CySEC imposed €2.02m fines on CIFs in 2020

Rick Steves

The regulator imposed a total of €3.19m in administrative fines, €2.02m of which were linked to CIFs. It also suspended the operating license of 8 CIFs, revoked the operating license of 3 CIFs, and notified more than 93 regulated entities to take certain measures, within a specific timeframe after identifying weaknesses and/or omissions as part of its oversight checks.

cyprus

CySEC has published a statement referring to the Cyprus capital market and its upward trajectory, with digital transformation being a top priority for the financial watchdog.

Despite the difficult financial environment and developments with the legislative framework, CySEC is optimistic about Cyprus’ position within capital markets.

Demetra Kalogerou, Chairwoman of the Cyprus Securities and Exchange Commission, stated that a total of 88 entities were approved for a CySEC license, 69 of which are active in collective investments, 14 in the provision of investment services, and 5 in the provision of administrative services.

CySEC has now 779 entities under its supervision, which is up by 4.42% compared to 2019, during which it supervised 746 entities.

Last year, the regulator added a new regulatory category, entitled ‘Mini-Managers’, and a new investment product, Crowdfunding.

“The continuous upgrade and simplification of CySEC’s operations and procedures, is still our priority, in order to turn Cyprus into one of the safest, most reliable and attractive investment destinations”. To this end,

CySEC is designing a data governance framework that aims at the optimal organization of the Commission’s huge database and create a framework for the timely identification, proper assessment, and management of potential dangers/risks connected with the operation of the Commission itself (Risk Assessment Framework).

The regulator is also working on a digital registry for Crypto Assets Services Providers, as stipulated in the Amending Law on AML/CFT which was passed in February 2021.

“CySEC’s main goal in 2021, is to develop procedures and a methodology to conduct data-driven supervision, which will allow it to identify any irregularities and risks in the market at an early stage, while it is looking into the possibility to transform the Innovation Hub into a Regulatory Sandbox”, said Ms. Kalogerou.

“In this case, innovative products or services will be provided as part of a controlled environment, on a trial basis and to a limited scale”, she added.

2020, the year in review

Recalling fines and other measures, the CySEC Chairman said the regulator imposed a total of €3.19m in administrative fines, €2.02m of which were linked to CIFs. It also suspended the operating license of 8 CIFs, revoked the operating license of 3 CIFs, and notified more than 93 regulated entities to take certain measures, within a specific timeframe after identifying weaknesses and/or omissions as part of its oversight checks.

The regulatory authority is committed to boosting its supervisory role in 2021. CySEC highlighted the reinforcement of investor protection as its highest priority.

CySEC is also implementing the package of Regulations on sustainable investments, based on the Paris Agreement. Comprised of three Regulations, the package entered into force on 10 March 2021.

“At CySEC, we help asset managers go through these options, while through the Innovation Hub, we will actively support businesses and business people who develop green FinTech solutions.

“As part of its mandate, CySEC actively supports new FinTech-based products, services, and infrastructure projects, especially those that can contribute to the financing of the real economy”.

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