EU AIFMD and the Cyprus Fund Industry

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Q. What is AIFMD and what does it mean for Cypriot firms?

A. The Alternative Investment Fund Management Directive (AIFMD) is the EU Level II Regulation transposed into the AIFM Law that regulates every Cyprus based legal person that manages one or more Alternate Investment Firms (AIF) whether these AIFs are Cyprus, EU or non-EU based. From 2015 on the AIFM Law shall also apply to non-EU AIFMs having designated Cyprus as their Member State of Reference for their management and/or marketing activities in the EU.

Q. When does AIFMD take effect in Cyprus?

A. Cyprus transposed the AIFMD by means of legislation, the Law 56 I/2013 ("AIFM Law") on July 5, 2013. The EU AIFMD provisions are directly and uniformly applicable in all EU Member States including Cyprus.

Q. Can a Cyprus Investment Firm (CIF) who is licensed by the CySEC to do Portfolio Management also manage a Cypriot International Collective Investment Scheme (ICIS)?

A. No. CIFs shall be excluded from directly managing ICIS under the scope of the AIFMD since the management of such an ICIS will be subject to a collective portfolio management license.

Q. Is an AIFM the same as a UCITS manager for an ICIS?

A. No. In addition to managing an ICIS in Cyprus AIFMs authorized under the AIFMD will be allowed to manage any type of non-UCITS (AIF) throughout the EU subject to passporting rights, i.e. EU wide distribution.

Q. What about the UCITS IV Directive in Cyprus?

A. An investment manager authorized under the AIFMD will also be able to obtain authorization under the UCITS IV Directive, in order to also manage UCITS investment schemes, but a CIF or UCITS only management company cannot manage an AIF.

Q. Will a CIF still be able to provide investment management services under AIFMD?

A. Yes. A CIF will be able to provide investment management services, either to UCITS or non-UCITS, but only as a delegate of the collective portfolio manager.

Q. What about a CIF that is already acting as the principal manager of an ICIS?

A. If the CIF is effectively managing the AIF, and intends to continue managing it, then it will have to renounce on its CIF status and apply to be authorised as an AIFM.

Q. What other choices does a CIF have other than to renounce its CIF status?

KMG Capital Markets Ltd (“Company”) is authorised and regulated by the Cyprus Securities and Exchange Commission (“CySEC”) with authorisation number AIFM 01/56/2013. The information contained on this website is provided for general information and does not constitute an offering or legal or other professional advice, nor does it constitute any form of personal recommendation. Accordingly, information on this website is merely intended to raise awareness of issues relating to the Company’s business and by accessing this information you shall be deemed to accept and agree to be bound by the terms of this notice. Information contained on this website is subject to change without notice. It is therefore advisable that the user reviews this Disclaimer and any other notices on this website on a regular basis so that the user is aware of any such amendments or modifications. The distribution of information contained within this website may be restricted in certain jurisdictions by law or regulation and, accordingly, parties who access it are required to inform themselves of and comply with any such restrictions that might apply. Parties interested in accepting any service detailed within this website should inform themselves as to (i) the legal and regulatory requirements within their country of nationality, residence or domicile; (ii) the tax consequences which might be relevant to the Company’s fund management services and; (iii) any other requirement or restriction which they may encounter. Therefore, the use of any information or materials on this website is entirely at your own risk, for which we expressly exclude liability to the fullest extent permitted by law. It shall be your own responsibility to ensure that any services or information available through this website meet your specific local requirements and/or restrictions. The entire contents of are subject to copyright with all rights reserved. You may download or print individual sections of the site for your personal use and information only provided that you retain all copyright and other proprietary notices. You may not reproduce (in whole or in part), transmit (by electronic means or otherwise), modify, link into or use for any public or commercial purpose the site without the prior written permission of the Company. The information contained within this website is of a general nature and further information should be sought by contacting us with your specific requirements.
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