Home / CY AIF Law of 2018 / PART ΙΙ: PROVISIONS REGARDING THE ALTERNATIVE INVESTMENT FUNDS / Chapter 3: Common provisions regarding the organisation and operation of AIFs / [22] AIF transactions.

22. AIF transactions.

(1) Without prejudice to the provisions of article 15 of the Alternative Investment Fund Managers Law, applicable to AIFMs which are internally managed AIFs, this article shall apply to external managers and the persons who effectively direct the business of internally managed AIFs, unless otherwise provided in this Law.

(2) Without prejudice to the provisions of article 17 -

(a) the external manager and the persons who effectively direct its business, as well as the persons who effectively direct the business of an internally managed AIF; and

(b) a company of the group to which the external manager or the internally managed AIF belongs, as well as the members of the governing body of such company,

may enter in a transaction with the AIF or profit from a transaction made by the AIF in relation to its assets, to the extent that this is permitted by the AIF’s fund rules or instruments of incorporation and complying with any possible conditions and procedures these may contain.

(3) Any transaction between the AIF and -

(a) its external manager or the persons who effectively direct the business of the AIF∙ or

(b) its depositary∙ or

(c) its investment advisor∙ or

(d) any of its unitholders∙ or

(e) person related by close links with a person referred to in paragraphs (a) to (d), including the AIF when it is externally managed,

shall take place in accordance with section (4), unless the provisions of section (5) apply, as follows:

• under the terms which are deemed normal for the specific transaction∙ and

• promoting the best interests of the AIF’s unitholders.

(4) The execution of the transaction of section (3), subject to the provisions of section (5), requires the previous valuation of the subject of the transaction from an independent valuer, who shall be nominated by the depositary, or, in case the depositary or a related person of the depositary is involved in the transaction, by the external manager of the AIF or the AIF, in case it is internally managed.

(5) When the valuation of section (4) is not practically possible to be performed, the depositary, or, in case the depositary or a related person of the depositary is involved in the transaction, the external manager of the AIF or the AIF, in case it is internally managed, shall certify the compliance with sub-paragraphs (i) and (ii) of section (3).

(6) When there is a poof executing a transaction in accordance with section (3), the offering document of the AIF shall include a relevant reference; the annual and half-yearly reports of the AIF shall include all necessary information regarding any such transactions that have been executed within the reference period, sorting them by category and by contracting party to the AIF, and disclosing any remunerations or fees paid to every party to the AIF, for each transaction separately.