Operation of mutual investment funds

UCITS Management Companies

UCITS management companies are supervised by the Central Bank of Iceland (CBI). They operate according to Act No. 116/2021 on UCITS. The Act transposes the UCITS (Undertakings for Collective Investment in Transferable Securities) directive of the European Union into Icelandic law. The Act applies to UCITS management companies and the operation and marketing of UCITS in Iceland.

Non-UCITS management companies are not permitted to operate UCITS. They are also forbidden to market a collective investment fund such as a UCITS unless it has been approved as such by the CBI.

Alternative Investment Fund Managers

The managers of alternative investment funds are supervised by the Central Bank of Iceland. They operate according to Act No. 45/2020 on alternative investments funds managers. The Act transposes the AIFM (Alternative Investment Fund Managers) directive of the European Union into Icelandic law. The Act applies to managing entities that operate or market one or more alternative investment fund in Iceland or in other states within the EEA.

Every alternative investment fund shall be run by the managing entity of the alternative investment fund, whether the managing entity has been granted an operating license for it or registered as such.

Other than the managing entities of alternative investment funds that have been granted an operating license for this purpose, it is not permitted to operate alternative investment funds for retail investors (formerly investment funds). It is also not permitted to market a mutual investment fund as an alternative investment fund for retail investors unless it has been approved by the CBI as an alternative investment fund for retail investors.

Marketing to retail investors

It is not permitted to market collective investment funds to anyone other than professional investors. However, mutual funds and alternative investment funds, which have been approved by the CBI, can be marketed to retail investors.