Private placement rules and law in Greece

1. Summary of private placement provisions for fund interests (if applicable)

Law 4099/2012 (the “Law”) implemented in Greece Directive 2009/65 of the European Parliament and of the Council on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (“UCITS Directive”). The Law is applicable only to UCITS established within the territories of the EU member states and when enacted, the Greek legislature added a provision (Article 92) which is not included in the UCITS Directive. Article 92 provides, inter alia, that any undertaking for collective investments that is seated in a Non EU member state needs to be licensed by the Hellenic Capital Market Commission (“HCMC”) before making offerings in Greece. 

Moreover Law 4209/2013, which implemented in Greece AIFMD, is applicable to AIFMs (either EU or Non EU based) that manage and/or market AIFs in the EU. However, Greece opted not to implement Article 42 of Directive 2011/61 which provides the conditions for Non EU AIFMs to make offerings to professional investors within an EU member state. 

In light of the above non EU funds are governed by the special provision of Article 92 of the Law. 

On 15.04.2022 Directive (EU) 2019/1160 was transposed into Greek law (via amendments to Law 4209/2013) and introduced new rules relating to the cross-border marketing and distribution of collective investment undertakings within the EU (uniformity of marketing communications rules for UCITS and AIFs). 

Regarding marketing of units or shares of AIFs by AIFMs to retail investors, the Law (article 41) provides that this is permitted only to AIFMSAs or other AIFMs operating in Greece (via passporting) as long as several conditions are fulfilled. 

There is no specific definition of private placement under Greek law but the concept of “private placement” is determined by opposition to public offer and by referring to the exemption from the requirement to publish a prospectus under the provisions of Law 4706/2020 (“Prospectus Law”). 

Private placement in Greece is a placement that: 

  1. is addressed solely to qualified investors. As per Article 2 of Regulation 2017/1129 EU, “qualified investors” means persons or entities that are listed in points (1) to (4) of Section I of Annex II to Directive 2014/65/EU, and persons or entities who are, on request, treated as professional clients in accordance with Section II of that Annex, or recognised as eligible counterparties in accordance with Article 30 of the Directive 2014/65/EU, unless they have agreed to be treated as non professional clients in accordance with the fourth paragraph of Section I of same above Annex and/or 
  2. is addressed to fewer than 150 natural or legal persons other than qualified investors per each EU member state; and/or 
  3. is addressed to investors who acquire securities for a total consideration of at least EUR 100,000 per investor, for each separate offer; and/or 
  4. refers to securities whose denomination per unit amounts to at least EUR 100,000; and/or 
  5. refers to securities where the total consideration for the offer in the EU is less than EUR 5,000,000 calculated over period of twelve months. 

If a fund meets any one (or more) of the above criteria then it is subject to private placement provisions. 

2. Other forms of possible placement options for fund interests outside fund regulations

The following fall outside of the scope of the law covering the placement of fund interests:

  1. reverse solicitation (i.e. following a genuine unsolicited request by the investor);
  2. non-equity securities issued by an EU Member State or by public international bodies of which one or more EU Member States are members or by the European Central Bank or by the central banks of the EU Member States;
  3. shares in the capital of central banks of the EU Member States;
  4. securities unconditionally and irrevocably guaranteed by an EU Member State;
  5. securities included in an offer where the total consideration for the offer in the EU is less than EUR 5m calculated over a one-year period; and
  6. non-equity securities issued in a continuous or repeated manner by credit institutions where the total consideration for the offer in the EU is less than EUR 75m calculated over a one-year period, provided that those securities are not subordinated, convertible or exchangeable and that they do not give a right to subscribe to or acquire other types of securities and that they are not linked to a derivative instrument.

3. Consequences of non-compliance with placement regimes for fund interests

If there is a violation of private placement provisions, the contract may be declared null and void under the applicable provisions of the Greek Civil Code. A breach of the applicable laws and regulations creates civil liability to fully indemnify any injured party.

Main regulatory sanctions are: 

  1. a public statement indicating the natural person or the legal entity responsible and the nature of the infringement in accordance with Article 42 of Regulation 2017/1129 EU; 
  2. an order requiring the natural person or legal entity responsible to cease the conduct constituting the infringement and not repeat it in the future;
  3. administrative pecuniary sanctions of at least twice the amount of the profits gained or losses avoided by the infringing parties due to the infringement, where those can be determined; 

4. Private placement rules for non-fund investments available

Non-fund investments which are generally subject to private placement opportunities outside fund regulation include financial instruments such as shares in companies; bonds or other forms of securitised debt; certain other securities; units in collective investment undertakings; options, futures and swaps and other derivative contracts. These financial instruments are subject to private placement provisions when the exemptions from the duty to publish a prospectus apply.