The Cyprus Securities and Exchange Commission (“CySEC”) has proceeded (through on-site inspections) to evaluate the policies/procedures established and implemented by AIFMs regarding their compliance with some operational aspects relating to the organisational requirements and the delegation of functions (“the Inspections”).
Legal Framework:
The Inspections covered requirements of Articles II and III of the Law, as well as the relevant supplementary provisions included in the “Commission Delegated Regulation (EU) no. 231/2013 supplementing Directive 2011/61/EU of the European Parliament and of the Council” (“the Regulation”).
Deficiencies Found:
- Risk Management Function
- Valuation of the AIF’s Assets Function
- Portfolio Management Function
- Compliance Function
- Responsibility of the external AIFM regarding managed AIFs in the form of a company/partnership.
- Organisational and operational matters of the AIFM and human resources’ professional expertise
Best Practice Standards:
- Control of the AIFM by the Board of Directors
- Control from Senior Management
- Organisation of the AIFM and human resources’ professional expertise