Home / CY AIF Law of 2018 / PART ΙΙ: PROVISIONS REGARDING THE ALTERNATIVE INVESTMENT FUNDS / Chapter 8: Special provisions / Part 1 - Common fund / [45] General provisions regarding a common fund.

45. General provisions regarding a common fund.

(1) The common fund is a pool of assets which shall fulfil the following conditions:

(a) It is the subject of collective management to the benefit of its unitholders, which are co-owners of each of the assets that comprise its portfolio and are liable only up to the amount of their contribution, which is expressed in units of the common fund;

(b) it is separated from the entity that manages it and is not liable for the obligations of this entity or its unitholders, but is only subject to the obligations and the expenses provided for in the Law or are specifically stated in its regulation; and

(c) it is authorised to operate as a common fund in accordance with Chapter 2 of Part II.

(2) The portfolio management of the common fund shall be exercised by an external manager in accordance with article 6(2)(b).

(3)(a) The common fund has no legal personality, while its unitholders shall be legally represented by its external manager with regard to the legal relationships arising from the management of the common fund and to their rights regarding its assets.

(b) Where the external manager represents the unitholders of the common fund, it shall act on its own name, underlying however, that it acts on behalf of the common fund.

(c) The external manager shall manage the common fund, exclusively in the interest of its unitholders and shall exercise all the rights that derive from the assets of the common fund.

(4) The unitholders of the common fund shall not be liable for any actions or omissions of the external manager or the depositary, in the exercise of their duties. The common fund shall not be liable for the obligations of its external manager and the depositary.

(5) The assets of the common fund shall be divided in units or fractions of units on the name of the unitholder, each of which shall represent the same percentage on its total assets. The rights derived from the units shall be exercised in relation with the percentage of total assets that they represent, with the exemption of the voting rights, which shall be exercised in accordance with the whole unit.