Home / CY AIFM Law of 2013 / PART ΙΙ – AUTHORISATION OF AIFMs / Section 6 - Conditions for taking up activities as AIFM of the Republic. 

Conditions for taking up activities as AIFM of the Republic.

6.-(1) An AIFM of the Republic must be a limited liability company with shares, which is covered by the provisions of this Law and by the provisions of Company Law with a registered office and central management in the Republic.

(2)(a) An AIFM of the Republic may manage AIFs only if it is authorised by the Commission in accordance with section 8 and only if it meets the conditions for authorisation established in this Law at all times.

(b) It is prohibited to an AIFM, other than an AIFM of the Republic to manage AIFs, unless the AIFM -

• is duly authorised according to national law or regulation, which harmonises the Directive 2011/61/EU, and 

• meets the conditions for authorisation established in Directive 2011/61/EU at all times.

(3) External AIFMs may - (i)

(a) only engage in the activities referred to in paragraph (5), and

(b) manage UCITS, 

as long as they have been duly authorised in accordance with Undertakings for Collective Investments Law of 2012 or in accordance with the national law of another Member State which harmonises the Directive 2009/65/ΕC. (ii)

(4) An Internally managed AIF may only engage in the activity of the internal management of the AIF in accordance with section 5.

(5) Every AIFM and every AIF, mentioned in other paragraphs of this section which refer to this paragraph -

(a) shall engage, at least in the following investment management functions when managing an AIF:

• portfolio management, and

• risk management;

(b) may additionally perform any of the following functions in the course of the collective management of an AIF:

• administration:

(Α) legal and fund management accounting services;

(Β) customer inquiries;

(C) valuation and pricing, including tax returns;

(D) regulatory compliance monitoring;

(Ε) maintenance of unit/shareholder register;

(F) distribution of income;

(G) unit/shares issues and redemptions;

(Η) contract settlements, including certificate dispatch;

(I) record keeping;

• marketing;

• activities related to the assets of the AIFs, namely services necessary to meet the fiduciary duties of the AIFM, facilities management, real estate administration activities, advice to undertakings on capital structure, industrial strategy and related matters advice and services relating to mergers and the purchase of undertakings and other services connected to the management of the AIF and the companies and other assets in which it has invested.

(6) By way of derogation from paragraph (3), an external AIFM may be authorised to provide any of the following services:

(a) management of portfolios of investments, including those owned by pension funds and institutions for occupational retirement provision in accordance with paragraph 1 of Article 19 of Directive 2003/41/EC, in accordance with mandates given by investors on a discretionary, client-by-client basis;

(b) non-core services comprising:

• investment advice;

• safe-keeping and administration in relation to shares or units of collective investment undertakings;

• reception and transmission of orders in relation to financial instruments.

(7) AIFMs are not authorised to provide -

(a) only the services referred to in paragraph (6); and/or

(b) non-core services referred to in paragraph (6)(b), without also being authorised to provide the services referred to in paragraph (6)(a); and/or

(c) only the activities referred to in paragraph (5)(b); and/or

(d) the services referred to in paragraph (5)(a)(i), without also providing the services referred to in paragraph (5)(a)(ii); and/or

(e) the services referred to in paragraph (5) (a) (ii), without providing the services referred to in paragraph (5) (a) (i). (iii)

(8) Articles 3(3), 10, 18, 36 and 77(6) of the Investment Services and Activities and Regulated Markets Law shall apply to the provision of the services referred to in paragraph (6) of this section by AIFMS. (iv)

(9) AIFMs of the Republic shall provide the Commission with the information the Commission requires to monitor compliance with the conditions referred to in this Law at all times.

(10) Investment firms authorised in accordance with the Investment Services and Activities and Regulated Markets Law and credit institutions authorised in accordance with Banking Law, shall not be required to obtain an authorisation under this Law in order to provide investment services such as individual portfolio management in respect of AIFs. However, investment firms shall, directly or indirectly, offer units or shares of AIFs to, or place such units or shares with, investors in the Union, only to the extent the units or shares can be marketed in accordance with this Law.

(i) 8(I) of 2015

(ii) 78(I) of 2012

(iii) 8(Ι) of 2015

(iv) 144(Ι) of 2007, 106(Ι) of 2009.