The Alternative Investments Funds Law of 2014 was enacted by the House of Representatives on 10th July 2014 and came into force on 18th July 2014. The new law replaces the International Collective Investment Schemes Law (ICIS) of 1999.
Under the applicable Cypriot legislation, namely the AIF Law, the Cyprus Securities and Exchange Commission (“CySEC”) is the regulatory and supervisory authority for AIFs and may, upon a written application, recognise a Fixed or Variable Capital Company, a Common Fund or a Partnership as a AIF.
Main characteristics of the AIF Law
The new AIF Law introduces new structuring options which were not possible under the previous framework, such as:
- It offers umbrella funds with multiple investment compartments that can operate individually, each with a different investment policy and different asset pools;
- It allows the creation of AIFs with Unlimited Number of Persons, or AIFs with Limited Number of Persons;
- Investors can participate as co-owners in the common contractual funds. These types of funds are particularly used for pension purposes;
- The Depositary function may now be undertaken, in certain cases, by an entity other than a credit/banking institution, subject to certain conditions. This may aid in the structuring and operations of AIFs not directly investing in financial and money market instruments, such as private equity and real estate funds;
- Possibility to make public offerings of shares/units of AIFs (the offering of ICIS shares/units was restricted to private placement only);
- Can list the units of AIFs on various stock exchanges
For more information on this subject please check Alternative Funds (AIF) contact Mr. Michalis Ioannides – Partner LLPO Law Firm Cyprus.