Open Closed-Ended Investment Funds in Spain

Investment funds in Spain can be registered as open-ended or closed-ended. While in an open-ended fund the investors can benefit from a variable capital, in the case of a closed-ended fund the capital is raised by numerous investors and the respective sum has to be a fixed amount of capital. At the same time, the closed-ended fund is limited in terms of share issuance. Our team of lawyers in Spain can offer in-depth information on the characteristics of a closed-ended fund and the registration requirements. 

 

 

A closed-ended fund obtains capital through an initial public offering, which is performed through the issuance of shares. Then, the investors purchase the respective shares in the form of stocks. The applicable legislation states that this type of vehicle must be managed by a management company. 

 

 

Because the capital of a closed-ended investment scheme is raised through the participation of numerous investors, they fall under the category of collective investment schemes (CIS). Closed-ended CIS in Spain assume that the investors can obtain their return on investment only at certain moments.

 

Further on, the closed-ended CIS can be regulated by different rules of law. In this sense, we mention the Law 25/2005, referring to the regulations of  Venture Capital Entities. Investors may find out more details on the legislation from our attorneys in Spain. 

 

Closed-ended funds can also be set up in Spain for securitization purposes and in this case the main rule of law is the Securities Market Law. 

 

 

As a member state of the European Union, Spain has implemented the Alternative Investment Fund Managers Directive, which is applicable to CIS. All collective investment schemes in Spain, open-ended or closed-ended, can be considered alternative investment funds, in the situation in which they do not fall under the UCITS category. 

 

The regulation was created to provide a simpler manner to market such funds on the European market. 

 

We invite businessmen to receive further details on the closed-ended investment funds from our law firm in Spain. Please contact our lawyers for personalized legal advice.