Summary of CySEC's Circular C562
Memo #16-2023
CySEC Circular No: C562
Date: 05/04/2023
Subject: Guidance to CAIFMs and AIFs, on key principles and concepts governing the Alternative Investments Fund Managers Directive 2011/61/EU (‘AIFMD’)
Purpose: To highlight to CAIFMs and/or AIFs externally managed by CAIFMs, some key aspects relevant to the application of the AIFMD.
In Summary:
CySEC has issued the Circular C562 on 04/04/2023 to highlight to Cyprus Alternative Investment Fund Managers (CAIFMs) acting as External Managers and Internally Managed AIFs and to Alternative Investment Funds (AIFs), Registered Alternative Investment Funds (RAIFs) and Alternative Investment Funds with Limited Number of Persons (AIFLNPs), some key aspects relevant to the application of the Alternative Investments Fund Managers Directive 2011/61/EU (AIFMD).
In accordance with this Circular C562, CySEC directs CAIFMs to ensure better understanding and compliance with the single AIFM principle, the principles governing the delegation of functions and the ‘letter box entity’ concept, as well as the AIFMD and AIF scope.
CySEC notes that through its supervisory activity, CySEC has become aware of practices which are not always aligned with the single AIFM principle, the principles governing the delegation of functions and the ‘letter box entity’ concept and the scope governing the AIFMD, as transposed and/or adopted in Cyprus’ legal framework.
This Circular C562 includes a reference for the single AIFM principle, the principles governing the delegation of functions and the ‘letter box entity’ concept and of the AIFMD and AIF scope.
This Circular also refers to the upcoming AIFM and UCITS Directive review.
CySEC further notes that where CAIFMs reviewing their practices, policies and procedures in accordance with the content of this Circular C562, identify any areas of concern, CySEC expects them to take immediate actions to ensure their compliance.
Relevant to the ‘Proposal for a Directive amending Directives 2011/61/EU and 2009/65/EC as regards the delegation arrangements, liquidity risk management, supervisory reporting, provision of depositary and custody services and loan origination by alternative investment funds’ (upcoming AIFM and UCITS Directive review), follow the below links:
• https://eur-lex.europa.eu/resource.html?uri=cellar:9025e7c1-4de7-11ec-91ac-01aa75ed71a1.0001.02/DOC_2&format=PDF
Read the CySEC Circular C562
Read more news at Regulatory News
