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01/09/2017

PL - New types of Investment Companies and Short-Term Debt Certificates in Portugal

On 30 June 2017, the Portuguese Government published Decree-Law No. 77/2017 which introduces a set of measures intended to improve the funding options for companies through enhancing the role of the capital market in funding small and medium-sized companies.

On 30 June 2017, the Portuguese Government published Decree-Law No. 77/2017 which introduces a set of measures intended to improve the funding options for companies through enhancing the role of the capital market in funding small and medium-sized companies. The new law is effective from 1 July 2017. Two significant measures introduced by the law are as follows:

  • Securities Investment Companies for the Promotion of the Economy (SIMFE)
    The law creates and regulates a new sub-type of the current Securities Investment Companies (SIM) called SIMFE. SIMFE are collective investment vehicles set up as private limited companies which have a limited investment scope to securities issued by eligible companies. Specifically, SIMFE are subject to certain investment limitations which require that no less than 70% of their portfolio should correspond to securities issued by eligible companies. The shares of the SIMFE must be listed on a regulated market, operating in Portugal, within one year of the creation of the SIMFE. The SIMFE are subject to tax regime applicable to SIM.
  • New type of short-term debt securities
    The law introduces new short-term debt certificates, expanding the set of debt securities available as funding sources. This new type of securities imposes specific requirements regarding liquidity, valuation, availability and freedom of trade, to make them eligible for investment by collective investment vehicles. They were created by an amendment to the legal framework of the commercial paper, which also extends the maturity of these instruments to a maximum of 397 days