in force 2024-01-10 MODIFIED+1,369 −241§
Amended by Regulation (EU) 2023/606 32023R0606 · Regulation (EU) 2023/2869 32023R2869
applies from: unchanged
The borrowing cap in point (a) changed from a single 30% limit on capital value to differentiated limits of 50% of net asset value for ELTIFs marketable to retail investors and 100% for ELTIFs marketed solely to professional investors, and point (e) on encumbrance of assets up to 30% was removed and replaced with a general statement that assets may be encumbered to implement the borrowing strategy, alongside a new carve-out for borrowing fully covered by investors' capital commitments.
Point (b) was reworded from referring to investing in eligible investment assets except loans under Article 10(c) to referring more broadly to making investments or providing liquidity including paying costs and expenses, and point (c) now also allows currency mismatches where currency exposure is appropriately hedged.
Paragraph 2 was expanded to require specifying borrowing limits in the prospectus, and two new paragraphs were added: paragraph 3 setting a phase-in rule for when prospectus borrowing limits apply, capped at three years after marketing commenced, and paragraph 4 allowing temporary suspension of the paragraph 1(a) limits during capital raises or reductions, for no longer than 12 months.
Cited: Art. 16, v1 · Art. 16, v2
text before / after
texts differ too much for an inline diff; shown separately
before (32015R0760)
Article 16 Borrowing of cash 1. An ELTIF may borrow cash provided that such borrowing fulfils all of the following conditions: (a) it represents no more than 30 % of the value of the capital of the ELTIF; (b) it serves the purpose of investing in eligible investment assets, except for loans referred to in point (c) of Article 10, provided that the holdings in cash or cash equivalents of the ELTIF are not sufficient to make the investment concerned; (c) it is contracted in the same currency as the assets to be acquired with the borrowed cash; (d) it has a maturity no longer than the life of the ELTIF; (e) it encumbers assets that represent no more than 30 % of the value of the capital of the ELTIF. 2. The manager of the ELTIF shall specify in the prospectus of the ELTIF whether or not it intends to borrow cash as part of its investment strategy.
after (02015R0760-20240110)
Article 16 Borrowing of cash 1. An ELTIF may borrow cash provided that such borrowing fulfils all of the following conditions: (a) it represents no more than 50 % of the net asset value of the ELTIF in the case of ELTIFs that can be marketed to retail investors, and no more than 100 % of the net asset value of the ELTIF in the case of ELTIFs marketed solely to professional investors; (b) it serves the purpose of making investments or providing liquidity, including to pay costs and expenses, provided that the holdings in cash or cash equivalent of the ELTIF are not sufficient to make the investment concerned; (c) it is contracted in the same currency as the assets to be acquired with the borrowed cash, or in another currency where currency exposure has been appropriately hedged; (d) it has a maturity no longer than the life of the ELTIF. When borrowing cash, an ELTIF may encumber assets to implement its borrowing strategy. Borrowing arrangements that are fully covered by investors’ capital commitments shall not be considered to constitute borrowing for the purposes of this paragraph. 2. The manager of the ELTIF shall specify in the prospectus of the ELTIF whether the ELTIF intends to borrow cash as part of the ELTIF’s investment strategy and, if so, shall also specify therein the borrowing limits. 3. The borrowing limits to be specified in the prospectus as referred to in paragraph 2 shall only apply as from the date specified in the rules or instruments of incorporation of the ELTIF. That date shall be no later than three years after the date on which the marketing of the ELTIF commenced. 4. The borrowing limits referred to in paragraph 1, point (a), shall be temporarily suspended where the ELTIF raises additional capital or reduces its existing capital. Such suspension shall be limited in time to the period that is strictly necessary taking due account of the interests of the investors in the ELTIF and, in any case, shall last no longer than 12 months.