The Cyprus Security and Exchange Commission (Cysec) is aiming to further boost the Cypriot capital market and the supervision of the sector, Cysec Chairwoman Demetra Kalogerou has said.
Cysec has seen its supervising companies rise almost twofold from 315 in December 2011 to 610 in December 2016, whereas an additional 134 applications for licensing are in the pipeline.
“The Cysec vision is to consolidate the Cypriot capital market as one of the safest, most credible and most attractive investment destinations. This can be achieved through effective supervision that would safeguard investor protection and healthy market growth,” Kalogerou said in a press conference.
According to Kalogerou, the Cypriot capital market is expected to receive further boost by the promotion of amendments to the legal framework that would enable the introduction of mini managers for Alternative Investment Firms (AIF) where the total assets of the AIF under management fall below the threshold of €100 million, as well as AIFs managers.
In addition, Cysec will promote new Fintech products such as crowd funding for start-ups and intends to take part in the University of London research programme on blockhain technology.
These efforts will further consolidate Cyprus as an international investment hub, she added.
Kalogerou went on to say that Cysec using a risked-based tool, will carry out fifty on-site inspections in 2017 in companies regarding money-laundering checks as well as fifty on-site inspections in Cyprus Investment Firms (CIF). “This way, we will carry out a more focused and more effective supervision,” she added.
Replying to questions, Kalogerou said that following the introduction of the necessary technology Cyprus, along with the UK, has been considered as a hub for Forex and binary companies, noting that these amount to 130 from its total 214 licensed CIFs.
Offered products
However, she added that Cysec has issued a circular reducing their offered products to four, as some of the offered products are more short-term and therefore more risky for investors.
“Our aim is not to destroy the market which contributes to the economy in general. We became a hub, let us utilise this to our benefit but we should find ways to bring about full compliance with the supervisory framework,” she added, noting that public tax revenues from these firms amounted to €58 million in 2015.
Kalogerou pointed out that the most significant future change in the supervisory framework is the second EU Market in Financial Instruments Directive (MifID II) to be implemented in 2018. “This is the biggest supervisory change to come to the EU capital markets the years to come and the market as we know it will change,” Cysec Chairwoman said.
Cysec will also promote the 4th EU directive on anti-money laundering (AML) which should be transposed into national law by 2017.
Responding to question on the checks concerning Panama papers, Kalogerou said the Commission discovered certain violations for ten Cyprus registered companies and has asked these firms to answer to these findings.
“We have discovered such issues and we will proceed with a possible imposition of administrative fines, depending on the answers we receive,” she said.
On the prospects for attracting investment firms from the UK following Brexit, Kalogerou said Cyprus has the lead in Forex and binary companies, adding that she also expects some interest from CIFs.
She noted however that Cyprus lags behind Ireland and Luxembourg in the sector of mutual funds, although Cyprus has comparative advantages such as low corporate tax, the English law and low relocation cost.
Source: CNA
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