Disclosure Requirements – Investment Funds – Cyprus
Disclosure Category: 2
Clearstream Banking S.A. (“CBL”) may be required to disclose the identity and holdings of customers and ultimate beneficial owners, upon request, in the case of holding Cyprus investment funds.
In order to comply with the applicable legislation, customers with holdings in Cyprus investment funds or entering into transactions in the Cyprus market must consent and are hereby deemed to consent to the required legal disclosure. Such consent includes the appointment of the requester (for example, the Fund Manager, Transfer Agent, Regulator, Tax authority) as their attorney-in-fact, under power of attorney, to collect from CBL the required information to be disclosed. Customers who do not grant such authority cannot hold such investment funds or financial instruments in their accounts with CBL.
Background and legal basis
In the case of holding Cyprus investment funds, CBL is obliged under the following legislation to disclose the identity and holdings of customers and/or ultimate beneficial owners.
- Prevention and Suppression of Money Laundering Activities and Financing of Terrorism (AML law)
- Know-your-customer (KYC) requirements
Cyprus fund managers and their agents as the “obliged entities” under Cyprus law, are required to conduct know-your-customer (KYC) checks on customers and applicants for business, including any ultimate beneficial owners holding 10% or more voting (or equivalent) interests in the customer or applicant.
Customers are advised that Cyprus public authorities entitled to receive information on CBL customer and ultimate beneficial owners include the following, who may also channel their disclosure requests through Cyprus fund managers and fund agents.
- The Unit for Combating Money Laundering (MOKAS)
- Cyprus Securities and Exchange Commission (CySEC)
- Cyprus Tax Department
Failure to comply with the disclosure request from the fund managers, its agents, the regulators may result in the fund refusing further subscriptions orders, freezing of accounts, closure of existing accounts and reporting as suspicious activities to the competent authorities.
The information contained in the Disclosure Requirements is based on the legal opinion obtained by CBL that was issued on 16 November 2018. CBL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CBL and the local laws and regulations, the latter shall prevail. The Disclosure Requirements do not constitute legal advice and customers should seek advice from independent professional counsel.
Customers are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless CBL, for any loss, expense, liability, damage or claims, whether direct or indirect, against or incurred by CBL arising out of or resulting from such non-compliance.