The extinction of the SICAVS: Funds, Liquidations and Reconversion of the Inverter Arm of the Rich

The dripping of SICAVS notifications to the National Securities Market Commission (CNMV) has been constant in recent weeks. Collective investment companies ha

The extinction of the SICAVS: Funds, Liquidations and Reconversion of the Inverter Arm of the Rich

The dripping of SICAVS notifications to the National Securities Market Commission (CNMV) has been constant in recent weeks. Collective investment companies have informed the supervisor of the market their intention to propose to shareholders the dissolution and liquidation over 2022, which represents the death certificate for an instrument that for years has been the favorite investment vehicle of The great fortunes.

According to the count of Europe Press since the beginning of January and until last Monday, almost 950 of these Sicavs had remitted relevant facts to report their plans, compared to the 2,300 on the end of September, according to the last Data available in the CNMV .

After many years of warnings and attempts to harden their conditions, last January 1, the legislative change established by more demanding requirements to benefit from 1% taxation came into force. Among other things, from now on the SICAVS that are maintained as such will have to have at least 100 partners (the so-called mariachis) with a minimum investment of 2,500 euros each maintained for three quarters of the year; Otherwise, the SICAV will tax 25%.

Societies that decide to stay as SICAVS should ensure that they have a conveniently diversified capital, something that is not usual, hence in the sector they foresee that most-a 90% - will decide to dissolve. Reality is on track to give them the reason.

However, the normative change establishes a transitory period to dissolve or settle at no fiscal cost until on December 31. "And with the dissolution of these societies, the investment funds will be the great beneficiaries," says Rafael Jany Seva, Director Partner of Wealth Solutions and President of Finletic. And they will be, according to the analysis of him, because "the transitory regime demands it". Specifically, it requires defering the taxation of the earnings derived from the liquidation, provided that the shareholders reinvest all of their settlement fee in other Spanish collective investment institutions (IIC).

In the opinion of John and Seva, "the characteristics of the funds are unbeatable: they have advantageous taxation, diversification capacity, adjusted costs, access to any type of financial asset, and combinations that allow a fully personalized portfolio."

The option to move the vehicle to a third country is also on the table, but Finletic President believes that "there is no clearing care to look for options in structures domiciled in third countries."

According to the Balance of Europe Press, the vast majority (more than 800) of the SICAVs that have notified changes to the CNMV reported on the intention of their advocacy advice to their respective shareholders' meetings an agreement for dissolution and Liquidation of society. Around 50 SICAVS communicated its intention to lose SICAV status and transform itself into an anonymous, limited or free investment Society, and about 70 confirmed that they had planned to maintain their current regime, although in some cases with modifications of the applicable tax rate.

For Víctor Alvargonzález, Founding Partner and NEXTEP Finance Strategy Director, the transfer to the funds is almost a logical consequence that has been slow to produce. The opinion of him puts the banking sector in focus. "Any partner of a SICAV tells him now what he would have told him six years ago, and is that in a country like Spain, where the transfer between funds has no fiscal cost, they can handle their assets without paying taxes, except when the Do you sell".

Keeping this in mind, Alvargonzález considers that "the only ones who had a solid motive to mount a SICAV for the financial heritage of the great investors were banks." "The SICAV are societies and therefore generate all kinds of expenses and commissions, whether they are working, maintenance, management, deposit, intermediation, etc. and banks are those who charge most of those commissions. The alternative, a portfolio of investment funds, it only had management commissions, and also very short, "he adds.

Alvargonzález sees the regulatory change "an opportunity" for the great fortunes, because "the management of the financial heritage through a portfolio of funds was and is much cheaper than using a SICAV, and above, societal and regulatory expenses are avoided." Of course, he warns that they should be very selective when it comes to choosing the new products in which they will invest.

Miguel Ángel Cicuéndez, Vice President of Aseafi (Spanish Association of Financial Advisory Companies), is contrary with the objective of the regulatory change that has caused the avalanche of communications to the CNMV. "If you wanted to avoid paying 1% before, now they will continue to be done through the funds, I do not know if it's worth it. From my point of view, no, and I do not find justification beyond politics," he says in Conversation with the world.

Cicuéndez admits that since his work they continue "betting on the SICAVS and for making an effort to keep them alive," although it also recognizes that it is being "difficult" to find new partners who meet the requirements that are required now.

Date Of Update: 05 February 2022, 04:44

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