New regulations on Collective Investment Funds

March 27th / 2024

On March 5, 2024, the Colombian Ministry of Finance and Public Credit issued the Decree 0265 of 2024 (the “Decree”), by which it makes a series of regulatory amendments to Decree 2555 of 2010 (the “Decree 2555”) in relation to Collective Investment Funds, with the objective of promoting the growth and efficiency of the capital market in Colombia. The Decree establishes provisions on the authorization of investment funds, risk management, minimum required capital of entitling companies, leveraged operations in MF, among others.

Of the amendments included in the Decree, the following are highlighted:

• The stock exchanges or the administrators of Securities Negotiation Systems subject to the inspection and surveillance of the Financial Superintendence of Colombia authorized to administer Foreign Securities Quotation Systems may list foreign securities in the system they administer.
• The Collective Investment funds management companies must keep an account statement available to investors.
• The Decree establishes conditions for the investments made by the management company in the funds it manages.
• The Decree establishes a series of rules for the repurchase of participations in private equity funds.
• The possibility of issuing bonds under the same terms set forth in Decree 2555 regarding the issuance and public offering of bonds by closed-ended investment funds was added to the authorized operations of real estate investment funds.
• Provisions are established regarding leveraged operations in investment funds.
• Aspects such as the suspension of trading of values in liquidation process, the communication of changes to investors, and the denomination of issues of mortgage-backed securities are detailed.

We will continue to be very attentive to the development of this regulation regarding Collective Investment Funds in Colombia.