Chapter 4: Open-Ended Undertakings for Collective Investment (UCI) Laws 2016-2016

Question 1

When should the summarized statement of assets and expenses be submitted to CySEC?

Answer 1

Summarized statement of assets for the first, second and third quarter, within 15 days of the end of the quarter.

Question 2

What should the notification sent by the Management Companies authorized in the Republic intended to establish a branch in another member state contain?

Answer 2

The name of the member state and business plan.

Question 3

Where do UCITS collect funds from?

Answer 3

The public.

Question 4

How much is a feeder UCITS allowed to invest on ancillary liquidity assets?

Answer 4

At least 15% of its total net assets.

Question 5

What should UCITS prospectus contain in regards to its portfolio composition or portfolio management techniques?

Answer 5

When the NAV of a UCITS is likely to have high volatility due to its portfolio composition.

Question 6

What is the reason the value of the redemption or repurchase of shares is different from the NAV?

Answer 6

The amount of commission of the management company.

Question 7

What is the reason CySEC may refuse the application of a management company, authorized in another member state that manages UCITS, to operate in the Republic?

Answer 7

The company is not authorized by the competent authorities in its home member state to manage the type of UCITS it has applied for.

Question 8

In the date of valuation of UCITS assets, a closing price isn’t available for the same day. What value should be used for the calculations?

Answer 8

The previous working day’s closing price.

Question 9

Can a master UCITS charge subscription, redemption or repurchase fees for the purchase or transfer of its units from the feeder UCITS?

Answer 9

No

Question 10

What is the required initial capital of a management company?

Answer 10

The management company must have a fully paid up initial capital of at least 125.000 euros.

Question 11

Up to how much of the required additional capital maybe provided in the form of a guarantee from a credit institution operating in the Republic or one of the other member states?

Answer 11

Up to 50% of the capital.

Question 12

How does a VCIC decrease its share capital?

Answer 12

By repurchasing old shares without resorting to a capital decrease under Comaly Laws

Question 13

How does a VCIC increase its share capital?

Answer 13

By issuing new shares.

Question 14

How much a UCITS may increase the investment with a single issuer if the securities are issued or guaranteed by a member state?

Answer 14

35%

Question 15

How much can a UCITS increase the investment with a single issuer when investing in bonds which are issued by a regulated and supervised credit institution in another member state?

Answer 15

25%

Question 16

How much exposure can a UCITS have in an OTC derivative transaction when the counterparty is a credit institution?

Answer 16

10%

Question 17

How much exposure can a UCITS have in an OTC derivative transaction when the counterparty is not a credit institution?

Answer 17

5%

Question 18

A feeder UCITS is a UCITS that has been approved to invest how much of its total net assets in UCITS or other collective investment funds?

Answer 18

At least 85%

Question 19

In which language must the Key Investor Information Document (KIID) be available?

Answer 19

In the official language of the member state the UCITS is issued or in both the official language and English.

Question 20

What should a UCITS authorized in the Republic do if it wants to market units to another member state?

Answer 20

Submit a notification letter to CySEC prior doing so.

Question 21

When can an authorized UCITS from another member state market its units in the Republic?

Answer 21

After CySEC has received a notification letter from the competent authorities of the UCITS home state.

Question 22

Which condition must be met for the grant of an operational license of a management company?

Answer 22

A minimum of two Directors appointed.

Question 23

How long does a management company has to settle its obligation after having its license revoked?

Answer 23

3 months

Question 24

Which function the management company cannot delegate?

Answer 24

The monitoring.

Question 25

What needs to be included in the notification to CySEC by a management company who wishes to gain operation license in the Republic by establishing a branch?

Answer 25

A complete business plan.

Question 26

What steps should CySEC follow when a management company providing cross-border services in the Republic from another member state breaches rules of the Republic?

Answer 26

• CySEC will request that the management company rectifies the situation, if not
• The competent authority of the home member state will be requested to take the necessary steps.
• CySEC will stop the management from undertaking activities within the Republic and inform the EC and ESMA.