REPUBLIC OF LITHUANIA                                     
                               LAW                                              
                                                                                
                               ON                                               
                                                                                
                      INVESTMENT COMPANIES                                      
                                                                                
                                                                                
                                                                                
                            Chapter 1                                           
                                                                                
                       General Provisions                                       
                                                                                
                                                                                
     Article 1. Objectives of the Law                                           
     1. This  Law regulates  the specific  aspects of  investment               
company establishment, reorganisation and liquidation, management               
and  operation,   state   supervision   of   investment   company               
activities, the  rights and  duties of  shareholders and measures               
for the  protection of  rights. This Law shall also determine the               
procedure  for   reorganising  into   investment  companies   the               
investment stock  companies established  prior  to  the  date  of               
coming into  the effect of this Law and operating for the purpose               
of state  property privatisation under the Law of the Republic of               
Lithuania on the Initial Privatisation of State Property.                       
     2.  Provisions  of  the  Company  Law  of  the  Republic  of               
Lithuania shall  apply to  investment companies  unless this  Law               
provides otherwise.                                                             
                                                                                
     Article 2. Definitions                                                     
     As used in the Law:                                                        
     depository means a bank, subsidiary of a bank or a brokerage               
company which  stores the  monetary funds  and securities  of  an               
investment company  and services  operations in securities and in               
cash in accordance with the procedure established by Chapter 4 of               
this Law;                                                                       
     controlled enterprise  means  an  enterprise  in  which  the               
investment company holds shares representing more than 30% of the               
total number of votes;                                                          
     investment company means a company the type of activities or               
property composition  whereof meets the criteria set by Article 3               
of this  Law. Investment  companies  may  operate  as  investment               
funds, closed-end funds or investment holding companies;                        
     investment stock company means a company established for the               
purpose of  state property  privatisation under  the Law  of  the               
Republic of  Lithuania on Initial Privatisation of State Property               
in compliance with the procedure established by the Government of               
the Republic of Lithuania;                                                      
     issuer means a natural or legal person who issues securities               
on its own behalf;                                                              
     investment  portfolio   means  a  collection  of  investment               
certificates held by an investment company;                                     
     diversified investment  portfolio means investment portfolio               
which meets all the following requirements:                                     
     1) not  more than  5% of  the investment company's own (net)               
assets have been invested in the securities issued by one issuer,               
except in  securities issued  or  guaranteed  by  the  government               
(local government)  in which up to 35% of own (net) assets may be               
invested;                                                                       
     2) no  more than  10%  of  one  issuer's  shares  have  been               
purchased; and                                                                  
     3) no  more than  10% of one issuer's debt securities except               
those issued  by the  government or  local government  have  been               
purchased;                                                                      
     investor means  a person  who has purchased or is purchasing               
securities in his name and with his capital;                                    
     authorised capital means the company's capital registered in               
accordance with the procedure established by law which amounts to               
the product  of the  number of  issued shares  and their  nominal               
value;                                                                          
     own capital  means the  investment fund shareholders' equity               
which is  not registered  and the  amount whereof  changes due to               
share redemption or cancellation as well as issue of new shares;                
     own (net)  assets means  the investment  company's  property               
value minus short-term and long-term liabilities;                               
     persons connected with the investment company:                             
     1) persons  holding more than 5% of the investment company's               
shares;                                                                         
     2) enterprises  or other  organisations  more  than  10%  of               
shares (or  other fractional  parts of  the capital)  whereof are               
held by the investment company; and                                             
     3) managers  of the  investment company  and enterprises  or               
organisations connected with it;                                                
     managers means  members of  the Supervisory  Board  and  the               
Board of  the enterprise,  manager of  the administration and his               
deputies,  chief   financier  (accountant)   and  other   persons               
authorised to conclude transactions in its name;                                
     management  enterprise   means  enterprise   to  which   the               
management of the property and current operation of an investment               
company is transferred under the property management agreement.                 
                                                                                
     Article 3. The Concept of Investment Company                               
     1. Investment  company is  a stock  company  (excluding  the               
exceptions provided  for by  Par. 3 hereof) which accumulates the               
funds of  natural and  legal persons by way of public offering of               
its own shares and has at least one of the following attributes:                
     1) investment  and reinvestment in securities and/or trading               
in securities  constitutes the principal activity generating more               
than 60% of income;                                                             
     2) securities  constitute more  than 50%  of  the  company's               
property value.                                                                 
     2.  Every  enterprise  which  corresponds  to  the  criteria               
specified in  items 1  and 2 of Par. 1 hereof must be reorganised               
into an  investment company  in  accordance  with  the  procedure               
established by this Law, with the exception of cases provided for               
in Par. 3 hereof.                                                               
     3. The  following shall  not be  considered as an investment               
company and this Law shall not apply to:                                        
     1) banks,  insurance companies, brokerage companies, as well               
as  other   financial  institutions   performing  operations   in               
securities whose activities are regulated by other laws and legal               
acts;                                                                           
     2) stock  companies having  no more  than  100  shareholders               
(owners) who have not offered for sale their securities;                        
     3)  stock  companies  which  temporarily  exceed  the  limit               
provided for  by item  2 of  Par. 1  hereof,  provided  that  the               
companies sell  the securities  exceeding the limit no later than               
within 3 months;                                                                
     4) enterprises with the authorised capital less than 250,000               
litas.                                                                          
                                                                                
     Article 4. Classification of Investment Companies                          
     1. Investment  companies may  belong to one of the following               
types:                                                                          
     1) investment funds;                                                       
     2) closed-end funds; or                                                    
     3) investment holding companies.                                           
     2. An  investment company  shall be considered an investment               
fund provided  that it  holds a  diversified investment portfolio               
whereas the  shares that have been issued or are being issued are               
redeemable shares whose holders have a right to sell them back to               
                                                                                
the company  and receive  therefor a  proportionate share  of the               
company's own (net) assets.                                                     
     3. An  investment company  shall be  considered a closed-end               
fund if its investment portfolio is diversified and if it has not               
issued redeemable shares.                                                       
     4. An  investment company  shall be considered an investment               
holding company if the investment securities portfolio held by it               
is not diversified and it has not issued redeemable shares.                     
     5. The investment holding company may be established only by               
reorganising, in  accordance with  the provisions  of Par.  2  of               
Article 3,  an investment  stock company as well as an enterprise               
of another type (except an investment fund or a closed-end fund).               
                                                                                
                            Chapter 2                                           
                                                                                
          General Requirements of Investment Companies                          
                                                                                
                                                                                
     Article 5. Establishment, Reorganisation and                               
               Liquidation of Investment Companies                              
     1. The  investment company may engage in its activities only               
upon being  issued a  permit by  the Securities  Commission.  The               
Securities Commission  must examine  the  matter  concerning  the               
issue of permit within 30 days from the filing of application for               
the issue of permit for the investment company activities. If the               
permit is  not issued  the founders  of the investment company or               
other representatives must be given a justified reply.                          
     2. The  name of  the investment  company  must  contain  the               
following words  or their  acronyms in  Lithuanian: "investicinis               
fondas"  or   "IF"  ("investment   fund"  or   "IF"),  "uřdarasis               
investicinis fondas"  or "UIF"  (  "closed-end  fund"  or  "CEF),               
"kontroliuojan▀ioji investicinˇ  bendrovˇ" or  "KIB" ("investment               
holding company"  or "IHC").  The words  "akcinˇ bendrovˇ" or the               
acronym "AB"  ("stock company"  or "SC")  is not mandatory in the               
name of  the investment  company.  The  name  of  the  investment               
company  must   correspond  to   the  requirements   set  in  the               
regulations of  enterprise, institution  and  organisation  names               
approved by the Government of the Republic of Lithuania.                        
     3. The  permit for  the activities of the investment company               
may be  issued to  a newly established investment fund or closed-               
end fund or to a going concern which is being reorganised into an               
investment company.                                                             
     4. The  shares of  the first  issue of  a newly  established               
investment company  may be  purchased only by its founders. These               
shares must  be fully  paid up  prior to  the investment  company               
registration in the enterprise register.                                        
     5. For  the issuance  of permit the investment company (when               
the company  is being established - the founders) shall file with               
the Securities Commission an application which must state:                      
     1) the name and registered office of the investment company;               
     2)  the  amount  of  the  registered  (in  case  of  company               
establishment - accumulated) authorised (own) capital;                          
     3)   information   concerning   material   suitability   and               
qualifications required  for engaging  in the  investment company               
activities (full  names,  addresses,  phone  numbers  of  persons               
possessing qualifications certificates); and                                    
     4) information  concerning the  chosen management enterprise               
and depository.                                                                 
     6. The  founding agreement,  bylaws, certificate  concerning               
the  payment  up  of  investment  company's  shares  as  well  as               
agreement  concluded  with  the  management  enterprise  and  the               
depository, if  the conclusion  of such  agreements  is  required               
under this  Law, must  be appended  to the  application  for  the               
permit issuance.                                                                
     7. The  investment company bylaws must contain the following               
information:                                                                    
     1) the name;                                                               
     2) the registered office of the company;                                   
     3) purposes, objects and ways of investment activities;                    
     4) the  amount of  authorised capital of the closed-end fund               
or  investment  holding  company,  initial  own  capital  of  the               
investment fund;                                                                
     5) the  number and  par value  of  the  closed-end  fund  or               
investment holding  company shares,  the largest number of shares               
the investment fund plans to issue;                                             
     6) rights carried by shares;                                               
     7) management bodies forming procedure;                                    
     8) the  competence of the general meeting, the procedure for               
calling the general meeting and the voting procedure;                           
     9) the competence of the supervisory board and the board, if               
it is formed;                                                                   
     10) income distribution policy;                                            
     11)  regulations   of  own   (net)  asset   evaluation   and               
establishment of investment fund share redemption price;                        
     12) cost structure and the principles of cost covering;                    
     13) procedure  for making announcements to the shareholders,               
procedure for  presenting  annual  and  semi-annual  reports  and               
announcing same to the shareholders; and                                        
     14) liquidation procedure.                                                 
     The bylaws  may also  contain other  provisions which are in               
compliance with  the laws and other legal acts of the Republic of               
Lithuania.                                                                      
     8.  The   investment  company   bylaws  may  be  amended  or               
supplemented and  the depository or the management enterprise may               
be changed  only  subject  to  the  approval  of  the  Securities               
Commission. The  approval shall  be deemed  to have been given if               
within 15  days of  the receipt  of appropriate  application  the               
Securities Commission  does not make a valid objection as regards               
the reason precluding the amendment of the bylaws or the changing               
of  the   depository  or   the  management  enterprise.  Disputes               
concerning the approval of the amendment and supplementing of the               
bylaws, changing  of the  management enterprise or the depository               
shall be settled by court.                                                      
     9. The  Securities Commission may refuse to issue the permit               
for the investment company activities if:                                       
     1) not all documents specified in Paras. 5 and 6 hereof have               
been presented;                                                                 
     2) the  documents presented for the issue of a permit do not               
meet the requirements of this Law;                                              
     3) documents  presented in order to receive a permit contain               
erroneous or fraudulent information;                                            
     4) not all investment company shares are fully paid up or if               
the founders of a newly founded investment company have purchased               
only part of shares of the first issue; or                                      
     5) investment company managers or founders are not reputable               
persons (there  are proofs  of dishonesty  or frequent  financial               
discipline violations,  penalties have  been imposed  on them for               
the violations  connected with  the abuse of official position or               
administrative penalties  have been imposed for the violations of               
legal acts  regulating the  securities market,  or they have been               
punished  for  fraudulent  bankruptcy  or  tried  for  deliberate               
crimes).                                                                        
     10. If the management of the investment portfolio of a newly               
founded closed-end  fund or  investment holding  company has  not               
been transferred  to the  management  enterprise,  at  least  two               
investment company managers or other administration officers must               
possess  a  broker's  qualifications  certificate  or  any  other               
certificate  recognised   by  the   Securities  Commission.   The               
Securities Commission  must be  within 10  days informed  of  the               
changes of persons possessing qualifications certificates.                      
     11. Investment  companies shall  be registered in accordance               
with the  procedure established  by the  Law of  the Republic  of               
Lithuania on  the Register of Enterprises provided that they have               
the permit  of the  Securities Commission  for investment company               
activities.                                                                     
     12. A  closed-end fund  may  be  reorganised  only  into  an               
investment  fund.   It  shall  be  prohibited  to  reorganise  an               
investment fund  into a  closed-end fund or an investment holding               
company.  The  consent  of  the  Securities  Commission  must  be               
obtained for the reorganisation of an investment company. When an               
investment company  is being  reorganised by way of division each               
investment company  shareholder must  receive the  same  part  of               
shares of  the newly  established investment company which he had               
in  the   company   under   reorganisation.   Grounds   for   the               
reorganisation or liquidation of an investment company may not be               
the decrease  below the  limit established in item 2 of Par. 1 of               
Article 3 of its part of property composed of securities.                       
     13. The  Securities Commission  may revoke  the  permit  for               
activities issued  to an  investment company  if  the  investment               
company:                                                                        
     1) is under liquidation;                                                   
     2) has  obtained the permit by presenting erroneous or false               
information, forged  documents as well as by concealing the facts               
by reason whereof the permit should not have been issued;                       
     3) is  no longer  fulfilling the terms and conditions of the               
permit issuance  or complying  with the laws and other legal acts               
of the Republic of Lithuania;                                                   
     4) fails to comply with the capital requirements established               
in Par. 1 of Article 6;                                                         
     5) has  not used  the issued permit for 12 months or has not               
engaged in its activities during the above period;                              
     6) does not guarantee the security of the funds entrusted to               
it or  is no  longer in the position to fulfil its obligations to               
the creditors; and                                                              
     7) maintains  the accounting  negligently  or  fraudulently,               
prepares financial accounts not properly.                                       
     The permit  of an  investment company may also be revoked in               
the event of emergence of any of the conditions specified in item               
5 of Par. 9 hereof.                                                             
     14. An  investment company shall have the right to employ an               
independent auditor  to audit  its  business  if  the  Securities               
Commission establishes  grounds for  the revocation of permit for               
the investment  company activities  as specified in items 6 and 7               
of Par.  13 hereof. The report of the independent auditor must be               
presented to  the Securities  Commission within 2 months from the               
request to  perform the audit unless the Commission fixes another               
date. The  issue concerning  the revocation of the permit for the               
investment company  activities  may  be  considered  without  the               
results of the independent audit if the investment company failed               
to present  said results  to the Securities Commission within the               
established period or refused to perform the independent audit or               
did not present any information as to the date of the independent               
audit.                                                                          
     15. In  the event  of revocation of the permit issued to the               
investment company the company must be liquidated. The investment               
company under  liquidation must  be re-registered  and the  words               
"under liquidation"  must  be  added  to  its  name.  Information               
concerning  the  investment  company's  liquidation  process  and               
liquidation dates  must be  presented to  every  shareholder  who               
requests it,  to a  directly  interested  third  person  and  the               
Securities Commission.  The property  of the  investment  company               
under  liquidation   (securities  and   other  movable  property,               
immovable property)  must be  sold  by  competitive  bidding  (by               
auction) or  on the  stock exchange.  The money  received for  it               
together with  other funds of the company under liquidation shall               
be distributed, upon satisfying all the company's liabilities, to               
the shareholders  in proportion  to the  number of  the company's               
shares held by them. The investment company under liquidation may               
conclude only  those transactions  which are  connected with  its               
liquidation.                                                                    
     16. Disputes  concerning the  issue or revocation of permits               
for the investment company activities shall be settled by court.                
                                                                                
     Article 6. Capital                                                         
     1. The  own capital  of an  investment fund  must be no less               
than 1 million litas. The authorised capital of a closed-end fund               
or investment holding company must be no less than 250,000 litas,               
whereas  their  own  (net)  assets  may  not  be  less  than  the               
authorised capital.  The Securities  Commission must  be no later               
than within 5 days notified if:                                                 
     1) own  capital of  an investment  fund becomes  less than 1               
million litas; or                                                               
     2) own  (net) assets  of a  closed-end  fund  or  investment               
holding company become less than the authorised capital.                        
     2. Contributions in kind may account for no more than 20% of               
the authorised (own) capital of an investment company.                          
     3. When  the  authorised  (own)  capital  of  an  investment               
company  is  increased,  shareholders  shall  have  no  right  of               
priority in subscribing for the shares of the new issue.                        
     4. A  closed-end fund or an investment holding company shall               
have no  right to reduce the authorised capital, except reduction               
by reason of the incurred losses.                                               
     5. Loan capital of an investment fund or closed-end fund may               
not account  for more  than 10%  of its own (net) asset value. If               
this requirement  is not complied with due to the decrease in the               
value of its own (net) assets, the investment fund or the closed-               
end fund must rectify the situation no later than within 3 months               
of the commission of the violation.                                             
                                                                                
     Article 7. Shares                                                          
     1. An  investment company  may  have  only  ordinary  shares               
entitling their  holders to  equal rights.  Every share carries a               
right to  one vote at all shareholders' meetings and is entitled,               
on equal  grounds  with  other  shares,  to  receive  payment  of               
dividend and  an appropriate  share of  the investment  company's               
property during its liquidation.                                                
     2. The  shares of  an investment  company may  be paid up in               
cash or  in kind. Contributions in kind may not be in the form of               
work and  services, intellectual  and other  intangible property.               
The shares of a closed-end fund and an investment holding company               
must be fully paid up prior to the registration of the authorised               
capital or the increase thereof. An investment fund shall have no               
right to sell its shares to be paid up by instalments or postpone               
the date  of payment. Payment for the investment fund shares must               
be effected  no later than within 3 days of the conclusion of the               
transaction. In  the event  that a  person fails  to pay  for the               
investment  fund  shares  within  the  above  period,  the  share               
purchase transaction shall be deemed not to have been effected.                 
     3. The  shares of  a closed-end  fund and investment holding               
company may  be listed  on the  Stock Exchange in accordance with               
the regulations  approved by  the Securities  Commission and  the               
Exchange. Investment  fund shares may not be purchased or sold on               
the stock exchange.                                                             
     4. At  the shareholder's  request the  investment fund  must               
redeem from  him the  shares of the fund paying for them in cash.               
Payment may  also be  effected  in  other  property  if  this  is               
provided for  by the  investment fund  bylaws.  Share  redemption               
price shall  be calculated  in  accordance  with  the  investment               
company's own  (net) asset  valuation methods  and must amount to               
the part  of the investment company's own (net) assets due to the               
share.                                                                          
     5. The  investment fund  must publicly  announce the selling               
and redemption  prices of its shares each time they are issued or               
redeemed,  but  no  less  frequently  than  twice  a  month.  The               
Securities Commission  may reduce  the frequency of announcements               
up to  one time  per month provided that such reduction causes no               
harm to the investment fund shareholders and other investors.                   
     6. An  investment fund  may, on  the basis of the procedures               
provided for by its bylaws or other regulations, temporarily (for               
no  longer  than  3  months  in  a  business  year)  suspend  the               
redemption of its shares if:                                                    
     1) the  suspension is  performed in  order  to  protect  the               
shareholder's interests  from possible insolvency as well as from               
the fall  in the  share redemption  price due to the unfavourable               
securities market condition and the related reduction of value of               
the investment portfolio held by the investment fund;                           
     2) own  capital becomes  less than the amount established in               
Par. 1 of Article 6; or                                                         
     3) this is requested by the Securities Commission.                         
     7. In  the event  of  suspension  of  share  redemption  the               
investment  fund   must  within  5  days  notify  the  Securities               
Commission of  its  decisions  and  make  a  public  announcement               
thereof  through  mass  media  (national  newspapers,  radio  and               
television) in  such a  manner and  at such  time as to provide a               
real  possibility   for  the  investment  fund  shareholders  and               
potential investors to find out about the event.                                
                                                                                
     Article 8. Management                                                      
     1. The  management of  an investment  fund property  must be               
transferred to  the management  enterprise which  is operating in               
accordance with Chapter 3 of this Law. Management of a closed-end               
fund or  investment holding  company  property  or  part  thereof               
(investment portfolio)  may  be  transferred  to  the  management               
enterprise. In  such instances  the investment  company board and               
administration may  be not  formed. If the management of property               
is transferred to the management enterprise the supervisory board               
must be formed in the investment company.                                       
     2. The  persons with  whom subscription  contracts have been               
concluded not  later than  10 working  days prior  to the meeting               
shall have  the right to participate in a general (shareholders')               
meeting  of   investment  fund.   The  quorum   at  the   general               
(shareholders's) meeting  shall be  determined according  to  the               
number of shares which have been issued and not subscribed for 10               
working days prior to the meeting.                                              
                                                                                
     Article 9. The Assets                                                      
     1.The assets of the investment company may consist of :                    
     1) monetary funds;                                                         
     2) securities;                                                             
     3) other  immovable and  movable property  necessary for the               
ordinary operations  of the investment company and which accounts               
for not  more than 20 percent of the value of the total assets of               
the company.                                                                    
     2. Investment company may acquire the following securities:                
     1) securities quoted on the stock exchanges operating in the               
Republic of Lithuania;                                                          
     2)  securities  traded  on  other  recognised,  regulated  ,               
permanently operating and public stock markets in Lithuania;                    
     3) newly  issued securities if the conditions of their issue               
provides for  the issuer's  obligation to  file an application to               
have its  shares quoted in the Official or Current list or in the               
list of  other recognised,  regulated, permanently  operating and               
public stock  market in  Lithuania and  there are guarantees that               
issued securities  will be  registered in  said lists  within one               
year of their issue;                                                            
     4) deposit certificates issued by banks;                                   
     5) securities  issued or guaranteed by the government (local               
government) ;                                                                   
     6) other  securities recognised by the Securities Commission               
as liquid.                                                                      
     3. Investment company may also acquire other securities that               
are not  indicated in  Par. 2  of this Article the total value of               
which may  not account  for more that 10 percent of the company's               
own (net  ) assets.  If said requirement is not complied with due               
to the  reduction in  value of  own (net)  assets, the investment               
company must rectify the situation not later than within 3 months               
from the date the violation was committed.                                      
                                                                                
     Article 10. Peculiarities of the Activities of                             
               Investment Companies                                             
     1. Investment  fund and  closed-end fund shall be prohibited               
from:                                                                           
     1) extending  loans, giving  a  guarantee  or  warranty  for               
another  person's   fulfilment  of   liabilities,  mortgaging  of               
securities or real property held by them;                                       
     2) taking  loans, with  the exception of cases when the loan               
is taken  for the  acquisition of  movable or  immovable property               
necessary for its operations;                                                   
     3)  acquiring  and  holding  securities  due  to  which  the               
requirements set  forth in  the diversified  investment portfolio               
would be violated;                                                              
     4) issuing bonds;                                                          
     5) establishing  affiliates or  other independent structural               
subdivisions.                                                                   
     2. If  the investment  fund or  closed-end fund violates the               
requirements of  the diversified  investment portfolio due to the               
preferential right  to acquire  newly issued  securities provided               
for in the laws and other legal acts of the Republic of Lithuania               
or for  other objective  reasons that  are beyond its control, it               
must sell  the portion  of securities  due to  which restrictions               
specified in  this part  were violated  not later  than within  3               
months.                                                                         
     3. The investment holding company shall be prohibited from:                
     1) investing  more than  25 percent  of its own (net) assets               
into the securities issued by one issuer;                                       
     2) taking loans from the controlled enterprises or obtaining               
their guarantees;                                                               
     3) without  the  decision  of  the  general  (shareholder's)               
meeting, mortgaging  , selling,  or in any other way transferring               
total issuer's shareholding or a part thereof, the total value of               
which accounts  for at  least 5  percent of the holding company's               
own (net)  assets if  due to such transaction the holding company               
would lose or might lose :                                                      
     in  the  general  (shareholder's)  meeting  of  the  issuer,               
qualified (2/3  of votes) or simple majority (1/2 of votes) vote,               
as well as the right of veto (1/3 of votes), calculating from the               
total number of votes;                                                          
     the right  of initiative  to convene general (shareholders')               
meeting as  well as  other rights for the implementation of which               
1/10 of the authorised capital of the issuer is required;                       
     the right to supplement the agenda or nominate candidates to               
the members  of the  Supervisory  Board  or  the  Board  for  the               
implementation of  which 1/20  of the  authorised capital  of the               
issuer is required;                                                             
     4) without the prior decision of the general (shareholders')               
meeting,  mortgaging   real  property,  extending  loans,  giving               
guarantee or  warranty  for  the  fulfilment  of  obligations  by               
another person  if the  total amount  of such  liabilities of the               
holding company  and the  total amount  of extended  loans  would               
account for  more than  10 percent  of the value of its own (net)               
assets.                                                                         
     4. The  closed-end fund  and the  holding company  shall  be               
prohibited from repurchasing, in any way, its shares or accepting               
them as a collateral.                                                           
     5. Provided  the securities  of the  issuer are trade on the               
stock exchange, the investment company shall be prohibited from:                
     1) when  buying securities  of the  issuer _  exceeding  the               
maximum price  which is  fixed on the day the transaction is made               
on the stock exchange;                                                          
     2) selling the issuer's securities at a price which is lower               
than the  minimum price  of these securities fixed on the day the               
transaction is made on the stock exchange.                                      
     6. The investment company shall be prohibited from acting as               
intermediary in stock market if the investment company is not the               
owner of these securities.                                                      
                                                                                
     Article 11. Information that must be Furnished by the                      
               Investment Companies to its Shareholders,                        
               General Public and Supervision Institutions                      
     1. The investment company must provide:                                    
     1) the prospectus;                                                         
     2) reports of each business year;                                          
     3) reports for the first 6 months of a business year.                      
     2. Annual and semi-annual reports must be published with the               
following regularity:                                                           
     1) annual - not later than within 4 months of the end of the               
accounting business year;                                                       
     2) semi-annual  - not  later than within 2 months of the end               
of the accounting six months.                                                   
     3. The bylaws of the investment companies must constitute an               
inseparable part  of the prospectus and must be provided together               
with the annexes attached thereto.                                              
     4. The  investment company  must submit  its prospectus  and               
amendments thereto,  as well  as annual  and six-month reports to               
the Securities Commission in compliance with the requirements set               
forth with  regard to its contents, procedure and time limits for               
its filing.                                                                     
     5. Financial  accounts provided in the annual report must be               
audited by  an independent  auditor entitled  to perform audit in               
accordance with  the procedure established by laws. Audit results               
must be provided in the annual report. Auditor's report must also               
contain information  on all  the violations of this Law and other               
laws and legal acts regulating financial activities of investment               
companies.                                                                      
     6. The prospectus, the last published annual and semi-annual               
reports must  be available to persons who subscribe to the shares               
in the investment company prior to the entering into subscription               
contract. In  addition, annual  and semi-annual  reports must  be               
available to  the general  public at  certain places specified in               
the prospectus.                                                                 
     7. The  investment company,  the management  enterprise with               
whom property  management agreement  has been  concluded, and the               
depository must keep records of transactions and other operations               
of the  company in  accordance with  the standards established by               
the laws  of the  Republic of Lithuania and other legal acts. All               
the documents  relative  to  the  activities  of  the  investment               
company must  be  available  for  inspection  by  the  Securities               
Commission.                                                                     
     8. At  the request  of the  Securities Commission  , but not               
more frequently  than once  a year,  the investment company must,               
within three  months, submit  to it  the report of an independent               
auditor, stating whether the investment company complies with the               
requirements set  forth in  Articles 9  and 10. Such audit of the               
investment company  may be performed more often at the expense of               
the Securities Commission.                                                      
     9. The  investment holding  companies  must,  together  with               
annual report,  each business  year make  and publish  additional               
report  about   the  activities   of  the  group  of  enterprises               
consisting of  the investment holding company and the enterprises               
controlled by it.                                                               
     10. In  describing the  financial position  of the  group of               
enterprises specified  in Par. 9 of this Article , the investment               
holding company must present in the report a consolidated balance               
sheet, consolidated  profit and  loss  account,  and  explanatory               
notes, prepared  according to  the standards  established by  the               
Ministry of  Finance. The  data of the consolidated balance sheet               
may not  be used  for judging  whether the  enterprise meets  the               
requirements set forth in item 2 of Par. 1 of Article 3 .                       
     11. The  enterprises which under the provisions of Par. 9 of               
this Article  form  a  group  of  enterprises,  must  furnish  to               
investment companies  all the  information necessary  for  making               
consolidated accounts.                                                          
     12. The  data in  the consolidated  accounts concerning  the               
assets and liabilities, profit and loss of the consolidated group               
of  enterprises,  as  the  separate  entity,  must  be  disclosed               
truthfully and  honestly. The  report on  the management  of  the               
group of  enterprises must disclose information on the management               
structure of  this group  as a  separate entity,  transformations               
that have  been made  or are planned to be made and the essential               
events that have occurred during the accounting period.                         
                                                                                
                                                                                
                            Chapter 3                                           
                                                                                
                     Management Enterprises                                     
                                                                                
                                                                                
     Article 12. The Concept of Management Enterprise                           
     1. A  stock company or a close stock company which possess a               
licence  issued  by  the  Securities  Commission  to  manage  the               
investment portfolio  of investment companies may be a management               
enterprise. The  procedure and  conditions for  the issue of such               
licences shall be established by the Securities Commission.                     
     2.  Disputes  concerning  the  issuing  or  cancellation  of               
licences shall be settled by the court.                                         
     3. The  authorised capital of the management enterprise must               
be not  less than  Lt100 000.  If the  authorised capital becomes               
less than the minimum capital, the management company must inform               
the Securities  Commission of  this fact  not later than within 5               
days.                                                                           
     4. At  least two  managers of the management enterprise must               
have broker's  qualification certificate or any other certificate               
recognised  by   the  Securities   Commission.   The   management               
enterprise must  submit to  the Securities  Commission data about               
all  managers  (  their  names,  surnames,  addresses,  telephone               
numbers) ,  as well as inform it of any changes therein not later               
than within 10 days.                                                            
     5. The  management enterprise  shall have the right to carry               
out no  other transactions with the investment company than enter               
into property management agreement.                                             
                                                                                
     Article 13. Property Management Agreement                                  
     1. The  property management agreement between the investment               
company and management enterprise must provide for:                             
     1) the object of the agreement;                                            
     2) rights and duties of the parties to the agreement;                      
     3) purpose, objects and methods of investment activities;                  
     4) the  amount of  the commission  paid  to  the  management               
enterprise, the manner and procedure for the payment thereof;                   
     5) structure  of  expenditures  of  investment  company  and               
procedure for their coverage;                                                   
     6) liability for non- fulfilment of its obligations;                       
     7) conditions  and procedure  for  the  termination  of  the               
agreement;                                                                      
     8) duration of the agreement.                                              
     The  property   management  agreement   may  contain   other               
provisions provided  they do  not contradict  the laws  and other               
legal acts of the Republic of Lithuania.                                        
     2. The property management agreement must be approved by the               
general (shareholder's) meeting of the investment company. It may               
be concluded  for the  period not exceeding 4 years. The property               
management agreement  may be  terminated by  the decision  of the               
general (shareholders')  meeting adopted by simple majority vote,               
prior to the expiry of the agreement.                                           
     3. The  commission payable  to the management enterprise for               
the management  of the property of the investment company may not               
be in excess of one of the following amounts:                                   
     1) 2 percent of the annual value of the investment company's               
own (net) assets;                                                               
     2) 20  percent of  the average  annual  net  profit  of  the               
investment company.                                                             
     A part  of this  commission may be paid by the shares of the               
investment  company  if  it  is  provided  for  in  the  property               
management agreement.                                                           
                                                                                
     Article 14. Liability for the Compensation of Losses                       
               (Damages)                                                        
     The  management   enterprise  shall   be  liable   for   the               
compensation of  losses (damages)  inflicted through its fault to               
the investment  company or its shareholders under the laws of the               
Republic of Lithuania.                                                          
                                                                                
                            Chapter 4                                           
                                                                                
                          Depositories                                          
                                                                                
     Article 15. The Obligation of the Investment Company to                    
               Transfer its Property to the Depository for                      
               Safe Keeping                                                     
     The  property  of  the  investment  company,  consisting  of               
monetary resources  and securities  must be  transferred  to  one               
depository for  safe keeping.  If the  depository selected by the               
investment company  has no  right to  accept cash  deposits,  the               
investment company  may transfer  its cash  deposits  to  another               
institution possessing such right. The investment company may not               
have more than one depository of securities or cash deposits.                   
                                                                                
     Article 16. Eligibility for Carrying out Depository                        
               Operations                                                       
     1.  A   bank  as  well  as  brokerage  company  and  a  bank               
subsidiary,  having   the  licence   issued  by   the  Securities               
Commission to  engage in  the activities of a depository may be a               
depository. The licences are of two types:                                      
     1) the licence for carrying out operations with securities;                
     2) the  licence for  carrying out operations with securities               
and cash.                                                                       
     2. The  conditions and  procedure for  granting licences  to               
brokerage companies and bank subsidiaries to engage in depository               
activities and  cancellation thereof  shall be established by the               
Securities Commission.                                                          
     3. The  authorised capital of the depository may not be less               
than 5  million litas if it operates as the depository dealing in               
cash and  securities and  may not be less than 1 million litas if               
it operates  as securities  depository. If the authorised capital               
of the  depository becomes  less than  the minimum capital or its               
own assets  become less  than its  authorised  capital,  it  must               
inform the  Securities Commission  of this  fact not  later  than               
within 5 days.                                                                  
                                                                                
     Article 17. Activities of the Depository and their                         
               Supervision                                                      
     1. The depository must separate the property entrusted to it               
by the  investment company  from its own property and identify it               
separately. The  creditors of  the depository shall have no right               
to settle  their claims  from the property entrusted to it by the               
investment company.                                                             
     2.  The  Securities  Commission  shall  have  the  right  to               
establish the  rules governing  the control  of the  depository's               
activities, as  well as  the requirements  for annual  and  other               
audit.                                                                          
     3. While  fulfilling  the  instructions  of  the  investment               
company or  management  enterprise  (  if  there  is  such),  the               
depository must ensure that:                                                    
     1) the  selling price  and repurchase price of the shares of               
the  investment   fund  is  determined  in  accordance  with  the               
requirements prescribed  by  this  Law  and  the  bylaws  of  the               
depository;                                                                     
     2) the  investment company  or persons  acting on its behalf               
comply with  the requirements  prescribed by  this  Law  and  the               
bylaws of  the company  when selling,  issuing,  repurchasing  or               
cancelling the shares of the company;                                           
     3) income  received from  the transactions with the property               
of the  investment company  is transferred  to its account in due               
time;                                                                           
     4) income  of the  investment company  is used in compliance               
with the  laws of the Republic of Lithuania, other legal acts and               
its bylaws.                                                                     
     4. The  depository shall  be liable  under the  laws of  the               
Republic of  Lithuania for the indemnification of losses (damage)               
caused through  its  fault  to  the  investment  company  or  its               
shareholders.  The  depository  may  not  be  relieved  from  the               
fulfilment of  its obligations  on grounds that the whole or part               
of the  property entrusted  to it has been transferred to a third               
party.                                                                          
     5.  The  depository  must  enter  into  agreement  with  the               
investment company,  which must provide for the procedure for the               
payment for services rendered by it and the rate of charges.                    
                                                                                
     Article 18. Independence of Depositories from                              
               Investment Companies                                             
     1. No  enterprise may  operate as  an investment company (or               
management enterprise) and a depository concurrently.                           
     2. The  investment company  or management enterprise and the               
depository must perform their functions independently.                          
     3. Persons  connected with the investment company may not be               
shareholders  or  managers  of  the  depository  with  whom  this               
investment company has deposited its securities or cash.                        
                                                                                
                            Chapter 5                                           
                                                                                
               Protection of Investors' Interests                               
                                                                                
                                                                                
     Article 19. The Duty to Act in the Best Interests of                       
               the Shareholders                                                 
     1. Investment  company, management enterprise and depository               
must carry  out its  activities in  compliance with the effective               
laws and other legal acts and ensure that their activities should               
not be  prejudicial to  the  shareholders'  property  rights  and               
interests.                                                                      
     2.  The   investment  company,   management  enterprise  and               
depository as  well as  persons connected with them may not enter               
into any  transactions concerning  the investment  company or its               
property, that  would be prejudicial to the investment company or               
the rights  and interests  of its  shareholders. Managers  of the               
investment company,  management  enterprise  and  the  depository               
shall not  be liable  for the  damage  that  was  caused  to  the               
investment company in order to reduce losses incurred as a result               
of the  depreciation of  its  investment  portfolio  due  to  the               
reduction in value of securities comprising it.                                 
     3.  Having   established  that   the  manager   has  made  a               
transaction from  which he  gained benefit  at the expense of its               
shareholders, as  well as  if the  shareholders of the investment               
company incur  losses  (  material  damage)  caused  by  unlawful               
actions of  the  manager,  the  shareholders  of  the  investment               
company shall  have the right to take him to court, requesting to               
transfer the rights and duties resulting from such transaction to               
the investment  company or  compensate for  the  (losses)  damage               
caused by such transaction.                                                     
     4. If  the  investment  holding  company  benefit  from  its               
unlawful actions  at the expense of the enterprise, controlled by               
it, or  its shareholders  or cause  to it  any other  damage, the               
controlled enterprise or its shareholders shall have the right to               
demand through court to be compensated for losses (damage) caused               
to it.                                                                          
                                                                                
     Article 20 The Rights of the Securities Commission                         
     1. When  implementing this  Law, the  Securities  Commission               
shall have  the  right  to  adopt  legal  acts  assigned  to  its               
competence.                                                                     
     2.  The  Securities  Commission  shall  have  the  right  to               
examine, control  and make  investigations  in  order  to  reveal               
whether  investment   companies,   management   enterprises   and               
depositories comply  with this  Law  and  other  legal  acts  and               
regulations. When  discharging these functions , the employees of               
the Securities Commission may, without asking for a permit, enter               
the premises  of the  above-mentioned enterprises,  examine, take               
temporarily the documents ( leaving behind their descriptions) or               
copy them, as well as question in writing or in word the managers               
of these enterprises or any other persons subordinate to them.                  
     3. The  instructions of  the Securities  Commission given to               
investment companies,  property management  enterprises or  their               
managers concerning the elimination of the violations of laws and               
other legal acts shall be binding                                               
     4. The  employees of  the Securities  Commission  must  keep               
commercial secrets  of investment companies, gained in the course               
of his  duties confidential.  For the  use of information not for               
its proper purpose or for other unlawful actions, these employees               
shall be liable under the laws of the Republic of Lithuania.                    
                                                                                
     Article 21. Liability for the Violation of this Law                        
     1.    Investment    companies,    management    enterprises,               
depositories and their managers shall be liable for the violation               
of this  Law in  accordance with the procedure established by the               
laws of the Republic of Lithuania.                                              
     2. The Securities Commission shall have the right :                        
     1) to  apply sanctions  provided  for  in  the  Republic  of               
Lithuania Administrative  Code against the managers of investment               
companies, management  enterprises and  depositories as  well  as               
against the  auditors of  these enterprises  for the violation of               
this Law and other legal acts;                                                  
     2) to  impose a  fine in  the amount  of up  to 3 percent of               
their  annual   income  on   those  management   enterprises   or               
depositories, which  inflict losses  (damage) by  their  unlawful               
actions to investment companies or their shareholders.                          
     The application  of these  sanctions shall  not relieve  the               
persons from  the liability  to compensate  for  losses  (damage)               
inflicted through  their fault  to  investment  companies,  their               
shareholders or  third parties,  as well  as from  the  liability               
under other laws of the Republic of Lithuania.                                  
     3. The  decisions of  the Securities Commission in regard to               
the imposition  of an  administrative penalties  may be  appealed               
against to  court in  the manner  established by  the laws of the               
Republic of  Lithuania. Decisions  of the  Securities  Commission               
regarding the  application of  sanctions specified  in item  2 of               
Par.2 of this Article may be appealed against to court within one               
month. The  appeal  shall  not  suspend  the  fulfilment  of  the               
instructions  and  decisions  of  the  Securities  Commission  to               
eliminate violations  of laws  and other  legal acts  unless  the               
court decides otherwise.                                                        
     4. Fines  must be paid into the budget not later than within               
15 days  of the receipt of the resolution to impose a fine on the               
investment company,  management enterprise,  depository or  their               
managers. Fines  shall  be  recovered  from  the  income  of  the               
management enterprises or depositories without suit.                            
                                                                                
                                                                                
                            Chapter 6                                           
                                                                                
                        Final Provisions                                        
                                                                                
                                                                                
     Article 22. Application of this Law to the Operating                       
               Investment Stock Companies                                       
     1. Investment  stock companies established during the period               
of the  privatisation of  state-owned property under the Republic               
of Lithuania  Law on  the Initial Privatisation of State Property               
must by  1 May  1996 alter  their bylaws and reregister itself in               
compliance with the requirements provided for in this Law. If the               
investment stock  company fails  to fulfil  this requirement,  it               
must be liquidated in the manner established by the Government of               
the Republic of Lithuania provided for in Par. 15 of Article 5 of               
this Law.  The auditor  must present  the report on the financial               
position of  this company  to the general (shareholders') meeting               
of the investment stock company in which the reorganisation shall               
be considered.                                                                  
     2.  Investment  stock  companies  may  be  reorganised  into               
investment companies  in accordance  with  the  requirements  set               
forth in  Article 10  of the  Company  Law  of  the  Republic  of               
Lithuania. The  provisions of  Par. 12  of Article  5 of this Law               
shall also  apply  to  the  reorganisation  of  investment  stock               
companies. The  preparation of the project for the reorganisation               
of the  investment stock  company into  investment company is not               
mandatory.                                                                      
     3.  The   preference  shares   issued  by  investment  stock               
companies must be converted into ordinary shares within one month               
from the  enforcement of  this Law, and the privileges granted by               
them shall  be abolished.  The founders'  privileges must also be               
abolished  if  the  bylaws  of  the  investment  stock  companies               
provided therefor.  Amendments to the bylaws relative thereto may               
be registered without convoking general meetings.                               
     4. Investment stock companies must, within six months of the               
coming into  effect of  this Law,  transfer for safe keeping cash               
and securities held by them to the depository selected by them. A               
copy of  the agreement  entered into  with the depository must be               
submitted to the Securities Commission.                                         
     5. If  after the  reorganisation  of  the  investment  stock               
company into  investment company  of  an  appropriate  type,  its               
property will have to be transferred to the management enterprise               
for the  purpose  of  its  management,  the  agreement  with  the               
selected management  enterprise must  be approved  in the general               
(shareholders') meeting prior to the date of the reregistering of               
this company.                                                                   
     6. The  investment stock  companies must,  within the period               
between the  coming  into  effect  of  this  Law  and  their  re-               
registration  into   investment  companies,  prepare  information               
specified in  Article 11  of this  Law. The auditors shall not be               
required to report on such information.                                         
     7. The  provisions contained in the first sentence of Par.10               
of Article 5 shall come into effect as of 1 January 1997. By this               
term and in such cases when the management of the property of the               
investment  company   is  not   transferred  to   the  management               
enterprise, at  least one  member of  the Board of the investment               
company  or  an  employee  of  the  administration  must  possess               
qualifications   certificate   of   a   broker   or   any   other               
qualifications   certificate   recognised   by   the   Securities               
Commission.                                                                     
     8. If the investment stock company has been reorganised into               
investment fund,  the announcement  about the  value of  the  own               
(net) assets  of the  investment fund and the redemption price of               
its shares must be published not later than within 30 days of its               
re-registration.                                                                
     The investment  funds reorganised in this manner must redeem               
its own shares within the following stages:                                     
     1) the  redemption of  shares may  be commenced  not earlier               
than after the third public announcement of the data specified in               
the first paragraph hereof ;                                                    
     2) by  1 July 1996 not less than 1/2 of all the applications               
of shareholders  to redeem  the  shares  held  by  them  must  be               
satisfied;                                                                      
     3) from  1 January  1997 the shares of investment funds must               
be redeemed without any restrictions in the manner established by               
this Law.                                                                       
     9. If  the shares  of the  investment stock  company that is               
being reorganised  into investment fund, were traded on the stock               
exchange, the  trade in  such shares  must be terminated from the               
date of the re-registration of this investment stock company .                  
     10. It shall be prohibited to establish new investment stock               
companies as of the date of the coming into effect of this Law.                 
                                                                                
     I promulgate  this Law  passed by the Seimas of the Republic               
of Lithuania.                                                                   
                                                                                
                                                                                
Algirdas Brazauskas                                                             
President of the Republic                                                       
                                                                                
Vilnius                                                                         
5 July 1995                                                                     
No. I-1018