THE IMPACT OF AIFM DIRECTIVE ON CYPRIOT FUNDS BECOMES CLEARER

On July 5 2013 Cyprus transposed into law the EU Alternative Investment Fund Managers (AIFM) Directive by introducing the AIFM Law (56 I/2013) (for further details please read our article “Fortifying the Cypriot investment funds’ legal framework”). By implementing these rules, relevant licenses and agreements will be affected, and the services provided by Cypriot banks, fund administrators and asset managers will be influenced.

Cyprus law affected by the new rules includes:

• The Law on Open-Ended Undertakings for Collective Investment (78 I/2012), which transposes into law the EU Directive on Undertakings for Collective Investment in Transferable Securities (UCITS) (2009/65/EC);
• The Law on Investment Services and Activities and Regulated Markets and Other Related Matters (144 I/2007, as amended), which transposes into law the EU Markets in Financial Instruments Directive (MiFID) (2004/39/EC);
• The Law on International Collective Investment Schemes (47 I/1999).

Reference has also been made to the provisions of the European Commission’s Delegated Regulation 231/2013 that apply directly and uniformly across all EU member states, as well as the guidelines and draft regulatory technical standards issued by the European Securities and Markets Authority (ESMA), which refer to key concepts of the directive and types of AIFMs, respectively.

This update sets out some of the main considerations that have emerged following the interaction of the new rules with the Cypriot funds and financial services regime.

Our team of highly experienced professionals can advise you on investment funds, tailored to your specific business and personal circumstances.

On July 5 2013 Cyprus transposed into law the EU Alternative Investment Fund Managers (AIFM) Directive by introducing the AIFM Law (56 I/2013) (for further details please read our article “Fortifying the Cypriot investment funds’ legal framework”). By implementing these rules, relevant licenses and agreements will be affected, and the services provided by Cypriot banks, fund administrators and asset managers will be influenced.

Cyprus law affected by the new rules includes:

• The Law on Open-Ended Undertakings for Collective Investment (78 I/2012), which transposes into law the EU Directive on Undertakings for Collective Investment in Transferable Securities (UCITS) (2009/65/EC);
• The Law on Investment Services and Activities and Regulated Markets and Other Related Matters (144 I/2007, as amended), which transposes into law the EU Markets in Financial Instruments Directive (MiFID) (2004/39/EC);
• The Law on International Collective Investment Schemes (47 I/1999).

Reference has also been made to the provisions of the European Commission’s Delegated Regulation 231/2013 that apply directly and uniformly across all EU member states, as well as the guidelines and draft regulatory technical standards issued by the European Securities and Markets Authority (ESMA), which refer to key concepts of the directive and types of AIFMs, respectively.

This update sets out some of the main considerations that have emerged following the interaction of the new rules with the Cypriot funds and financial services regime.

Our team of highly experienced professionals can advise you on investment funds, tailored to your specific business and personal circumstances.