Open-end investment funds in Polish law
An open-end investment fund sells units and redeems them at the request of an investor. Upon the redemption of the units, they shall, by law, be cancelled.
According to Polish law:
1. The fund may not ascribe different property rights to unit-holders who hold units of the same category.
2. A unit may not be sold by an investor to a third party.
3. A unit may be inherited.
4. Units may be the subject of a pledge. A pledgee may be satisfied from the subject of the
pledge only through the repurchase, by the fund, of the units following a demand made during enforcement proceedings. The satisfaction of a pledgee does not require enforcement proceedings if that satisfaction takes place under a pledge agreement established pursuant to the Act on Selected Financial Guarantees (Journal of Laws, No. 91, item 871). In such case the fund shall pay into the pledgee’s account the sum due from the redemption of the units.
5. The establishment of a pledge on units becomes effective at the moment that, upon a motion by either the pledgor or pledgee, the relevant entry is made in the register of fund investors, after the fund has been shown the pledge agreement.
6. The pledgor may not demand the redemption of the units under pledge before the payment date of the debt secured by the pledge without the pledgee’s consent.
7. If the debt secured by the pledge has become payable, the creditor may demand that the
fund redeems the units under pledge. However, the payment of the funds due from the redemption of those units by the fund may only take place after the pledgee presents a declaration stating that the debt secured by the pledge is due for repayment.
8. The provisions of paragraphs 4-7 shall be applied as appropriate to treasury and registered pledges on investment fund units, if this does not contravene the provisions of laws regulating the establishment and expiry of treasury and registered pledges.
[Legal basis: The act on investment funds of 27 May 2004]
Some further on Polish capital market:
Banks in Poland : Issue of bonds in Poland : Open-end investment funds in Poland : Brokerage Houses in Poland : Global Investment Funds
Some further on investment funds:
Mutual funds : Umbrella funds : Hedge funds : Pension funds : Equity funds : Bond funds : Balanced funds : Money-market funds : Funds of funds : Alternative investment fund
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