Guidance in relation to the requirement to raise capital from investors within a specified time period
In order to give Authorized Alternative Investment Fund Managers and Sub-threshold Alternative Investment Fund Managers information regarding the necessity to obtain capital from investors within a certain time frame, CySEC released Circular C538 on December 13, 2022.
This Circular C538 defines Authorised Alternative Investment Fund Managers and Sub-threshold Alternative Investment Fund Managers.
The minimum amount of capital must be raised by an AIF, an AIFLNP, and a RAIF in accordance with the provisions of articles 14(1)(a), 129(1)(a), and 136 of Law 124(I)/2018 (the “AIF Law”), within 12 months of the date of authorisation or registration.
The minimum capital to be raised is €500.000 for an AIF, €250.000 for an AIFLNP, and €500.000 for a RAIF within 12 months of the authorization/registration date.
It should be noted that when a fund is an umbrella fund, each investment compartment must meet the minimum capital requirement independently.
This Circular C538 from CySEC offers advice for:
- Proving adherence to provisions 14, 129, and 136 of the AIF Law
- Filing a report with CySEC after raising the required amount of capital
Additionally, with this Circular C538, CySEC offers advice for the situation in which the required minimum amount of capital is not raised within the allotted time frame.
According to CySEC, AIFMs are required to use every reasonable effort to obtain the required minimum capital for each Fund that they administer, and they must do so by the deadlines specified in paragraphs 14, 129, and 136 of the AIF Law.
