CySEC tightens requirements for investment firms with respect to activities in third countries

Maria Nikolova

The Cypriot regulator will require that firms certify their authorization by the authorities of a third country in case they want to provide services there.


The Cyprus Securities and Exchange Commission (CySEC) is apparently taking a closer look at the activities of Cyprus Investment Firms (CIFs). Shortly after the regulator published its proposals for new rules governing the provision of binary options services by CIFs, it is now seeking to tighten its oversight on the provision of services by investment firms in third countries.

In a Circular, out today, CySEC addresses the issue of CIF’s freedom to provide investment and ancillary services and/or perform investment activities in a third country. Apparently, the document concerns all those companies that refer to their “passport” rights to deliver investment services across the EU.

The Cypriot regulator notes that CIFs may provide/perform investment services/activities in the territories of third countries “only when they are authorised to do so by the Cyprus Securities and Exchange Commission (CySEC) and the respective competent authorities of the third countries, where applicable”. In addition, CySEC stresses that it is the CIF that solely responsible for obtaining such authorization by the authorities of the third countries.

At its meeting of February 13, 2017 the Board of CySEC has decided that any new requests to CySEC must be accompanied with a certified copy of the authorization from the competent Authority of the third country to provide such services. This should happen before CySEC allows or prohibits the provision of investment and ancillary services and/or performance of investment activities in a third country.

Even if a third country does not require such authorization, the CIF should provide CySEC with a legal opinion issued by a qualified lawyer or a legal firm of the relevant jurisdiction that no such authorization is required.

As we’ve already mentioned, this Circular is published shortly after the proposals for new rules for the binary options industry in Cyprus. In fact, it may be that these two documents are related. The case of Banc de Binary, which was once authorized in Cyprus as a CIF, has drawn international attention, as the now-defunct binary options broker had clients across Europe – notably in France and Belgium. The latter country does not authorize provision of binary options trading services to Belgian customers.

Read this next

Digital Assets

Coinbase CEO says Chase UK’s ban on crypto “totally inappropriate”

Coinbase CEO Brian Armstrong criticized Chase UK’s decision to restrict cryptocurrency-related transactions in the UK. He called the move “totally inappropriate” and expressed his disagreement with the bank’s decision to ban its UK customers from conducting debit card or wire transfers related to cryptocurrencies.

Digital Assets

Binance CZ refutes any connection with CommEX

Changpeng “CZ” Zhao, the founder and CEO of Binance, has denied being the owner of CommEX, the company that reportedly acquired Binance’s business in Russia.

Institutional FX

Refinitiv’s spot FX volumes hit 8-month low

Refinitiv, the former Financial and Risk business of Thomson Reuters, today reported that the average daily volumes (ADV) of currency trading were $424 billion last month on the company’s main FX trading services.

Executive Moves

Integral hires industry veteran Paul Arnold as liquidity manager

Integral, a technology provider to the financial markets’ buy-side, has appointed Paul Arnold, a highly experienced FX industry professional, as its liquidity manager, according to information made public on his Linkedin profile.

Digital Assets

Terraform’s Do Kwon challenges US extradition request

Do Kwon, the crypto entrepreneur and former CEO of Terraform Labs, is opposing the U.S. Securities Exchange Commission’s request to question him about the crash of his company’s stablecoins Terra and Luna.

Digital Assets

Coinbase gets nod to offer futures for retail customers

Coinbase International Exchange has received regulatory approval from Bermuda’s financial regulator, the Bermuda Monetary Authority (BMA), to allow eligible non-US retail customers to trade perpetual futures contracts.

Inside View

How brokers can win the trading tech wars: Insights from iFX EXPO 2023

Last week’s iFX EXPO International 2023, held at the City of Dreams Mediterranean Integrated Resort in Limassol, Cyprus, welcomed a series of insightful discussions. A panel that particularly stood out focused on the role and evolution of trading technology.

Crypto Insider

Web3 Transformation: Radix’s Babylon Update Redefines User and Developer Engagement

Radix Publishing leaps forward in the decentralized world with the release of the Babylon mainnet upgrade, bridging the gap between innovative tech and user-friendly DeFi experiences.

Digital Assets Joins Forces with PayPal and Paxos for Enhanced PYUSD Exchange Experience collaborates with PayPal and Paxos to fortify its position as the premier exchange for PYUSD, marking a significant milestone in the global crypto landscape.