Cyprus Investment Funds under CySEC

In the last decade, the jurisdiction of Cyprus has built a reputation for attracting exciting investment projects to the island. Cyprus Investment Firms (CIF), Crypto-Asset Services Providers (CASP), E-money (EMI) & Payment Institutions (PI), and Investment Funds have established a regulated presence in Europe out of Cyprus. Foreign investors have been enticed to set up shop due to the unique characteristics that make Cyprus such an attractive investment hub.

Within this blog post, the team at the Institute aims to provide a brief introduction to Cyprus Investment Funds operating under the oversight of CySEC (Cyprus Securities and Exchange Commission).

At the end of this post, we highlight a course dedicated to Cyprus Investment Funds that expands on the content shared here. Further, the course has been designed to educate professionals about the CySEC regulatory framework revolving Cyprus Investment Funds, the basic concept of Collective Investment Undertakings (CIU), the investment fund ecosystem and more.

What is an Investment Fund?

Simply put, an investment fund is a vehicle used to collectively raise funds and is employed to execute an investment strategy. A main point of attraction for investors is that the pooling of funds provides access to a wider range of investment opportunities. Additionally, investment funds can be either internally or externally managed.

What are the different types of investment funds under CySEC? 

Under CySEC, Alternative Investment Funds (AIF) and Registered Alternative Investment Funds (RAIF) are the most popular investment fund categories in Cyprus. RAIF structures in particular have played a significant role in the growth that the investment fund industry in Cyprus has experienced since the enactment of the AIF Law in 2018 which introduced the RAIF model.

Furthermore, RAIF structures were introduced to eliminate the costly and time-consuming authorisation procedures mandated by CySEC. It is also important to note that RAIF are not actually authorised or regulated by CySEC itself. Rather, a RAIF is obliged to appoint an external Fund Manager that is responsible for overseeing the RAIF and ensuring its compliance with the regulatory framework. Once appointed, the external Fund Manager notifies CySEC, and the Cypriot regulator registers the RAIF within 1 month.

Additionally, AIF structures can be differentiated between an unlimited number of persons (AIF) or with a limited number of persons (AIF Limited Number of Persons – AIFLNP). The main differences between the two AIF structures here is that an AIFLNP can have a maximum of 50 investors and cannot involve any retail investors. On the contrary, an AIF is able to have an unlimited number of investors and can include retail investors too.

What is the Cyprus Investment Funds: AIF & RAIF course and what does it include?

The Cyprus Investment Funds: AIF & RAIF course is delivered by Nikolas Xenofontos, the Managing Director at SALVUS Funds, and aims to instil professionals with a solid understanding of the CIU concept as well as the investment fund ecosystem in Cyprus under CySEC.

Upon successful completion of this course, professionals will acquire knowledge relating to the characteristics and requirements for AIF, AIFLNP, RAIF, and the differences with Undertakings of Collective Investment in Transferable Securities (UCITS). The course is suited for professionals with no or limited experience in investment funds and are employed within: