The Money Market Mutual funds (FICMM) are open-ended funds, invested in securities denominated in national currency or their representative units, registered in the RNVE and rated with at least investment grade, with the exception of public debt securities issued or guaranteed by the Nation, the Bank of the Republic or Fogafin. which do not require qualification.

The management of the portfolios of these funds must ensure that the maximum weighted average term for the maturity of their investments does not exceed 365 days, and the redemption of shares must be made on the business day following the request. 

11.2.1 Definition

Private equity funds (FCPs) are closed-end FICs that must allocate at least two-thirds of their investors' contributions to the acquisition of assets or rights of economic content, excluding securities registered in the RNVE. Indirect investments in RNVE securities are not considered in this calculation. 

The SA is only required to redeem investors' shares at the end of the fund's intended duration. However, private equity funds may be created with specific redemption terms established in the regulations, the minimum term being thirty (30) days common.

11.2.2 Requirements for incorporation 

The SA must meet a series of essential requirements that include demonstrating sufficient administrative and technological capacity, having specialized personnel dedicated exclusively to the administration of funds, having a robust internal control structure and a comprehensive information system. In addition, they must implement codes of good corporate governance, have contingency plans and effective risk management systems, and hire securities custody services.

11.2.3 Types of participations 

FCPs can establish different types of participations, which can vary depending on the investor's profile. These shares may differ in rights and obligations, management fees, rules for contributions and redemptions, thus offering options adapted to the needs and expectations of different types of investors.

11.2.4 Incorporation of shares 

Shares in an FCP are constituted through the delivery of resources by investors. Investors can also commit to underwriting shares through investment promises, as long as these do not exceed certain limits based on their income or equity, thus ensuring a financial commitment commensurate with their capabilities.

11.2.5 Commercialization of shares 

The marketing of the shares of an FCP can be carried out by the professional manager, the management company, or entities designated for this purpose. This process must be carried out on behalf of the management company and in accordance with the provisions established in the fund's regulations, ensuring transparent and regulated management of the shares.

11.2.6 Documents representing the shares 

The participation rights in an FCP are represented in documents that have the quality of securities, which may or may not be registered in the RNVE. Their trading must be carried out in accordance with the rules governing the functioning of the securities market.

11.2.7 Compartments 

FCPs can be organized into compartments, each with a specific investment plan and clearly defined management costs. These compartments, under a single regulation, allow investors to choose between different investment strategies within the same fund, thus offering greater flexibility and diversification options.

11.2.8 Investment Policy 

The investment policy of private equity funds in Colombia must be clearly defined and documented in the fund's regulations. This document must include an investment plan that describes the objective of the fund, the assets allowed for investment and the characteristics of those investments. In addition, it must establish the duration of investments, especially in the case of fixed-income securities, and detail the investment selection process.

The policy should set parameters for money market operations and define risk profiles, based on a detailed analysis of the risks that may affect the fund. It is important to include mechanisms to identify and mitigate these risks, specifying which risks will be managed by the management company and which by the professional manager, if any.

The investment policy must also contemplate debt operations and the granting of guarantees, establishing the maximum exposure limits of the fund. If credit operations are envisaged, the regulation should describe the principles and mechanisms for professional credit risk management. However, funds that issue bonds are restricted from carrying out these credit operations.

11.2.9 Bond issuance and public offering 

Private equity funds in Colombia may issue bonds for public offering, subject to authorization from the Financial Superintendency. Once authorized, these bonds are automatically registered in the National Registry of Securities and Issuers (RNVE). Each compartment within a fund can issue bonds independently, as long as it complies with regulatory requirements.

The maturity of the bonds must not exceed the duration of the issuing fund. During the term of the bonds, the fund may not change its investment policy or portfolio valuation methodology without authorization.

The fund must ensure the necessary resources for the payment of interest and principal before the redemption of the shares. The issuance of each bond requires the approval of the Investment Committee. The management company or professional manager must comply with disclosure obligations. In addition, the rules for securities issuers apply to funds that issue bonds, and issuances can be made in the second market if they comply with the regulations.

11.3.1 Definition 

They are a type of FIC designed to replicate or track the performance of a national or international index. To do this, your portfolio includes some or all of the assets that make up the index and may incorporate standardized derivatives whose underlying are in the index basket.

11.3.2 Creation units and shares

The creation unit of a stock market fund consists of assets in the target index, weighted according to their relevance in the index. The fund's regulations should specify how the number of units equivalent to each creation unit is determined. 

The documents representing the shares have the quality of security and must be negotiated in a securities trading system. 

The constitution of creation units occurs when investors transfer the assets that compose them, and can be carried out both in money and in the specific assets stipulated by the regulation. In funds that track local equity indices, transactions must be carried out in securities, with exceptions. 

Stock market funds must have at least two investors, except for the first six months of operation. 

11.4.1 Definition

They are a specific category of closed-end funds whose investment policy requires at least 75% of their total assets to be concentrated in specific real estate assets. This minimum concentration will not be required during the first six months of operation of the fund.

The SAs in these funds have the option of creating families made up only of funds of this type. 

11.4.2 Assets 

Permitted investments include real estate, mortgage-backed securities or real estate, and fiduciary rights of autonomous estates intended for real estate projects.

They can also invest in shares in other local and international real estate funds, and in real estate projects ranging from construction to remodeling and marketing of real estate. In addition, they can acquire shares or shares of social interest in companies whose main activity is investment in real estate, as long as the fund has a majority stake or the company is listed on a recognized stock exchange.

The regulation should set out clear rules for the diversification of investments in these assets, ensuring effective management and balance in the fund's portfolio.