What regular reports and notifications does the ČNB require from investment funds?

Operating an investment fund from the Czech Republic offers a strategic gateway to European capital markets. However, success requires strict compliance with the reporting regulations of the Czech National Bank (ČNB). This guide provides clear answers on the specific reports, deadlines, and data requirements your fund must meet to operate successfully and avoid significant penalties. 

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Jáchym Petřík", an expert on the subject.

The Foundation: Understanding Your ČNB Reporting Obligations

For foreign investors, navigating a new regulatory landscape can seem daunting. The Czech Republic’s framework, however, is built on a foundation of stability and transparency, designed to align with the highest European standards. The reporting rules are not arbitrary hurdles; they are a critical component of maintaining a secure financial market that protects investors and ensures stability.

The primary legislation governing this area is Act No. 240/2013 Sb., the Act on Investment Companies and Investment Funds (ZISIF). Crucially, this law directly incorporates and builds upon EU directives, particularly the Alternative Investment Fund Managers Directive (AIFMD). This means that if you operate in other EU jurisdictions, the principles behind Czech regulations will be familiar, providing a predictable and reliable legal environment.

Your specific reporting duties depend on the type of fund you manage. The most common structure for new market entrants is the sub-threshold alternative fund, often called a "minifund," governed by § 15 of ZISIF. Larger, fully licensed funds, such as a Fund of Qualified Investors (FKI), face a more intensive reporting schedule. Understanding which category your fund falls into is the first step toward compliance.

A Practical Breakdown of Key ČNB Reports

The ČNB requires specific, structured data submitted in designated reports. For foreign managers, understanding the purpose and content of each report is essential for accurate and timely filing.

For Sub-Threshold Alternative Funds (§ 15 ZISIF): Decoding the Essentials

If you operate a so-called "minifund," your primary reporting obligations consist of two core annual reports and one newer, specialized report. These must be filed even if your fund is dormant or has not yet begun investing—a common compliance trap that leads to avoidable fines.

The ROFOS 36 - Hlášení podlimitního správce alternativního fondu (Report of the Sub-Threshold AIFM) focuses on the manager entity. It requires you to disclose key information about your operations, including your primary investment strategies, the main markets you trade in, and the total value of your Assets Under Management (AUM).

The ROFOS 37 - Hlášení o alternativním fondu podlimitního správce (Report on the Sub-Threshold AIF) shifts the focus to the fund itself. This report demands a detailed breakdown of the fund's portfolio, including the composition of its assets, the most significant investment instruments used, major market exposures, and a classification of your investors (e.g., domestic vs. foreign, professional vs. retail).

A newer requirement effective from 2025 is the DOFOS 15 report. This is specifically for § 15 ZISIF managers and serves one primary purpose: to report the total number of investors in your fund. This data allows the ČNB to monitor whether your fund has crossed the threshold of 20 non-qualified investors, which triggers the mandatory requirement to provide an auditor's report.

FAQ – Legal tips about CNB report content

• Must I report if my fund hasn't started investing yet?
  Yes, absolutely. The ČNB requires a "zero-activity report" even if you have no assets or investors. Failure to file is a common mistake that leads to penalties. To ensure you meet this requirement correctly, get tailored legal solutions by writing to office@arws.cz.
• What are the valuation standards for reporting Assets Under Management (AUM)?
  The ČNB requires AUM to be reported at fair value, calculated according to International Financial Reporting Standards (IFRS). This ensures consistency and transparency across all funds. For help with valuation methodology compliance, our lawyers are ready to assist you – email us at office@arws.cz.

Reporting for Larger and Licensed Funds

While many foreign entities start with a § 15 ZISIF structure, ARROWS also provides comprehensive legal services for larger, fully licensed funds. These entities face more frequent and granular reporting obligations. For example, a Fund of Qualified Investors (FKI) must submit monthly statements on issued and redeemed shares (FKI (ČNB) 5-12), while other licensed funds file quarterly balance sheets (OFZ (ČNB) 10-04) and profit and loss statements (OFZ (ČNB) 20-04).

The Process in Practice: How, When, and Where to Submit

Understanding what to report is only half the battle; the process of submission is equally critical and fraught with potential pitfalls.

All regulatory reporting to the ČNB must be submitted electronically through its dedicated SDAT system. Foreign managers often find the system’s interface complex and not particularly user-friendly, making technical errors a common problem. Accessing the SDAT portal requires a qualified electronic signature based on a valid qualified certificate, which can be a significant administrative hurdle for entities without a physical presence in the Czech Republic.

The deadlines are strict and non-negotiable.

• January 31: Deadline for the annual ROFOS 36 and ROFOS 37 reports for the preceding calendar year.
• June 30: Deadline for the new DOFOS 15 report on investor numbers for the preceding calendar year.

Missing these deadlines, even by a day, is considered a regulatory breach.

Procedural Failures and Their Consequences

Risks and Penalties	How ARROWS Helps
Penalty for missing the Jan 31 deadline: Fines starting from CZK 50,000, increased regulatory scrutiny, and reputational damage.	Proactive Compliance Management: We manage your reporting calendar and prepare submissions well in advance. Need legal help? Contact us at office@arws.cz.
Data rejection by the SDAT system due to formatting errors: Deemed a failure to file, triggering penalties for non-submission and requiring urgent correction.	Technical Preparation and Submission: Our team ensures all data is correctly formatted for the SDAT portal and can submit reports on your behalf. Get tailored legal solutions by writing to office@arws.cz.
Failure to report zero activity ("nulový výkaz"): A common but costly mistake, resulting in fines for non-compliance despite no financial activity.	Drafting Legally Required Documentation: We ensure all required reports, including zero-activity filings, are accurately completed and filed. For immediate assistance, write to us at office@arws.cz.

 

The High Stakes of Non-Compliance: A Look at ČNB Sanctions

The ČNB has broad enforcement powers, and the financial and business consequences of non-compliance can be severe. The regulator's actions are not arbitrary; they often follow a pattern of escalation. A minor procedural error that is ignored can quickly evolve into a major business threat. Ignoring a formal inquiry from the ČNB is one of the most common reasons for penalties to be issued or increased.

Financial penalties vary widely based on the severity of the breach. For simple administrative failures like late filing by a minifund, fines typically range from CZK 50,000 to CZK 100,000. However, for more substantive issues, the penalties escalate dramatically. For example, the ČNB has fined financial institutions millions of crowns for submitting inaccurate liquidity data or for failures in their internal Anti-Money Laundering (AML) systems. In cases of unauthorized collection of funds, fines have reached CZK 15 million or more.

Beyond fines, the ČNB can impose even more damaging regulatory sanctions. These include issuing a public warning, ordering remedial actions, suspending your fund's activities, or banning specific individuals from holding managerial positions in any financial institution in the country. The ultimate penalty is de-registration from the ČNB's official list, which is a de facto termination of your right to operate and can lead to a total loss of investment.

Substantive Violations and Strategic Risks

Risks and Penalties	How ARROWS Helps
Submitting inaccurate data on asset composition or investor status: Substantial fines (e.g., millions of CZK), mandatory audits, and potential investor lawsuits.	Legal Opinions and Data Review: We provide legal opinions on asset classification and review your data to ensure it meets ČNB's strict methodological requirements. Our lawyers are ready to assist you – email us at office@arws.cz.
Weak Anti-Money Laundering (AML) controls leading to reporting failures: Fines up to CZK 130 million, reputational collapse, and potential criminal liability.	Preparation of Internal Company Policies: We draft and implement robust, compliant AML and risk management systems tailored to your fund's strategy. Do not hesitate to contact our firm – office@arws.cz.
Long-term failure to report or respond to ČNB inquiries: De-registration from the ČNB list, effectively terminating your ability to operate in the Czech Republic.	Representation Before Public Authorities: We manage all communications with the ČNB and represent your interests in any formal proceedings. Need legal representation? Write to office@arws.cz.

 

The ARROWS Advantage: Global Expertise from a Prague, EU Hub

As an international law firm operating from Prague, European Union, ARROWS combines deep local regulatory knowledge with a global perspective. Our experience shows that while the principles of AIFMD create a harmonized framework across Europe, the practical implementation differs in each member state.

For instance, Germany's regulator, BaFin, also requires AIFMD-derived reports to be submitted in XML format via a dedicated electronic portal (MVP). Similarly, the UK's Financial Conduct Authority (FCA) uses its own system (RegData) for submitting AIFMD-based reports known as AIF001 and AIF002. While the core data requirements are similar, the specific forms, submission systems, and local interpretations require expert guidance.

With a network built over 10 years, ARROWS is perfectly positioned to handle these cross-border complexities. We support over 150 joint-stock companies and 250 limited liability companies, operating in 90 countries worldwide. This extensive experience allows us to provide foreign clients with seamless, efficient legal support that anticipates challenges before they arise.

Your Next Step: Secure Your Fund's Compliance with ARROWS

Navigating the ČNB's reporting requirements is a critical task that demands precision, timeliness, and expert knowledge. ARROWS provides a comprehensive suite of services designed to ensure your fund remains fully compliant, allowing you to focus on your investment strategy. Our services include:

• Preparation of internal company policies (AML, risk management).
• Drafting all legally required documentation (ROFOS, DOFOS reports).
• Legal consultations to prevent penalties.
• Contract review (e.g., with administrators or auditors).
• Representation before the ČNB.
• Professional training for management on compliance obligations.

Ensure your investment fund operates seamlessly and securely within the EU. As a leading Czech law firm in Prague, EU, we provide the expert guidance you need. To schedule a consultation, contact our team today at office@arws.cz.

FAQ – Most Common Legal Questions About ČNB Investment Fund Reporting

• What is the most common mistake foreign fund managers make regarding ČNB reporting?
  The most frequent and costly error is failing to file a "zero-activity report" for a dormant or newly established fund. The ČNB requires a report regardless of activity, and missing this deadline results in automatic penalties. To avoid this common pitfall, contact us for a compliance check at office@arws.cz.
• How much time should we allocate for preparing the annual ROFOS reports?
  While the forms are filed annually, data collection should be an ongoing process. We recommend starting the consolidation and legal review at least 6-8 weeks before the January 31 deadline to ensure accuracy and handle any complexities. For help establishing a reporting workflow, email our experts at office@arws.cz.
• Can ARROWS handle the entire reporting process on our behalf?
  Yes. We offer a complete outsourced solution where we prepare the data according to ČNB methodology, complete the forms, and submit them through the SDAT system on your behalf using a power of attorney. Get tailored legal solutions by writing to office@arws.cz.
• What should I do if the ČNB contacts my fund with a query about a submitted report?
  Do not ignore it. A prompt, accurate, and professionally drafted response is crucial to prevent the issue from escalating. You should contact your legal counsel immediately. Our lawyers are ready to assist you with regulatory communications – email us at office@arws.cz.
• Are the reporting requirements the same for a venture capital fund and a real estate fund?
  The reporting forms (ROFOS 36/37) are the same for all sub-threshold alternative funds, but the content will differ significantly based on your asset class. The ČNB requires specific breakdowns of your portfolio, so the data for a real estate fund will be very different from that of a VC fund. For a legal opinion on asset classification, write to office@arws.cz.
• Besides the scheduled reports, are there any ad-hoc events I must notify the ČNB about?
  Yes, certain material changes to your fund or management company must be reported to the ČNB outside of the regular schedule. This can include changes in key personnel or significant shifts in investment strategy. To understand your ad-hoc notification duties, do not hesitate to contact our firm – office@arws.cz.

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