Cyprus has approved a new bill to regulate the activities of collective investment management companies.
The new regulations set out clear requirements for organisations undertaking the administration and management of funds on behalf of the state and private investors.
Such companies must now obtain licences from the Cyprus Securities and Exchange Commission (CySEC). The law also sets out the conditions that must be met to obtain a licence, including organisational structure requirements, internal procedure requirements, and transparency of operational requirements.
Additionally, the document outlines the conditions for transferring administrative functions to specialised third-party organisations, the mechanisms through which CySEC will supervise management companies' activities, and the measures of responsibility in the event of violations, including administrative sanctions and fines.
DIKO MP and chair of the parliamentary committee on financial and budgetary matters, Christiana Erotokritou, stressed that the initiative was a conscious strategic choice by Cyprus, not a result of obligations to the EU. According to her, the law aims to develop and support the growing collective investment sector, which has the potential to make a significant contribution to the country's economy. The new law paves the way for a more transparent and professional environment in asset management, enhancing the island's attractiveness to international investors and funds.
It will create new, highly skilled and well-paid jobs. Furthermore, it will bolster Cyprus's international reputation as a competitive jurisdiction for business and capital management, said Erotokritou.
According to CySEC's report for the fourth quarter of 2024, there are currently 321 registered collective investment management companies in Cyprus.
Of these, 253 are active. Total assets under management amount to €10.1 billion, which is a 10.21% increase compared to the previous quarter. The net asset value is €9.6 billion.
The Cyprus Investment Funds Association (CIFA) welcomed the adoption of the law, describing it as 'a milestone in the development of the industry' and a key element in the sector's institutional strengthening. CIFA expressed gratitude to parliament, the Ministry of Finance, CySEC, the Republic's Legal Service and Invest Cyprus for their close cooperation.
CIFA Chair Maria Panayiotou said that the adoption of the law strengthens confidence, protects investors and enhances the competitiveness of the Cypriot investment ecosystem.
She also noted that CIFA will continue to work on modernising legislation on alternative investment funds (AIFs, AIFLNPs and RAIFs) and promoting Cyprus as an international investment hub.