Investor Classification for Alternative Investment Funds
Alternative Investment Fund Investors may be classified as Retail Investors, Well Informed Investors or Professional Investors
Based on the revised Markets in Financial Instruments Directive II and related implementing measures (together “MIFID II”), as incorporated in 144(I)/2007 Law which provides for the Provisions of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and other related matters an Alternative Investment Fund should classify its investors into one of the following three classifications:
- Retail Investors, which are afforded the highest level of protection;
- Well Informed Investors, which benefit from an intermediate level of protection;
- Professional Investors, which benefit from an intermediate level of protection;
These respective investor classes reflect the fact that investors have different levels of knowledge and experience, and therefore, the level of regulatory protection differs. Such differences in the regulatory protection under MiFID II cover a broad range of topics including, among others, investor disclosure requirements, rules for executing investor orders, and assumptions which can be made regarding investors by an Alternative Fund.
Well Informed Investors
A Well-Informed Investor is any investor who is not professional, and satisfies the following criteria: Confirms that: He either has sufficient knowledge and experience in financial and business matters in order to be able to assess the benefits and ...
Retail Investors enjoy the highest level of protection provided by law. A retail investor is an investor who does not meet the conditions required to be included in the professional investors’ or the well-informed investors’ class.
Professional investor is generally an investor who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risk that it incurs. In order to be considered a professional investor, the entity or ...
The Types of Alternative Investment Funds in Cyprus
The three available fund structures in Cyprus are the AIF for Unlimited Number of Persons (AIF), the AIF for Limited Number of Persons (AIFLNP) and the Registered AIF (RAIF) The Alternative Investment Funds Law of 2018 provides for three types of ...
Legal Forms of Alternative Investment Funds
An AIF may take the following legal structures: investment company in the legal structure of a limited liability company with fixed capital (FCIC); investment company in the legal structure of a limited liability company with variable capital (VCIC); ...