The long awaited law on Alternative Investment Funds (AIFs) was approved unanimously by the House of Representatives on July 10^th.

The said law creates a new institutional framework governing the establishment and operation of Alternative Investment Funds in the Republic of Cyprus, offering transparency and protection within collective investments, while keeping in line with European law.

Pursuant to the new law, AIFs will be regulated by the Cyprus Securities and Exchange Commission, and this will apply for all types of Investment Funds.

The AIF law, in association with the existing legislation of the Alternative Investment Fund Managers Directive (AIFMD), as well as the Undertakings in Collective Investment in Transferable Securities (UCITS), creates an attractive and competitive environment for the further enhancement and development of the fund industry of Cyprus, which now can accommodate all types of funds. Cyprus’ fund industry offers several advantages to international asset managers and investors such as EU passporting, re-domiciliation, and competitive costs.

AIF practitioners in Cyprus are expecting a significant growth in the use of Cyprus Funds, since the amended AIF law, renders them considerably more attractive than their EU counterparts.