The Alternative Investment Fund Managers Directive (AIFMD 2011/61/EU), entered into force on 21st July 2011, with the aim of providing for an internal market for Alternative Investment Fund Managers (AIFMs) and a harmonised regulatory and supervisory framework for the activities within the EU of all AIFMs. The key objectives were to reduce systemic risk and enhance investor protection, with the corresponding benefit for AIFMs being a pan-European “passport” to provide management services and distribute funds across the EU.
UCITS management companies in Cyprus are governed by Law No. 78(I)/2012 (the “UCI Law”), transposing the UCITS IV Directive into national law, and are regulated by the Cyprus Securities and Exchange Commission (“CySEC”).
The Management Company is a limited company by shares, which has its registered office and central administration within the territory of the Republic of Cyprus and its main objective is the management of one or more UCITS. Prior authorisation by CySEC is required in order to start business. Such authorisation, which is granted as an operation licence, is valid in all member states of the European Union.
The Management Company does not exercise activities other than the management of UCITS, apart from the additional management of other collective investment undertakings following an authorisation by CySEC.
On 3 July 2020, the Cypriot Parliament passed and brought in force new legislation entitled the Mini Alternative Investment Fund Managers Law (L. 81(I)/2020) (Mini-AIFM Law) creating a regime for the regulation and licensing of sub-threshold alternative investment fund managers based in the jurisdiction (Sub-threshold AIFMs or Mini-AIFMs). Prior to the enactment, Sub-threshold AIFMs were not independently subject to licensing in the Republic of Cyprus
The Mini-AIFM Law operates on a complementary basis to the Alternative Investment Fund Management Law (L. 56(I)/2013), as amended (AIFM Law), which in turn transposes the EU Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD) into national law and regulates Cypriot full-scope alternative investment fund managers (AIFMs).