How to establish collateral on investment certificates of closed-end investment funds?
In 2019, legal regulations came into force providing for a mandatory dematerialisation of investment certificates issued by closed-end investment funds, including those which are not a part of a public offering and have not been admitted to an organised trading market. Newly issued certificates will no longer be able to be issued as a document, or function as an entry in the record of investment certificates kept by an investment fund company. They will have to be registered in the depository of securities kept by the Krajowy Depozyt Papierów Wartościowych (National Depository for Securities, KDPW). These regulations were then supplemented by rules for how an issuing agent must operate a register of investment certificates before their registration in KDPW. This fundamental change entails a number of practical and formal consequences that are significant in establishing and enforcing collateral on investment certificates.