Home / CY AIF Law of 2018 / PART ΙΙ: PROVISIONS REGARDING THE ALTERNATIVE INVESTMENT FUNDS / Chapter 7: Subscriptions and redemptions of AIF units / [43] Suspension of the redemption or repurchase of AIF units.
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43. Suspension of the redemption or repurchase of AIF units.
(1)(a) The suspension of redemption or repurchase of units of an AIF is only allowed in exceptional cases where this is required by the circumstances or in cases provided in the fund rules or instruments of incorporation of the AIF and in any case, if this is justified by the interest of the unitholders.
(b) The relevant suspension of redemption or repurchase requires the previous decision by the external manager or the AIF, in case it is internally managed, and the relevant authorisation by the Securities and Exchange Commission and shall be communicated, by the external manager or the AIF, in case it is internally managed, to the competent authorities of the other countries where the units of the AIF are marketed, and its unitholders.
(c) The decision referred to in paragraph (b) shall define the timeframe of the suspension of the redemption or repurchase and any extension of this timeframe is only permitted in compliance with the procedure provided in paragraph (b):
It is provided that, by way of derogation from paragraph (c) above, the Securities and Exchange Commission may decide the extension of the suspension period, where this is justified by the interest of the unitholders of the AIF and the necessity to ensure the proper functioning of the market.
(2) In case the circumstances under which the suspension of redemption or repurchase of the units of the AIF has been decided, cease to exist before the end of the suspension period, the external manager or the AIF, in case it is internally managed, shall terminate the suspension and notify the Securities and Exchange Commission and the competent authorities of the other countries where its units are marketed.
(3) By way of derogation from section (1), the Securities and Exchange Commission may-
(a) decide, as long as it considers that it is to the investors’ interest or the safeguarding of the proper functioning of the market, the suspension of the redemption or repurchase of AIF units, when the provisions of the applicable legislation or of the fund rules or of the instruments of incorporation of the AIF are not complied with or any other agreements that govern its function,
(b) extend the suspension period of paragraph (a), for as long as it considers this is necessary for the investors’ interest or this is required to ensure the proper functioning of the market,
(c) terminate the suspension of the redemption or repurchase if it determines that before the end of the suspension period, or its extension, the reasons on which the suspension had been decided, cease to exist:
It is provided that, every decision of the Securities and Exchange Commission in accordance with this section is immediately notified to the external manager or the AIF, in case it is internally managed.
(4) During the suspension period, neither the submission of an application for redemption or repurchase of units is allowed, nor the redemption or repurchase of units by the unitholders.
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