Introduction
The Cyprus Securities and Exchange Commission (CySEC) issued Circular C793 on 6 August 2026, detailing updates to liquidity risk management for Cyprus Investment Fund Managers (CyIFMs) due to Directive (EU) 2024/927. This is a clarification involving no new obligations but highlights necessary compliance with newly adopted EU standards.
CySEC Circular C793 – At a Glance
- Issued date: 06 August 2026
- Applies to: Cyprus Investment Fund Managers (CyIFMs)
- Deadline: 16 April 2027 for pre-existing UCITS and AIFs
- Key requirement: Comply with Directive (EU) 2024/927 standards.
- Submission method: [CONFIRM]
What Does This Circular Require?
What firms must do. Assess and implement updated liquidity risk management practices and tools.
Legal basis. Directive (EU) 2024/927, RTS EU 2026/465, EU 2026/466.
Regulatory objective. Enhance liquidity risk management and investor protection.
Who Is in Scope?
The circular applies to UCITS Management Companies and Self-Managed Cyprus UCITS as well as AIF Managers.
- Cyprus UCITS Management Companies
- Self-Managed Cyprus UCITS
- Cyprus Alternative Investment Fund Managers
- Self-Managed Cyprus AIFs
Edge cases and exceptions:
- Transitional arrangements: applies until 16 April 2027 for UCITS and AIFs established before 16 April 2026.
Key Requirements Breakdown
Reporting / Submission Requirements
Documented gap analysis and maintenance of records.
Technical / System Requirements
Expertise, systems, and capacity for implementing liquidity tools.
Practical Implementation: What Firms Should Do
In practice, CyIFMs must conduct a thorough review of existing risk management frameworks and ensure alignment with the requirements of Directive (EU) 2024/927. These include enhancements to liquidity management tools and operational adjustments as necessary.
Key Dates and Deadlines
| Date | What happens |
|---|---|
| 16 April 2026 | RTS application begins. |
| 16 April 2027 | Transitional deadline for UCITS and AIFs existing before implementation. |
How to Apply This Correctly
- Perform a gap analysis of current frameworks.
- Enhance systems and operational capacities.
- Document and maintain evidence of compliance processes.
- Ensure Board oversight and approval of changes.
Compliance Officer Checklist
- Review amendments in Directive (EU) 2024/927
- Conduct gap analysis on existing practices
- Align tools and procedures with RTS and ESMA Guidelines
- Record all implementation steps for future audits
Evidence to Retain
- Documentation of gap analysis results
- Records of decisions and measures implemented
- Evidence of compliance and alignment with new standards
Why This Matters
Non-compliance with updated liquidity risk management practices poses significant risks, including potential regulatory penalties and reputational damage for CyIFMs. Effective liquidity management is crucial to protect investors and maintain market stability.
Frequently Asked Questions
Who does the new liquidity management framework apply to?
It applies to Cyprus Investment Fund Managers, including UCITS Management Companies and Alternative Investment Fund Managers.
When must existing UCITS comply with the new framework?
UCITS and AIFs established before 16 April 2026 must comply by 16 April 2027.
What is required from the Boards of Directors under the new framework?
They must exercise effective oversight, ensure timely compliance and validate that liquidity tools are appropriate for each fund’s profile.
What should CyIFMs document under the updated requirements?
CyIFMs should document gap analysis, decisions, and measures taken to align with RTS and ESMA guidelines.
What are liquidity management tools?
They include mechanisms and strategies used to manage liquidity risks within investment funds, as detailed in Directive (EU) 2024/927.
How CX Financia Can Support You
CX Financia can assist you with Regulatory Compliance and Risk Management to effectively navigate these liquidity management updates. Our expertise ensures your firm aligns with new directives and guidelines, safeguarding against non-compliance risks.
Disclaimer
General information, not regulatory advice…