GREECE Law and Practice Contributed by: Ioannis Charalampopoulos, Petros Machas and Alexandros Saratsiotis, Machas & Partners
3.7 Outsourcing of Investment Functions/ Business Operations Alternative Investment Fund Managers (AIFMs) may delegate certain investment functions or operational activities to third parties, subject to strict regulatory conditions. For AIFMs, Article 20 of Law 4209/2013 (transposing Article 20 of the AIFMD) permits delega - tion provided that the HCMC is notified in advance and the arrangement is objectively justified. • The delegate must have adequate resources, integrity, and professional experience. • Portfolio or risk management functions can only be delegated to authorised and supervised entities, and if located in a third country, an appropriate cooperation agreement must exist between the HCMC and the foreign supervisory authority. • Delegation must not hinder effective supervision or compromise the interests of investors. • The AIFM must retain the ability to give instruc - tions, monitor the delegate on an ongoing basis, and retain overall responsibility. • Delegation to the depositary, its sub-custodian, or entities with conflicting interests is prohibited unless robust functional and hierarchical separa - tion is ensured. • Sub-delegation is possible only under similar con - ditions and with prior consent from HCMC. In all cases, the manager’s responsibility towards the fund and its investors is not diminished, and the scope of delegation must be limited so that the manager continues to exercise substantial decision-making powers and genuine management control over the fund’s operations. 3.8 Local Substance Requirements The granting of an AIFM license from HCMC requires the maintenance of a registered seat in Greece. There are no other specific local substance requirements. The regulatory framework does not mandate that cer - tain functions – such as accounting, compliance, port - folio management, or risk management – be physically carried out from Greece, nor does it impose an obliga - tion that employees be employed locally. Managers are also required to demonstrate that they have ade - quate financial and non-financial resources to perform their functions effectively, regardless of where these
resources are located. Regulatory focus is placed on the manager’s organisational structure, governance framework, and the capability to supervise and con - trol delegated functions in line with investor protection and regulatory oversight requirements. 3.9 Change of Control A merger, sale, restructuring, or other change-of- control transaction involving a licensed AIFM under Law 4209/2013 will trigger regulatory requirements as an amendment of the grounds for the granting of the AIFM license since such transactions will involve the disposal and/or acquisition of qualifying holdings. In these cases, the HCMC must be notified in advance, and its prior approval is required before comple - tion. The HCMC assesses the suitability of the new shareholder(s), including their reputation, financial soundness, and ability to ensure prudent manage - ment of the entity. Such transactions generally do not require prior investor consent unless specifically provided in the fund’s constitutional or contractual documentation. 3.10 AI and Use of Data There is no dedicated national framework specifically regulating the use of artificial intelligence (AI), predic - tive analytics, or big data by licensed fund managers, whether for investment or operational/compliance purposes. Managers may deploy such technologies, provided their use complies with existing obligations under Greek law, as well as broader EU financial regu - lation. The security and data management policies of managers remain subject to the supervisory authority of the HCMC, which oversees the adequacy of their administrative, accounting, and IT systems. In par - ticular, both AIFMs must maintain appropriate and sufficient administrative and accounting procedures, internal control mechanisms, and security arrange - ments for electronic data processing, including net - work and information systems, in line with Regulation (EU) 2022/2554 on digital operational resilience, as well as rules on personal transactions by employees and on proprietary investments. Such mechanisms must ensure traceability of transactions and compli - ance with fund rules and applicable law. A key development is the EU Artificial Intelligence Act, which entered into force on 1 August 2024 and will
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