Cyprus: CySEC 2015 review

Author: | Published: 20 Apr 2016
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Andreas Neocleous & Co

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Elias Neocleous

On March 9 2016, the Cyprus Securities and Exchange Commission (CySEC) published its review of market developments and work carried out in 2015. It also set out its action plan for developing Cyprus' capital market and financial sector. Despite competition from other jurisdictions, CySEC continues to receive an unprecedented number of new applications for licences. During 2015 the number of regulated entities it supervises increased to more than 550.

During 2015 CySEC carried out extensive investigations into the banking sector, particularly into the events which led up to the 2013 banking crisis. As a result of these investigations it imposed administrative fines amounting to €9 million (approximately $10.2 million) and reported specific issues to the appropriate authorities for criminal investigation.

It also increased supervisory controls of Cyprus investment firms (CIFs) and introduced stringent new measures to improve compliance on the part of regulated entities. The aim was to improve investor protection through more effective market and stakeholder supervision. Comprehensive on-site checks were carried out on CIFs and fines amounting to €2.6 million were imposed in respect of breaches disclosed. In addition, recommendations were made for the CIFs concerned to improve their internal procedures so as to fully comply with their obligations. CIFs must implement these measures within a prescribed time, at the end of which CySEC will re-assess their compliance. CySEC also investigated complaints filed by investors against regulated entities, and issued public warnings to investors on the risks of investing in complex products.

One of CySEC's priorities for 2015 was the prevention of money laundering. During the year it established a specialised department to monitor regulated entities' compliance with anti-money laundering requirements and to organise training events for regulated entities.

During 2016, CySEC intends to focus on three key areas, namely: rigorous market supervision; sanctions against those who violate the law; and ensuring the healthy development of the market through substantial improvements to procedures and enhanced investor protection.

Elias Neocleous