Cypriot Guidance On Alternative Investment Fund Law
by Lorys Charalambous, Lowtax.net, Cyprus
18 August, 2014
A new law has entered into force in Cyprus to regulate the establishment and operation of Alternative Investment Funds.
The Alternative Investment Funds Law (L.131(I)/2014), which came into force on July 27, 2014, is to replace the International Collective Investment Schemes Laws of 1999 and 2000.
The law shifts responsibility for these funds' supervision from the Central Bank of Cyprus to the Cyprus Securities and Exchange Commission.
The 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 authorized as an Undertaking for Collective Investments in Transferable Securities (UCITS) under the Open-Ended Undertakings for Collective Investments Law of 2012.
The International Collective Investment Schemes (ICIS) that are established and operate in accordance with the International Collective Schemes Laws fall within this definition.
A four-month transitional period will apply to those schemes falling under the new definition and managers of such. Guidance on the impact of the changes has been released by the Cyprus Securities and Exchange Commission.
It prescribes that certain documents be furnished and fees paid before November 27, 2014. International Collective Investment Schemes that have been authorized by the Central Bank of Cyprus shall remain under its supervision until that date, or until they submit the information required. After this date, ICIS that failed to meet the requirements will be dissolved.
The relevant application documents and the Directive regarding the amount of the fees payable are under preparation by the Commission, and it is expected to be concluded by the middle of September.
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