Further to a consultation paper circulated by the Cyprus Securities and Exchange Commission back in April 2016, the legal framework governing Alternative Investment Funds in Cyprus is expected to be amended during the last quarter of 2016. The proposed amendments to both the Alternative Investment Fund Law (No. 131(I)/2014) and the Alternative Investment Fund Managers Law (No. 56(I)/2013) will introduce into national law the “Registered Alternative Investment Fund” and sub-threshold AIFM or “Mini Manager” regimes.
The new category of funds, the Registered AIFs, will be addressed to professional or well-informed investors and will not require authorization by the Cyprus Securities and Exchange Commission, who will also not be responsible for their supervision. Instead, the Commission will rely on the regulated status of their external AIF Manager to ensure compliance with the applicable laws. The Registered AIFs will be able to operate as open or closed ended funds and could be organized in any legal form available under Cyprus Law.
As for the sub-threshold AIFM or “Mini Manager” regime, the Commission has also decided to introduce a licensing requirement for these entities, who will be managing assets of less than €100 million. The plan is to allow such Mini Managers to manage all categories of Cypriot AIFs, the newly introduced Registered AIFs taking the form of a limited partnership, as well as non Cypriot AIFs, subject to the discretion of such competent authority in the other jurisdiction.
