Home / CY AIFM Law of 2013 / PART Ι – INTRODUCTORY PROVISIONS / Section 2 - Interpretation. 

Interpretation.

2.-(1) In the present Law, except where it follows otherwise from the context-

«competent authority of the home Member State», in relation to AIFMS of the Republic, means the Cyprus Securities and Exchange Commission ∙

«competent authorities» means the national authorities of Member States which are empowered by law or regulation to supervise AIFMs ∙

«competent authorities», in relation to a depositary means:

(a) if the depositary is a credit institution authorised under the Banking Law or under the legislation of another Member State which harmonises the Directive 2006/48/EC, the competent authorities as defined in paragraph (4) of Article 4 of this Directive, (i)

(b) if the depositary is an investment firm authorised under the Investment Services and Activities and Regulated Markets Law of 2007, as amended or under the legislation of another Member State which harmonises the Directive 2004/39/EC, the competent authorities as defined in point (22) of paragraph (1) of Article 4 of this Directive, (ii)

(c) if the depositary falls within a category of institution referred to in section 23(3)(c) of this Law, the national authorities of its home Member State which are empowered by law or regulation to supervise such categories of institution,

(d) if the depositary is an entity referred to in article 23(5) of this Law, the national authorities of the Member State in which that entity has its registered office and which are empowered by law or regulation to supervise such entity or the official body competent to register or supervise such entity pursuant to the rules of professional conduct applicable thereto,

(e) if the custodian is appointed as depositary for a non-EU AIF in accordance with section 23(7)(b) of this Law and does not fall within the scope of the previous paragraphs of this definition, the relevant national authorities of the third country where the depositary has its registered office ∙

«initial capital» means funds as referred to in points (a) and (b) of the first paragraph of article 57 of Directive 2006/48/EC;

«prime broker» means a credit institution, a regulated investment firm or another entity -

(a) subject to prudential regulation and on-going supervision, and

(b) offering services to professional investors primarily to finance or execute transactions in financial instruments as counterparty, and

(c) which may also provide other services such as clearing and settlement of trades, custodial services, securities lending, customised technology and operational support facilities;

«Republic» means the Republic of Cyprus;

‘marketing’ means a direct or indirect offering or placement at the initiative of the AIFM or on behalf of the AIFM of units of an AIF it manages to or with investors who -

(a) domicile in EU, if these are natural persons or,

(b) have their registered office in EU, if these are legal persons;

the term ‘marketing of units’ is interpreted accordingly;

‘managing AIFs’ means performing at least investment management functions referred to in section 6(5)(a) for one or more AIFs;

‘AIFM’ or ‘Alternative Investment Fund Manager’ means any legal person whose regular business is managing one or more AIFs;

‘non-EU AIFM’ means an AIFM which is not an EU AIFM;

‘AIFM of the Republic’ means an AIFM whose home Member State is the Republic;

‘EU AIFM’ means an AIFM which has its registered office in a Member State;

‘ESMA’ or ‘European Securities Markets Authority’ means the European Securities and Markets Authority established under the Regulation (EU) No 1095/2010;

‘established’ means -

(a) for AIFMs, ‘having its registered office in’

(b) for AIFs ‘being authorised or registered in’ or if the AIF is not authorised or registered, ‘having its registered office in’;

(c) for depositaries, ‘having its registered office or branch in’;

(d) for legal representatives that are legal persons, ‘having its registered office or branch in’;

(e) for legal representatives that are natural persons, ‘domiciled in’;

‘EU’ means -

(a) the European Union, and

(b) the European Economic Area, in case of application of the Directive 2011/61/EU to the latter;

‘qualifying holding’ means a direct or indirect holding in an AIFM, which -

(a) represents, at least, 10% of the capital or of the voting rights in accordance with section 28, section 29(1)(a), (b), (c), (d) and section 30(1) of the Transparency Requirements (Securities Admitted to Trading on a Regulated Market) Law, taking into account the conditions regarding the aggregation thereof laid down in section 34(1) and (2) and section 35(1) and (2) of the said Law, or (iii)

(b) which makes it possible to exercise a significant influence over the management of the AIFM in which that holding subsists; 

‘issuer’ means an issuer within the meaning of section 2 of the Transparency Requirements (Securities Admitted to Trading on a Regulated Market) Law, where that issuer has its registered office in the EU, and where its shares are admitted to trading on a regulated market within the meaning of section 2(1) of the Investment Services and Activities and Regulated Markets Law of 2007, as amended;

‘employees’ representatives’ means employees’ representatives as defined in section 2 of the Law Establishing a General Framework for Informing and Consulting Employees; (iv)

‘auditor’ means a person qualified under the Company Law to be appointed as an auditor of a company; (v)

‘control’ means control as defined in Article 1 of Directive 83/349/EEC;

‘FATF’ means the Financial Action Task Force for the Combat against Money Laundering and Terrorist Financing, which was established by the 15th G-7 Summit that was held in Paris on the 14th to 16th of July 1989;

‘professional investor’ means an investor which is considered to be a professional client or may, on request, be treated as a professional client within the meaning of Annex II to the Investment Services and Activities and Regulated Markets Law of 2007 as amended;

‘Securities and Exchange Commission’ or ‘Commission’ means the legal entity of public law established and operating pursuant to the Cyprus Securities and Commission Law of 2009 as amended; (vi)

‘investment firm’ has the meaning attributed to the term in section 2(1) of the Investment Services and Activities and Regulated Markets Law of 2009 as amended; (vii)

‘competent authorities’, in relation to non-EU AIFM, means the national authorities of the third country which are empowered by law or regulation to supervise the AIFM;

‘competent authorities’, in relation to non-EU AIF, means the national authorities of the third country, which are empowered by law or regulation to supervise the AIF;

‘ESRB’ or ‘European Systemic Risk Board’ means the European Authority established by the act of European Union titled ‘Regulation (EU) No 1092/2010 of the European Parliament and the Council of the 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board’; (viii)

‘holding company’ means a company with shareholdings in one or more other companies –

(a) the commercial purpose of which is to carry out a business strategy or strategies through its subsidiaries, associated companies or participations in order to contribute to their long-term value and which is either a company; and

(b) which is either a company which:

• operates on its own account and whose shares are admitted to trading on a regulated market in the Union, or

• is not established for the main purpose of generating returns for its investors by means of divestment of its subsidiaries or associated companies, as evidenced in its annual report or other official documents;

‘retail investors’ means investors who are not professional investors;

‘subsidiary’ means a subsidiary undertaking as defined in section 148 of the Company Law;

‘own funds’ means own funds as referred to in Articles 56 to 67 of Directive 2006/48/EC;

‘Regulation (EU) No 1095/2010’ means the act of the European Union titled ‘Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending decision No 716/2009/EC and repealing Commission Decision 2009/77/EC, as recently amended by the Directive 2011/61/EU; (ix)

‘Regulation (EU) No 231/2013’ means the act of the European Union titled ‘Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, operating conditions, depositaries, leverage, transparency and supervision’;

‘Regulation (EU) No 1060/2009’ means the act of the European Union titled (x)

‘Regulation (EU) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies’ as lastly amended by Regulation (EU) No 462/2013 of the European Parliament and of the Council of 21 May 2013· (xi)

‘relevant legislation’ has the meaning attributed to this term by article 2 of the Cyprus Securities and Exchange Commission Law of 2009;

‘Member State’ means:

(a) Member State of the European Union, or

(b) in case of application of Directive 2011/61/EU in the European Economic Area, another state that is a contracting party to the European Economic Area Agreement, signed in Oporto on May 2nd, 1992, and adapted by the Protocol signed in Brussels on May 17th 1993, as this Agreement shall be further amended;

‘Member State of reference’ means the Republic determined in accordance with article 50 of this Law or another Member State determined in accordance with article 37(4) of the Directive 2011/61/EU;

‘home Member State’ of an AIFM, means -

(a) the Member State in which the AIFM has its registered office, or

(b) for non-EU AIFMs, the Member State of reference;

‘home Member State’ of an AIF, means -

(a) if the AIF is neither authorised nor registered in a Member State, the Member State in which the AIF has its registered office and/or head office;

(b) the Member State in which the AIF is authorised or registered under applicable national law, or in case of multiple authorisations or registrations, the Member State in which the AIF has been authorised or registered for the first time;

‘host Member State’ of an AIFM means any of the following:

(a) a Member State, other than the home Member State, in which an EU AIFM manages EU AIFs, or

(b) a Member State, other than the home Member State, in which an EU AIFM markets units or shares of an EU AIF, or

(c) a Member State, other than the home Member State, in which an EU AIFM markets units or shares of a non-EU AIF, or

(d) a Member State, other than the Member State of reference, in which a non-EU AIFM manages EU AIFs, or

(e) a Member State, other than the Member State of reference, in which a non-EU AIFM markets units or shares of an EU AIF,

(f) a Member State, other than the Member State of reference, in which a non-EU AIFM markets units or shares of a non-EU AIF, and

(g) the Member State, other than the home Member State, in which the EU AIFM provides the services of subsection (6) of section 6; (xii)

‘master AIF’ means an AIF in which another AIF invests or has an exposure in accordance of the term ‘feeder AIF’ as determined in this section ∙

‘units of an AIF’ or ‘units’ regarding an AIF means -

(a) units of an AIF of contractual form or of a trust form, or

(b) shares of an AIF of a corporate form;

‘non-listed company’ means a company which has its registered office in the Union and the shares of which are not admitted to trading on a regulated market within the meaning of section 2(1) of the Investment Services and Activities and Regulated Markets Law of 2007, as amended;

‘parent undertaking’ means a parent undertaking within the meaning of section 148 of the Company Law;

‘leverage’ means any method by which the AIFM increases the exposure of an AIF it manages, whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means;

‘legal representative’ means a natural or legal person which -

(a) in case of a natural person, is domiciled in the EU, or

(b) in case of a legal person, has its registered office in the Union,

and which, expressly designated by a non-EU AIFM, acts on behalf of such non-EU AIFM vis-à-vis the authorities, clients, bodies and counterparties to the non-EU AIFM in the EU with regard to the non-EU AIFM’s obligations under this Law;

‘directive’ means the directive of regulatory content of the Cyprus Securities and Exchange Commission that is published in the Official Gazette of the Republic

‘Directive 83/349/EEC’ means the act of the European Community titled ‘Seventh Council Directive of 13 June 1983 based on the Article 54(3)(g) of the Treaty on consolidated accounts’, as it has been recently amended by Directive 2009/49/EC of the European Parliament and the Council of 18 June 2009; (xiii)

‘Directive 2003/41/EC’ means the act of the European Community titled ‘Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision’, as it has been recently amended by Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011; (xiv)

‘Directive 2003/71/EC’ means the act of the European Community titled ‘Directive 2003/71/EC of the European Parliament and of the Council of 4 June 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC’, as it has been recently amended by Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010; (xv)

‘Directive 2004/39/EC’ means the act of the European Community titled ‘ Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on the markets in financial instruments, amending Council Directives 85/611/EEC and 93/6/EEC of the Council and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC’, as it was recently amended by Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010;(xvi)

‘Directive 2006/48/EU’ means the act of the European Community titled ‘Directive 2006/48/EU of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuing activities of credit institutions’ as it was recently amended by Directive 2011/89/EU of the European Parliament and of the Council of 16 November 2011;Directive 2006/48/EU’ means the act of the European Community titled ‘Directive 2006/48/EU of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuing activities of credit institutions’ as it was recently amended by Directive 2011/89/EU of the European Parliament and of the Council of 16 November 2011; (xvii)

‘Directive 2006/49/EC’ means the act of the European Community titled ‘Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions’, as it was recently amended by Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010; (xviii)

‘Directive 2009/65/EC’ means the act of the European Community titled ‘Directive 2009/65/EC’ of the European Parliament and of the Council on the coordination of laws, regulations and administrative provisions, relating to undertakings for collective investment in transferable securities (UCITS)’, as it was recently amended by Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011; (xix)

‘Directive 2011/61/EU’ means the act of the European Union tilted ‘Directive 2011/61/EU of the European Parliament and of the Council on Alternative Investment Fund Managers and amending Directives 2003/41/EC και 2009/65/EC and Regulations (EC) No 1060/2009 and (ΕU) No 1095/2010’;

‘Directive 2012/30/EU’ means the act of the European Union tilted ‘Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent, as is from time to time amended· (xx)

AIF’ or ‘Alternative Investment Fund’ means any collective investment undertaking, including investment compartments thereof, which:

(a) raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors; and

(b) do not require authorisation pursuant to section 9 of the Open-ended Undertakings for Collective Investment Law of 2012 or pursuant to the legislation of another Member State which harmonises the article 5 of Directive 2009/65/ΕC; (xxi)

’non-EU AIF’ means an AIF which is not an EU AIF;

‘EU AIF’ means -

(a) an AIF which is authorised or registered in a Member State under the applicable national law; or

(b) an AIF which is not authorised or registered in a Member State, but has its registered office and/or head office in a Member State;

‘securitisation special purpose entity’ means entity whose sole purpose is to carry on a securitisation or securitisations within the meaning of Article 1(2) of Regulation (EC) No 24/2009 of the European Central Bank of 19 December 2008 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions (ECB/2008/30) and other activities which are appropriate to accomplish that purpose; (xxii)

‘OECD’ means the Organisation for Economic Co-operation and Development established in 1960, by the Convention for the Organisation for Economic Co-operation and Development;

UCITS’ means an undertaking for collective investment in transferable securities authorised in accordance with section 9 of the Undertakings on Collective Investments Law of 2012 or in accordance with the national legislation of another Member State which harmonises Article 5 of the Directive 2009/65/ΕC; (xxiii)

‘credit institution’ means bank or a cooperative society;

‘close links’, means a situation in which two or more natural or legal persons are linked by -

(a) participation, namely ownership, directly or by way of control, of at least 20% of the voting rights or capital of an undertaking; or

(b) control, namely the relationship between a parent undertaking and a subsidiary, as referred to in section 148 of the Company Law or a similar relationship between a natural or legal person and an undertaking; for the purposes of this point, a subsidiary undertaking of a subsidiary undertaking shall also be considered to be a subsidiary of the parent undertaking of those subsidiaries; or

(c) control relationship permanently to the same person;

‘third country’ means a country that is a non an EU Member State;

‘feeder AIF’ means an AIF which -

(a) invests, at least 85% of its assets in units of another AIF (the ‘master AIF’); or

(b) invests at least 85% of its assets in more than one master AIFs where those AIFs have identical investment strategies; or

(c) has otherwise an exposure of at least 85% of its assets to such a master AIF;

‘branch’ means a place of business which is a part of an AIFM, which has no legal personality and which provides the services for which the AIFM has been authorised; all the places of business established in the same Member State by an AIFM with its registered office in another Member State or in a third country shall be regarded as a single branch;

‘financial instrument’ means an instrument as specified in Part III of the Third Annex of the Investment Services and Activities and Regulated Markets Law of 2007, as amended.

(2) For the purposes of definition ‘own funds’ in section (1), Articles 13 to 16 of Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions shall apply mutatis mutandis. (xxiv)

(3) In this Law and in the directives issued pursuant to this Law, any references to legislative acts of the European Union, such as Directive, Regulation or Decision means the relevant act as adjusted, amended or replaced, unless a different meaning is attributed by the text.

In this Law and in the regulatory or individual administrative acts issued pursuant to this Law, any reference to legislative act of the European Union, such as Directive, Regulation of Decision, means the relevant act as adjusted, amended or replaced, unless a different meaning is attributed to it by the text.

(4) The Commission may, by directive, adopt regulatory technical standards to determine types of AIFMs in order to ensure uniform conditions of application of the rules established under this Law.

(i) 66(Ι) of 1997, 74(Ι) of 1999, 94(Ι) of 2000, 119(Ι) of 2003, 4(Ι) of 2004, 151(Ι) of 2004, 231(Ι) of 2004, 235(Ι) of 2004, 20(Ι) of 2005, 80(Ι) of 2005, 100(Ι) of 2009, 123(Ι) of 2009, 27(Ι) of 2011, 104(Ι) of 2011, 107(Ι) of 2012, 14(Ι) of 2013.

(ii) 144(Ι) of 2007, 106(Ι) of 2009, 141(Ι) of 2012, 154(Ι) of 2012.

Official Gazette, Annex I: 16.11.2012, 30.11.2012.

(iii) 190(Ι) of 2007, 72(Ι) of 2009, 143(Ι) of 2012.

(iv) 78(Ι) of 2005.

(v) Cap 113., 9 of 1968, 76 of 1977, 17 of 1979, 105 of 1985, 198 of 1986, 19 of 1990, 41(1) of 1994, 15(Ι) of 1995, 21(Ι) of 1997, 82(Ι) of 1999, 149(Ι) of 1999, 2(Ι) of 2000, 135(Ι) of 2000, 151(Ι) of 2000, 76(I) of 2001, 70(Ι) of 2003, 167(Ι) of 2003, 92(Ι) of 2004, 24(Ι) of 2005, 129(Ι) of 2005, 130(Ι) of 2005, 98(Ι) of 2006, 124(Ι) of 2006, 70(Ι) of 2007, 71(Ι) of 2007, 131(Ι) of 2007, 186(Ι) of 2007, 87(Ι) of 2008, 49(Ι) of 2009, 99(Ι) of 2009, 42(Ι) of 2010, 60(Ι) of 2010, 88(Ι) of 2010, 53(Ι) of 2011, 117(Ι) of 2011, 145(Ι) of 2011, 157(Ι) of 2011, 198(Ι) of 2011, 64(Ι) of 2012, 98(Ι) of 2012, 190(Ι) of 2012, 203(Ι) of 2012, 6(Ι) of 2013.

(vi) 73(Ι) of 2009, 5(I) of 2012.

(vii) Official Gazette Annex (Ι):31.7.2009.

(viii) OJ of EU: L 331, 15.12.2010, p. 1.

(ix) OJ No. L 331, 15.12.2010, p. 84.

(x) 8(I) of 2015

(xi) OJ No. L.302, 17.11.2009, p.1 L146, 31.5.2013, p.1.

(xii) 97(I) of 2015 

(xiii) OJ: No L 193, 18.7.1983, p. 1∙ No L 164, 26.6.2009, p. 42.

(xiv) OJ: No L 335, 17.12.2009, p. 1∙ No L 174, 1.7.2011, p. 1.

(xv) OJ: No L 345, 31.12.2003, p. 64∙ No L 331, 15.12.2010, p. 120

(xvi) OJ: No L 145, 30.4.2004, p. 1∙ No L 331, 15.12.2010, p. 120.

(xvii) OJ: No L 177, 30.6.2006, p. 1∙ No L 326, 8.12.2011, p. 113.

(xviii) OJ: No L 177, 30.6.2006, p. 201∙ No L 331, 15.12.2010, p. 120.

(xix) OJ: No L 302, 17.11.2009, p. 32∙ No L 174, 1.7.2011, p. 1.

(xx) 8(I) of 2015

OJ: L315, 14.11.2012, p. 74, L158, 10.6.2013, p. 365

(xxi) 78(Ι) of 2012.

(xxii) OJ: No L 15, 20.1.2009, p. 1.

(xxiii) 78(Ι) of 2012

(xxiv) OJ: No L 177, 30.6.2006, p. 201.