Closed-End Investment Funds (FIZ) in Poland operate based on the Act on Investment Funds of May 27, 2004, and related executive regulations. According to the provisions, the sole activity of FIZ is the allocation of financial resources collected through the issuance of investment certificates into specified securities, money market instruments, and other property rights. The issuance of certificates may take place in the form of a public offering (addressed to an unspecified recipient) or a private offering (addressed to no more than 149 investors).
Investment Fund Companies (TFI) are responsible for creating and managing FIZ. TFIs serve as the entity representing the fund in all legal relations with third parties. The activities of TFI are strictly supervised by the Polish Financial Supervision Authority (KNF), ensuring transparency in their operations and compliance with applicable legal regulations and market practices.
The operational principles of FIZ are defined in their statutes, which are drawn up in the form of a notarial deed when the fund is established by TFI. After its creation, the fund is submitted to the National Court Register, which verifies the documents for legal compliance. If positively verified, the fund is entered into the public Investment Fund Register, increasing the transparency of its operations.
At the time of the fund’s establishment, the first series of investment certificates is issued, which are acquired by investors in exchange for financial resources or other assets. These certificates confirm the title of participation in the fund, grant the right to participate in Investor Assemblies, and their value depends on the investment performance of the fund.
Valuation of certificates must be conducted periodically, at least once per quarter, as well as before each issuance of new certificates and on the redemption date. The valuation process is verified by a Depository, which is most often a bank with a specialized department handling investment fund services.
FIZ has the right to invest in various asset classes, such as securities, derivatives, real estate, or receivables. However, the law imposes restrictions, requiring portfolio diversification by investing in at least five independent ventures, aiming to minimize investment risk.
Exiting an investment can be done by submitting a request for redemption of investment certificates, resulting in their cancellation, or by selling the certificates to other interested parties, provided that the fund’s statute allows it.
In recent years, there has been a decline in the number of closed-end investment funds in Poland. By the end of 2022, TFIs managed 561 FIZ, compared to 592 in the previous year. This decline was primarily due to the liquidation of closed-end investment funds.
Polish Financial Supervision Authority
The net asset value of investment funds has also changed. By the end of 2022, the total net asset value of investment funds amounted to PLN 284 billion, representing a 12% decline compared to the previous year.