Amendment to the ZISIF and AIFMD II

What is changing and why to address it immediately

ZISIF, i.e. Act No. 240/2013 Coll., on Investment Companies and Investment Funds, is the backbone of Czech fund regulation. The amendment, Act No. 130/2026 Coll. of 8 July 2026, promulgated on 23 July 2026, transposes the AIFMD II directive into it under Czech legislation.

For most managers, this is not a revolution. However, it concerns three areas where the fund business has moved the most in recent years and where regulation has lagged behind: credit (private credit) strategies, liquidity management in open-ended funds, and extensive delegation of activities to external entities.

The practical consequence is therefore specific: most managers will have to open their fund statutes, internal regulations, and agreements with delegates. Not because they are doing something wrong, but because the law now requires certain things to be explicitly described, measurable, and demonstrable.

The first step is to determine the manager's category. Under Section 28 of ZISIF, as amended, the rules for fund loans and loan-originating funds, liquidity management tools, conflicts of interest in funds established at the initiative of another person, and requirements regarding the residence and time capacity of senior managers do not apply, among other things, to a manager who is not authorized to exceed the relevant threshold and manages only qualified investor funds.

The amendment also abolishes the minimum fund capital requirement. A qualified investor fund no longer has to reach EUR 1,250,000 within 12 months of its establishment (former Sections 280 to 282 of ZISIF), and a collective investment fund no longer has to reach the same amount within 6 months (former Section 208 of ZISIF).

Fund loans: private credit gets its own rules

The amendment explicitly envisages that the management of a special fund, a qualified investor fund, or a comparable foreign fund may also include the acquisition of receivables from so-called fund loans – i.e., loans granted for the account of the fund or structured for the fund.

Crucially, the concept also targets indirect forms of exposure. If the manager participated in structuring the loan or pre-negotiating its parameters and the receivable is subsequently assigned to the fund, it falls under the same regime. The room for circumventing the rules through subsequent acquisitions of receivables is thus significantly narrowed.

If you are currently planning a more complex loan portfolio or an acquisition of receivables, take a look at our specialization for transactions and M&A – our Prague-based Czech legal team will be happy to help you set up the entire structure so that it is legally clear and secure.

A fund manager acquiring receivables from fund loans must, in particular:

• implement and apply policies and procedures for the acquisition of these receivables, credit risk assessment, and the management and ongoing monitoring of the loan portfolio,

• regularly review these procedures – a formal document that no one opens will not satisfy the requirement,

• respect risk concentration limits towards defined types of borrowers,

• not acquire receivables towards selected connected or involved parties,

• adhere to the rules for allocating loan revenues to the fund.

Two aspects deserve special attention. First, the prohibition of a strategy built solely on granting a loan for the purpose of its subsequent assignment – the regulation thus targets the "originate-to-distribute" model, where the fund does not actually bear the economic risk of the loan. 

Second, the obligation to retain 5% of the nominal value of each assigned receivable from a fund loan, for loans with a maturity of up to 8 years until their maturity, and for others for at least 8 years. The law provides for exceptions, for example, during the liquidation of the fund or in the event of an identified increase in credit risk (Section 37h of ZISIF). The aim is to align the manager's interest with the quality of the loans that the fund generates and passes on.

"Loan-originating fund": a new category with its own regime

The amendment introduces a separate category – a loan-originating fund. This will be a fund whose investment strategy consists primarily of acquiring receivables from fund loans, or a fund where the nominal value of these receivables reaches at least 50% of the fund's capital (Section 37i of ZISIF).

The second test is trickier in practice. A fund can fall into this category without intending to – simply due to how the portfolio composition evolves over time. This is precisely why every fund with credit exposure should have ongoing monitoring of this indicator set up, rather than a one-off assessment at inception.

A stricter regime applies to this category:

• The basic rule is a closed-ended fund structure.

• An open-ended structure is only possible if the manager is able to demonstrate to the CNB upon request that the fund's liquidity risk management system is compatible with its investment strategy and redemption rules (Section 37j of ZISIF).

• The leverage limit is 175% for open-ended funds and 300% for closed-ended funds.

The logic is clear: a loan portfolio is typically less liquid than a portfolio of publicly traded securities. Promising investors quick redemptions against an illiquid portfolio is a recipe for trouble, which will fall precisely on those investors who remain in the fund.

In practice, real estate funds and QIFs face this challenge in particular. If you manage or are preparing a fund focused on real estate, take a look at our page for real estate law – our Czech legal team will help you fine-tune the asset structure and the fund's statute to fully comply with the new liquidity and risk management requirements.

Liquidity management tools: open-ended funds must choose in advance

The manager of an open-ended fund will have to specify at least two appropriate liquidity management tools from a defined list in the statute or a comparable document. For money market funds, one tool is sufficient. For this purpose, an open-ended fund also includes an open-ended qualified investor fund if it is managed by a manager authorized to exceed the relevant threshold (Section 37a of ZISIF).

The selection is made from the following tools: redemption gates, extension of redemption notice periods, redemption fees, anti-dilution levies, swing pricing, dual pricing, and redemptions in kind; choosing only both pricing methods is not sufficient (Section 37b of ZISIF). Suspension of subscriptions and redemptions and side pockets remain tools for exceptional situations – usable only when circumstances require and if justified in the interest of investors.

The purpose of the regulation is not to complicate routine redemptions. The purpose is for the fund to have the tool described and ready before it is needed. Improvisation during a wave of redemptions is the fastest path to disputes with investors.

Note on timing: the rules apply from the effective date of the amendment, but existing open-ended funds have until 16 April 2027 to bring their statutes into compliance. However, amending a statute is not an administrative task for a single afternoon, especially for funds with multiple sub-funds.

Delegation of activities: the end of "letterbox" managers

AIFMD II responds to managers who formally hold an authorization, but a substantial part of their activities is actually performed by someone else. The amendment therefore tightens the rules for delegating individual activities to other persons and expands the scope of information notified to the Czech National Bank.

From 16 April 2027, the manager will notify, among other things, details about the delegate, the scope of delegation, information on their own human resources, the volume and proportion of the fund's assets affected by the delegation, the capacities allocated to monitoring the delegate, and information on regular reviews. Similar rules apply to sub-delegation by an already delegated person.

Delegation remains legitimate and often necessary in practice. However, it must now be demonstrable that the manager retains sufficient expertise, control, and responsibility. The test shifts from "we have a signed contract" to "we can prove that we understand it and that we control it."

Senior managers and conflicts of interest in funds established at the initiative of a third party

The amendment explicitly formulates requirements for the manager's senior managers: integrity, professional competence, sufficient experience, and time capacity. The manager must have at least two senior managers residing in a Member State, and these persons must devote sufficient time to the performance of their duties, corresponding to the statutory weekly working hours under the Labor Code (Section 21a of ZISIF). The residence and time capacity requirement does not apply to a manager below the relevant threshold who manages only qualified investor funds (Section 28 of ZISIF).

Practically even more interesting is the new regulation of conflicts of interest when managing a fund at the initiative of another person. A typical scenario: a fund is established on the initiative of a developer, sponsor, or group that also supplies projects to it, provides services, or acts as a counterparty to transactions.

This model is not prohibited. However, it is now the case that the manager must take reasonable measures to prevent conflicts of interest, and if they cannot be prevented, identify, manage, monitor, and disclose the conflict to investors (Section 20c of ZISIF). The manager shall inform the Czech National Bank of the measures taken and how the conflict is identified, managed, monitored, and disclosed (Section 456(1) of ZISIF). This obligation also does not apply to a manager below the relevant threshold who manages only qualified investor funds.

For development and real estate structures where the fund is part of a broader group, this implies only one thing: intra-group relations should be described, documented, and set on an arm's length basis. Although Section 20c does not explicitly require market conditions, this is a practical recommendation that facilitates defense before the CNB and investors.

Lawyers from ARROWS regularly encounter this constellation in real estate funds, and the weak point is usually in informal agreements. If you build and finance projects through fund structures, take a look at our services for development and construction law – our Prague-based Czech legal team will help you align intra-group contracts so that they pass supervisory reviews without any issues.

Depositary: opening the door to foreign banks

The amendment allows, under specified conditions, a foreign bank established in another Member State to act as a depositary for a special fund, even if it does not have a branch in the Czech Republic. This is subject to a decision by the Czech National Bank based on an application by the manager.

Furthermore, it is required, among other things, that the range of services offered by entities registered in the list of investment fund depositaries does not cover the needs of the fund in question with regard to its investment strategy. A limit also applies: the total value of assets of special funds and qualified investor funds managed by a manager authorized to exceed the relevant threshold must not exceed EUR 50 billion (Section 69(4) of ZISIF).

This will not be a mass phenomenon. However, for specialized structures where the Czech market does not offer a sufficiently suitable solution, it represents a real expansion of depositary choice.

Effectiveness and transitional provisions: what applies when

The amendment was promulgated in the Collection of Laws under No. 130/2026 Coll. Generally, it comes into effect on the first day of the second calendar month following its promulgation, i.e., 1 September 2026. Only selected changes, in particular the new notification obligations for delegation and extended reporting to the CNB, are postponed to 16 April 2027. Existing open-ended funds must supplement liquidity management tools in their statutes by 16 April 2027 at the latest.

For some obligations, a six-month period is envisaged to bring affairs into compliance with the new regulation. Special transitional rules apply to loan-originating funds and distinguish, among other things, based on whether the fund was established before 15 April 2024, after that date, or whether it raises additional capital.

The practical recommendation is therefore clear: do not rely on a single general effective date. For each fund, it is necessary to assess independently which rules apply to it, from when, and whether any transitional provisions can be relied upon. For groups with multiple funds and sub-funds, such an analysis usually yields several different deadlines rather than just one.

What to do now: a practical approach

The amendment allows time for preparation, but not as much as it might seem at first glance. We recommend the following approach:

1. Map the credit exposure of all funds and sub-funds – including receivables acquired through assignment and intra-group financing.

2. Calculate the proportion of the nominal value of receivables from fund loans to the fund's capital and set up its ongoing monitoring, not a one-off calculation.

3. Review the statutes of open-ended funds and choose liquidity management tools that match your strategy – not those that are easiest to write down.

4. Review the outsourcing map: who does what, what volume of assets it affects, who monitors it, and how often it is reviewed.

5. Describe conflicts of interest towards the founder or sponsor of the fund and set up their management and communication to investors.

6. Draw up a timeline of individual obligations for each fund separately, taking into account transitional provisions.

Conclusion

The ZISIF amendment published under No. 130/2026 Coll. is not a rewrite of fund regulation. However, it brings the greatest practical changes precisely where the market has moved the furthest in recent years: in credit funds, open-ended funds with real liquidity risk, and managers built on extensive outsourcing.

For managers, this is not just a legislative update. It is a reason to re-examine whether fund documentation, internal processes, and contractual relationships correspond to the new regulatory logic – and whether they would stand up to a supervisory audit.

The good news is the transitional periods. However, they should not lead to postponing preparation. Especially for funds with a credit strategy, open-ended funds, and managers with an extensive delegation model, it is advisable to start with an impact analysis even before the amendment comes into effect. The lawyers from the ARROWS law firm will be happy to help you with this – from the initial analysis to the modification of statutes and communication with the Czech National Bank. Contact us at consultation@arws.cz.