The Cyprus Securities and Exchange Commission (CySEC) recently issued a reminder to Cyprus Investment Firms (CIFs) board members about their duties and the importance of adhering to all regulatory guidelines. This comes in light of recent reviews that revealed certain compliance shortcomings. As of 2023, CySEC oversees 250 Investment Firms. Among these, 159 firms cater to forex products for retail investors, while 90 firms focus on traditional products.
Chairman of CySEC, George Theocharides, emphasized a zero-tolerance stance towards CIFs not aligning with the set regulatory framework. Addressing local investment firm board members in online seminars, Theocharides elaborated on CySEC’s expectations in the present European regulatory landscape. He underscored the importance of regulatory adherence and safeguarding investors.
He also detailed efforts by the European Securities and Markets Authority (ESMA) and CySEC to enhance cross-border retail financial services oversight, hinting at more forthcoming restrictions.
The chairman expressed concerns about the potential risks associated with the rapid digitization of financial services and the proliferation of online investment promotions. He warned of the complexities of financial products, which may not always be understood by all.
Over the past three years, CySEC has levied fines totaling €5.3 million on CIFs for violations, including a significant €1 million fine on Itrade Global (Cy) Ltd. Their oversight has been intensified, leading to stricter consequences for non-compliant firms. CySEC’s initiatives include investments in staff training and the introduction of cutting-edge supervisory systems.
The commission has been stringent, even holding key individuals accountable for a CIF’s regulatory breaches. They have also been decisive in rejecting, revoking, or suspending CIF licenses when necessary.
In alignment with its Supervisory Action Plan, CySEC conducts regular CIF reviews and site inspections. Their Anti-Money Laundering & Combating the Financing of Terrorism department (AML & CFT) also performs additional checks to assess the robustness of measures adopted by supervised firms.
