Fund management regulation

Regulatory framework and authorities

How is fund management regulated in your jurisdiction? Which authorities have primary responsibility for regulating funds, fund managers and those marketing funds?

Activity involving the management, investment and marketing of funds is mainly regulated by the relevant European regulations and by the following:

  • the Undertakings for Collective Investment Law, enacted by Law No. 16/2015 of 24 February 2015 (the UCI Law), which implemented in Portugal Directive 2009/65/EC on undertakings for collective investment in transferable securities (UCITS) (the UCITS Directive), and Directive 2011/61/EU on alternative investment fund managers (AIFMD), as amended from time to time;
  • the Portuguese Securities Exchange Commission (CMVM) Regulation No. 2/2015 on Undertakings for Collective Investment, as amended from time to time, which sets forth more specific rules regarding certain aspects of the UCI Law; and
  • the Portuguese Securities Code, enacted by Decree-Law No. 486/99 of 13 November 1999, as amended from time to time, which entered into force on 1 March 2000.


The CMVM is the regulatory body in relation to investment funds and fund managers.


In addition, it should be noted that, in Portugal, Directive 2011/61/EU on alternative investment fund managers (AIFMD) has been partially implemented by Law No. 18/2015 of 4 March 2015, relating to venture capital, social entrepreneurship and specialised investment (the Venture Capital Law).

The Venture Capital Law contains a specific regime applicable to funds investing in equity instruments for a limited period of time, as well as in other structures, which, despite having similar features to the undertakings for the collective investment (UCI) framework, is perceived under Portuguese law as being an autonomous subject in relation to UCIs. Despite this, the Venture Capital Law falls outside the relevant scope of this chapter.

Fund administration

Is fund administration regulated in your jurisdiction?

Fund administration activities, when not directly carried out by the fund managers, are generally undertaken by a depositary and are subject to specific legal provisions, including the duty of care, outsourcing and liability of the parties involved. Particularly, the outsourcing of decision powers regarding the investment of the fund may only be carried out in relation to other fund managers or entities authorised to take up discretionary portfolio management, save for the case of alternative investment funds targeting professional investors only, subject to specific authorisation to be granted by CMVM.

Further, some support services, depending on their specific scope, may be deemed investment services or activities, or ancillary services, thus being subject to specific authorisation by the Bank of Portugal or the CMVM, as applicable.


What is the authorisation or licensing process for funds? What are the key requirements that apply to managers and operators of investment funds in your jurisdiction?

The CMVM authorises the setting up of funds. When requesting such authorisation, the relevant fund manager must provide the CMVM with the fund’s documentation (notably, the key investor information document and the full prospectus of the fund), which must also include the fund regulations.

In addition, the CMVM must also be given copies of the agreements to be executed between the management company and the depositary; the distributors or entities that will market the fund; and any other entities that will render services to the fund or to the fund manager.

Documents corroborating the acceptance of the services rendered by all entities involved in the fund’s activities must also be delivered to the CMVM.

Authorisation is issued within 20 days (or three or six months in the case of self-managed collective investment companies, which are respectively AIF or UCITS) of the receipt of either the request or of any supplementary information or amendments to the documents required by the CMVM. If, at the end of this period, the applicants have not yet been notified of the success of their application, authorisation is considered to have been tacitly granted.

The CMVM may refuse to grant authorisation if the applicant does not submit the required documentation or if the fund manager in question engages in irregular management of other investment funds.

Once authorisation is granted, a fund will be fully set up from the moment the first subscription is settled in the case of opened-ended funds; from the moment the initial subscriptions are settled in the case of closed-ended funds; or from the date the by-laws are registered with the Commercial Companies Registry Office in the case of collective investment companies.

Territorial scope of regulation

What is the territorial scope of fund regulation? Can an overseas manager perform management activities or provide services to clients in your jurisdiction without authorisation?

No. For fund managers to provide their services in Portugal they will need to be incorporated in Portugal or resort to the passport regime, notably, the freedom of services or the freedom of establishment under the UCITS Directive or the AIFMD.


Is the acquisition of a controlling or non-controlling stake in a fund manager in your jurisdiction subject to prior authorisation by the regulator?

In the case of fund managers authorised to manage UCITS, the UCI Law establishes that any entity or legal person wishing to acquire or to raise a qualifying shareholding in a fund manager, to the extent that it surpasses the 10, 20, 30 or 50 per cent share capital threshold, or if the fund manager becomes a subsidiary of the acquirer, will have to file a prior authorisation application with the CMVM. If the fund manager is not authorised to manage UCITS, it will need to immediately notify CMVM of any change to the qualifying shareholding structure.

Restrictions on compensation and profit sharing

Are there any regulatory restrictions on the structuring of the fund manager’s compensation and profit-sharing arrangements?

Yes. Article 139 et seq of the UCI Law establishes that the fund manager is remunerated through a management fee, which may comprise a variable component. The fixed or variable components of the management fee and its calculation methods must be clearly foreseen in the fund’s constitutional documents. CMVM Regulation No. 2/2015 further determines that the variable component of the management fee depends on the valorisation of the relevant fund's unit or share, which needs to be higher than the last relevant term (minimum 12 months) and to the relevant benchmark.