What Professionals Need to Know About the New Fund Administration Law
 

A transformative chapter in fund administration began on 29 May 2025.

The "Law on the Establishment and Operation of Fund Administration Companies (referred to by their Greek acronym ΚΕΔΟΣΕ, in English: MCCIU) – 2023" introduces a robust framework for licensing, compliance, and governance in Cyprus.

The primary goals of the "Law on the Establishment and Operation of Fund Administration Companies (MCCIU)" are to enhance the accountability and transparency of fund administration companies in Cyprus, protect investors, and strengthen competitiveness in the Cyprus investment fund sector. 
The new guidelines aim to close existing regulatory gaps and align Cyprus with international best practices, thereby reinforcing its position as a global investment hub.   

New Regulatory Framework for Fund Administration Companies 

The new law (MCCIU) establishes the Cyprus Securities and Exchange Commission (CySEC) as the single regulatory authority for all fund administration companies. This approach not only facilitates the licensing process but also ensures consistency and enhances supervision across all fund administrators, resulting in strengthening the industry's trust.  

Additionally, the "Law on the Establishment and Operation of Fund Administration Companies" allows CySEC the authority to pursue and discipline firms that are not in compliance with the law by imposing sanctions.

Another significant change introduced by the "Law on the Establishment and Operation of Fund Administration Companies" is the requirement for fund administrators to appoint a Compliance Officer who will be responsible for ensuring compliance with all relevant laws and regulations. This approach aims to improve internal controls and risk management within the fund administration companies.   

What You Should Know  

The newly implemented law explicitly outlines the actions that fund administration businesses should take by establishing clear standards.  

 Key highlights of MCCIU 

• Licensing by CySEC  
  Only businesses that have a licence from CySEC can legally operate as fund administrators. This practice aims to ensure professionalism and retain market integrity.  

• Compliance requirements  
  Strict governance obligations, internal controls, and capital adequacy are being applied to ensure the provision of high-quality services.  

• Prohibited practises 
  From 29 May onwards, it is against the law to use the title "fund administrator" without prior permission. Penalties will be imposed on businesses which do not comply with the new legislative framework.

• Alignment with EU Directives  
  The MCCIU aligns with European regulatory frameworks, such as AIFMD, UCITS, and CRD IV. This uniformity with the EU Directives escalates transparency, investor protection, and trust in Cyprus as a global hub for investment services.  

Why This Matters for Your Business  

Following the new regulation of MCCIU, your organisation avoids penalties and risks, as well as gains a significant competitive advantage. Investors recognise your adherence to international standards as they follow the updates in the sector, understanding that your organisation is committed to quality and reliability.  

How RSM can help your organisation 

We are dedicated to working with you. We are committed to helping you meet the new MCCIU statutory framework standards. Our professionals, with extensive industry experience, closely monitor all changes in the sector and study the provisions of new laws in order to provide you with personalised advice and guidance that meets your needs. We can help you, amongst others, with compliance issues, governance, internal controls, and budgeting planning. 

This legislative milestone is not just a challenge;  it's an opportunity to improve investor trust and strengthen  Cyprus' global market position. 

When working together, we can turn change into a competitive advantage.  

 If you have any questions or need personalised guidance?  

 Contact us directly—we're here to help.