PORTUGAL Law and Practice Contributed by: João Nóbrega, Bernardo Marques and Francisco Miguel Gomes, EY Law – Sociedade de Advogados, SP, S.A.
• the AIFM maintains effective control and oversight over the subsidiary; and • the subsidiary is fully consolidated for accounting, valuation and reporting purposes. Any interposition of vehicles must not compromise investor protection or the CMVM’s ability to supervise the fund’s operations. In practice, the CMVM expects a “look-through” approach, ensuring transparency of the underlying assets and exposures when AIFs invest through subsidiaries or joint ventures. 2.8 Local/Presence Requirements for Funds The investment management of an AIF can be con - ducted by a Portuguese-authorised AIFM with a registered office in Portugal, by EU AIFMs operating under the passport regime of the AIFMD, or by non- EU AIFMs, provided that they obtain prior authorisa - tion from the CMVM. If a corporate AIF is structured as a self-managed investment company, it must adhere to the same structural requirements as AIFMs, necessitating the establishment of a local management structure, including local premises and employees. The Portuguese regime does not allow for the incor - poration of partnership funds; instead, AIFs must be established as either contractual funds or SICs. When an AIF is incorporated as an investment fund or as an externally managed investment company, the local substance requirements applicable to AIFMs will also apply. 2.9 Rules Concerning Service Providers Portuguese law establishes detailed rules regarding the appointment and location of service providers supporting AIFs. The key functions and requirements are as follows. Depositary Every Portuguese AIF must appoint a depositary established in Portugal. This role can only be fulfilled by (i) credit institutions or their branches authorised in Portugal, or (ii) investment firms expressly author - ised by the CMVM to conduct depositary activities. The depositary is responsible for the safekeeping of assets, cash flow monitoring, and oversight of legal
and operational compliance. It must operate indepen - dently of the AIFM to avoid conflicts of interest (Arti -
cles 191–199 of the RGA). Investment Management
The investment management function may only be performed by an authorised AIFM. The AIFM can del - egate specific functions (eg, portfolio or risk manage - ment) to entities authorised to provide discretionary management of collective investment undertakings or third-party portfolios. Such delegation requires prior notification to the CMVM and must not result in the AIFM being classified as a “letter-box entity”. Compliance and Internal Control Functions AIFMs must maintain an internal compliance function led by a designated compliance officer, responsible for ensuring adherence to regulatory and anti-money laundering (AML) obligations. While AIFMs may out - source certain support activities, overall responsibility remains with the AIFM. There are no statutory location requirements for external compliance or AML service providers; however, the CMVM expects them to pos - sess sufficient knowledge of the Portuguese legal and regulatory environment. Fund Administration and Ancillary Services The law does not impose specific location require - ments for fund administration, accounting or IT ser - vice providers. AIFMs may appoint non-Portuguese providers, including those located elsewhere in the EU, provided that: • the service agreement ensures effective oversight and access by the AIFM and CMVM; and • the provider has the necessary resources, systems and expertise to perform the delegated tasks to professional standards. Auditor All AIFs must appoint a statutory auditor ( Revisor Ofi - cial de Contas ) registered with the CMVM, responsible for auditing annual financial statements and verifying compliance with applicable valuation and reporting requirements. In practice, while some administrative and support functions may be outsourced cross-border, core fidu -
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