Cyprus is a major financial and investment centre in the EU and internationally. As a result, there is a requirement for an effective and efficient regulatory framework. In Cyprus, the Cyprus Security Exchange Commission (CySEC) is an independent legal entity that regulates and supervises any investment activity carried out in Cyprus and the operation of investment firms on the island. Furthermore, CySEC is responsible for granting licenses to investment firms. The objectives of CySEC are to supervise the investment activities on the island, protect investors and contribute to developing a safe and reliable security market.
Regulatory framework:
The finance and investment team of Michael Chambers & Co. LLC will present the regulatory framework and provide useful information for investors, firms and the public. On this point, it should be stressed that CySEC operates according to the provisions of Investment Services and Activities and Regulated Markets Law (144(I)/2007).
Michael Chambers and his team would like to underline that Law 144 (I)/2007 regulates:
- The provision of investment and ancillary services in the Republic of Cyprus.
- The performance of investment activities on a professional basis in the Republic of Cyprus.
- The operation of regulated markets.
The Law (I)/2007 is harmonised with European Union regulations and Directives, and it applies to:
- Local and foreign firms that provide investment and ancillary services to persons who stay/reside/ are domiciled in the Republic of Cyprus or where the relevant transaction is held in Cyprus.
- Persons that stay/ reside/are domiciled in the Republic of Cyprus and act on behalf of a third party based outside of Cyprus in offering investment and ancillary services, either as an employee or in another capacity.
CySEC’s duties:
As mentioned before, CySEC authorises and supervises investment firms and regulated markets that operate in the Republic of Cyprus. In addition, CySEC grants a license to investment firms. In other words, CySEC is responsible for examining applications and granting licenses to firms under its supervision. Moreover, CySEC may suspend and revoke licenses if the investment firms do not satisfy the necessary conditions.
It should be mentioned that CySEC is responsible for supervising and regulating investment firms and agencies so that to ensure that they comply with the relevant laws. In the case that the investment firms do not comply with the law, then CySEC may impose administrative and disciplinary sanctions and even withdraw their licenses.
In addition, CySEC may demand information from any person or firm so that to permit experts and auditors to proceed with the necessary investigations. Hence, persons and firms are obliged to provide the information needed to CySEC.
Furthermore, the legal team of Michael Chambers & Co. LLC would like to underline that CySEC is responsible for the supervision of the following entities:
- Cyprus Investment Firms
- Cyprus branches of Investment Firms of other EU member-states
- Tied Agents of Cyprus Investment Firms
- Undertakings for Collective Investment in Transferable Securities
- UCITS (Undertakings for Collective Investment in Transferable Securities) Management Companies
- UCITS Agents
- Cyprus branches of UCITS Management Companies of other EU member-states
- Administrative Services Companies – Trustee and Fiduciary Service Providers
- Variable Capital Investment Companies
- Alternative Investment Fund Managers
- Regulated Markets
- Central Counterparty Clearing House (CCPs) of over-the-counter (OTC) derivatives
- Trade depositories of over-the-counter (OTC) derivatives
General information about the operation of investment firms:
The investment and finance team of Michael Chambers & Co. LLC will highlight some information an investment firm should take into consideration, i.e. authorisation. Investment firms are corporate entities that provide investment services on a professional basis inside or outside the Republic of Cyprus. Furthermore, an investment firm should operate within the limits of its license.
Law 144 (I)/2007 outlines specific provisions concerning capital requirements and the establishment of branches. Michael Chambers & Co. LLC’s legal team can provide you with all the necessary information about capital and other related requirements.
It should be taken into account that investment firms can only operate with prior authorisation from CySEC. That is to say, they cannot offer investment services if they have no authorisation from CySEC. An investment firm must provide all the necessary information to satisfy CySEC in order to get authorisation. The investment and finance team of Michael Chambers & Co. LLC points out that all investment firms’ authorisations are registered, kept and updated in a register that is accessible to the public. Michael Chambers and his team will guide applicants to gather all the necessary information and submit their applications.
Investor Compensation Fund:
According to article 59, the Investor Compensation Fund aims to protect clients and investors. Furthermore, the Investor Compensation Fund secures clients’ claims against investment firms. That is to say, the provisions of the law protect investors and clients adequately in case an investment firm does not operate sufficiently. Nevertheless, if you have a claim against an investment firm, you will need professional legal support to file a case to the Court. The legal team of Michael Chambers & Co. LLC may provide you with all the necessary legal and administrative support you might need. Our lawyers will help you to gather the necessary information that will help you to support your case.
Our services:
Michael Chambers & Co. LLC provides legal services to firms and investors. On the one hand, investment firms may contact our investment and finance lawyers so that to have professional assistance and then acquire authorisation by the CySEC. On the other hand, investors who might have a claim against an investment firm may contact our legal team so that to provide them with the necessary legal and administrative assistance. If you wish to speak to one of our lawyers, then please get in touch with us: at info@chambers.law
[1] Retrieved on the 3rd of February 2016 from: https://www.cysec.gov.cy/en-GB/cysec/vision-mission/
