Summary of CySEC's Circular C434
Memo #10-2021
CySEC Circular No: C434
Date: 23/03/2021
Subject: Suspension of redemption of UCITS and AIF units on 2nd and 5th April 2021
Purpose: To inform Regulated Entities that the redemption of UCITS and AIF units is suspended for the 2nd and 5th April 2021.
In Summary:
CySEC has issued the Circular C434 on 23/03/2021 to inform the Undertakings Collective Investment in Transferable Securities (UCITS) - Management Companies and the Alternative Investment Funds (‘AIF’) – AIF Managers, that the redemption of UCITS and AIF units is suspended for the 2nd and 5th April 2021.
It is provided that the suspension refers to UCITS and AIFs that hold assets in transferable securities listed in regulated markets and whose net asset value is calculated on a daily basis.
To reach this decision, CySEC has taken into consideration the relevant articles of the UCI Law and of the AIF Law which provides about when CySEC may decide for the suspension of the redemption of UCITS and AIF units, as well as, the fact that the 2nd and 5th of April 2021 are public holidays in most international stock markets, the settlement system for payments TARGET2 is closed on those days and the need to safeguard the interests of unit-holders of UCITS and AIFs and the proper functioning of the market.
CySEC also notes that the obligations under article 20(2) of the UCI Law and article 43 of the AIF Law continue to apply.
The article 20(2) of the UCI Law provides that the provisions of article 19 of the UCI Law in relation to the duration of the suspension, the extension, the publication of announcements of commencement, expiry or revocation of the suspension, the information of the competent supervisory authorities and the restrictions with regard to the submission of application to redeem units as well as with regard to the redemption of UCITS units shall apply mutatis mutandis in the case of the suspension of the redemption of units by the Securities and Exchange Commission’s decision as defined in subsection.
The article 19 of the UCI Law is about the suspension of redemption of units by a decision of the Management Company or the UCITS.
The article 43 of the AIF Law provides about the suspension of the redemption or repurchase of AIF units.
