Private placement rules and law in Slovenia

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

Definition of a “private placement”

There is no explicit definition of “private placement” under Slovenian national law. 

The concept of private placement is generally interpreted as a contrast to public placement. 
According to the Regulation 2017/1129 of 14 June 2017 (“Prospectus Regulation”) which is directly applicable in Slovenia, public placement is defined as communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities. This definition also applies to the placing of securities through financial intermediaries.

Pursuant to the Prospectus Regulation, a prospectus must generally be issued, unless one of the exemptions under Article 1(4) applies.

Please note that even in cases when no prospectus is required, certain other rules regarding marketing (i.e. provision of certain information or documentation prior to investment, etc.) may be applicable.

Type of investor in scope of private placement exemptions

Under Slovenian law, exemptions from public placement stipulated in the Prospectus Regulation apply directly. 

Additionally, pursuant to Article 72 of the Market in Financial Instruments Act (Zakon o trgu finančnih instrumentov; “ZTFI-1”), public placement rules are not mandatory in case i) the total consideration of each such offer in the EU does not exceed EUR 5,000,000 over a period of 12 months, and ii) such offers are not subject to notification in accordance with Article 25 of the Prospectus Regulation. 

Potential changes of private placement rules

According to publicly available information, there are no foreseeable changes to private placement rules in Slovenia in near future. The Ministry of Finance has just proposed an amendment to ZTFI-1, but it concerns the implementation of Regulation 2022/858/EU for market infrastructures based on distributed ledger technology and related amendments to Directive 2014/65/EU.

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

EEA and non-EEA AIFMs may exercise pre-marketing activities of AIFs to professional investors on the Slovenian market within the limited scope provided by the law. Pre-marketing of units of UCITS is not regulated under Slovenian law.

Reverse solicitation is not explicitly captured by the legislation regulating AIFs (i.e. it is neither allowed nor prohibited). Pre-marketing is pursuant to Alternative Investment Fund Managers Act (Zakon o upravljavcih alternativnih investicijskih skladov;ZUAIS”) defined as any direct or indirect provision of information or communication on investment strategies or investment ideas to potential professional investors domiciled or established in Slovenia, carried out at the initiative of an AIFM or an EU AIFM. In addition, pursuant to the Decision on the definition of terms regarding the marketing of units of AIF, the transaction shall be deemed not to have been entered into at the initiative of an EU AIFM if the investor has confirmed in a written statement, prior to receiving the offer of units of the AIF, that he has acquired the units of the AIF on his own exclusive and unsolicited initiative. In the light of this, it could be argued, on a case-by-case basis, that this should not in principle be considered as a marketing activity, in particular if it relates to the cross-border acquisition of fund units by a qualified investor on his own exclusive unsolicited initiative.

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

Mandatory contractual consequences

Non-compliance with mandatory provisions on placement regimes might cause the placement agreement to become invalid and/ or potential claims for damages by investors. A fund’s management might also be held liable for the breach of managerial duties.

Regulatory sanctions

Article 526 of ZTFI-1 envisages fines amounting from EUR 25,000 to EUR 500,000 for legal entities in serious breach of some of the public placement rules. Additionally, responsible persons could be fined in the amount from EUR 800 to EUR 10,000 and individuals seriously breaching the rules in the amount from EUR 400 to EUR 5,000. 

In case of less serious breaches, Article 527 of ZTFI-1 envisages fines for legal entities amounting from EUR 5,000 to EUR 500,000. Responsible persons can be fined in the amount from EUR 400 to EUR 10,000, individuals in the amount from EUR 200 to EUR 5,000 and individual entrepreneurs from EUR 400 to EUR 150,000. 

4. Private placement rules for non-fund investments available

There is no distinction between private placement of fund and non-fund interests. All the tradeable non-fund interests (such as shares, bonds, options, swaps, futures, other financial derivatives etc.) may be subject to private placement rules if no prospectus is required.

Non-fund investments subject to private placement opportunities outside fund regulations

Generally, the private / public placement distinction is applicable to securities issued by any entity.

They may include:

  1. shares or other securities equivalent to shares which represent a share in capital or in shareholders’ rights in a company, as well as the certificates of shares deposited,
  2. bonds and other types of securitised debts, also including a certificate of deposit related to such securities,
  3. any other security that gives the right to its holder to: acquire or sell negotiable securities by a unilateral declaration of will; or to demand a cash payment in an amount which is determined in view of the value of negotiable securities, foreign currency exchange rate, interest rates or yield, commodity, or in view of any other index or factor.

Type of non-funds subject to private placement provisions

Private and public placement rules are applicable to any entity which places securities or other interests on the market.