On 13 December 2016 the Cyprus Securities and Exchange Commission (CySEC) issued Circular C173 to UCITS management companies and self-managed UCITS investment companies and Circular C174 to Alternative Investment Fund Managers that it regulates. The circulars draw recipients’ attention to the new and amended guidelines on sound remuneration policies issued by the European Securities and Markets Authority under the UCITS Directive and the Alternative Investment Fund Managers Directive. The guidelines will take effect from 1 January 2017.

The UCITS guidelines apply to UCITS management companies authorised under article 111(1) of the Open – Ended Undertakings for Collective Investment Law and to UCITS taking the form of self-managed investment companies authorised under article 9(2) of the law, where no UCITS management company has been designated under article 34 of the law. The AIFM guidelines, which are an amendment of earlier guidelines, apply to Alternative Investment Fund Managers authorised under article 8 of the Alternative Investment Fund Managers Law. These may be third-party managers or the AIF itself, if the legal form of the AIF allows this and the AIF’s governing body chooses not to appoint an external manager.

The objective of both sets of guidelines is to ensure common, uniform and consistent application of the provisions on remuneration contained in the respective EU directives. CySEC has adopted the guidelines and expects the entities it regulates to comply with them.