On 1 June 2017 entered into force the new rules on securities investment companies for promotion of the economy (SIMFE) and the new rules on short-term debt certificates, provided for in Decree-Law no. 77/2017, of 30 June (DL 77/2017).
The SIMFE as well as the new short-term debt certificates are measures of the governmental program "Programa Capitalizar", approved by the Council of Ministers Resolution no. 42/2016, of 18 August, which seeks, among others, the creation of alternative leverage mechanisms for funding and private investment, as well as the stimulation of the capital market.
SIMFE are collective investment undertakings with fixed capital corporate form, corresponding to securities investment companies aimed for the investment in securities issued by eligible companies, i.e., companies that satisfy one of the following conditions:
- Small and medium-sized companies;
- Companies issuers of shares admitted to trading on regulated markets which, on the average of the last three calendar years, have had a market capitalisation of less than € 50,000,000 based on the quote at the end of the year within three calendar years preceding the investment;
- Companies qualified as Mid-Caps or Small Mid-Caps not issuers of negotiable securities admitted to trading on regulated markets.
A percentage of no less than 70% of SIMFE's investments must be applied in eligible companies.
SIMFE's administrative and supervisory bodies must meet sound and prudent management requirements, and shall guarantee that SIMFE have organizational structure, internal resources and procedures appropriate and proportionate to their size and complexity of the activities undertaken.
CMVM is responsible for the supervision of the compliance with SIMFE's legal framework and other applicable rules.
Short-term debt certificates are commercial paper which simultaneously meet the following requirements: (i) liquidity, (ii) value capable of being assessed at all time, and (iii) freely tradeable.
This new type of security aims to enable companies to diversify their funding sources, being eligible for investment by securities collective investment undertakings.
Following the creation of this new type of securities which are the short-term debt certificates, the diploma amends the Commercial Paper Legal Framework, extending up to 397 days the maximum maturity period for the monetary securities representative of short term debt.
