Home / CY AIF Law of 2018 / PART VIII: REGISTERED ALTERNATIVE INVESTMENT FUNDS / Chapter 1: Establishment of RAIFs / [135] External manager and depositary of a RAIF.

135.External manager and depositary of a RAIF.

(1) The RAIF shall appoint as its external manager-

(a) an AIFM of the Republic, or

(b) an EU AIFM, or

(c) a non-EU AIFM, in case it may passport its services in accordance with Directive 2011/61/EU, and which has determined a member state of reference.

(2)(a) Irrespective of section (1) and subject to paragraph (b), a RAIF established as a limited partnership, with or without separate legal personality, in accordance with the General and Limited Partnerships and Business Names Law, may appoint as its external manager one of the entities of article 6(2)(b).

(b) In case the entity of article 6(2)(b) is not an AIFM, the following conditions shall apply:

• the RAIF invests, at least seventy per cent (70%) of its assets to illiquid assets, and

• the RAIF is a closed-ended AIF.

(3)(a) The obligations of the external manager arising from the relevant law which regulates the external manager shall proportionately apply to the RAIFs under its management, and in case of resignation or replacement of the external manager, for any reason, article 25 shall apply.

(b) The AIFM as the external manager of the RAIF shall -

• ensure that the RAIF has the necessary organisational structure and corporate governance enabling it to operate effectively in order to achieve its objective, and that the persons employed by or offering services to the RAIF have the necessary expertise and experience, in order to be able to respond to their tasks,

• establish and apply procedures for the control and monitoring of the operation of the RAIF, in accordance with sub-section (i), keep records of the results of the control and monitoring which shall be provided to the Securities and Exchange Commission, upon such request by the latter,

• ensure that the units of the RAIF are addressed only to professional and/or well informed investors.

(4) The AIFM, as the external manager of the RAIF, shall notify the Securities and Exchange Commission for any change regarding the RAIF, immediately and prior to the implementation of such change, which results to the RAIF not operating in accordance with section (3)(b)(i).

(5) The AIFM, as the external manager of the RAIF, appoints a depositary, in relation to which articles 23 to 28 of the Alternative Investment Fund Managers Law apply.

(6)(a) The entities of article 6(2)(b), which are not AIFMs, and which are appointed as external manager of the RAIF which operates in the form of a limited partnership, shall appoint a depositary, in relation to which articles 26(3) and (4), 27 to 31 and 34(1)(a), (b) and (d) of this Law apply.

(b) The replacement of the depositary entails the amendment of the partnership agreement, in accordance with article 32(5) to (7).

(c) In case the depositary of the RAIF resigns for any reason, article 32 shall apply.

(d) The replacement of the depositary takes place in accordance with article 33.

(7) Without prejudice to the right of the Securities and Exchange Commission to request the provision of data or information by the external manager of the RAIF, subject to the provision of this Law or the Alternative Investment Fund Managers Law, the Securities and Exchange Commission may request the provision, by the external manager of the RAIF, of any information or data in order to conclude that the RAIF complies with the legislation of the Republic relevant to the establishment and operation of RAIFs.