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