Advanced Search

Order Of 24 September 1993 On Funds And Real Estate Investment Companies.

Original Language Title: Orden de 24 de septiembre de 1993 sobre fondos y Sociedades de inversión inmobiliaria.

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$40 per month.

TEXT

This Order culminates a normative process that, initiated under Law 19/1992, of July 7, on the Company and Fund of Real Estate Investment and on the Funds of Mortgage Securitization, continued with the Royal Decree 686/1993, May 7.

With the approval of this Order will be possible the implementation in Spain of the institutions of collective investment real estate, of notable roots and utility in other countries. Given the vocation that these investment formulas have to invest in real estate for rent, together with the legally adopted tax regime, it is to be expected that there will be an appreciable increase, in the medium term, of the supply of homes for rent, thus providing for one of the main concerns that the Government of the Nation has been demonstrating in the area of housing policy. On the other hand, a new institution is introduced into our financial system, characterised by its long-term security and profitability, which can therefore be of particular interest to institutional investors.

The Order regulates only the financial aspects of the real estate collective investment institutions, as the tax aspects were in Law 19/1992 and Royal Decree 686/1993 cited.

Although the Order, in coherence with the rules it develops, regulates both the Companies and the Real Estate Investment Funds, it is the latter figure that is the subject of a more complete regulation, and must constitute the Fund of Investing the ordinary real estate collective investment formula.

In relation to these, the Order seeks to ensure both its transparency and adequate valuation and a certain degree of liquidity in the investment, although the latter, given the real estate nature of the assets of the Fund, only it is relatively high, thus having a "semi-open" character.

Constitute rules aimed at ensuring transparency and value prudence, among others, the following:

a) The valuation of assets by a valuation company, which will act as an independent expert.

(b) The obligation to value the buildings at least once a year, as well as for their purchase and sale.

c) The monthly calculation of the Fund's liquidative value and the setting of precise rules for its determination.

d) The intervention of the depositary.

e) The reporting obligations, inherent in any collective investment institution and the supervisory role of the National Securities Market Commission.

They constitute rules that seek to guarantee a certain degree of liquidity in the investment of the participants, among others, the following:

(a) The obligation to ensure, at least once a year, the redemption of the units.

b) The existence of both a liquidity ratio and an investment ratio in securities.

(c) The establishment of a period of time, time and time, in order to take account of the possible repayment of shares.

The Order finally regulates three categories of financial subjects called upon to play a fundamental role in the life of real estate collective investment institutions. In the first place, the management companies, in whose regulation it has been chosen to allow the same company to manage both transferable securities and property assets, although, given the very different nature of both types of assets, have entered a number of specific functions and rules. Secondly, the valuation companies, whose role in the institutional scheme is basic, given the importance of the correct valuation of the buildings and, consequently, the independence of the valuer vis-à-vis the companies. gestoras. Finally, depositaries, whose function, not always identical to that applicable to investment institutions, is also geared towards the protection of investors.

CHAPTER FIRST

General provisions

Section first. Scope of application

Article 1. General Provisions.

Companies and Real Estate Investment Funds, as defined in Article 72 of the Regulation of Law 46/1984 of December 26, are subject to this Order of 26 December, regulating collective investment institutions.

Section 2. Authorization, registration, and naming

Art. 2. Authorization and registration.

1. The procedures for the authorization, modification and registration of the Companies and the Real Estate Investment Funds shall be in accordance with the provisions of Article 9 of the Regulation of Law 46/1984 of 26 December 1984, with the specialties established in this Order. In addition, applications for authorization, as a condition for granting authorization, shall be accompanied by an explanatory memorandum on the characteristics of the institution and the criteria to which it shall adjust its investments, in which the financial viability of the institution. In particular, this Memory shall specify:

a) The types of properties that you intend to invest in.

b) Geographical investment areas.

c) Risk diversification criteria.

d) Forms of asset management.

(e) Formulas for the marketing of holdings in the Funds.

f) The investment calendar and program of the resources that are captured.

g) The assessed valuation company to perform the valuation of the properties.

h) The relationship and history of Administrators and managers.

i) In the case of Funds, if a liquidity contract is to be concluded with a Credit Entity to ensure participation repayments, its fundamental clauses shall be specified and explained.

j) Material means to develop management.

k) Fund liquidity plan.

l) Any other additional information required by the National Securities Market Commission.

2. The specifications to be included in the Real Estate Investment Fund Management Regulation will be those provided for in general in Article 35.1 of the Regulation of Law 46/1984, with the necessary adaptations to the characteristics of the same. In addition, they will be specified:

a) The object of the Entity, for the purposes of determining the applicable applicable tax regime.

b) The selection criteria and geographic areas of the properties.

(c) Specialties in terms of subscription and redemption of the units. In particular, the number of times per year to be guaranteed shall be given, the fecas in which the requests and the pre-warning scheme will be addressed.

d) Specific dates for the calculation of the liquidative value.

e) Periods of real estate appraisals.

f) Policy for the conservation and insurance of the Fund's real estate.

g) A liquidity contract, in the event that it is envisaged to be concerned.

h) Expenditure on the holding of buildings attributable to the Fund.

i) The valuation company initially designated to assess the real estate, the term of this designation and the procedures and time limits for successive designations.

3. The procedure for the authorization of Real Estate Investment and Real Estate Investment Companies will have a maximum period of six months for their resolution. The judgment may be refused only for failure to comply with the requirements laid down in Law 46/1984, in its Implementing Regulation and in this Order. After the deadline without express delivery, the application shall be deemed to be rejected. In the case of changes in the social statutes of the Real Estate Investment Companies or the Management Regulations of the Real Estate Investment Funds, the time limit will be four months, and no express resolution will be understood granted the authorization.

4. In the register of other collective investment institutions of the National Securities Market Commission, under the provisions of Article 9.3 of the Regulation of Law 46/1984, two special sections shall be established, respectively, for Real Estate Investment and Real Estate Investment Companies.

Art. 3. º Denomination.

1. The Real Estate Investment Funds and Companies shall include in their denomination the expression "Real Estate Investment Fund" or "Real Estate Investment Company", or their corresponding abbreviations and acronyms. I. I. "and" S. I. I. ", respectively.

2. The names "Real Estate Investment Fund" and "Real Estate Investment Company" shall be private of the Entities entered in the corresponding special sections of the Register referred to in the previous Article 2.4.

Section 3. Arrangements for investments and obligations vis-à-vis third parties

Art. 4. The Rules of Investments.

1. Real estate investment companies will invest at least 90 per 100 of the annual average monthly balances of their assets in real estate. The remaining percentage of the asset may be invested in fixed income securities traded on the secondary markets organised as referred to in Article 17 of the Regulation of Law 46/1984.

2. Real Estate Investment Funds should adjust the investment of your asset to the following rules:

(a) At least 70 per 100 of the annual average of monthly balances shall be invested in real estate. However, such investments may not exceed 90 per 100 of the average mentioned.

(b) The remaining percentage of the asset, without prejudice to the expected liquidity ratio, may be invested only in fixed income securities traded on the markets referred to in Article 17 of the Regulation of Law 46/1984 of 26 December, regulating collective investment institutions.

The percentages provided for in the preceding paragraphs shall be the value of the goods and securities at the end of each month in accordance with the valuation rules set out in this Order. To check if the percentages are met, the calculation will be performed at the end of each year.

(c) They must maintain a minimum liquidity ratio of 5 per 100 of the total assets of the previous month. The compliance of the coefficient shall be monthly, calculated on the basis of the daily average of the coefficient throughout the month. This coefficient shall be materialised in cash, deposits, accounts in a credit institution or in fixed income instruments or instruments with a maturity period of less than 18 months and which are agreed with a pact. for the repurchase of securities of public debt, provided that they are traded on secondary markets organised as referred to in Article 17 of the Regulation of Law 46/1984.

3. The minimum number of real estate to be owned by the Companies and the Real Estate Investment Funds will be seven. A single immovable property may not represent at the time of its acquisition more than 20 per 100 of the total asset, according to the last valuation of that asset, carried out in accordance with the criteria of Article 17 of this Order. In the case of buildings, the percentage above will relate to the value of the building as a whole, and not to the value of the different farms that make it up. For this purpose, all integrated buildings in the same building shall be considered as a single building.

4. The percentages and investment criteria referred to in numbers 1 and 2 of this Article shall be attained by the Real Estate Investment and Real Estate Investment Companies within two years of their registration. in the Special Register of the National Securities Market Commission. However, in the first year, a minimum of 30 per 100 of the asset must be invested in real estate. The deadline referred to above shall be of a general nature, without prejudice to the shorter time limits required by the law and the Regulation to enjoy specific tax regimes.

During the transitional period referred to in the preceding paragraph, the assets of the Real Estate Investment Company and the Real Estate Investment Funds shall be invested in the marketable securities of fixed income Article 17 of the Regulation of Law 46/1984 is referred to. The investment diversification rules contained in Article 4 of that Regulation should also be observed.

5. For the purposes of this Order, buildings which are exclusively or jointly intended for housing, office, car parks or commercial purposes shall be deemed to be immeasurable. Individual dwellings, offices, commercial premises and car parks, whether or not linked to or linked to the above, shall also be considered as immovable property.

6. The real estate assets of the Real Estate Investment Company and the Real Estate Investment Funds can only be owned by owner. Such goods must also be acquired free of the rights of usufruct, use and room.

7. Immovable property leased to Entities of the same group may not represent more than 25 per 100 of the institution's assets. For these purposes, the group concept referred to in Article 4. of Law 24/1988 of 28 July of the Stock Market shall apply.

8. Neither Real Estate Investment Funds nor Real Estate Investment Companies will be able to develop real estate promotion activities. If they are able to rehabilitate the buildings acquired for their subsequent lease, provided that they do not represent more than 20 per 100 of the asset and the rehabilitation works are designed with a third party.

9. The collection of the price for the sale of immovable property may not be deferred for more than six months after the completion of the sales contract.

10. The National Securities Market Commission is enabled to specify the concepts that will integrate the computable asset for the purposes of the provisions of this Article.

Art. 5. Mortgage Guarantee Financing.

1. Real Estate Investment Companies and Real Estate Investment Funds will be able to finance the acquisition of real estate that will integrate their equity with a mortgage guarantee. Such funding may also be used to finance rehabilitation in the terms referred to in this order.

2. The outstanding balance of the mortgage guarantee finantions at no time may exceed 20 per 100 of the institution's asset.

Section 4. Operational limitations

Art. 6. Operations with Administrators, Managers, Partners and Partners.

1. The arrangements for the operations with the Directors, Administrators or Directors of the Mobiliary Investment Company and the Management Societies of collective investment institutions, as provided for in Article 7 of the Regulation of Law 46/1984, will be applicable in the cases referred to the Companies and Real Estate Investment Funds.

2. The limitations set out in the preceding number will also affect the lease, acquisition or disposal of real estate that integrates the assets of the Inmobilaria Investment Companies and the Real Estate Investment Funds. However, the derogation provided for in Article 7.4 of the Regulation shall not apply in respect of immovable property.

3. Real Estate Investment Funds and Real Estate Investment Companies will not be able to acquire or sell real estate to Entities belonging to the management company group or to the Real Estate Investment Company, respectively. For these purposes, the group criterion provided for in Article 4. of Law 24/1988 of 28 July of the Stock Market will be considered.

4. Neither the partners or members of the Real Estate Investment Company and the Inmobiliaria Investment Funds nor the persons or entities that maintain links with those in accordance with the criteria contained in Article 5.4 of the Law 46/1984, or forming part of the same group in accordance with the criterion of Article 4. º of Law 24/1988, may be tenants of immovable property which integrate the asset or holders of other rights other than those resulting from its condition of partners or members.

Art. 7. Market regime operations.

1. As regards transactions relating to marketable securities which, in the percentages laid down in this Order, include the assets of the Companies and the Real Estate Investment Funds, the requirements of Article 8 of the Treaty shall apply. Regulation of Law 46/1984, as to how to carry out operations.

2. Both the acquisition and the sale of real estate shall require prior appraisal, which shall not have an effect on the determination of the settlement value. Notwithstanding the foregoing, in the case of sale, the valuation shall not be compulsory in those cases where the asset was priced, for the purposes of fixing the liquidative value, in the preceding six months.

Section 5. Reporting obligations

Art. 8. General provisions.

1. The Real Estate Investment Companies and Funds, as well as their corresponding Management Companies, shall be subject to the reporting obligations set out in Article 10, numbers 1 to 3 of the Regulation of Law 46/1984.

2. In addition, the Real Estate Investment Companies or, where appropriate, the corresponding Gestora Company, shall comply with the supplementary obligations of information on relevant facts as referred to in Article 10.4 of the Law Regulation. 46/1984. However, in the case of redemption of shares, any reimbursement of more than 5 per 100 of the Fund's assets shall be deemed to be relevant. They shall also have the consideration of relevant facts as referred to in Articles 18.2, 19.5, 20.2, in respect of which a participant reaches 25 per 100; 21, as regards the modification of the commissions in force, and 28.3 of this Order. The sale of a property for a lower price by a price of 10 per 100 to its valuation value, calculated as provided for in Article 7.2, shall also be considered as relevant.

3. The National Securities Market Commission is hereby enabled to establish the form and content of the Model Information, Annual Report and Quarterly Reports of the Institutions regulated in this Order, taking into account the The resulting features of the investment and operating system.

Art. 9. Information and publicity about significant holdings.

The system of communication, information and publicity about significant interests referred to in Articles 5 and 6 of the Law Regulation will be applicable to Companies and Real Estate Investment Funds. 46/1984 and its implementing rules. However, in the case of the Real Estate Investment Company, it will be considered for significant participation that it reaches 0.5 per 100 of the share capital.

Section sixth. Monitoring and Inspection

Art. 10. Competence.

1. The inspection and supervision of compliance with the provisions of this standard shall be the responsibility of the National Securities Market Commission.

2. The National Securities Market Commission under the above powers may apply to both Real Estate Investment Companies and Real Estate Investment Funds for the additional information it deems necessary, establishing, where applicable, the models for transmission.

3. The National Securities Market Commission shall establish the specific accounting rules of the Real Estate Collective Investment Institutions as well as those necessary for the calculation of the liquidative value of the Real Estate Investment Funds.

CHAPTER II

From Real Estate Investment Companies

Art. 11. Applicable form and legislation.

1. Real Estate Investment Companies will be a company that will only be able to take the form of Fixed Capital.

2. The Real Estate Investment Company will be governed, first, by the provisions of Law 46/1984 of 26 December, and its Regulation for the Institutions of Collective Investment in Real Estate; second, as provided for in the This Order and its implementing rules, and, in addition, as provided for in the aforementioned Law, in its Rules of Procedure and in the Implementing Rules for the Capital of Fixed Capital Investment Companies.

Art. 12. Social capital.

1. The minimum social capital of the Real Estate Investment Companies will be 1.5 billion pesetas. It shall be paid-up from its constitution and represented by nominative shares, which shall have the same nominal value and shall confer the same rights.

2. Actions may be represented by titles or by annotations in account.

3. Contributions for the acquisition of shares shall be made in cash.

Art. 13. Minimum number of shareholders.

1. The minimum number of shareholders will be provided for in general in Article 15 of the Regulation of Law 46/1984.

2. The direct or indirect participation of a single partner may not exceed 1 per 100 of the share capital. For the purposes of determining indirect participation, the criteria laid down in Article 5 (3) and (4) of the Regulation of Law 46/1984 shall be met.

Art. 14. Asset valuation, audit regime, annual accounts, determination and distribution of results and administration.

1. Real estate investment companies will have to assess their real estate assets at least once a year. To this end, they shall comply with the assessment criteria and standards referred to in Article 17 of this Order. The aforementioned valuation will be carried out by a Tassation Society registered in the Official Register of the Banco de España, in which real estate refers. As regards the assets, the assets will be in accordance with the criteria laid down in the Regulation of Law 46/1984 for the Mobiliary Investment Companies and provisions that develop it.

2. The audit scheme, annual accounts and the determination and distribution of results shall be in accordance with the general provisions of Articles 23, 30 and 31 of the Regulation of Law 46/1984.

3. The General Meeting of shareholders may agree, when provided for in the Statute of the Company, that the management or administration of assets that integrate the social patrimony is entrusted to a Management Society of Investment Institutions. Collective meeting the requirements set out in this Order.

4. The scheme of the Audit and Management Control Committee shall be in accordance with the provisions of Articles 23, 24 and 25 of the Regulation of Law 46/1984.

5. The managers and directors of the Real Estate Investment Companies shall meet the requirements of good repute and knowledge required by Article 9. of the Regulation of Law 46/1984. At least most of them will have knowledge and experience in the real estate market.

CHAPTER III

From Real Estate Investment Funds

Art. 15. Applicable legislation.

The Real Estate Investment Funds will be governed, first, by the provisions of Law 46/1984 of 26 December for the non-financial institutions of collective investment, and in its regulation for the Institutions of Collective Investment Real Estate; second, by this Order and standards of development, and suppletoriely, as provided for in the aforementioned Law, in its Regulation and in the norms of development for the Funds of Investment financial character.

Art. 16. Heritage.

1. The Real Estate Investment Funds must have an initial minimum estate of 1.5 billion pesetas, fully disbursed.

2. The shares representing the equity of the Funds shall have the same characteristics and shall be regarded as marketable securities and may be represented by nominative certificates without a nominal value or by taking into account, as the general scheme provided for in Article 12.2 of the Regulation 46/1984.

3. Contributions for the acquisition of shares may be made in cash only.

Art. 17. Assessment criteria.

1. The value of the property of the Real Estate Investment Funds shall be the result of deducting the accretive accounts of the sum of all its assets, valued according to the following criteria:

(a) Real estate will be valued in accordance with the criteria laid down in Article 35 of the Regulation of Law 2/1981 of 25 March of Regulation of the Mortgage Market, approved by Royal Decree 685/1982, of 17 March, and its implementing rules. However, in the case of leased buildings, the arithmetic mean between the value of net income capitalisation, in accordance with the instructions on the valuation of assets in the mortgage market, and the value of the net income shall be taken as the value of valuation. Property market, supposed free of tenants. The valuation value to be adopted may not exceed the market value of the property, which is free of charge of tenants.

(b) Marketable securities shall be valued in accordance with the general criteria laid down in Article 43 of the Regulation of Law 46/1984, and provisions that develop it.

(c) Cash, deposits and bank accounts shall be valued at their nominal value.

2. The valuations of the real estate shall be carried out by the following companies registered in the Special Register of the Banco de España.

3. The valuations of the real estate shall be carried out at least once a year, unless the Management Regulation establishes a higher frequency.

Art. 18. Arrangement of the units.

1. The equity of the Fund shall be divided into shares of equal characteristics, without nominal value, which shall confer on their holders a right of ownership over that in the legally established terms and in the Management Regulation.

2. The number of shares will not be limited, depending on your subscription of the demand that will be made, unless, through the express authorization of the National Securities Market Commission, the subscription is suspended at reasoned request and founded by the Gestora Society, which shall, in particular, when the subscription requests exceed 15 per 100 of the total assets of the Fund.

3. The subscription of shares shall imply the acceptance of the Regulation governing the Fund.

4. The Management Regulation, in compliance with Article 20.2, may set ceilings for the percentage of the Fund which may be held by a single participant, as well as the initial minimum investment required.

Art. 19. Subscription and reimbursement scheme.

1. The value of the holding shall be the result of dividing the assets of the Fund, as assessed in accordance with Article 17 of this Order, between the number of units in circulation.

2. The settlement value of the shares shall be calculated once a month by the Management Company and on the date fixed in the Fund Management Regulation. It may differ only from that applied to the participation by the subscription or reimbursement fees, or by the application of the discounts in favour of the Fund, if they are provided for in its Management Regulations for reimbursements.

3. The value of the real estate, for the purposes of determining the liquidative value of the units, shall be obtained as follows:

(a) The Tassation Company, in accordance with the assessment criteria of Article 17 of this Order, shall assess the property.

(b) The Management Company, with the prior, reasoned and written consent of the Tasation Company, may apply a wobble of up to 3 per 100, up or down, on the value of the valuation. In no case shall the resulting value exceed the market value given in the assessment.

c) This value shall be maintained for these purposes until a further assessment.

4. For the purposes of determining the price of the shares, the increases in the value of the immovable property, in accordance with the assessments made by each of them, shall be distributed proportionally, month-on-month, for a period of 12 months. months from the date on which the assessment is carried out. However, where in the Management Regulation a lower rate of valuation is established per year, the value increases to be obtained shall be distributed proportionally, month-on-month, during the interval between the valuations. intended.

Value decreases will be attributed to the first liquidative value that is calculated after the valuation.

5. The redemption of the units shall be adjusted to the periodicity, specific dates and conditions laid down in the Fund Management Regulation and shall, in any event, be secured at least once a year.

In exceptional cases and, in particular, when reimbursement requests exceed 15 per 100 of the Fund's assets, the National Securities Market Commission may authorize, among other measures:

(a) Provisional suspension of reimbursement. In this case, it shall be reimbursed up to an amount equal to 15 per 100 of the asset, by way of a pro rata among all the reimbursements requested prior to the suspension.

b) Payment with assets belonging to the Fund's assets.

c) Non-compliance with the diversification coefficients contained in Article

.

The above is without prejudice to the management of the Fund when the equity falls below the minimum provided for in Article 16, or in circumstances such as to force its liquidation.

6. Requests for reimbursement as provided for in the preceding number must be made within a period of one month to 15 days in advance of the specific date laid down in the Fund Regulation to determine the settlement value. monthly applicable to the transaction. Subscription requests may be made at any time prior to that date; however, the delivery of funds shall be in accordance with the conditions set out in the Management Regulation.

The liquidative value that will be applied to the related subscriptions and refunds will be the first one that is calculated after the request for the transaction.

7. Reimbursement shall be made within a maximum of five days from the date of the monthly fixing of the settlement value that is applicable.

Subscriptions will be materialized the day after the monthly fixing date of the settlement value that is applicable.

Art. 20. Minimum number of members.

1. The minimum number of members shall be as general rule in Article 15 of the Regulation of Law 46/1984, number to be reached within one year from the date of registration of the Fund in the Register of the Commission National Stock Market.

2. The direct or indirect participation of a single participant may not exceed 25 per 100 of the Fund's assets. For the purposes of determining indirect participation, the criteria laid down in Article 5 (3) and (4) shall be met. of the Regulation of Law 46/1984.

Art. 21. Commissions and expenses.

1. Management companies may receive from the Funds a management fee, as remuneration for their services, which may not be higher: 4 per 100 of the Fund's assets or 10 per 100 of its results, if calculated on the basis of these; or 1.50 per 100 of the estate and 5 per 100 of its results, if calculated based on both.

2. The subscription fee may not exceed 5 per 100 of the share price.

3. The reimbursement fee may not exceed 5 per 100 of the share price.

4. For the Fund, the costs of assessment, repairs, rehabilitation and storage of buildings, which are linked to the acquisition and sale of buildings, must be paid to a third party for the provision of a service, and the other referred to in the Management Regulation.

Art. 22. Specialties in terms of modification of Management Regulations.

1. The amendments to the Management Regulation, once authorized, must be published in the "Official Gazette of the State" and communicated by the Management Society to the members within ten days of the notification of the authorization.

2. Where the amendments relate to the cases referred to in Article 35 (2) of the Rules of Law 46/1984, the reimbursement to which the unit-holders are entitled shall be automatic in the cases where the person represents, as maximum, 15 per 100 of the total assets of the Fund. For the purposes present, the change in the object of the Fund shall also be deemed to be an amendment where it determines a change in the tax regime.

3. In cases exceeding the percentage established in the previous number, the Management Company may ask the National Securities Market Commission for the provisional suspension of the refund, as well as to propose the possible measures to be taken. in the face of this situation. Applications submitted up to the limit of 15 per 100 referred to above shall also be addressed. However, in cases where the requested reimbursement reaches a total amount equal to or greater than 50 per 100 of the Fund's assets, it may be dissolved.

4. The refunds regulated in this number must be made within one month from the date of registration of the changes in the Register of the National Securities Market Commission.

Art. 23. System of audits, annual accounts and determination and distribution of results.

The audit scheme, annual accounts and distribution of results shall be the general rule in Articles 44, 46 and 60 of the Regulation of Law 46/1984.

Art. 24. Specialties on dissolution and settlement of the Fund.

1. The scheme for the dissolution and liquidation of the Real Estate Investment Funds will be provided for in general in Article 47 of the Regulation of Law 46/1984 of 26 December 1984, with the particularities set out in the following numbers. The diversification rules provided for in Article 4. of this Order shall not apply during this period.

2. The disposal of the immovable property, in the event of the dissolution of the Fund, shall be carried out after it has been assessed.

3. If, within two years of the start of the liquidation, all the assets and property rights belonging to the Fund's assets have not been put in place, the Management Company shall proceed with the cancellation of the Fund and the registration of property and property rights in the Land Registry in favour of all members.

CHAPTER IV

Management Societies of Real Estate Collective Investment Institutions

Art. 25. System of Management Societies.

1. The regime of the Companies of the Institutions of Collective Investment in Real Estate will be adjusted to the general foreseen in Chapter III of the first of the Regulations of Law 46/1984, with the specifications that are established in the numbers next.

2. The Management Companies of Collective Investment Institutions that intend to manage the Real Estate Collective Investment Institutions must count in their Board of Directors and among its directors or assimilated with persons with knowledge and experience in financial markets and real estate markets.

The total number of members with experience in one of the above markets should be majority in the Board of Directors.

For such purposes, it shall be understood that they have adequate knowledge and experience in relation to the property markets who have held, for a period of not less than two years, senior management, administration or advice on financial institutions linked to the real estate sector, or functions related to the real estate market in other public or private entities.

Art. 26. Functions of the Gestora Society.

In addition to the functions attributed in Article 54 of the Regulation of Law 46/1984, the Companies of the Real Estate Investment Funds will have the following functions:

(a) Selection, acquisition and sale of real estate assets that integrate the Fund's assets.

b) Contry all kinds of services that are linked to the real estate.

c) Manage the properties.

d) To exercise as a representative of the Fund all the rights that the current legislation grants to the owner, of the real estate that integrates the assets of the Fund.

e) The hiring, formalization, modification, and cancellation of credits with mortgage collateral.

(f) Designate, in accordance with the provisions of the Management Regulation, the Taser Company that will perform the valuation of the Fund's real estate.

g) How to store, improve, and advise on the Fund's real estate.

h) The marketing of the units.

i) Custody of public or private documents, representative of the rights to the real estate of the Fund.

j) In general, any activity of administration and disposal of assets and rights of the Fund aimed at achieving an increase in the value of the equity and resulting in compliance with regulatory regulations.

k) Concerting with third parties, by means of the corresponding lease of work, the rehabilitation of real estate. Such third party may not be an Entity of the Management Society group, in accordance with the group concept of Article 4. of Law 24/1988, of July 28, of the Securities Market.

CHAPTER V

Of The Tasers

Art. 27. Functions.

The valuation of the real estate belonging to the Real Estate Investment Company and the Real Estate Investment Funds will be carried out by the specialized companies registered in the Special Register of the Banco de España.

Valuation companies that intend to value real estate belonging to the Real Estate Investment Institutions will communicate it to the National Securities Market Commission, and must provide this Agency with any information relating to their requested activity as requested.

Art. 28. Designation.

1. The Management Companies of the Real Estate Investment Funds and the Real Estate Investment Companies shall appoint the Tasation Society which shall carry out the assessments provided for in this Order for a period of not less than three years, nor to nine.

2. The Gestora Company may not designate as a Taser Society any of the following assumptions:

(a) belonging to the same group as the Gestora, in accordance with Article 4. of Law 24/1988, of the Securities Market.

(b) That the remuneration obtained annually from the Gestora accounts for more than 15 per 100 of the total revenue from valuation services of the Taser Society.

3. Upon authorization of the National Securities Market Commission, for justified reasons, the Taser Society may be changed before the time limit set in paragraph 1 of this Article elapses.

4. Changes in the Taser Society shall be communicated to the National Securities Market Commission.

CHAPTER VI

Depositaries

Art. 29. General provisions.

1. The Real Estate Investment Funds shall have a depositary. Such depositary shall be authorised by the National Securities Market Commission, as provided for in Article 9. of the Regulation of Law 46/1984.

2. The Entities referred to in Article 55 of the Regulation of Law 46/1984 may be depositaries of Real Estate Investment Funds, resulting from the application of the rest of the rules referred to in that Article, in terms of requirements that they must collect the depositaries.

3. The specific function of the Depositaries of Real Estate Investment Funds will be to assume to the participants the function of supervision and supervision of the management carried out by the Management Societies, as well as the one of guarding the values or cash from the institution. In particular, in terms of their supervisory role they shall:

(a) Check that the operations performed by the Management Company of the Fund are in accordance with the conditions and limitations set forth in Articles 6 and 7 of this Order.

(b) Check that the operations of the Funds comply with the investment and financing arrangements provided for in Articles 4 and 5 of this Order.

c) Monitor the criteria, formulas and procedures used by the Gestora Society for the calculation of the liquidative value of the units.

d) Monitor the acquisition and disposal of real estate and assets of the Fund by checking that they conform to the rules set out in this Order.

The depositary shall obtain sufficient information from the Management Society on a quarterly basis to enable it to perform its supervisory and surveillance functions correctly.

If, in the exercise of its supervisory function, the depositary fails to manage the Funds, it shall inform the National Securities Market Commission.

Depositors must also fulfil the functions provided for in Article 56 (d) and (e) of the Regulation of Law 46/1984. The other functions of the aforementioned article not specified in this number shall not be carried out by the Depositaries of the Real Estate Investment Funds.

4. The maximum fee to be charged by the depositary shall be 4 per 1000 per year of the Fund's assets.

ADDITIONAL DISPOSITION

1. Each year, the Directorate-General of the Treasury and Financial Policy, after reporting by the supervisory bodies concerned, shall establish the maximum and minimum rates of capitalisation to be applied in order to carry out the valuations referred to in the Article 17 of this Order.

2. The shares and units of the Real Estate Investment Company and the Real Estate Investment Funds, respectively, shall be considered eligible assets for the investment of the technical provisions of the insurance institutions subject to the scope of application of Law 33/1984 of 2 August on the Management of Private Insurance.

3. The current management companies of Collective Investment Institutions that intend to promote or manage Real Estate Investment Funds should adapt to the scheme provided for in this Order, prior to the start of the aforementioned activities. To this end, they shall submit to the National Securities Market Commission a statement of activities that reflects their intention to manage Real Estate Investment and Real Estate Investment Funds, accompanied by a supporting document. of its ability to manage this type of Institutions.

The request will be deemed to be denied after three months of the request, or since the required documentation is properly completed.

FINAL DISPOSITION

Without prejudice to the specific ratings contained in this Order, the National Securities Market Commission is generally enabled to dictate how many provisions are necessary for its development.

Madrid, 24 September 1993.

SOLBES MIRA

Ilmos. Mr Director-General of the Treasury and Financial Policy and Chairman of the National Securities Market Commission.