In May 1999, Cyprus enacted the International Collective Investment Schemes Law 47 (1)/99 which provides the necessary legal framework and appropriate incentives to encourage the establishment of international funds. An International Fund, like the P&C Global Gold and Natural Resources Fund, is designed for the collective investment of funds of unitholders. The Fund can invest anywhere in the world limited by its own investment policy - except in Cyprus. Such a Fund is an open-ended, limited liability structure and in the case of the P&C Global Gold and Natural Resources Fund only accessible to experienced investors. The Regulatory Authority is the Central Bank of Cyprus. In 1999, Cyprus began aggressively to develop its status as a fund center. The Central Bank has the target to promote Cyprus funds and is working closely with promoters and advisors on the establishing of International Funds.

The Cyprus Fund Law follows the rules and regulations of the relevant European Directives regarding investment funds. A Cyprus Fund could therefore have similar qualities to a UCITS with the possibility of registration for public offering and distribution within the European Union. The declared aim of the Cyprus Central Bank is to create a Fund Center with a development similar to that of Dublin ten years earlier. Cyprus fund practices essentially correspond to fund practices found in Dublin. Cyprus legislation is continually evolving and tends to follow European law in many areas. This reflects Cyprus' aim of joining the European Union in the near future; Cyprus is a candidate for accession.

The advantages of Cyprus as fund jurisdiction have been clearly identified by P&C: Cyprus is no longer an off-shore center and is recognised in the international community as a reputable business place. Cyprus has a long tradition of trading and shipping and has developed in the last fifteen years a powerful financial services industry. Cyprus is strongly connected to the major European countries, in particular to the UK.

Another advantage of Cyprus for fund jurisdiction is the cost factor. In particular, taxes and duties as well as professional service fees are highly competitive. Further, in comparison to other European jurisdictions, the Cyprus Fund Law does not expect the Custodian Bank to be resident on Cyprus, and offers therefore the choice to the Fund for the best and most suitable banking partner.

The legal security of the Fund is assured by the relevant Cyprus authorities, in particular by the Cyprus Central Bank. Nevertheless, it is also important to cooperate with reputable partners in Cyprus which guarantee a high standard of professionalism: P&C has chosen KPMG Cyprus for the establishment of its funds and as auditors to its funds.

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