More on UCITS
Last Updated on Friday, 25 September 2009 08:10
Under the current legislation, Organisation and operation of Open-Ended Undertaking for Collective Investment in Transferable Securities (UCITS), Law 200(I)/2004, the Central Bank of Cyprus is the regulatory and supervisory authority. A UCIT may take one of the following forms:
Common Fund (Mutual Fund); The mutual fund is a pool of assets which may be comprised of transferable securities, money market instruments and cash in the form of bank deposits. The assets of the mutual fund belong to the unit holders of the fund and its operation is defined by regulation. The fund is registered on approval of the Cyprus Securities and Exchange Commission and is managed by a mutual fund manager. The assets of the mutual fund under custodianship. The mutual fund is represented by the manager or management company.
Variable Capital Company (VCC); Variable capital investment companies are incorporated under company law and are limited liability companies with share holdings and have also been registered under the UCITS 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. The company may manage its own assets but not the assets of other companies. The assets of the company are kept under a custodian arrangement.
The following are not considered as UCITS under the law
- UCITS which are closed-ended
- UCITS who do not promote sale of their units in either Cyprus or the EU
- UCITS that only make their units available to the public in other countries except Cyprus due to a restriction on their constitutional documents
- Investment companies whose assets are invested through subsidiary companies rather than transferable securities
- UCITS which are in conflict with the investment and borrowing policy set out in the law 200(I)/2004
Registration
Registrations for UCITS are affected through both the Central Bank of Cyprus and CySEC.
A written application for registration is submitted by the fund manager/fund management company. The fund manager must be a licensed institution by CySEC with sufficient reserves and relevant expertise and qualified staff.
The minimum capital required is €1,708,601 and must be deposited within three (3) months of the granting of the license.
