Registered Alternative Investment Funds ("RAIFs") operate under the supervision of the Cyprus Securities and Exchange Commission ("CySec") through the appointment of a regulated external fund manager and represent an investment vehicle which offers more flexibility, reduce costs, within the robust regulatory framework of CySec.
Pursuant to a new circular published by CySec on 26th of January 2022 the following main changes were communicated to external managers regarding the registration and de-registration of RAIFs:
- Within one (1) month from the date of submission of the information provided for in section 138(2) of the Alternative Investment Funds Law of 2018 ("AIF Law"), CySec will be examining and verifying whether the authorisation of the External Manager covers the management of an AIF with the investment policy of the respective RAIF, and where it does, CySec registers the RAIF in question with the CySec RAIFs Register and informs its external manager.
- The External Managers shall ensure that each and every RAIF under their management, comply with all of their obligations under the AIF Law, so that they can operate as RAIFs. The compliance with the provisions of the AIF Law is assessed by CySec in the context of its ongoing supervision and where potential violations arise, CySec may impose sanctions to the respective External Manager and/or RAIF, pursuant to section 120 of the AIF Law.
- External Managers of RAIFs are also reminded of the list of documents required to accompany the application for a RAIF's registration with the CySec RAIF register, the relevant requirements and timeframes for the establishment of a RAIF as an investment company, a limited partnership, a mutual fund or conversion of existing company into a RAIF, as well as the provisions of the AIF Law that must taken into consideration when producing the regulation or the constitutional documents (as the case may be).
The full Circular can be found on CySec's website.
Highlighting some of the benefits of choosing RAIF as an investment vehicle:
- No licensing required as it's externally managed;
- No investment restrictions;
- Multiple compartments possible;
- Units of RAIFs may be listed;
- Requirement to appoint local depository;
- Can be set up as a common fund, investment company, or limited partnership;
- Addressed solely to well-informed and/or professional investors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.