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Features of CIF,
requirements for its participants

read time: 5 min

02.04.2021

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The corporate investment fund is a universal tool for solving business problems in completely different areas, so it is worth understanding what features the CIF has.

The Corporate Investment Fund (CIF) is a separate legal entity with exclusive joint investment activities, payer of income tax on general grounds.

The form of establishment is a joint-stock company, but the CIF is not subject to the Law of Ukraine “On Joint-Stock Companies“.
Corporate funds are created and operate in accordance with a special law – the Law of Ukraine “On Mutual Investment Institutions”.

A CIF is considered to be established from the moment of its state registration as a legal entity.

It may conduct joint investment activities from the moment the CIF is entered in the Unified State Register of Сollective Investment Institutions (CII Register), based on the registration of the CIF regulations and obtaining the relevant Certificate from the National Securities and Stock Market Commission (NSSMC).

The corporate fund is a financial institution, it receives this status at the same time as it is included in the Unified State Register of Сollective Investment Institutions. Until now, the CIF cannot conduct financial transactions.

In order to attract funds for mutual investment, the corporate investment fund issues shares of the corporate investment fund.
The person who owns the shares of the corporate fund is a member of the CIF. All CIF shares can belong to one participant.

Participants in the corporate fund can be legal entities and individuals. Both residents and non-residents can buy CIF shares.

The following legal entities cannot be participants in CII:

  • appraiser of the property of the collective investment institution, custodian of the assets of the collective investment institution, depository, auditor (audit firm) of such CII and their related parties;
  • entities in which the share of communal or state property exceeds 25%.

Individuals can become a member of a qualifying and venture CIF only if they purchase a package of securities, the amount established by law, such a collective investment institution:

  • A participant in a qualifying CIF may be a natural person. person when buying shares of such an institution in the amount at the nominal value of these shares is at least 100 minimum wage in the monthly amount established by law on 01.01.2014.
  • A participant in a venture fund can be a natural person. person, subject to the purchase of shares in the amount of the nominal value of these shares is not less than 1500 minimum wage in the monthly amount established by law on 01 01.2014.

The owners of the corporate fund have the right to:

  • participate in the distribution of corporate investment fund profits and receive CIF dividends (only for closed-end CIFs);
  • appoint representatives to participate in the General Meeting and recall them at any time;
  • participate in the management of the fund.

The Corporate Fund is not liable for the obligations of CIF members. Any sanctions restricting their rights may not be applied to the corporate fund and its bodies in the event that CIF members commit illegal acts.

The accounting of rights to securities is maintained by the depository institution in which the securities account of the CIF owner is opened.

CIF securities are subject to free circulation on the market, which means that the owner of the corporate fund can sell his shares or part of them at any time to third parties.