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

Institutional FX

CLS FX volume continues downward trend in August

Total daily traded volume submitted to CLS for settlement took yet another step back in August.

Digital Assets

Huobi taps AstroPay to facilitate fiat-to-crypto payment in Latin America

Huobi, the world’s sixth-largest crypto exchange by trading volume, has recently partnered with payment solution provider AstroPay to launch local currency account deposits and withdrawals in Latin America.

Digital Assets

Crypto exchange FTX to raise $1 billion at flat valuation of $32 billion

FTX is reportedly in discussions with a clutch of heavyweights from traditional finance to raise up to $1 billion in fresh funding to fuel more deal-making.

Digital Assets

Revolut US launches trading on Avalanche, Solana, and Dogecoin

British fintech and banking firm Revolut has further expanded its cryptocurrency offering in the US with the addition of 29 new tokens.

Digital Assets

Bahrain greenlights eazyPay to launch Binance Pay

The Central Bank of Bahrain has blessed a new partnership inked by Binance with Eazy Financial Services ‘eazyPay’, a local POS and online payment service provider. The greenlight enables EazyPayto to launch Bitcoin and cryptocurrency payments in the region.

Digital Assets

Coinbase approved to offer crypto for Dutch users

Nasdaq-listed crypto exchange operator Coinbase has been handed regulatory approval to operate as a crypto service provider in the Netherlands.

Metaverse Gaming NFT

AC Milan partners with Solana-based NFT football game MonkeyLeague

“Partnering with champions like AC Milan, an absolute iconic Club throughout footballs history, is another testament to what we are building and where we are headed as a game and game studio. It also represents a key step in our plans to bridge the Web2 and Web3 worlds.”

Digital Assets

Shariah-compliant Islamic Coin to support SDG-compliant ventures, green projects, and philanthropy

Shariah-compliant Islamic Coin has recently launched a collaboration with the World Green Growth Organization and the International Youth Conference 6, taking place on September 22-25th and September 30th-October 1st, 2022, in New York. 

Market News

Week ahead: US core PCE and eurozone CPI 

We heard from a range of central banks last week and the update sparked big moves in the markets, and the bulk of the volatility was in currencies.