Regulatory Framework: Cyprus has a well-established regulatory framework for investment funds, primarily governed by the Cyprus Securities and Exchange Commission (CySEC). CySEC regulates and supervises investment services and activities, including the establishment and operation of investment funds.
Types of Funds: Cyprus allows for various types of investment funds, including UCITS (Undertakings for Collective Investment in Transferable Securities) and AIFs (Alternative Investment Funds). AIFs can be further categorized into AIFs marketed to retail investors (RAIFs) and AIFs not marketed to retail investors.
Licensing and Registration: Fund managers and fund administrators must obtain appropriate licenses from CySEC to operate in Cyprus. The process involves demonstrating compliance with regulatory requirements, including capital adequacy, governance, and operational standards.
Disclosure and Reporting: Funds are required to disclose information to investors according to regulatory standards. This includes periodic financial reporting and adherence to anti-money laundering (AML) regulations.
Distribution Rules: There are specific rules regarding the marketing and distribution of funds within Cyprus and across the European Union (EU), especially for UCITS and AIFs. Compliance with these rules ensures that funds can be marketed to investors within the EU under the EU's passporting regime.
