May Cyprus change its image? CySEC plans to launch innovation hub
There may be hope for the future of the financial business sector of Cyprus, as CySEC appears to be looking in the right direction via the launch of an Innovation Hub.
Over the past several years, Cyprus’ financial sector has gained ill fame thanks to the activities of numerous binary options brokers that left thousands of customers defrauded. The new ESMA rules that prohibited the offering of binary options to retail investors and are about to impose restrictions on the offering of CFDs, appear to be pushing the Cyprus Securities and Exchange Commission (CySEC) into a novel direction that fosters the study and development of novel solutions for the financial services sector.
Of course, there have been a number of Cyprus-based companies active in the fintech and regtech fields – Spotware Systems and Point Nine are just a couple of examples of such business with solid reputation. But whether Cyprus’ financial sector will now look up to fintech and regtech as key sectors remains to be seen.
Earlier today, CySEC announced the establishment of an Innovation Hub, which aims to address and explore the rise of FinTech and RegTech developments. The regulator promises that the Innovation Hub will be a place where both supervised and non-supervised entities in innovative or new industries will have ongoing access to CySEC to best understand and implement their regulatory requirements.
CySEC’s initiative aims to create a platform for dialogue between innovative industries that operate in the FinTech and RegTech spaces, facilitating the exchange of information. FinTech firms will have access to specialised regulatory expertise, industry and academic roundtables – and will also have a voice to improve CySEC’s understanding of the risks and benefits of new innovative investment products and platforms, using Distributed Ledger Technology (DLT) (e.g. Blockchain), enabling a more informed regulatory landscape.
Demetra Kalogerou, Chair of the CySEC, said:
“The establishment of the Innovation Hub marks an important and exciting step for CySEC’s supervision of new and innovative Fintech companies in Cyprus. In promoting closer ties with these fledgling but fast-growing industries, we aim to best protect investors by fully understanding the risks and benefits these new products bring.”
The Innovation Hub is expected to become operational in September 2018.
A dedicated space will be created on CySEC’s website. The eligibility criteria for examination of a request will be announced, once the Innovation Hub becomes operational.