Small Fund Manager:

Operating Licence or Obtaining the Registration

The main and permanent work of a fund management company is to manage the assets of a fund established as a company or a contractual fund. A management company may manage several funds.

License or Registration

Main differences between small alternative fund manager and alternative fund manager are following:

amount of assets that fund can manage - small fund managers have threshold for portfolios they manage (please see the threshold below). In case manager is about to exceed the threshold, appropriate license should be obtained;
a manager of a small fund can only manage a non-public fund - manager may apply for a license only to manage non-publicly offered funds, and
small fund manager cannot apply for the right to provide investment services and ancillary services within the meaning of the Securities Market Act.

Small funds can manage:

portfolios of SAIFs whose assets under management, including any assets acquired through use of leverage, in total do not exceed a threshold of EUR 100 million; or
portfolios of SAIFs whose assets under management in total do not exceed a threshold of EUR 500 million when the portfolios of SAIFs consist of SAIFs that are unleveraged and have no redemption rights exercisable during a period of 5 years following the date of initial investment in each SAIF.

According to Directive 2011/61/EU and national legislation, small fund managers can provide services, when they have obtained a license from FSA or have appropriate registration.

If company business plan and planned services correspond to registration requirements, the amount of information that is necessary to provide to Regulator is less, and supervisory of such small fund managers is less stricter than on the ones that require license.

According to Estonian Investment Fund act the license is required for those small fund managers that intend to manage common fund or public limited fund.

That means that small fund managers that manage limited partnership funds are not required to obtain the license, and can provide services (manage the fund) on the basis of registration in FSA.

Small Fund Manager Registration in FSA and FIU

Full Package price 10 900 EUR

Registration obtaining process and requirements

1. Preparation for the submission of application / 800 EUR

An introductory stage, during which our experts organise a meeting with the Client to discuss its planned activities. At this stage, the company does not necessarily have to be established yet.

What Client do?

Documents to be submitted:

- the CVs of the shareholder, board members and other representatives;
- a description of the service and its provision, and;
- general information on the type of planned capital financing and the origin of funds (when applicable).

What ComplyWise experts do?

- Provides advice regarding the applicable regulatory framework.
- Carries out an assessment of the initial business project and procedures.
- Assesses whether the authorisation process can be continued.
- Provides advice on documents to be submitted.

The preparation stage takes up to 10 days.

2. Establishing the company (if required) / 395 EUR - 1000 EUR*

Holders of an Estonian ID card or e-Residency card and a growing number of holders of EU member states’ ID cards can establish a private limited company fully online. If an ID or e-Residency card is not available, a visit to a notary will be organised for the Client where foundation documents will be verified.
Procedure takes up to 2 weeks.
* State fees and notary fees are included in the service fee

3. Preparing the necessary documents by ComplyWise experts / 4500 EUR*

In order to register a small fund manager following documents will be submitted:
1) a written application and the following data and documents on the form provided for in Annex 4 to Commission Delegated Regulation (EU) No 231/2013:
2) the contact details and articles of association or other equivalent document of the small fund manager;
3) the number of funds managed and their names or business names;
4) the dates of foundation or establishment of the funds managed and the country under which law the funds were founded or established;
5) the information concerning the investment policy of the funds, including the investments and instruments traded, trading venues of the fund, main risks of the fund and composition and total value of the assets managed;

6) Money laundering and terrorist financing preventing policy and sanctions policy;

7) Fund manager representatives and shareholders (and UBOs) identification documents, CVs and a certificate of the criminal records database or an equivalent document issued by a competent judicial or administrative body of its country of origin, which certifies the absence of a penalty for an offence against the authority of the state or a money laundering offence or another intentionally committed criminal offence and has been issued no more than three months ago and has been authenticated by a notary or certified in accordance with an equivalent procedure and legalised or certified with a certificate replacing legalisation (apostille), unless otherwise provided by an international agreement.

Documents can be provided in Estonian or English. If documents will be provided in English, FSA has a right to request translation into Estonian of the data and documents submitted in English.
Preparing the documents takes up to 3 weeks.

*Service fee excludes state fee.

4. Submission of application to FSA and FIU / 500 EUR

Submission of application: ComplyWise experts prepare and submit an application for registration to FSA and FIU.

What ComplyWise do?
1) Submits a fully completed application and all necessary information, documents for the registration (please see the list of documents above in part 3).
2) Receives information from Regulator regarding the starting the examination of the application for registration or on deficiencies to be addressed in the submitted application.
3) Provides the necessary additional explanations and support.

What Regulator do?
1) Carries out an assessment of the completeness of the application within 25 working days (the assessment of the application as to the substance is not yet ongoing).
2) If the application is incomplete, Regulator sends a letter to ComplyWise and the Client indicating the deficiencies identified which need to be addressed.
3) If the application is complete, Regulator sends a letter to ComplyWise and the Client informing that an assessment of the application for authorisation has started.

*Service fee excludes state fee.

5. Assessment of the application by Regulators

Regulators carry out the assessment of the application as to the substance.

5.1. What Regulator do?
5.1.1. Carries out the assessment of the application as to the substance.
5.1.2. Contacts the contact person of the Client and ComplyWise team in case of identification of deficiencies.
5.1.3. Draws up a letter if deficiencies are identified in the application.
5.1.4. Continues the examination of the application pursuant to the additions submitted.
5.1.5. Completes the examination of the application.

6. Amending the application / internal rules and procedures (if required)/from 400 EUR

6.1. What Complywise team do?
6.1.1. Provides answers to additional information requests by Regulator as soon as possible.
6.1.2. Corrects the submitted documents according to Regulator instructions.
6.1.3. Participates in meetings held by Regulator.
Amending the application or documents takes up to 2 weeks.

7. Receipt of Registration by FSA and FIU

Regulators finalise the examination of the application and take a decision on the issue or refusal to issue registration.

Post-registration activity

A small fund manager submits regularly to the FSA the following information concerning the funds managed by it :
1) the number of the funds and their names or business names;
2) the dates of establishment or foundation of the funds and the country under which law the funds were established or founded;
3) the investment policy of the funds, including description of the investments and instruments traded, trading venues of the fund, main risks of the fund and composition and total value of the assets managed.
The information reporting period is a calendar year and the information shall be submitted within one month after the end of the reporting period.

A small fund manager shall promptly notify the FSA of any changes in its contact details and articles of association or other equivalent documents and submit the respective documents.

The requirements for providing information are provided for in Commission Delegated Regulation (EU) No 231/2013.

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Small Fund Manager License in FSA

Full Package price 10 900 EUR

License obtaining procedure and requirements

1. Preparation for the submission of application / 800 EUR

An introductory stage, during which our experts organise a meeting with the Client to discuss its planned activities. At this stage, the company does not necessarily have to be established yet.

What Client do?

1. Prepares information on the shareholder, board members and other representatives;
2. Prepares general information on the type of capital financing and the origin of funds.
3. Prepares information on the planned business model: procedures for the provision of services, organising payment flows, customers, countries in which the service will be provided.
4. Prepares the list of existing documents or starts the drafting of the necessary documents.

Share capital requirement -
1) Upon foundation of a small fund manager, the share capital must be at least 25,000 euros and it has to be increased to 50,000 euros within three years after the foundation. Only amounts actually paid in may be indicated as the share capital.
2) In the case of an operating company, the minimum amount of the initial capital of a fund manager must be equivalent to at least 50,000 euros.

Documents to be submitted:

- the CVs of the shareholder, board members and other representatives;
- a description of the service and its provision;
- general information on the type of planned capital financing and the origin of funds.

What ComplyWise experts do?

2. Establishing the company (if required) / 395 EUR - 1000 EUR*

3. Preparing the necessary documents by ComplyWise experts / 7500 EUR*

To apply for an operating licence above mentioned documents shall be submitted together with written application. ComplyWise experts assist with full package, or if Client with single documents and procedures. Service fee depends on amount of documents and procedures ComplyWise experts prepare.

1.         A copy of the statutes for a business that is operating, any decision by the general meeting to amend the statutes, and the amended text of the statutes;
2.         A notarised copy of the foundation contract for a business being founded and documentation proving that share capital has been paid in;
3.         A business plan;
4.         The initial balance of the applicant and a review of income and expenses or the balance and profit report as at the end of the month prior to the application for an operating business, and annual reports for the past three years if they exist;
5.         Internal rules or proposals for them;
6.         Information on the members of the management board and supervisory board, including their first and family names, personal ID codes or date of birth if they have no ID code, place of residence, description of education, full list of jobs and positions held, and for members of the management board a list of their areas of responsibility, together with any documentation that the applicant considers relevant for demonstrating their trustworthiness and compliance with the requirements;
7.         Information on the auditor and internal auditor of the applicant, giving their names, places of residence or locations of operations, and personal ID codes or dates of birth or registry code if there is no ID code;
8.         The first and family names of the managing director of the fund, their personal ID code or date of birth if they have no ID code, place of residence, a description of their education, a list of jobs and positions held in the past three years, and a copy of the contract with the managing director in which they agreed to take on the role of managing director once the licence has been granted;
9.         A list of the shareholders of the applicant showing the name of each shareholder or member, their registry code or ID code, or date of birth if they have none, and details on the share or equity holdings of each shareholder and the voting weight given to them;
10.   Data on people who directly or indirectly control more than 10% of the voting shares of the applicant;
11.   Data on any business that the applicant or its management or supervisory board members or managing director holds more than 20% of, where those data include the size of its share or equity capital, a list of its areas of activity, and the size of the holding of the applicant and each manager;
12.   Documentation certifying the value of net own funds for a business that is already operating, together with the auditor’s report;
13.   Internal rules or proposed rules for bookkeeping.

*Service fee excludes state fee.

4. Submission of application to FSA and FIU / 500 EUR

Submission of application: ComplyWise experts prepare and submit an application for operating license to FSA.

What ComplyWise do?
1) Submits a fully completed application and all necessary information, documents for the operating license (please see the list of documents above in part 3).
2) Receives information from Regulator regarding the starting the examination of the application for operating license or on deficiencies to be addressed in the submitted application.
3) Provides the necessary additional explanations and support.

*Service fee excludes state fee.

5. Assessment of the application by Regulator

What Regulator do?
1) Carries out an assessment of the completeness of the application.
2) If the application is incomplete, Regulator sends a letter to ComplyWise and the Client indicating the deficiencies identified which need to be addressed.
3) If the application is complete, Regulator sends a letter to ComplyWise and the Client informing that an assessment of the application for authorisation has started.

The decision to issue an operating licence or to refuse it is taken by FSA within two months after all the necessary documentation and data have been received, and not later than six months after the application for the operating licence has been received.

6. Amending the application / internal rules and procedures (if required)/from 400 EUR

6.1. What ComplyWise team do?
6.1.1. Provides answers to additional information requests by Regulator as soon as possible.
6.1.2. Corrects the submitted documents according to Regulator instructions.
6.1.3. Participates in meetings held by Regulator.
Amending the application or documents takes up to 2 weeks.

7. Receipt of Registration by FSA

Regulator finalises the examination of the application and takes a decision on the issue or refusal to issue registration.

Post-registration activity

A small fund manager shall regularly submit to the FSA the following information concerning the funds managed by it:
1) the number of the funds and their names or business names;
2) the dates of establishment or foundation of the funds and the country under which law the funds were established or founded;
3) the investment policy of the funds, including description of the investments and instruments traded, trading venues of the fund, main risks of the fund and composition and total value of the assets managed.
The information reporting period is a calendar year and the information shall be submitted within one month after the end of the reporting period.
The requirements for providing information are provided for in Commission Delegated Regulation (EU) No 231/2013.

In addition a small fund manager shall submit its annual report, the sworn auditor’s report, an extract from the proposal for and decision on distribution of profits or covering of losses of the financial year and the minutes of the general meeting concerning the approval of or refusal to approve the annual report to the FSA within two weeks after the general meeting of the shareholders but not later than by 1 May of the year following the financial year. A small fund manager need not submit the specified documents to the FSA if these documents have been disclosed on the website of the fund manager or the consolidation group to which the fund manager belongs.

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Small Fund Manager: