This Week's Focus: The demonization of the SICAVs

This Week's Focus: The demonization of the SICAVs


This week Citizens has filed a proposition of law in the Congress of Deputies to tighten the tax treatment to investment companies with variable capital, better known by its acronym SICAV.

The proposal, in line with the governance pact signed with the Popular Party, contains two measures. The first, give control over compliance with the criteria for applying the special rate of corporation tax of 1%, the same applies to investment funds, the Tax Agency detriment of the Comisión Nacional del Mercado de Valores (CNMV).

The second proposal is that, for the purposes of determining the amount of shareholders for the consideration of collective investment institutions, are counted only those who hold more than 0.55% of assets.

SICAV and funds, just change the wrapper

Funds and investment companies have to achieve a minimum spread of 100 participants or partners before one year of its constitution and hold it in time to be considered collective investment. The condition of shareholder or partner is acquired by holding the minimum required by the fund's prospectus or SICAV, often only 1 participation or action.

The SICAV are mercantilely speaking, corporations while investment funds are assets without legal personality. In corporations can not be discrimination between members unless they hold classes or series of shares with different rights, but always the same within the series or class.

Requiring a minimum of 0.55% of assets for the purposes of socio compute shareholding spread, it implies that at least 55% of the assets of the Fund is held by 100 shareholders. Input, it may seem reasonable, but a deeper analysis shows the perversion of this measure, which would get just the opposite of what you intended.

Radiography of the SICAV

The objective expressed in the proposal is a collective investment vehicle for managing individual assets are not used.

According to data from CNMV at the end of the second quarter of 2016, Spain has 3,337 SICAV with total assets of 31,869 million euros. More than half have more than 4.8 million assets and 10% of them exceed 18 million.

As for shareholders, the Spanish SICAV bring together nearly half a million investors, namely 491,296 shareholders according to statistics CNMV. 97% of the SICAV accounts with more than 100 shareholders each and 11 of them have more than 1,000 individual shareholders.

Discriminating against the small investor

The average investment per investor in mutual funds is 28,261 euros. In the SICAV, the average investment per shareholder is 64,868 euros.

It seems that the SICAV fulfill the function of collective investment which have been created, allowing any investor from very low investment minimum amounts, as usually required only 1 share as minimum investment. The requirement of a minimum of 0.55% would mean that the shareholders would have to carry much higher outlays in clear discrimination with investment funds.

This means, in practice, set aside the small investor to participate in these vehicles, many of them more profitable and cheaper than mutual funds.

Is not collectively a SICAV which has 400 investors, regardless of the volume of their assets? And if you got a high net worth, say, 60 million euros, it has to feed mainly investors of more than 300,000 euros?

Unfortunately, we have a proposition that besides discriminatory, not going on the line of what is intended to prevent. Demonize an entire sector of collective investment and propose measures that what they get is to reduce labor supply retail investors in this country, it is illiberal and improper center-right positions.