ExCo greenlights investment funds bill

The Executive Council (ExCo) has approved a new “Investment Funds Law” to accelerate the development of the modern financial sector and promote economic diversification in the region.

The proposed law, which will be submitted for consideration by the Legislative Assembly (AL), aims to strengthen coordination with international supervisory regimes, optimize regulations on investment fund transactions, and add new prudential limits for entities within the same group.

The proposed Investment Funds Law was drafted after consulting financial experts and analyzing legislation elsewhere. It will replace the current Decree-Law No. 83/99/M, regulating investment funds and fund management companies. The bill seeks to strengthen coordination with international oversight while optimizing transaction rules and adding new limits for group-owned entities. It also increases disclosure requirements and unit holder meeting provisions to boost investor protections.

To encourage fund operation and development, the law would remove minimum participant and fundraising thresholds to form investment funds along with scrapping inspection fees. It also lifts a limit confining real estate funds to local property investments. The scope of fund management companies is expanded as well, allowing them to organize as limited liability companies. Eligible depositaries are increased, and new provisions clarify that private funds can be established by way of contracts, commercial companies, or partnerships.

The bill also aims to optimize the development of the fund management sector by expanding the scope of activity of investment fund management companies and adding provisions relating to private investment funds. A one-year transitional period is provided for current funds and entities under the proposed Investment Funds Law, which now moves to the AL for discussion and voting. Victoria Chan