Decree-Law 60/2002, of 20 March 2002, changed the legal framework applicable to Real Estate Investment Funds (Fundos de Investimento Imobiliário – "FIIs") in accordance with the main guidelines of the 1995 reform and with the 1999 Securities Code.
Decree-Law 60/2002 establishes the legal framework for the incorporation and operation of FIIs and refers to the Portuguese Securities Commission the regulation of other issues with respect to, among other things, the content of the prospectus, the terms and conditions for the trading of participating units (in particular, its subscription and sale), the terms, conditions and limits for the use of derivatives for the purposes of risk coverage, the provisions for the valuation of the investment funds’ assets, the obligation to report to the public and the Portuguese Securities Commission and the terms, conditions and procedures for the merger of funds.
Decree-Law 60/2002 also establishes a distinction between closed-end and open-end funds (chapter III and IV) and creates mixed funds (chapter V), which aim at collecting investment not only from a sophisticated investors, but also from the public in general.
Mixed funds comprise a variable part (the units of which grant its holders the right to a pro-rata share of the fund’s profits, to sell the units and to be reimbursed with preference of its value in case of liquidation of the fund) and a fixed part (the units of which grant its holders the right to hold investors’ meeting and to the share of the funds’ net assets in case of liquidation).
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