Information Obligations

4growth VC Sp. z o.o. (hereinafter referred to as: 4growth VC), as a manager of alternative investment companies (hereinafter: “AIC”), informs that on September 29, 2023, the Act of August 16, 2023, amending certain acts in connection with the development of the financial market and the protection of investors on that market (Journal of Laws of 2023, item 1723, hereinafter the “Amendment Act”), came into force. This Act introduced a number of changes to the Act of May 27, 2004, on investment funds and the management of alternative investment funds (Journal of Laws of 2023, item 681, as amended, hereinafter the “Investment Funds Act”), regulating the operations of AIC managers and alternative investment companies.

Key amended provisions governing the operations of AIC managers and AICs, introduced by the Amendment Act:

The content of Article 8c(1) of the Investment Funds Act was amended, specifying that an investor in an AIC is an entity that holds AIC participation rights and meets the criteria of a professional client (Article 2 point 13a of the Investment Funds Act). A contribution to an AIC in exchange for AIC participation rights may be made only by an entity that qualifies as a professional client (Article 8c(4) of the Investment Funds Act).

Changes have also been introduced regarding the classification of natural persons as professional clients. Recognizing a natural person as a professional client now requires that the person submits a request to be treated as such, that the AIC manager assesses the person’s knowledge and experience to determine whether they are capable of making informed investment decisions and assessing associated risks, and that the person makes a contribution to the AIC with a value not less than the equivalent of EUR 60,000 in PLN. This amount is determined using the average euro exchange rate published by the National Bank of Poland on the date the contribution or participation is made (Article 70k(1) and (3) of the Investment Funds Act).

The funds used for the contribution or participation by the individual mentioned above cannot originate from a loan, donation, or other similar agreement concluded with the AIC, the AIC manager, or an entity related to them within the meaning of the Accounting Act (Article 70k(4) of the Investment Funds Act).

The AIC manager has been assigned obligations related to verifying transactions involving the transfer of AIC participation rights. According to the newly added Article 70k(6) of the Investment Funds Act, any legal act involving AIC participation rights that results in their transfer to an entity other than an AIC investor or AIC manager requires written consent from the AIC manager. The manager must refuse consent if, upon verification, the entity does not meet the criteria of a professional client in accordance with Article 70k(3) and (4) of the Investment Funds Act. Any legal act carried out without such consent is null and void.

However, Articles 70k(3)–(6) of the Investment Funds Act do not apply if at least 50% of the AIC participation rights are held by professional clients referred to in Article 2 point 13a letters a–m of the Investment Funds Act (Article 70k(7)).

Furthermore, Article 8a of the Investment Funds Act was supplemented with paragraph 4, which stipulates that an AIC may not conclude a loan agreement or other similar agreement, nor issue bonds or other securities that do not constitute AIC participation rights, if the lender or purchaser is a natural person. This restriction does not apply to natural persons recognized as professional clients under Article 70k(1) and (3) of the Investment Funds Act.

Under the newly added Article 70a(6) of the Investment Funds Act, an AIC manager is obliged to operate its own website, where it must publish, in particular, legally required information and announcements.

The Amendment Act also introduces specific transitional provisions for entities currently managing AICs and for individuals who are AIC investors.

Pursuant to Article 56(1) of the Amendment Act, natural persons who, on the date the Act came into force, held AIC participation rights in companies where at least 50% of the participation rights were not held by professional clients and who do not meet the condition set out in Article 70k(3) of the Investment Funds Act, shall remain investors in the AIC.

According to Article 56(2) of the Amendment Act, such individuals may not acquire new AIC participation rights, including through new share issues, purchase of treasury shares, or increases in nominal share value, if the total value of new and existing contributions is less than the amount specified in Article 70k(3) of the Investment Funds Act and if the individual has not received a positive assessment under Article 70k(1) of the Act.

Please note that the full, consolidated text of the Act is available on the website of the Polish Parliament (Sejm) at the following link: https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=wdu20041461546