Financial investment companies (SIFs) will no longer be allowed to buy shares from the Stock Exchange if it leads to their interest in a particular company exceeding 10% of the SIF's net assets. This is what the National Securities Commission (CNVM) decided on Monday under a provision that remains in force until the SIF regulations are issued.
Thus, even though CNVM has not issued the regulations governing the operations of financial investment companies, according to the new capital market regulation, it has already imposed a number of restrictions on SIFs with regard to their portfolio management.
The limitations on SIFs' portfolios are even stricter than before but are temporary, pending replacement with the provisions in the regulations. Until the regulations are published, the new provisions could cause some SIFs to miss certain opportunities to make a profit.
The SIFs' investments have to keep within certain limits related to their net assets. This also goes for the current or deposit accounts opened with a specific bank. If the SIFs already exceed these limits at the moment, they will not be forced to sell some of their assets but will no longer be allowed to make further investments in that specific direction so as to increase their share in the assets.
At least until the regulations are published, SIFs will not be allowed to invest on the foreign capital markets or in commercial papers such as bills of exchange or promissory notes. SIF Moldova for instance still has debts to pay in this regard and has been subjected to debt enforcement procedures on several occasions because FPP (Private Ownership Fund, the former name for SIF) Moldova guaranteed the payment of the commercial paper.
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