History of establishment of funds
The Investment fund industry in the Czech Republic is closely connected to coupon privatization. Funds became a solution for inhabitants who had no experience with the capital market. Over 400 funds participated in the first wave, 353 in the second wave, while several funds from the first wave took part also in the second wave. Funds acquired approx. 73 % of total assets assigned for the first ware and 65 % of assets for the second wave.
Only investment funds in the form of joint stock companies, in other words legal entities, were admitted to the first wave of privatization under the law. Mutual funds, i. e. non-legal entities established by investment companies could have entered the second wave. Crown open-end mutual funds started to penetrate the market in 1990, slowly but steadily.
History of establishment of associations
The need for a professional union associating investment funds arose at the beginning of nineties. Three associations in the Czech Republic were established at that time.
Association of Investment Companies and Funds - AISF was established in 1991 on the initiative of small non-banking funds. The main task of this association was to help managers of investment funds to increase qualification and protect investors. It associated 60 members at the beginning and 104 members in 1994. AISF focused on organization of seminars and consulting for members, co-operation with the Ministry of Finance in legislative and tax issues and co-operation with abroad.
Association of Investment Companies - SDIS - was established in 1991. Members included 26 powerful companies who owned 67 % assets privatized in the first wave of the coupon privatization. Any investment company willing to comply with the Status and the Code of Ethics could have become a member. The association became an active and representative organization co-operating with central entities and establishing contacts with two other similarly oriented associations. In 1994, the association became the observer of the European Federation of Investment Funds and Companies (EFAMA).
Association of Investment Companies and Funds from Moravia and Silesia - SISMFS - was established in 1992 in Brno. Its activities were similar to the above and included mutual co-operation of the three associations. Members include 22 funds and companies who operated in Moravia and Silesian regions.
Establishment of the Union of Investment Funds and Companies
The Establishment of the Union of Investment Companies of the Czech Republic in June 1996 rounded off the effort of Czech associations of investment companies and funds aimed at creating one professional organization of collective investment entities in the Czech Republic. At the time of its constitution, the Union associated major investment companies and self-governing investment funds which managed over 80 % assets from the coupon privatization and also newly established crown funds. In the following years the Union associated investment companies whose market share in the open-end fund industry exceeded 90 % and open-end mutual funds formed the basis of its activity.
Investment funds and closed-end mutual funds established before the amendment of the law on investment companies and funds from 1998 came into effect have to be transformed to open-end mutual funds by the end of 2002.
Transformation into the Association of Funds and Asset Management of the Czech Republic (AFAM CR)
In accordance with the development on the European level the Association broadened its scope to the field of asset management. At the same time the new name was introduced: Association of Funds and Asset Management of the Czech Republic. Now AFAM CR is the representing body of collective investment and asset management industry in the Czech Republic.
Merger of the Association of Funds and Asset Management of ČR (AFAM ČR) and the Czech Capital Market Association (AKAT)
The General Assemblies of the Czech Capital Market Association (AKAT) and the Association of Funds and Asset Management of ČR (AFAM ČR) approved the merger of these two associations at their meeting held on January 9, 2008. The unified association was named the CZECH CAPITAL MARKET ASSOCIATION. Inconnection with the associations` merger, the By-laws were modified; the Chairman and Vice-chairman of the association were elected as well as new bodies of the association - the Board of Directors and the Executive Committee.