In a world of increased globalisation, regulation continues to be a key driver of the strategic agenda for financial services firms. With constant changes to domestic and international legal environments, we provide our clients with market-leading expertise in order to assist them to develop innovative and practical solutions to the challenges they face.

We are pleased to present our regulatory Insights April 2023 edition, which outlines the latest updates on regulatory developments in Cyprus and Europe.


Cyprus Securities and Exchange Commission

New Form for the AML/CFT Monthly Prevention Statement for CySEC regulated entities

On 20 April 2023 CySEC through Circular C567 notified all regulated entities about the new version of the AML/CFT Monthly Prevention Statement (MPS) Form. The new version of the

form needs to be submitted every month using CySEC's Transaction Reporting System (TRS), instead of the CySEC Portal.

  • Starting from May 2023, the new MPS Form will replace the current Form 144-08-11.
  • The first submission of the new form shall cover the period of 01/04/2023 – 30/04/2023.
  • After this initial submission, the new form will need to be submitted monthly and within 15 days from the end of each month.

CySEC Risk Based Supervision for CIFs (RBS-F Form) and new deadline for the year 2022

CySEC has issued Circular C563 (for CIFs), regarding their reporting obligation to submit Form RBSF-CIF new version 7. CySEC specifies that this latest version of the form does not require any additional information compared to the version 6 of the form.

CIF regulated entities that were authorised by 31 of December 2022, are required to submit this form electronically via CySEC's Transaction Reporting System (TRS), the latest by 15:00 on Friday, 26 of May 2023.

CySEC Risk Based Supervision for ASPs (RBS-F Form) and new deadline for the year 2022

CySEC has issued Circular C564 and C565 (for ASPs), regarding their reporting obligation to submit Form RBSF-ASP new version 6. CySEC specifies the amendments to the form and additional information requested in particular under section E – Products, Services and Transactions.

All ASP that were authorised by 31 of December 2022, are required to submit this form electronically via CySEC's Transaction Reporting System (TRS), the latest by 15:00 on Wednesday, 31 of May 2023.

Guidance to Cyprus AIFMs (CAIFMs) and AIFs, on key principles and concepts governing the Alternative Investments Fund Managers Directive 2011/61/EU ('AIFMD')

Through Circular C562, CySEC wishes to provide guidance to CAIFMs and/or AIFs externally managed by CAIFMs on some key aspects of the application

of the AIFMD. CySEC directs CAIFMs to ensure better understanding and compliance with the single AIFM principle, the principles governing the delegation of functions and the 'letter box entity' concept, as well as the AIFMD and AIF scope.


The CAIFM is the only legal person with ultimate responsibility to manage an AIF (the Single AIFM Principle). For CAIFMs and AIFs to comply with the 'Single AIFM Principle', the following should be followed:

  • Each externally managed AIF appoints a single CAIFM, who is the person legally responsible for ensuring compliance of the management of the AIF with the CAIFM Laws and for providing the investment management functions as outlined under the AIFM Laws.
  • The CAIFM should not be considered a delegate/ third party provider to the AIF. The CAIFM should be the legal person appointed by the AIF to manage the fund in accordance with the CAIFM Laws. The Investment Management agreement between a CAIFM and an AIF should be construed on this basis.
  • An externally managed AIF cannot itself perform and/or be involved in any way in the execution of functions included under Annex I of the AIFMD as incorporated in the CAIFM Laws.
  • The role of the Board of Directors of the AIF is limited to in particular:
  • (i) determining the Investment objective and policy; (ii) monitoring the appointment of the CAIFM. (ii) In the event of delegation of functions by the CAIFM, the AIF should only be part of the Delegation agreement signed between the CAIFM and the third party/delegate, where necessary.


The CAIFMs and Internally Managed AIFs remain responsible for ensuring compliance with the CAIFM Laws relevant to the execution of the delegated functions. It should be ensured at all times that their functions are not delegated, especially investment management functions, to the extent they become a 'letter-box entity'. In this respect the following should be followed:

  • Each time a function is delegated, the sufficiency and appropriateness of human and technical resources of the delegate should be assessed at all stages from its selection, ongoing monitoring, and supervision.
  • In relation to the investment management functions, every time a new function is delegated, all existing delegations for a specific AIF should be considered.

It is clarified that the assessment of a 'Letter-box entity', is applicable at the level of each AIF under management and not at the AIFM level.


CAIFMs should always ensure that their business and/or the investment undertaking fall within the AIFMD and AIF scope of application.

Investment managers which manage one or more AIFs and whose only investors are the CAIFM itself or a related party of the CAIFM do not fall under the AIFMD framework.

Investment undertakings which invest the private wealth of investors without raising external capital should not be considered as AIFs meeting the relevant AIF definition.

In order for an investment undertaking to constitute an AIF and hence fall under the scope of the AIFM Legal Framework, it must be assessed according to the ESMA Guidance on Key Concepts of the AIFMD.

CySEC expects CAIFMs to review their arrangements, policies and procedures in accordance with the present circular and if identifying any areas of concern to take immediate actions to ensure compliance.

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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.