of Albania or through the establishment of a branch, must notify the Authority in writing to this effect. 2. The notification must contain a programme of operations stating the country or countries in which it intends to operate and the publicly offered collective investment undertakings it proposes to manage. The programme of activities must include the services to be provided, the company’s risk management systems and what measures will be taken to be in a position to make payments to share or unitholders, redeem shares or units, make information available

compliant

If a management company already manages other UCITS of the same type in the UCITS home Member State, reference to the documentation already provided shall be sufficient.

and deal with client complaints.3. The notification must in addition contain the following information:a) The organisational structure of the branch;b) The address in the Home Country of the publicly offered collective investment undertakings from which documents may be obtained;c) The name and contact details of the persons responsible for management of the branch;d) The written contract with the depositary;e) Information on delegation arrangements regarding investment management and administration of the collective investment undertaking.


2. In so far as it is necessary to ensure compliance with the rules for which they are

Non compliant

Albania is not an EU member state so cannot yet apply this

responsible, the competent authorities of the UCITS home Member State may ask the competent authorities of the management company’s home Member State for clarification and information regarding the documentation referred to in paragraph 1 and, based on the attestation referred to in Articles 17 and 18, as to whether the type of UCITS for which authorisation is requested falls within the scope of the management company’s authorisation. Where applicable, the competent authorities of the management company’s home Member State shall provide their opinion within 10 working days of the initial request.


3. The competent authorities of the UCITS home Member State may refuse the application of the management company only if:

Article 96 para 3

Such recognition may only be granted if -a) The management company of the collective investment undertaking or its home country regulatory authority has

Partially compliant

(a) the management company does not comply with the rules falling under their responsibility pursuant to Article 19;

(b) the management company is not authorised by the competent authorities of its home Member State to manage the type of UCITS for which authorisation is requested; or

(c) the management company has not provided the documentation referred to in paragraph 1.

Before refusing an application, the competent authorities of the UCITS home Member State shall consult the competent authorities of the management company’s home Member State.

transmitted to the Authority such information as the Authority prescribes or requires;b) Satisfactory supervisory cooperation has been established between the regulatory authority in the management company’s home country and the Authority in the Republic of Albania;c) The management company is subject to adequate supervision in their home country;d) The management company meets the requirements imposed for carrying on business in its home country and these requirements provide investors in the Republic of Albania with protection at least in line with the protection provided to them when investing with domestic management companies;e) The management company of the

undertaking makes the arrangements necessary to be able in the Republic of Albania to make payments to the participants, redeem participations and provide the information which the undertaking is required to prepare under the Law in its home country;f) The sale in the Republic of Albania of the undertaking takes place either directly from the head office of the management company of the undertaking, through a representative office in the Republic of Albania or through a management company licensed either in the Republic of Albania or in another country or of a management company recognised under this Article, or an agent under Article 102.

Article 20Paragraph 4,5

4. Any subsequent material modifications of the documentation

Article 95Para 8

A management company must inform the Authority and the Host Country regulatory

Fully compliant

referred to in paragraph 1 shall be notified by the management company to the competent authorities of the UCITS home Member State.

5. In order to ensure consistent harmonisation of this Article, ESMA may develop draft regulatory technical standards to determine the information to be provided to the competent authorities in the application for managing a UCITS established in another Member State.The Commission may adopt the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.

authority in writing before making changes to previous disclosures. Where a branch has been established, information on any change must be provided at least one month before the change is implemented.

N/A ESMA provisions

In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to establish standard forms, templates and procedures for such provision of information.Power is conferred on the Commission to adopt the implementing technical standards referred to in the third subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.


Article 211. A management company’s host Member State may, for statistical purposes, require all management companies with branches within its territory to report periodically on their activities pursued in that host Member State to the competent authorities of that host Member State.

Article 218Para 1

The Authority may require a foreign alternative investment fund manager carrying on business under Article 132 and Article 135 or foreign management company carrying on business under Article 156 to submit reports on its activity.

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2. A management company’s host Member State may require management companies pursuing business within its territory through the establishment of a branch or under the freedom to provide services, to provide the information necessary for the monitoring of their compliance with the rules under the responsibility of the management company’s host Member State that apply to them.

Those requirements shall not be more stringent than those which the same Member State imposes on management companies authorised in that Member State for the monitoring of their compliance with the same standards.

Management companies shall ensure that the procedures and arrangements referred to in Article 15 enable the

Article 218Para 2

Article 96 subsection 9

The Authority may request such information for foreign alternative investment fund managers and foreign management companies and their branches as is necessary to verify compliance with the rules applied to their business in the Republic of Albania.

A foreign fund management company or branch of a foreign fund management company must ensure

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This power is given in the Albanian law but reporting requirements for these entities are the same (as relevant to their activities) as for domestic entities of the same type

competent authorities of the UCITS home Member State to obtain directly from the management company the information referred to in this paragraph.

that it is able to provide the Authority with the information necessary for the monitoring of their compliance with this Law and regulations under this Law as required.


3. Where the competent authorities of a management company’s host Member State ascertain that a management company that has a branch or provides services within its territory is in breach of one of the rules under their responsibility, those authorities shall require the management company concerned to put an end to that breach and inform the competent authorities of the management company’s home Member State thereof.

Article 219Para 2

Before an Administrative Order is issued under subsection 1, the regulatory authority of the foreign alternative investment fund manager or management company’s Home Country shall be alerted by the Authority and given the opportunity to take measures to bring the violations to an end.

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4. If the management company concerned refuses to provide the management company’s

Article 219Para 2

Before an Administrative Order is issued under subsection 1, the regulatory

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host Member State with information falling under its responsibility, or fails to take the necessary steps to put an end to the breach referred to in paragraph 3, the competent authorities of the management company’s host Member State shall inform the competent authorities of the management company’s home Member State accordingly. The competent authorities of the management company’s home Member State shall, at the earliest opportunity, take all appropriate measures to ensure that the management company concerned provides the information requested by the management company’s host Member State pursuant to paragraph 2 or puts an end to the breach. The nature of those measures shall be communicated to the competent authorities of the management

authority of the foreign alternative investment fund manager or management company’s Home Country shall be alerted by the Authority and given the opportunity to take measures to bring the violations to an end.

company’s host Member State.

Article 21Paragraph 5Point (a,b)

5. If, despite the measures taken by the competent authorities of the management company's home Member State or because such measures prove to be inadequate or are not available in the Member State in question, the management company continues to refuse to provide the information requested by the management company's host Member State pursuant to paragraph 2, or persists in breaching the legal or regulatory provisions, referred to in the same paragraph, in force in the management company's host Member State, the competent authorities of the management company's host Member State may take either of the following actions:

(a) after informing the

Article 219Paras 1, 3 and 4

1. The Authority may issue a foreign alternative investment fund manager or their branch carrying on business under Article 132 and Article 135 or foreign management company or their branch carrying on business, under Article 156 with a rectification Administrative Order, or an Administrative Order requiring the foreign alternative investment fund manager or foreign management company or branch to cease business in the Republic of Albania, if that business is carried out in contravention of this Law or regulations under this Law.3. If measures taken under subsection 2 are not sufficient to bring the violations to an end, the Authority may take such measures as are necessary, including

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As Albania is not an EU member state it cannot refer non-compliance to ESMA

competent authorities of the management company's home Member State, take appropriate measures, including under Articles 98 and 99, to prevent or penalise further irregularities and, in so far as necessary, to prevent that management company from initiating any further transaction within its territory. Member States shall ensure that within their territories it is possible to serve the legal documents necessary for those measures on management companies. Where the service provided within the management company's host Member State is the management of a UCITS, the management company's host Member State may require the management company to cease managing that UCITS; or

(b) where they consider that the competent authority of the

measures to prevent new contraventions. Before a decision is taken, the Authority must alert the regulatory authority of the alternative investment fund manager or management company’s Home Country.4. The Authority may take requisite measures to safeguard financial stability and the integrity of the market or to protect investors in the Republic of Albania, if the rules of the alternative investment fund manager or management company’s Home Country are not complied with. Before measures are taken, the regulatory authority of the alternative investment fund manager or management company’s Home Country shall be alerted and given the

management company's home Member State has not acted adequately, refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.

opportunity to take steps to bring the violations to an end.


6. Any measure adopted pursuant to paragraphs 4 or 5 involving measures or penalties shall be properly justified and communicated to the management company concerned. Every such measure shall be subject to the right to apply to the courts in the Member State which adopted it.

Article 213 para 1

Before giving an Administrative Order or making a revocation, the Authority must –a) give a warning notice in writing of its intention to do so to the person concerned and afford them the opportunity of making representations in writing; andb) take such steps as it considers reasonably practicable to bring the notice to the attention of other persons who are, in its opinion, likely to be affected; andc) in addition to the warning, instruct the licensed or registered person to eliminate

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As a matter of general law, any decisions by the Authority can be the subject of appeal to the court so this does not have to be stated

violations or implement measures relating to the taking of the licence or registration revocation warning decision within a time limit specified in the Administrative Order. The Authority shall lay down the restrictions or conditions to be complied with by the licensed or registered person in the time period specified by the Authority.


7. Before following the procedure laid down in paragraphs 3, 4 or 5, the competent authorities of the management company's host Member State may, in emergencies, take any precautionary measures necessary to protect the interests of investors and others for whom services are provided. The Commission, ESMA, and the competent authorities of the other Member States concerned shall be informed of such measures at the earliest

Article 219Para 4

The Authority may take requisite measures to safeguard financial stability and the integrity of the market or to protect investors in the Republic of Albania, if the rules of the alternative investment fund manager or management company’s Home Country are not complied with. Before measures are taken, the regulatory authority of the alternative investment fund manager or management

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Albania is not an EU member state so this cannot be fully applied

opportunity.

After consulting the competent authorities of the Member States concerned, the Commission may decide that the Member State in question must amend or abolish those measures, without prejudice to power of ESMA under Article 17 of Regulation (EU) No 1095/2010.

company’s Home Country shall be alerted and given the opportunity to take steps to bring the violations to an end.


8. The competent authorities of the management company’s home Member State shall consult the competent authorities of the UCITS home Member State before withdrawing the authorisation of the management company. In such cases, the competent authorities of the UCITS home Member State shall take appropriate measures to safeguard investors’ interests. Those measures may includedecisions preventing the management company

Article 95 para 10

The Authority shall consult the foreign regulatory authority of the home country of any foreign undertaking for collective investment in transferable securities managed by a management company licensed by the Authority before withdrawing the authorisation of the management company.

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concerned from initiating any further transactions within its territory.

Every two years the Commission shall issue a report on such cases.


9. Member States shall inform ESMA and the Commission of the number and type of cases in which they refuse authorisation under Article 17 or an application under Article 20 and of any measures taken in accordance with paragraph 5 of this Article.Every two years the Commission shall issue a report on such cases.

N/A ESMA requirements


CHAPTER IV

OBLIGATIONS REGARDING THE DEPOSITARYArticle 221. An investment company and, for each of the common funds that it manages, a management company shall ensure that


A publicly offered collective investment undertaking must appoint a single depositary.The depositary must be

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a single depositary is appointed in accordance with this Chapter.

licensed by the Authority as a depositary to publicly offered collective investment undertakings.


2. The appointment of the depositary shall be evidenced by a written contract.

That contract shall, inter alia, regulate the flow of information deemed to be necessary to allow the depositary to perform its functions for the UCITS for which it has been appointed as depositary, as laid down in this Directive and in other relevant laws, regulations and administrative provisions.

Article 36Para 4

The appointment of the depositary must be by written contract signed by both parties in the presence of a notary public. The contract must cover the core obligations of each party as required by this Law and regulations under this Law. That contract must include provisions regulating the flow of information necessary to allow the depositary to perform its functions for the publicly offered collective investment undertaking.

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Article 22Paragraph 3Point (a,b,c,d,e)

3. The depositary shall:

(a) ensure that the sale, issue, repurchase,

Article 43

ensure that the sale, issue, repurchase,

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redemption and cancellation of units of the UCITS are carried out in accordance with the applicable national law and the fund rules or instruments of incorporation;

(b) ensure that the value of the units of the UCITS is calculated in accordance with the applicable national law and the fund rules or the instruments of incorporation;

(c) carry out the instructions of the management company or an investment company, unless they conflict with the applicable national law, or with the fund rules or the instruments of incorporation;

(d) ensure that in transactions involving the assets of the UCITS any consideration is remitted

Para 2Subsection a)




redemption and cancellation of shares or units are carried out in accordance with this Law and the constituting instrument of the undertaking;

ensure that the value of the shares or units of the undertaking is calculated in accordance with this Law, regulations under this Law and the constituting instrument of the undertaking;

carry out the instructions of the management company unless they conflict with this Law or regulations under this Law or with the constituting instrument of the undertaking;

ensure that in transactions involving the assets of the undertaking any consideration is remitted to the

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to the UCITS within the usual time limits;

(e) ensure that the income of the UCITS is applied in accordance with the applicable national law and the fund rules or the instruments of incorporation.


undertaking within the usual time limits;

ensure that the income of the undertaking is applied in accordance with this Law and the constituting instrument of the undertaking;


4. The depositary shall ensure that the cash flows of the UCITS are properly monitored, and, in particular, that all payments made by, or on behalf of, investors upon the subscription of units of the UCITS have been received, and that all cash of the UCITS has been booked in cash accounts that are:

(a) opened in the name of the UCITS, of the management company acting on behalf of the UCITS, or of the depositary acting on behalf of the UCITS;

(b) opened at an entity referred to in points (a), (b)

Article 43Para 2Subsections f) to h)

f) ensure that the cash flows of the undertaking are properly monitored, and, in particular, that all payments made by, or on behalf of, investors upon the subscription of shares or units in publicly offered collective investment undertakings have been received, and that all cash of the publicly offered collective investment undertaking has been booked in cash accounts in the name of the undertaking, the management company on behalf of the undertaking or the depositary on behalf of

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and (c) of Article 18(1) of Commission Directive 2006/73/EC ( 19 ); and

(c) maintained in accordance with the principles set out in Article 16 of Directive 2006/73/EC.

Where the cash accounts are opened in the name of the depositary acting on behalf of the UCITS, no cash of the entity referred to in point (b) of the first subparagraph and none of the own cash of the depositary shall be booked on such accounts.

the undertaking;

g) In relation to accounts opened under subsection f) the depositary must take the necessary steps to ensure that client funds deposited in a central bank, a commercial bank in the Republic of Albania, a bank licensed in another country or a UCITS money market fund are held in an account or accounts identified separately from any accounts used to hold funds belonging to the depositary or to other funds or clients of the depositary;

h) Where the cash accounts are opened in the name of the depositary acting on behalf of the undertaking, no cash of the entities referred to in subsection g) and none of the own cash of the depositary are booked on such accounts;

Article 22Paragraph 5Point (a/i,ii)

5. The assets of the UCITS shall be entrusted to the depositary for safekeeping as follows:

(a) for financial instruments that may be held in custody, the depositary shall:

(i) hold in custody all financial instruments that may be registered in a financial instruments account opened in the depositary’s books and all financial instruments that can be physically delivered to the depositary;

(ii) ensure that all financial instruments that can be registered in a financial instruments account opened in the depositary’s books are registered in the depositary’s books within segregated accounts in accordance with the principles set out in Article 16 of Directive 2006/73/EC, opened in the name of the UCITS or the management company acting on behalf of

Article 43Para 3Subsection a)Points (i) and (ii)

The assets of a publicly offered collective investment undertaking must be entrusted to the depositary for safekeeping as follows:a) for financial instruments that may be held in custody, the depositary must -

i) hold in custody all financial instruments that may be registered in a financial instruments account opened in the depositary’s books and all financial instruments that can be physically delivered to the depositary;

ii) ensure that all financial instruments that can be registered in a financial instruments account opened in the depositary’s books are registered in the depositary’s books

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the UCITS, so that they can be clearly identified as belonging to the UCITS in accordance with the applicable law at all times;

within segregated accounts, opened in the name of the publicly offered collective investment undertaking or the management company acting on behalf of the undertaking, so that they can be clearly identified as belonging to the undertaking in accordance with the applicable law at all times;

Article 22Paragraph 5Point (b/i,ii)

(b) for other assets, the depositary shall:

(i) verify the ownership by the UCITS, or by the management company acting on behalf of the UCITS, of such assets by assessing whether the UCITS or the management company acting on behalf of the UCITS holds the ownership based on information or documents provided by the UCITS or

Article 43Para 3Subsection b)Points (i) and (ii)

b) for other assets, the depositary must:

i) verify the ownership by the publicly offered collective investment undertaking, or by the management company acting on behalf of the undertaking, of such assets by assessing whether the publicly offered collective investment

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by the management company and, where available, on external evidence;

(ii) maintain a record of those assets for which it is satisfied that the UCITS or the management company acting on behalf of the UCITS holds the ownership and keep that record up to date.

undertaking or the management company acting on behalf of the undertaking holds the ownership based on information or documents provided by the undertaking or by the management company and, where available, on external evidence;

ii.maintain a record of those assets for which it is satisfied that the publicly offered collective investment undertaking or the fund management company acting on behalf of the undertaking holds the ownership and keep that record up to date and provide the management company with a comprehensive

inventory.


6. The depositary shall provide the management company or the investment company, on a regular basis, with a comprehensive inventory of all of the assets of the UCITS.

Article 43Para 3Subsection b)Point (ii)

maintain a record of those assets for which it is satisfied that the publicly offered collective investment undertaking or the fund management company acting on behalf of the undertaking holds the ownership and keep that record up to date and provide the management company with a comprehensive inventory.

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Article 22Paragraph 7Point(a,b,c,d)

7. The assets held in custody by the depositary shall not be reused by the depositary, or by any third party to which the custody function has been delegated, for their own account. Reuse comprises any transaction of assets held in custody including, but not limited to, transferring, pledging, selling and lending.

The assets held in custody

Article 43Para 5Subsections a) to e)

The assets held in custody by the depositary must not be reused by the depositary, or by any third party to which the custody function has been delegated, for their own account. Reuse comprises any transaction of assets held in custody including, but not limited to, transferring, pledging, selling and lending. The assets

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by the depositary are allowed to be reused only where:

(a) the reuse of the assets is executed for the account of the UCITS;

(b) the depositary is carrying out the instructions of the management company on behalf of the UCITS;

(c) the reuse is for the benefit of the UCITS and in the interest of the unit holders; and

(d) the transaction is covered by high-quality and liquid collateral received by the UCITS under a title transfer arrangement.

The market value of the collateral shall, at all times, amount to at least the market value of the reused assets plus a

held in custody by the depositary are allowed to be reused only where:

a) the reuse of the assets is executed for the account of the publicly offered collective investment undertaking;

b) the depositary is carrying out the instructions of the management company on behalf of the publicly offered collective investment undertaking;

c) the reuse is for the benefit of the undertaking and in the interest of the share or unit holders; and

d) the transaction is covered by high-quality and liquid collateral received by the publicly offered collective investment undertaking under a title transfer arrangement;

premium. e) the market value of the collateral at all times amounts to at least the market value of the reused assets plus a premium.


8. Member States shall ensure that in the event of insolvency of the depositary and/or of any third party located in the Union to which custody of UCITS assets has been delegated, the assets of a UCITS held in custody are unavailable for distribution among, or realisation for the benefit of, creditors of such a depositary and/or such a third party.

Article 83 para 4

In the event of insolvency of the alternative investment fund depositary or depositary and/or of any third party to which custody of assets of a collective investment undertaking or sub-fund has been delegated, the assets of the collective investment undertaking or sub-fund are not available for distribution among, or realisation for the benefit of, creditors of such a depositary and/or such a third party.

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Article 22aParagraph 1,2Point (a,b,c)

Article 22a

1.The depositary shall not delegate to third parties the functions referred to in Article 22(3) and (4).

Article 45Para 1

The depositary must not delegate to third parties the functions referred to in Article 43 subsection 2 a) to h).

The depositary may

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2. The depositary may delegate to third parties the functions referred to in Article 22(5) only where:

(a) the tasks are not delegated with the intention of avoiding the requirements laid down in this Directive;

(b) the depositary can demonstrate that there is an objective reason for the delegation;

(c) the depositary has exercised all due skill, care and diligence in the selection and the appointment of any third party to whom it intends to delegate parts of its tasks, and continues to exercise all due skill, care and diligence in the periodic review and ongoing monitoring of any third party to which it has delegated parts of its tasks and of the arrangements of the third party in respect of the

Article 45Para 2




delegate to third parties the functions referred to in Article 43 subsection 3 but only where:

the tasks are not delegated with the intention of avoiding the requirements laid down in this Law and regulations under this Law;

the depositary can demonstrate that there is an objective reason for the delegation;

the depositary has exercised all due skill, care and diligence in the selection and the appointment of any third party to whom it intends to delegate parts of its tasks, and continues to exercise all due skill, care and diligence in the periodic review and ongoing monitoring of any third party to which it has delegated parts of its tasks and of the arrangements of the

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matters delegated to it. third party in respect of the matters delegated to it.

Article 22aParagraph 3Point (a,b/i,ii)

3. The functions referred to in Article 22(5) may be delegated by the depositary to a third party only where that third party at all times during the performance of the tasks delegated to it:

(a) has structures and expertise that are adequate and proportionate to the nature and complexity of the assets of the UCITS or the management company acting on behalf of the UCITS which have been entrusted to it;(b) for custody tasks referred to in point (a) of Article 22(5), is subject to:

(i) effective prudential regulation, including minimum capital requirements, and supervision in the

Article 45Para 3


Article 45Para 3Subsection b)Point (i)

The functions referred to in Article 43 subsection 3 may be delegated by the depositary to a third party only where that third party at all times during the performance of the tasks delegated to it:

has structures and expertise that are adequate and proportionate to the nature and complexity of the assets of the publicly offered collective investment undertaking which have been entrusted to it;

for custody tasks referred to in Article 43 subsection 3 a) is subject to:

effective prudential regulation, including minimum capital requirements, and

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jurisdiction concerned;

(ii) an external periodic audit to ensure that the financial instruments are in its possession;

Point (ii)supervision in the jurisdiction concerned;

an external periodic audit to ensure that the financial instruments are in its possession;

Article 22aParagraph 3Point (c,d,e/a,b)

(c) segregates the assets of the clients of the depositary from its own assets and from the assets of the depositary in such a way that they can, at any time, be clearly identified as belonging to clients of a particular depositary;

(d) takes all necessary steps to ensure that in the event of insolvency of the third party, assets of a UCITS held by the third party in custody are unavailable for distribution among, or realisation for the benefit of, creditors of the third party; and

(e) complies with the general obligations and



Article 45

segregates the assets of the clients of the depositary from its own assets and from the assets of the depositary in such a way that they can, at any time, be clearly identified as belonging to clients of a particular depositary;

takes all necessary steps to ensure that in the event of insolvency of the third party, assets of a publicly offered collective investment undertaking held by the third party in custody are unavailable for distribution among, or realisation for the benefit of, creditors of the third party; and

complies with the general obligations and

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prohibitions laid down in Article 22(2), (5) and (7) and in Article 25.

Notwithstanding point (b)(i) of the first subparagraph, where the law of a third country requires that certain financial instruments be held in custody by a local entity and no local entities satisfy the delegation requirements laid down in that point, the depositary may delegate its functions to such a local entity only to the extent required by the law of that third country, only for as long as there are no local entities that satisfy the delegation requirements, and only where:

(a) the investors of the relevant UCITS are duly informed, prior to their investment, of the fact that such a delegation is required due to legal

Para 3Subsection d)

Article 45Para 4


prohibitions set out in Article 36 subsections 3 and 4, Article 43 subsections 1, 4 and 5 and Article 44 subsections 1 and 2.

Notwithstanding subsection 3, where the law of another country requires that certain financial instruments be held in custody by a local entity and no local entities satisfy the delegation requirements laid down in that point, the depositary may delegate its functions to such a local entity only to the extent required by the law of that country, only for as long as there are no local entities that satisfy the delegation requirements, and only where:

a) the investors of the relevant publicly offered collective investment undertaking are duly informed, prior to their investment, of the fact

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constraints in the law of the third country, of the circumstances justifying the delegation and of the risks involved in such a delegation;

(b) the investment company, or the management company on behalf of the UCITS, has instructed the depositary to delegate the custody of such financial instruments to such a local entity.

The third party may, in turn, sub-delegate those functions, subject to the same requirements. In such a case, Article 24(2) shall apply mutatis mutandis to the relevant parties.


Article 46 Para 1

that such a delegation is required due to legal constraints in the law of the other country, of the circumstances justifying the delegation and of the risks involved in such a delegation;

b) the management company on behalf of the publicly offered collective investment undertaking, has instructed the depositary to delegate the custody of such financial instruments to such a local entity.

The depositary is liable to the publicly offered collective investment undertaking and to the share or unit holders of the undertaking for the loss by the depositary or a third party to whom the custody of financial instruments held in custody in accordance with Article 43 subsection 3 has been delegated or sub-delegated.

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Article 22a Paragraph 4

4. For the purposes of this Article, the provision of services as specified by Directive 98/26/EC of the European Parliament and of the Council ( 20 ) by securities settlement systems as designated for the purposes of that Directive or the provision of similar services by third-country securities settlement systems shall not be considered to be a delegation of custody functions.

Article 45Para 5

For the purposes of this Article, the provision of services by securities settlement systems as designated for the purposes of settlement or the provision of similar services by third-country securities settlement systems shall not be considered to be a delegation of custody functions.

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Article 231. A depositary shall either have its registered office or be established in the UCITS home Member State.

See Article 37 in the next section

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2. The depositary shall be:

(a) a national central bank;

(b) a credit institution

Article 37Para 1Subsections a) to c)

The depositary of a publicly offered collective investment undertaking must be –a) A bank licensed by the Bank of Albania or a branch of a foreign bank with a registered office in the Republic of

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The Albanian Law does not provide for the central bank to act as depositary and does not allow an entity other than a bank to

authorised in accordance with Directive 2013/36/EU; or

(c) another legal entity, authorised by the competent authority under the law of the Member State to carry out depositary activities under this Directive, which is subject to capital adequacy requirements not less than the requirements calculated depending on the selected approach in accordance with Article 315 or 317 of Regulation (EU) No 575/2013 of the European Parliament and of the Council ( 21 ) and which has own funds not less than the amount of initial capital under Article 28(2) of Directive 2013/36/EU.

Albania which is licensed by the Bank of Albania to provide custodial, depositary and fiduciary services; orb) In relation to an undertaking for collective investment in transferable securities established in a foreign country under Article 95, other categories of institutions that are eligible to be a depositary for an undertaking for collective investment in transferable securities under the law of that country;

c) In the case of a bank or branch of a foreign bank under subsection a) licensed by the Authority to undertake custody of financial instruments under Law 9879 on Securities.

provide depositary services in Albania

Article 23 Paragraph 2Point

A legal entity as referred to in point (c) of the first subparagraph shall be

Article 37Para 2

The depositary must meet the following minimum requirements:

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Licensed banks are subject to prudential regulation

(a,b,c,d) subject to prudential regulation and ongoing supervision and shall satisfy the following minimum requirements:

(a) it shall have the infrastructure necessary to keep in custody financial instruments that can be registered in a financial instruments account opened in the depositary’s books;

(b) it shall establish adequate policies and procedures sufficient to ensure compliance of the entity, including its managers and employees, with its obligations under this Directive;

(c) it shall have sound administrative and accounting procedures, internal control mechanisms, effective procedures for risk assessment and effective




a) Having the infrastructure necessary to keep in custody financial instruments that can be registered in a financial instruments account opened in the depositary’s books;

b) Having adequate policies and procedures sufficient to ensure compliance of the entity, including its managers and employees, with its obligations under this Law;

Having sound administrative and accounting procedures, internal control mechanisms, effective procedures for risk assessment and effective control and safeguard arrangements for information processing systems;

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Note that in the Albanian Law these requirements apply to all entities undertaking depositary activiies for publicly offered CIU, not just those delineated in Article 37.1.c

control and safeguard arrangements for information processing systems;

(d) it shall maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest;


Having effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest;

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Article 23 Paragraph 2Point (e,f,g,h,i)

(e) it shall arrange for records to be kept of all services, activities and transactions that it undertakes, which shall be sufficient to enable the competent authority to fulfil its supervisory tasks and to perform the enforcement actions provided for in this Directive;

(f) it shall take reasonable steps to ensure continuity and regularity in the performance of its depositary functions by employing appropriate and proportionate


Article 37Para 2Subsection f)

Having arrangements for records to be kept of all services, activities and transactions that it undertakes, which must be sufficient to enable the Authority to fulfil its supervisory tasks and to perform the enforcement actions provided for in this Law;

taking all reasonable steps to ensure continuity and regularity in the performance of its depositary functions by employing appropriate and proportionate systems, resources and

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systems, resources and procedures including to perform its depositary activities;

(g) all members of its management body and senior management, shall, at all times, be of sufficiently good repute, possess sufficient knowledge, skills and experience;

(h) its management body shall possess adequate collective knowledge, skills and experience to be able to understand the depositary’s activities, including the main risks;

(i) each member of its management body and senior management shall act with honesty and integrity.

Article 37Para 2Subsection g)

Article 37Para 2Subsection h,i)

procedures including to perform its depositary activities;

the key persons and key personnel of the depositary at all times, are fit and proper, possess sufficient knowledge, skills and experience and have the skills and experience to be able to understand the depositary’s activities, including the main risks;

the key persons and key personnel of the depositary act with honesty and integrity;

the key persons and key personnel of the depositary are sufficiently experienced in relation to the collective investment undertaking for which

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Note Article 37Para 2Subsection g) of the Albanian law covers both subsection (g) and (h) of Article 23 Para 2 of the UCITS Directive

Additional Albanian requirement not in the Directive

they act or propose to act: to that end, the identity of the key persons and of members of key personnel and any person succeeding them in office must be communicated immediately to the Authority.


3. Member States shall determine which of the categories of institutions referred to in the first subparagraph of paragraph 2 shall be eligible to be depositaries.

N/A Albania has already decided which of its institutions may act as a depositary for publicly offered CIU – see Article 37.1.


4. Investment companies or management companies acting on behalf of the UCITS that they manage, which, before 18 March 2016, appointed as a depositary an institution that does not meet the requirements laid down in paragraph 2, shall appoint a depositary that meets those requirements before 18

N/A Concerns a transition period to comply with new requirements for depositaries, now passed.

March 2018.Article 24 Paragraph 1

Article 24

1. Member States shall ensure that the depositary is liable to the UCITS and to the unit-holders of the UCITS for the loss by the depositary or a third party to whom the custody of financial instruments held in custody in accordance with point (a) of Article 22(5) has been delegated.

In the case of a loss of a financial instrument held in custody, Member States shall ensure that the depositary returns a financial instrument of an identical type or the corresponding amount to the UCITS or the management company acting on behalf of the UCITS without undue delay. The depositary shall not be liable if it can prove that the loss has arisen as a result of an external

Article 46Para 1

Article 46Para 2

The depositary is liable to the publicly offered collective investment undertaking and to the share or unit holders of the undertaking for the loss by the depositary or a third party to whom the custody of financial instruments held in custody in accordance with Article 43 subsection 3 has been delegated or sub-delegated.

In the case of a loss of a financial instrument held in custody, the depositary must ensure that it returns a financial instrument of an identical type or the corresponding amount to the publicly offered collective investment undertaking without undue delay. The depositary shall not be liable if it can prove that the loss has arisen as a

Fully compliant

Fully compliant

event beyond its reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary.

Member States shall ensure that the depositary is also liable to the UCITS, and to the investors of the UCITS, for all other losses suffered by them as a result of the depositary’s negligent or intentional failure to properly fulfil its obligations pursuant to this Directive.

Article 46Para 3

result of an external event beyond its reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary.

The depositary is also liable to the publicly offered collective investment undertaking, and to the investors of the undertaking, for all other losses suffered by them as a result of the depositary’s negligent or intentional failure to properly fulfil its obligations pursuant to the law and regulations.

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2. The liability of the depositary referred to in paragraph 1 shall not be affected by any delegation as referred to in Article 22a.

Article 46Para 1

1. The depositary is liable to the publicly offered collective investment undertaking and to the share or unit holders of the undertaking for the loss by the depositary or a third party to whom the custody of financial instruments held in custody in accordance

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with Article 43 subsection 3 has been delegated or sub-delegated.


3.The liability of the depositary referred to in paragraph 1 shall not be excluded or limited by agreement.

Article 46Para 4

The liability of the depositary referred to in this Article cannot be excluded or limited by agreement.

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4. Any agreement that contravenes paragraph 3 shall be void.

Article 46 Para 4

Any agreement that contravenes this requirement shall be null and void.

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5. Unit-holders in the UCITS may invoke the liability of the depositary directly or indirectly through the management company or the investment company provided that this does not lead to a duplication of redress or to unequal treatment of the unit-holders.

Article 46Para 5

Investors in a publicly offered collective investment undertaking may invoke the liability of the depositary directly or indirectly through the management company or the investment company provided that this does not lead to a duplication of redress or to unequal treatment of the share or unit-holders of the undertaking.

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Article 25

1. No company shall act as both management

Article 44Para 2

A company that is licensed as a depositary must not also hold a

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company and depositary. No company shall act as both investment company and depositary.

licence as a management company with the exception that a depositary may partially or wholly own a subsidiary that is licenced as a fund management company. A company that is licensed as a depositary may not also be licensed as an investment company.


2. In carrying out their respective functions, the management company and the depositary shall act honestly, fairly, professionally, independently and solely in the interest of the UCITS and the investors of the UCITS. In carrying out their respective functions, the investment company and the depositary shall act honestly, fairly, professionally, independently and solely in the interest of the investors of the UCITS.

Depositary: Article 43 Para 1

Management Company: Article 23 Para 1

+

The depositary must act honestly, fairly, professionally, independently and solely in the interests of the publicly offered collective investment undertaking’s investors.

A fund management company must carry on its activity in accordance with this Law, regulations under this Law and regulations under this Law and Law No 9879 on Securities as applicable and must act honestly fairly, professionally, independently and

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A depositary shall not carry out activities with regard to the UCITS or the management company on behalf of the UCITS that may create conflicts of interest between the UCITS, the investors in the UCITS, the management company and itself, unless the depositary has functionally and hierarchically separated the performance of its depositary tasks from its other potentially conflicting tasks, and the potential conflicts of interest are properly identified, managed, monitored and disclosed to the investors of the UCITS.

Article 44 Para 1

solely in the interests of the collective investment undertaking’s investors.

A depositary must not carry out activities with regard to a publicly offered collective investment undertaking or the fund management company on behalf of the publicly offered collective investment undertaking that may create conflicts of interest between the publicly offered collective investment undertaking, the investors in that undertaking, the management company and itself, unless the depositary has functionally and hierarchically separated the performance of its depositary tasks from its other potentially conflicting tasks, and the potential conflicts of interest are properly identified, managed, monitored and disclosed

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to the investors of the publicly offered collective investment undertaking.


Article 26

1. The law or the fund rules of the common fund shall lay down the conditions for the replacement of the management company and of the depositary and rules to ensure the protection of unit-holders in the event of such a replacement.


1. A licensed fund management company shall have the right to transfer the contract for management of collective investment undertakings to another management company having the necessary relevant licence from the Authority in accordance with a procedure to be defined by regulation by the Authority and, in the case of an investment company, upon approval by extraordinary resolution of shareholders.2. The proposed transfer must be notified in writing in advance to the Authority who must approve the transfer prior to its

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The Albanian Law lays down the rules for the replacement of depositary or management company

Article 47Paras 1, 7 and 8

implementation.3. The management company that is transferring management must notify share and unit holders in publicly offered collective investment undertakings under its management of the transfer three months in advance of such transfer. No exit charges shall be chargeable during said notice period.4. A management company that is transferring the contract for management must enter into a transfer arrangement with another licensed management company which must include –a) A specific description of all procedures and actions which will be carried out in order to effect the transfer;b) A schedule starting from notification to share or unit holders up to completion of the

transfer.

1. A depositary to a publicly offered collective investment undertaking may only be replaced with the prior approval of the Authority7. A depositary may be replaced at the decision of the fund management company of an investment fund or the key persons of an investment company by another licensed depositary subject to the relevant conditions in the depositary agreement and prior approval by the Authority of the replacement licensed depositary and subject to subsection 3. 8. The outgoing depositary must transfer all assets held on behalf of a publicly offered collective investment undertaking for which it previously acted together with associated records, to the incoming

replacement licensed depositary in a manner that ensures that the interests of the investors in that publicly offered collective investment undertaking continue to be effectively protected.


2. The law or the instruments of incorporation of the investment company shall lay down the conditions for the replacement of the management company and of the depositary and rules to ensure the protection of unit-holders in the event of such a replacement.

N/A The Albanian Law does not enable UCITS in the form of open ended investment companies

Article 26a Article 26a

The depositary shall make available to its competent authorities, on request, all information which it has obtained while performing its duties and that may be necessary for its competent authorities or for the competent

Article 48Para 1

The depositary must make available to the Authority, on request, all information which it has obtained while performing its duties and that may be necessary for the Authority’s effective supervision of a publicly

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authorities of the UCITS or of the management company.

If the competent authorities of the UCITS or of the management company are different from those of the depositary, the competent authorities of the depositary shall without delay share the information received with the competent authorities of the UCITS and of the management company.

Article 48Para 2

offered collective investment undertaking or of the management company.

If the regulatory authority of the publicly offered collective investment undertaking or management company is different from that of the depositary, the regulatory authority of the depositary must without delay share the information received with the regulatory authority of the publicly offered collective investment undertaking or management company.

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Article 26b Point (a,b/i,ii,iii)

Article 26b

The Commission shall be empowered to adopt delegated acts in accordance with Article 112a specifying:

(a) the particulars that

N/A Pertains to the EU Commission

need to be included in the written contract referred to in Article 22(2);

(b) the conditions for performing the depositary functions pursuant to Article 22(3), (4) and (5), including:

(i) the types of financial instrument to be included in the scope of the custody duties of the depositary in accordance with point (a) of Article 22(5);

(ii) the conditions subject to which the depositary is able to exercise its custody duties over financial instruments registered with a central depositary;

(iii) the conditions subject to which the depositary is to safekeep the financial instruments issued in a nominative form and registered with an issuer

or a registrar, in accordance with point (b) of Article 22(5);

Article 26b Point(c,d,e,f,g,h)

(c) the due diligence duties of depositaries pursuant to point (c) of Article 22a(2);

(d) the segregation obligation pursuant to point (c) of Article 22a(3);

(e) the steps to be taken by the third party pursuant to point (d) of Article 22a(3);

(f) the conditions subject to which and circumstances in which financial instruments held in custody are to be considered to be lost for the purpose of Article 24;

(g) what is to be understood by external events beyond reasonable control, the consequences of which would have been unavoidable despite all

N/A Pertains to the EU Commission

reasonable efforts to the contrary, pursuant to Article 24(1);

(h) the conditions for fulfilling the independence requirement referred to in Article 25(2).

Article 27 CHAPTER V

OBLIGATIONS REGARDING INVESTMENT COMPANIESSECTION 1Conditions for taking up businessArticle 27Access to the business of an investment company shall be subject to prior authorisation to be granted by the competent authorities of the investment company’s home Member State.

Member States shall determine the legal form which an investment company must take.

N/AUnder the Albanian Law a UCITS cannot be formed as an open ended investment company so the requirements of Chapter V of the UCITS Directive do not apply

The registered office of the investment company shall be situated in the investment company’s home Member State.

Article 28 Article 28No investment company may engage in activities other than those referred to in Article 1(2).

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Article 29 Paragraph 1Point (a,b,c)

Article 29

1. Without prejudice to other conditions of general application laid down by national law, the competent authorities of the investment company’s home Member State shall not grant authorisation to an investment company that has not designated a management company unless the investment company has a sufficient initial capital of at least EUR 300 000 .

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In addition, when an investment company has not designated a management company authorised pursuant to this Directive, the following conditions shall apply:

(a) the authorisation must not be granted unless the application for authorisation is accompanied by a programme of operations setting out, at least, the organisational structure of the investment company;

(b) the directors of the investment company must be of sufficiently good repute and be sufficiently experienced also in relation to the type of business pursued by the investment company and, to that end: the names of the directors and of every person succeeding them in office must be communicated forthwith to the competent

authorities; the conduct of an investment company’s business must be decided by at least two persons meeting such conditions; and ‘directors’ shall mean those persons who, under the law or the instruments of incorporation, represent the investment company, or who effectively determine the policy of the company; and

(c) where close links exist between the investment company and other natural or legal persons, the competent authorities must grant authorisation only if those close links do not prevent the effective exercise of their supervisory functions.

The competent authorities of the investment company’s home Member

State shall also refuse authorisation if the laws, regulations or administrative provisions of a third country governing one or more natural or legal persons with which the investment company has close links, or difficulties involved in their enforcement, prevent the effective exercise of their supervisory functions.

The competent authorities of the investment company’s home Member State shall require investment companies to provide them with the information they need.


2. Where an investment company has not designated a management company, the investment company shall be informed, within six months of the submission of a complete application, whether or not authorisation has been granted. Reasons shall be

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given whenever an authorisation is refused.


3. An investment company may start business as soon as authorisation has been granted.

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Article 29 Paragraph 4Point (a,b,c,d,e)

4. The competent authorities of the investment company’s home Member State may withdraw the authorisation issued to an investment company subject to this Directive only where that company:

(a) does not make use of the authorisation within 12 months, expressly renounces the authorisation or has ceased the activity covered by this Directive more than six months previously, unless the Member State concerned has provided for authorisation to lapse in such cases;

(b)has obtained the

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authorisation by making false statements or by any other irregular means;

(c)no longer fulfils the conditions under which authorisation was granted;

(d)has seriously or systematically infringed the provisions adopted pursuant to this Directive; or

(e) falls within any of the cases where national law provides for withdrawal.

Article 29 Paragraph 5Point (a,b,)

5. In order to ensure consistent harmonisation of this Directive, ESMA may develop draft regulatory technical standards to specify:

(a) the information to be provided to the competent authorities in the application for the authorisation of the investment company, including the programme

N/A ESMA provisions

of operations; and

(b) the obstacles which may prevent effective exercise of the supervisory functions of the competent authority under paragraph 1(c).



6. In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to establish standard forms, templates and procedures for the provision of information referred to in point (a) of the first subparagraph of paragraph 5.

Power is conferred on the Commission to adopt the

N/A ESMA provisions

implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

Article 30 SECTION 2Operating conditionsArticle 30Articles 13 to 14b shall apply to investment companies that have not designated a management company authorised pursuant to this Directive.For the purpose of the Articles referred to in the first paragraph, ‘management company’ means ‘investment company’.Investment companies shall manage only assets of their own portfolio and shall not, under any circumstances, receive any mandate to manage assets on behalf of a third party.

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Each investment company’s home Member State shall draw up prudential rules which shall be observed at all times by investment companies that have not designated a management company authorised pursuant to this Directive.

In particular, the competent authorities of the investment company’s home Member State, having regard also to the nature of the investment company, shall require that the company has sound administrative and accounting procedures, control and safeguard arrangements for electronic data processing and adequate internal control mechanisms including, in particular, rules for personal transactions by its employees or for the holding or management of

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investments in financial instruments in order to invest its initial capital and ensuring, at least, that each transaction involving the company may be reconstructed according to its origin, the parties to it, its nature, and the time and place at which it was effected and that the assets of the investment company are invested according to the instruments of incorporation and the legal provisions in force.


SECTION 3Obligations regarding the depositaryArticle 321. The assets of an investment company shall be entrusted to a depositary for safe-keeping.

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2. A depositary’s liability as referred to in Article 34 shall not be affected by the fact that it has entrusted to a third party all or some of the assets in

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its safe-keeping.Article 32Paragraph 3Point(a,b,c)

3. A depositary shall ensure the following:

(a) that the sale, issue, repurchase, redemption and cancellation of units effected by or on behalf of an investment company are carried out in accordance with the law and with the investment company’s instruments of incorporation;

(b) that in transactions involving an investment company’s assets any consideration is remitted to it within the usual time limits; and

(c) that an investment company’s income is applied in accordance with the law and its instruments of incorporation.

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4. An investment company’s home Member State may decide that

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investment companies established on its territory which market their units exclusively through one or more stock exchanges on which their units are admitted to official listing are not required to have depositaries within the meaning of this Directive.

Articles 76, 84 and 85 shall not apply to such investment companies. However, the rules for the valuation of such investment companies’ assets shall be stated in the applicable national law or in their instruments of incorporation.


5. An investment company’s home Member State may decide that investment companies established on its territory which market at least 80 % of their units through one or more stock exchanges designated in their instruments of incorporation are not required to have

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depositaries within the meaning of this Directive provided that their units are admitted to official listing on the stock exchanges of those Member States within the territories of which the units are marketed, and that any transactions which such an investment company may effect outwith stock exchanges are effected at stock exchange prices only.

The instruments of incorporation of an investment company shall specify the stock exchange in the country of marketing the prices on which shall determine the prices at which that investment company will effect any transactions outwith stock exchanges in that country.

A Member State shall avail itself of the derogation provided for in the first subparagraph only if it

considers that unit-holders have protection equivalent to that of unit-holders in UCITS which have depositaries within the meaning of this Directive.

Article 32Paragraph 5Point(a,b,c)

Investment companies referred to in this paragraph and in paragraph 4, shall, in particular:

(a) in the absence of national law to this effect, state in their instruments of incorporation the methods of calculation of the net asset values of their units;

(b) intervene on the market to prevent the stock exchange values of their units from deviating by more than 5 % from their net asset values;

(c) establish the net asset values of their units,

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communicate them to the competent authorities at least twice a week and publish them twice a month.

At least twice a month, an independent auditor shall ensure that the calculation of the value of units is effected in accordance with the law and the instruments of incorporation of the investment company.

On such occasions, the auditor shall ensure that the investment company’s assets are invested in accordance with the rules laid down by law and the instruments of incorporation of the investment company.


6. Member States shall inform the Commission of the identities of the investment companies benefiting from the derogations provided for in paragraphs 4 and 5.

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Article 33

1. A depositary shall either have its registered office or be established in the same Member State as that of the investment company.

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2. A depositary shall be an institution which is subject to prudential regulation and ongoing supervision.

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3. Member States shall determine which of the categories of institutions referred to in paragraph 2 shall be eligible to be depositaries.

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4. The depositary shall enable the competent authorities of the UCITS home Member State to obtain, on request, all information that the depositary has obtained while discharging its duties and that is necessary for the competent authorities to supervise compliance of the UCITS with this Directive.

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5.Where the management company’s home Member State is not the UCITS home Member State, the depositary shall sign a written agreement with the management company regulating the flow of information deemed necessary to allow it to perform the functions set out in Article 32 and in other laws, regulations or administrative provisions which are relevant for depositaries in the UCITS home Member State.

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6. The Commission may adopt implementing measures in relation to the measures to be taken by a depositary in order to fulfil its duties regarding a UCITS managed by a management company established in another Member State, including the particulars that need to be included in the standard agreement to be used by the depositary and the management company in accordance

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with paragraph 5.

Those measures, designed to amend non-essential elements of this Directive by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 112(2).


A depositary shall, in accordance with the national law of the investment company’s home Member State, be liable to the investment company and the unit-holders for any loss suffered by them as a result of its unjustifiable failure to perform its obligations, or its improper performance of them.

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Article 35

1. No company shall act as both investment company

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and depositary.Article 35Paragraph 2

2. In carrying out its role as depositary, the depositary shall act solely in the interests of the unit-holders.

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The law or the instruments of incorporation of the investment company shall lay down the conditions for the replacement of the depositary and rules to ensure the protection of unit-holders in the event of such replacement.

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Article 37 CHAPTER VIMERGERS OF UCITSSECTION 1Principle, authorisation and approvalArticle 37For the purposes of this Chapter, a UCITS shall include investment compartments thereof.

Article 2 para 68

“Merger” in the context of a collective investment undertaking means an operation whereby two or more collective investment undertakings or sub-funds thereof are combined either by absorption of one or more undertakings or sub-funds into another collective investment undertaking or sub-fund or by allocation of

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assets of existing undertakings into a new collective investment undertaking or sub-fund;


Article 38

1. Member States shall, subject to the conditions set out in this Chapter and irrespective of the manner in which UCITS are constituted under Article 1(3), allow for cross-border and domestic mergers as defined in Article 2(1)(q) and (r) in accordance with one or more of the merger techniques provided for in Article 2(1)(p).



A publicly offered investment fund or sub-fund may only merge with another publicly offered investment fund or sub-fund

The provisions of Section 1 shall not apply to the cross border merger of publicly offered collective investment undertakings.Approval for such mergers shall be granted by the regulatory authority of the merging undertaking’s Home Country.

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As Albania is not an EU member state it cannot make full provision for corss border mergers at this time


2. The merger techniques used for cross-border mergers as defined in Article 2(1)(q) must be provided for under the

Article 164 Para 3

The Authority may but is not obliged to provide further by regulation for requirements for cross border mergers of publicly offered

Partially compliant

As Albania is not an EU member state it cannot make full provision for corss border

laws of the merging UCITS home Member State.

The merger techniques used for domestic mergers as defined in Article 2(1)(r) must be provided for under the laws of the Member State, in which the UCITS are established.

Articles 158 – 163

collective investment undertakings governing requirements for merger agreements, information to investors, entry into effect, confirmation of entry into effect and notification by the Authority and to the Authority by foreign regulatory authorities.

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mergers at this time

Articles 158 to 163 make provision for mergers of domestic CIUs


Article 39

1. Mergers shall be subject to prior authorisation by the competent authorities of the merging UCITS home Member State.

Article 164Para 2

Approval for such mergers shall be granted by the regulatory authority of the merging undertaking’s Home Country.

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2. The merging UCITS shall provide the following

N/A Refer comment on Article 38 para 2 above

Point (a,b,c,d) information to the

competent authorities of its home Member State:(a) the common draft terms of the proposed merger duly approved by the merging UCITS and the receiving UCITS;(b) an up-to-date version of the prospectus and the key investor information, referred to in Article 78, of the receiving UCITS, if established in another Member State;

(c) a statement by each of the depositaries of the merging and the receiving UCITS confirming that, in accordance with Article 41, they have verified compliance of the particulars set out in points (a), (f) and (g) of Article 40(1) with the requirements of this Directive and the fund rules or instruments of incorporation of their respective UCITS; and

(d) the information on the

proposed merger that the merging and the receiving UCITS intend to provide to their respective unit-holders.

That information shall be provided in such a manner as to enable the competent authorities of both the merging and the receiving UCITS home Member State to read them in the official language or one of the official languages of that Member State or those Member States, or in a language approved by those competent authorities.


3. Once the file is complete, the competent authorities of the merging UCITS home Member State shall immediately transmit copies of the information referred to in paragraph 2 to the competent authorities of the receiving UCITS home Member State. The competent authorities of the merging

N/A Refer comment above

and the receiving UCITS home Member State shall, respectively, consider the potential impact of the proposed merger on unit-holders of the merging and the receiving UCITS to assess whether appropriate information is being provided to unit-holders.

If the competent authorities of the merging UCITS home Member State consider it necessary, they may require, in writing, that the information to unit-holders of the merging UCITS be clarified.

If the competent authorities of the receiving UCITS home Member State consider it necessary, they may require, in writing, and no later than 15 working days of receipt of the copies of the complete information referred to in paragraph 2, that the receiving UCITS modify

the information to be provided to its unit-holders.

In such a case, the competent authorities of the receiving UCITS home Member State shall send an indication of their dissatisfaction to the competent authorities of the merging UCITS home Member State. They shall inform the competent authorities of the merging UCITS home Member State whether they are satisfied with the modified information to be provided to the unit-holders of the receiving UCITS within 20 working days of being notified thereof.

Article 39 Paragraph 4Point (a,b,c)

4. The competent authorities of the merging UCITS home Member State shall authorise the proposed merger if the following conditions are met:

(a) the proposed merger complies with all of the requirements of Articles 39 to 42;

(b) the receiving UCITS has been notified, in accordance with Article 93, to market its units in all Member States where the merging UCITS is either authorised or has been notified to market its units in accordance with Article 93; and

(c) the competent authorities of the merging and the receiving UCITS home Member State are satisfied with the proposed information to be provided to unit-holders, or no indication of dissatisfaction from the competent authorities of the receiving UCITS home Member State has been received under the fourth subparagraph of paragraph 3.



5. If the competent authorities of the merging UCITS home Member State consider that the file is not complete, they shall request additional
