As of 30 May 2014, The Republic of Estonia has fully implemented the Alternative Investment Fund Managers Directive (AIFMD) with relevant amendments to the Investment Funds Act and a new regulation of the Minister of Finance (Regulation No. 15 of the Minister of Finance dated 20 May 2014 "Requirements for an Alternative Investment Fund Manager and a Depository of an Investment Fund Managed by an Alternative Investment Fund Manager").
The transposition of the provisions of the AIFMD into local Estonian law essentially took place in two rounds.
In the first round of implementation, the focus of the legislator was on supplementing the Investment Funds Act with rules derived primarily from Article 32 (marketing of units or shares of EU AIFs in Member States other than the home Member State of the AIFM) and Article 33 (conditions for the marketing of EU AIFs domiciled in another Member State) of the AIFMD.
With the second round of implementation, the requirements of the AIFMD were fully implemented. The framework for the activity of a third country AIFM based on Articles 39 - 41 has been implemented and entered into force on 22 July 2015.
There is no express definition of "private placement" in Estonian law. Instead, the Estonian Securities Market Act and the Investment Funds Act contain a definition of "public offer" and a list of exemptions under which an offer or placement of securities would not be considered as public. The relevant exemptions in the Securities Market Act are set out in Prospectus Directive (Directive 2003/71/EC of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading).
An offer of securities (including an offer of investment units or investment shares in the funds) shall be deemed to be public unless it meets one of the following exceptions specified in the Estonian Securities Market Act.
For the purposes of the Estonian Securities Market Act, an offer of securities is defined as a communication to persons in any form and by any means containing sufficient information about the terms of the offer and the securities to be offered to enable an investor to decide to purchase or subscribe to such securities.
Article 12(2) of the Estonian Securities Market Act states that an offer of securities shall not be deemed to be a public offer if it falls under any of the following exceptions:
- an offer of securities (units, shares) is addressed exclusively to qualified investors (as defined in Article 6(2) of the Securities Market Act, which implements the definition of qualified investor from the revised EU Prospectus Directive without any significant changes); or
- an offer of securities (units, shares) is directed to fewer than 150 persons per EEA Member State who are not qualified investors; or
- an offer of securities (units, shares) is directed to investors who acquire securities (units, shares) for an aggregate amount of at least EUR 100,000 per investor, for each individual offer; or
- an offer of securities (units, shares) has a nominal value or book value of at least EUR 100,000 per security (per unit, per share); or
- an issue or offer of securities (units, shares) has a total consideration in all EEA Member States of less than EUR 100,000 in one year.
In addition, the Investment Funds Act exempts from the public offer regime any offering of units or shares of a foreign open-ended investment fund by a fund, a management company or a credit institution to a specified client in the course of providing portfolio management services or services in connexion with the issue or underwriting of securities.
The concept of private placement remained unchanged after the full implementation of the AIFMD.
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