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New type of funds (Cyprus): The Registered AIF (RAIF) By: A.G. Paphitis & Co
A new category of Alternative Investment Funds, the Registered AIFs (‘RAIFs’) has been introduced by the CySEC and recently affirmed by the Cyprus Parliament.
The introduction of RAIFs is considered one of the most important changes made in the fund industry thus far.
A RAIF will be a special type of an AIF that will not be subject to authorisation itself from CySEC, but it will be regulated through its manager who should always be a licensed AIFM.
Conditions for a RAIF
An AIF can operate as a RAIF, if all the following conditions are met:
- It is exclusively addressed to Professional and well-informed investors
- Is externally managed
- Its regulatory documents clearly mention that it is under the specific part of the AIF Law
A RAIF will be registered in a central register, but it will not fall under the direct supervision of CySEC.
A RAIF can be set up as:
- A mutual fund
- An investment company
- A partnership
A RAIF can operate with multiple compartments provided that this is mentioned in its regulatory Documents.
Regarding the minimum capital and the evaluation of the RAIF, the provisions for AIFs are valid. For more information on AIFs please visit our post here.
Alternative Investment Fund Manager (AIFM)
A RAIF should always appoint an external manager that must be either:
- An AIFM of the Republic
- An AIFM of EU
- An AIFM outside EU provided that it has received the passport of Directive 2001/61/EU and has defined a reference country in EU
The AIFM should also appoint a custodian as per the provisions of AIFM Law.
For more information you may contact our FS Regulatory and Advisory Department of our firm.