The Cyprus Investment Funds Association, known as CIFA, welcomes you all and especially welcomes the investor participants from the non-banking sector to this important summit.
I would like to thank the organizers, Cyprus Invest, for inviting me here today and giving me the opportunity to briefly present to you Cyprus attributes as competitive investment funds jurisdiction.
Many policy makers and regulators have raised the desirability of moving within the EU from a bank-dominated financial system to a system with more diverse sources of financing. This shift is very attractive because, firstly, such diversification will reduce risks and, secondly, in the non-banking sector there are more opportunities for equity funding, which helps in increasing investments without necessarily increasing the indebtness of a country’s economy.
As the financial services sector emerges from the economic crisis, the fund management industry has an increasingly important role to play in raising finance to invest, generating new jobs and wealth and playing a leading part in the recovery.
Social and demographic trends are highly favourable as it is predicted that assets under management in Europe will reach €24.6 trillion by 2020 up from €17 trillion in 2013 and Cyprus can play an important role due to its proximity to the Middle East and Africa, while being a Member State of the EU. It is therefore not a surprise that our Funds Industry is gaining significant momentum from both local and international promoters.
Cyprus wishes to be at the forefront of the investment funds sector and is prepared to meet this growing demand with its legal and regulatory framework that incorporates the enhanced regulatory measures adopted at EU level, while also offering investors and fund promoters stability along with cost and tax efficiency.
Our legal framework is all-encompassing and, at the same time, attractive enough to establish investment funds, which can meet diverse investor requirements. An investment fund may be set up as either an Alternative Investment Fund (AIF) or an Undertaking for Collective Investment in Transferable Securities (UCITS).
The enactment of the Alternative Investment Funds Law (AIF Law) in July 2014 provides for a significant modernization of the related legal framework and offers a comprehensive tool box and new structuring options competitive to those of other established jurisdictions.
What also plays a crucial role in the successful establishment of Cyprus as a funds jurisdiction is the fact that the competent regulatory authority, The Securities and Exchange Commission, is efficient, effective and approachable, and constantly strives for the creation of a dynamic regulatory framework which is also market sensitive. It is self-evident that good regulation and supervision go hand in hand with successful financial markets that contribute to growth.
The main components to transform Cyprus into a regional fund centre of excellence are its strategic location, its stable and transparent political infrastructure, its modern legal system based on common law, its full compliance with EU and OECD standards for anti-money laundering and insider dealing and its expert professional and financial services offered at a competitive cost. Furthermore and as explained before, we offer one of the most attractive fund tax regimes in Europe; both at the level of the Fund Manager and the investors, as well as at the level of the Fund.
We are well-positioned to support the full operational lifecycle of an investment fund, providing foreign investors, as well as fund promoters, a uniquely competitive entry point to Europe’s capital markets, as well as the necessary financial instruments that serve to protect and enhance investment value. We would therefore welcome any of today’s Investor participants to consider expanding their operations in the region by setting up regional Funds in Cyprus, or setting up as Fund Managers under the AIFMD or through a UCITS management company for their investments into Cyprus or through Cyprus taking advantage of the Cyprus Double Tax Treaties and Cyprus proximity to the markets.
CIFA, with more than two hundred members, acts as the single unified representative body of the industry in Cyprus, representing the sector in economic missions to promote and support the development of the Investment Fund industry. In closing, we as CIFA, are committed to facilitate the constant upgrading of our legal frame work and service quality on all fronts, to ensure investor protection by operating nine technical committees to support our members, the Government and the Regulator on new developments in the industry.
Thank you for your attention and I am at your disposal for any questions you may have. You may find further information material about CIFA and the Cyprus funds industry both on CIFA’s website, as well as in the information material provided to you.