More on ICIS

Under the current legislation, International Collective Investment Schemes Law, 47(I)/1999, the Central Bank of Cyprus is the regulatory and supervisory authority for ICIS and may, upon a written application, recognise a company incorporated under the Cyprus Companies Law, a trust created under the International Trust Law or a partnership registered under the Partnership and Business Names Law, as an International Collective Investment Scheme.   Under the above legislation, therefore, a Scheme may take one of the following forms:

International Fixed Capital Company (IFCC); incorporated under the companies law and recognised to operate as an international fixed capital company by the ICIS law. Its assets and unit holders are non-Cypriot residents and the share capital cannot vary, it remains fixed.  The initial minimum capital required to set up an IFCC is US$100,000.  The company (or fund) is then marketed to the public or experienced investors.  If the IFCC is a private ICIS then it is exempted from this capital requirement.  A private ICIS is one that has 100 or less investors.

International Variable Capital Company (IVCC); incorporated under the companies law and operates as an international variable capital company by the ICIS law.  Its assets and unit holders are non-Cypriot residents and the share capital varies according to the participating investors at any given time.  The share capital of the company is equal to the net asset value (NAV) of the shares of the company at any time.      

International Unit Trust Scheme (IUTS); an international trust created under the International Trust Law and recognised to operate as  an International Unit Trust Scheme under the ICIS Law.  (See Cyprus International Trusts).  The assets are owned by the Schemes Trust in fiduciary for the trust beneficiaries        

International Investment Limited Partnership (IILP), a limited partnership registered under the Partnership and business Names Law and recognised to operate as an international investment limited partnership by the ICIS law.  As with all limited partnerships (see Partnerships), there must be a general partner appointed who manages the fund and is responsible for the assets and liabilities of the fund.  The limited partner will also be a member of the scheme.  A general partnership can also have companies as partners. 

All four legal types of Schemes can either be of limited (closed-end) or unlimited (open-end) duration.

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It should also be noted that the International Collective Investment Schemes Law of 1999 will soon be amended, so that the Central Bank of Cyprus will be the regulatory authority but only for Private Collective Investment Schemes (i.e. schemes with up to 100 investors).  In view of the above, the Central Bank of Cyprus accepts applications and recognises only Private Schemes.  Such Schemes must appoint a Custodian which must be a Cyprus bank, unless specifically exempt by the Central Bank of Cyprus.  It must also be noted that Private Schemes which do not have a physical presence in Cyprus, must appoint a company to carry out the administration work of the Scheme.  The said company must be based in Cyprus and be approved by the Central Bank of Cyprus.

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Registrations

Registrations for ICIS are affected through both the Central Bank of Cyprus and CySEC. 

A written application for registration is submitted as follows

• IFCC and IVCC, the application is made on by the company
• IUTS the application is made by the trustee
• IILP the application is made the limited partnership

Documentation and the application forms as requested by the Central Bank.

• Schedule 1 – Preliminary Application Form (Form P.A.)
• Schedule 2 - Documentation to accompany an application for a recognition as an International Collective Investment Scheme (“ICIS”) (does not require filling in)
• Schedule 3 – Standard Application Form (Form SA)
• Schedule 4 – Personal Questionnaire (Form P.Q.)
• Schedule 5 – Questionnaire for legal person (Form “L.P.”)
• Schedule 6 - Documentation requirements in support of an application for an authorisation to act as a manager of an ICIS (does not require filling in)
• Schedule 7 – Questionnaire for Manager (Form “M”)
• Schedule 8 – Questionnaire to be completed by the trustee (Form “T”)
• Schedule 9 – Personal Questionnaire for persons who will be providing trustee services (Form P.QT)
• Form IA – Application Form for authorisation to act as an Investment Adviser

In addition CySEC and the Central Bank have to be satisfied that:

The directors, promoters, the manager and the trustee of the scheme are competent and honest, and that the general partner and the trustee can act independently of the manager.

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Disclosures & Reporting Requirements

•  Annual Financial reports including, financial statements, information on borrowing, portfolio information, report by Trustees and Report by Auditors
• Half-yearly reports including, Balance sheet, Income Statement, Statement of sources from which the ICIS income has been generated
• Statement of duties, charges and fees paid out, statement of income distribution or allocation

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