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CySEC on the registration process of Registered Alternative Investment Funds (RAIFs)

24 October 2018

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On 15 October 2018 Cyprus Securities Exchange Commission (CySEC) issued “Secondary legislation: Directive DI124-01 regarding the registration of RAIFs in, and deletion from, the RAIFs Register” (the ‘Directive’). This secondary legislation has been long awaited and was released by CySec almost 3 months following the publication of law 124(I)/2018 “Regulating the Organisation of Alternative Investments and other matters” (the ‘AIF Law’). All the while business professionals were eagerly awaiting its release in order to start putting their pipeline into place, which has built up over the last few months.

The AIF Law provides for the possibility to set-up a RAIF however this was not possible until CySEC issued the Directive. The Directive is available in Greek, is five pages long and in summary provides for :

  • Application process using form Form 124-00-01 to CySEC
  • Conditions for registration in the register of RAIFs
  • Provision of additional particulars, documents and information to CySEC
  • Strike-off from the register of RAIFs
  • Language for submitting information to CySEC
  • Important to note is that along with the Directive, CySEC issued Form 124-00-01 (the ‘Form’) which aims to encapsulate the various information and requirements of the RAIF and also to present the requirements in an understandable and appropriate manner

Form 124-00-01

The Form is also in Greek however information and documentation required may be submitted using one of the acceptable official languages of the Republic of Cyprus, or in English.

The Form and accompanied documents must be completed and submitted by the external Alternative Investment Fund Manager (AIFM). The Form must be submitted using CySEC’s dedicate upload portal. All questions and information provided should be as complete as possible and the Form clearly specifies that CySEC is not privy to any other information or documentation in Cyprus. The promoter must also include their details for further communication and/or clarification if needed.

Apart from the obvious that a typical disclosure form to CySEC would require (Section A) , the AIFM makes a declaration as to the their correctness (Section B) and Section C provides a checklist of documents to be submitted. These are summarised as follows:

  • Certificate of registration
  • Investment strategy of the fund
  • Articles of association
  • Arrangements regarding the custodian
  • The RAIF’s information memorandum
  • AIFMD license
  • External financial consultants confirmation
  • Main promoters confirmation

Punchline

The Directive and the Form will need to be tested and hope that they will be suitable for intended purpose. If all works out, a RAIF will have a set-up time limited to 30 days which is far shorter compared to the 6-8 month process which is currently in place. It will also significantly reduce the fees required to set-up as the process is a lot simpler than what it used to be under the AIF licensing.

If you would like to discuss in more detail, please get in touch with Harris Sharpe.