Home / CY AIF Law of 2018 / PART ΙΙ: PROVISIONS REGARDING THE ALTERNATIVE INVESTMENT FUNDS / Chapter 7: Subscriptions and redemptions of AIF units / [36] Rules for the marketing of AIF units.

36. Rules for the marketing of AIF units.

(1) For the marketing of AIF units and the subscription to AIF units by a unitholder, the following are required-

(a) a subscription application, submitted to the external manager or the AIF, in case it is internally managed, either in writing or electronic form∙

(b) acceptance of the fund rules or instruments of incorporation of the AIF∙

(c) full payment of the amount due for the acquisition of AIF units, as this is determined by the subscription price of the units-

• in cash, by depositing the amount in accounts opened by the external manager in the name of the AIF or in the name of the external manager acting on behalf of the AIF or in the name of the depositary acting on behalf of the AIF, or by the AIF, in case it is internally managed, in the name of the AIF or in the name of the depositary acting on behalf of the AIF, or

• where this is acceptable by the external manager or the AIF, in case it is internally managed, in the form of other assets in which the AIF is allowed to invest in accordance with the investment policy of the AIF, and which are valued according to article 20(6) which applies proportionately∙ especially for real estate AIFs and venture capital AIFs, the means and the timing for the payment of the amount due for subscription to their units is governed by the relevant terms in their fund rules or instruments of incorporation.

(2) The subscription price of the units shall be calculated in accordance with the specific provisions included in the fund rules or instruments of incorporation of the AIF, in accordance with the provisions of this Law. The fund rules or instruments of incorporation of the AIF shall determine the final date for the submission of subscriptions applications, so that the subscribed units are valued at the subscription price of the next scheduled subscription date following the submission of the application.

(3)  (a) The external manager or the AIF, in case it is internally managed, shall provide the applicant, free of charge, with the offering document of the AIF, its fund rules or instruments of incorporation and its latest annual and half-yearly reports and shall disclose to the applicant the latest net asset value of the AIF or the latest market price of its units, in accordance with article 20, before signing the subscription application.

(b) Where the AIF is managed by an AIFM or in the case of an AIFM, which is an internally managed AIF, the investor shall receive the information referred to in article 30(1) and (2) of the Alternative Investment Fund Managers Law, before signing the subscription application.

(c) An open ended AIF addressed to retail investors shall issue a key investors’ information document, the content of which shall be in compliance with the Regulation No. 583/2010, which shall be given to the applicant by the external manager or the AIF, in case it is internally managed, in addition to the documents mentioned in paragraphs (a) and (b) above, free of charge, before signing the subscription application.

(4) The external manager or the AIF, in case it is internally managed, may also market its units through credit institutions, investment firms, UCITS management companies which fall under the scope of the Open Ended Undertakings in Collective Investments Law and AIFMs.

(5) The marketing of AIF units by the persons of section (4) or by other persons acting as their representatives, shall take place in accordance with the provisions of the Investment Services and Activities and Regulated Markets Law, as amended, which regulates the investment service of reception and transmission of orders, without prejudice to any specific provision of this Law.

(6) The Securities and Exchange Commission may, by means of a directive, specify -

(a) any technical matters or details related to the application of sections (1) to (5), the qualifications and the procedure for the certification of the persons that participate in the marketing network of units of AIFs, including the qualifications and obligations of such persons∙

(b) the conditions under which the electronic submission of the application for subscription in units shall be possible, specifying the security measures which the external manager of the AIF itself, in case it is self-managed, shall establish to ensure the investors’ protection.