UCITS passporting in Cyprus

An EEA UCITS Scheme may market its units in Cyprus. This procedure is regulated by Sections 69 to 72 of the Cypriot Open-Ended Undertakings for Collective Investment Law of 2012 (as amended) (the “UCI Law”). 

Notification 

For an EEA UCITS Scheme to market its units in Cyprus, the Cyprus Securities and Exchange Commission (“CySEC”) must receive the relevant notification (the “Notification”) from the HMSA in which the EEA UCITS Scheme is licensed. 

The Notification must include the following information (the “Notification Information”): 

1. information on arrangements made for marketing units of the EEA UCITS Scheme in the host Member State, including, where relevant, information in respect of share classes; 
2. an indication that the EEA UCITS Scheme is marketed by the EEA Management Company that manages the EEA UCITS Scheme; and 
3. the latest version of the EEA UCITS Schemes: 
   1. fund rules or its instruments of incorporation; 
   2. prospectus; and 
   3. latest annual report and any subsequent biannual report (if available),  translated, at the choice of the EEA UCITS Scheme, into one of the official languages of Cyprus or into English. Any translation of these reports is the responsibility of the EEA UCITS Scheme and shall accurately reflect the content of the original information. 
4. the latest version off the KIID in accordance with Article 78 of the UCITS Directive translated into one of the official languages of Cyprus or into a language approved by the HMSA. Any translation of these reports is the responsibility of the EEA UCITS Scheme and shall accurately reflect the content of the original information; 
5. an attestation by the HMSA that the EEA UCITS Scheme fulfils the conditions imposed by the UCITS Directive no later than 10 working days from receipt of the notification letter accompanied by the complete documentation. 

The Notification must be in English unless the CySEC and the HMSA have agreed that this may be provided in an official language of Cyprus and an official language of the HMSA. 

The CySEC may not request from the HMSA any further documentation, certificates or information other than those set out above. However, an EEA UCITS Scheme must notify the CySEC of any changes made to the regulation, instruments of incorporation, prospectus, last annual and biannual report or to the KIID of the EEA UCITS Scheme. The CySEC must also be informed where these documents can be obtained electronically. Where there are changes made to the Notification Information, the EEA UCITS Scheme must give written notice to the CySEC prior to implementation. 

An EEA UCITS Scheme may be marketed in Cyprus from the date on which the EEA UCITS Scheme has been notified by the HMSA that the Notification has been made. 

Obligations of EAA UCITS Schemes marketing their units in Cyprus 

In order to market the EEA UCITS Scheme in Cyprus, the provisions of section 70 of the UCI Law relating to the manner in which the EEA UCITS Scheme must market to investors in Cyprus must be complied with. 

Interaction between the requirement to prepare a KIID and Regulation (EU) No 1286/2014 (the “PRIIPs Regulation”) 

Following the transposition of an amendment to the UCITS Directive, where a UCITS fund marketing its units to Cyprus-based investors draws up, provides, revises, and translates a key information document (the “KID”) which complies with the requirements for KIDs laid down in PRIIPs Regulation, such UCITS fund is not required to draw a separate KIID and it is considered to have satisfied the requirements applicable to UCITS in relation to KIIDs. 

The CySEC charges a fee to recognise an EEA UCITS Scheme seeking to market in Cyprus. The charge for the notification for commencing marketing in Cyprus by an EEA UCITS Scheme is EUR 800. If the EEA UCITS Scheme has several investment compartments, then additional charges apply. 

Furthermore, an annual contribution must also be made to the CySEC by the EEA UCITS Scheme. This is currently EUR 1,000 in the case of an EEA UCITS Scheme with no investment compartments and EUR 2,000 in the case of an EEA UCITS Scheme with several investment compartments. 

Recently, the Directive (EU) 2019/1160 with regard to cross-border distribution of collective investment undertakings was transposed into local legislation by way of amendments to the UCI Law. As relevant to the present purposes, the transposition: 

1. enables EEA UCITS to de-notify arrangements made for the marketing of its units in the Republic, subject to certain conditions;  
2. requires EEA UCITS, intending to market units investors in Cyprus, to make facilities available for the performance of certain tasks by investors; and 
3. requires that the Notification contains all details necessary, including the address, for the invoicing or for the communication of any applicable regulatory fees or charges by CySEC and information on the above mentioned facilities available to investors.