Home / CY AIFM Law of 2013 / PART ΙΙΙ – OPERATING CONDITIONS FOR AIFMs / CHAPTER 1 - General Requirements / Section 13 - General principles. 

General principles.

13.-(1) AIFMs shall, at all times -

(a) act honestly, with due skill, care and diligence and fairly in conducting their activities; and

(b) act in the best interests of the AIFs or the investors of the AIFs they manage and the integrity of the market; and

(c) have and employ effectively the resources and procedures that are necessary for the proper performance of their business activities; and

(d) take all reasonable steps to avoid conflicts of interest and, when they cannot be avoided, to identify, manage and monitor and, where applicable, disclose, those conflicts of interest in order to prevent them from adversely affecting the interests of the AIFs and their investors and to ensure that the AIFs they manage are fairly treated; and

(e) comply with all regulatory requirements applicable to the conduct of their business activities so as to promote the best interests of the AIFs or the investors of the AIFs they manage and the integrity of the market; and

(f) treat all AIF investors fairly.

(2) No investor in an AIF shall obtain preferential treatment, unless such preferential treatment is disclosed in the relevant AIF’s rules or instruments of incorporation.

(3) Each AIFM, the authorisation of which also covers the discretionary portfolio management service referred to in paragraph (a) of subsection (6) of section 6 of this Law shall-

(a) not invest all or part of the client’s portfolio in units or shares of the AIFs it manages, unless it receives prior general approval from the client; and

(b) with regard to the services referred to in subsection (6) of section 6 of this Law, be subject to the provisions of section 17 and Part VII of the Investment Services and Activities and Regulated Markets Law and to the provisions of the Regulations on the Establishment and Operation of an Investors Compensation Fund of clients of CIFs of 2004. (i)

(i) Official Gazette of the Republic Third Appendix (Ι): 30.4.2004 (Κ.Δ.Π. 531/2004), 4.6.2004 (Κ.Δ.Π. 594/2004), 29.7.2005 (Κ.Δ.Π. 359/2005).