Following the entry into force of the Alternative Investment
Funds Law of 2014 ("the AIF Law") on 27 July the Cyprus
Securities and Exchange Commission ("CySEC") has issued
guidance on transitional arrangements. The AIF Law regulates the
establishment and operation of Alternative Investment Funds (AIFs)
in Cyprus and replaces the International Collective Investment
Schemes Laws of 1999 and 2000 ("the ICIS Laws"). It
designates CySEC as the supervisory authority for AIFs.
Following article 4(1)(a) of the Alternative Investment Fund
Managers Directive, the AIF Law defines an AIF as "a
collective investment undertaking, including investment
compartments thereof, which raises capital from a number of
investors with a view to investing it in accordance with a defined
investment policy for the benefit of those investors and is not
authorised as an Undertaking for Collective Investments in
Transferable Securities (UCITS) in accordance with section 9 of the
Open-Ended Undertakings for Collective Investments Law of
2012."
International Collective Investment Schemes (ICIS) established
under the ICIS Laws fall within this definition. Article 120(1) of
the AIF Law provides that ICIS that have been authorised under the
ICIS Laws by the Central Bank of Cyprus ("CBC") may
continue to operate on one of the following bases:
(a) As AIFs with a limited number of persons, subject to complying with articles 114 – 118 of the AIF Law and providing CySEC the information and documents specified in article 120(1)(a). Under this option they may continue to operate on the basis of the authorisation issued by the CBC, and need not apply for re-authorisation by CySEC;
(b) As AIFs under Part II of the AIF Law, subject to obtaining authorisation from CySEC in accordance with article 13 of the AIF Law; or
(c) As Alternative Investment Fund Managers, subject to obtaining authorisation from CySEC in accordance with article 8 of the Alternative Investment Fund Managers Law of 2013.
The information referred to in (a) and the applications referred
to in (b) and (c) above must be submitted to CySEC by 27 November
2014. Until that date, or until the information has been submitted
to CySEC, whichever occurs first, the CBC will continue to
supervise ICIS that it has authorised. ICIS that submit an
application may continue to operate until their application has
been considered and they have been informed of the outcome. ICIS
that do not follow this procedure, or that do not fulfil the
conditions of the AIF Law for continuation on the chosen basis,
will be dissolved in accordance with the ICIS Laws.
The CBC has already transferred to CySEC its register of the ICIS
that it has authorised. Any pending applications at 27 July 2014
from ICIS meeting the requirements of article 114(1) of the AIF Law
are to be transferred from the CBC to CySEC and will be determined
by CySEC without any need for a new application to be submitted.
CySEC will contact the applicants to resolve any questions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
