Law on amendments and supplements to the law on alternative investment funds adopted
The National Assembly of the Republic of Serbia adopted on November 27, 2024, the Law on Amendments and Supplements to the Law on Alternative Investment Funds (“Official Gazette of the Republic of Serbia” Nos. 73/2019 and 94/2024) (hereinafter: the Law), which came into force on December 6, 2024, except for Article 4, which will be applied starting from February 7, 2025.
1. With the adopted amendments to the law, the financial obligation of a semi-professional investor—a small investor—for the purpose of investing in shares of an AIF of a single AIF has been reduced from a one-time payment of at least EUR 50,000 to EUR 5,000, or an equivalent value in another currency, all in accordance with the business rules and the prospectus of the AIF (where the obligation for its publication exists).
2. The amount of initial capital representing the threshold for mandatory dual management has been increased for a closed-ended AIF with legal personality established as a joint-stock company. Instead of the previous EUR 200,000, the initial capital must now exceed EUR 10,000,000 to meet the requirement for mandatory dual management.
3. Following the same principle, the threshold for mandatory dual management has also been raised for a closed-ended AIF with legal personality established as a limited liability company. It is now stipulated that such an AIF must have dual management if its initial capital exceeds EUR 10,000,000, instead of the previous threshold of EUR 200,000.
4. Regarding the Law’s supplements, Article 115a, titled “Pledge on Investment Units” (the section of the Law that includes the addition of Article 115a and Article 115a shall apply as of February 7, 2025) has been added. This article regulates the registration and disposal of pledge rights on alternative investment funds (AIFs) investment units. According to its provisions, only one pledge right can be registered on a single investment unit, which is recorded by the AIF Management Company (DZUAIF) in a special register maintained by the Central Securities, Depository, and Clearing House. The disposal of investment units (sale or gift) is possible only with the consent of the creditor in whose favor the pledge is registered. Data from the register are considered business secrets and are available only to authorized persons, including fund members (for their own data), depositaries, individuals with proven legal interest, and judicial and administrative bodies. Any disposal contrary to these provisions is void. The Commission retains continuous access to the register and further regulates the registration process and data access through its acts.
5. A provision reducing the minimum required investment by an individual investor in an AIF with a private offer from EUR 50,000 to EUR 10,000 has been introduced. This lowers the entry threshold for this type of investor, facilitating access to capital and encouraging investments in privately offered AIFs.
6. Additionally, it has been clarified that a small investor attains the status of a semi-professional investor in a private equity AIF if they commit to a minimum payment of EUR 50,000, instead of the previous EUR 250,000, or the equivalent monetary value for investing in the fund’s stakes. By lowering the threshold for semi-professional investors, a broader group of investors is enabled to participate in such investments.
7. Finally, the adopted amendments allow the establishment of umbrella AIFs, which may include multiple smaller sub-funds. These amendments require the AIF Management Company (DZUAIF) to obtain the Commission’s approval for organizing and managing an umbrella AIF and for establishing and managing each sub-fund within the umbrella AIF. Once the umbrella AIF is established, the DZUAIF may, with the Commission’s approval, add new sub-funds to the umbrella AIF, enabling flexibility in managing different types of investments under the supervision and control of the Commission to ensure compliance with legal provisions.
These amendments and supplements demonstrate the legislator’s intent to facilitate access to investments in alternative investment funds. By making alternative investment funds more accessible to a broader circle of investors, a framework for increased investment inflow and faster development of the alternative investment sector has been established.
If you have any questions or require additional information, please feel free to contact us at office@ctlegal.rs
Note: The information contained in this document does not constitute legal advice on any legal matter but is provided only for the purpose of general information about legal changes.
