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REGULATION OF INVESTMENT SERVICES IN CYPRUS

Cyprus is a major financial and investment centre in the EU and internationally.  As a result, there is a requirement for an effective and efficient regulatory framework.   In Cyprus, the Cyprus Security Exchange Commission (CySEC) is an independent legal entity that regulates and supervise any investment activity carried out in Cyprus and the operation of investment firms on the island.  Furthermore, CySEC is responsible for granting licenses to investment firms.  The objectives of CySEC is to supervise the investment activities on the island, protect investors and contribute to the development of a safe and reliable security market.

Regulatory framework:
The finance and investment team of Michael Chamebers& Co. LLC will present the regulatory framework and provide useful information for investors, firms and public.  In this point, it should be stressed that CySEC operates according to the provisions of Investment Services and Activities and Regulated Markets Law (144(I)/2007).

Michael Chambers and his team would like to underline that the Law 144 (I)/2007 regulates:

  • The provision of investment and ancillary services in the Republic of Cyprus.
  • The performance of investment activities on a professional basis in the Republic of Cyprus.
  • The operation of regulated markets.

The Law (I)/2007 is harmonised with European Union regulations and Directives, and it applies to:

  • Local and foreign firms that provide investment and ancillary services to persons who stay/reside/ are domiciled in the Republic of Cyprus, or where the relevant transaction is held in Cyprus.
  • Persons that stay/ reside/are domiciled in the Republic of Cyprus and act on behalf of a third party based outside of Cyprus in offering investment and ancillary services, either as an employee or in another capacity.

CySEC’s duties:
As mentioned before, CySEC authorises and supervises investment firms and regulated markets that operate in the Republic of Cyprus.   In addition, CySEC grants licenses to investment firms. In other words, CySEC is responsible for examining applications and granting licenses to firms under its supervisions.  Moreover, CySEC may suspend and revoke licenses in case the investment firms do not satisfy the necessary conditions.

It should be mentioned, that CySEC is responsible for supervising and regulating investment firms and agencies so that to ensure that they comply with the relevant laws.  In the case that the investment firms do not comply with the law, then CySEC may impose administrative and disciplinary sanctions, and even withdraw their licenses.

In addition, CySEC may demand information from any person or firm so that to permit experts and auditors to proceed with the necessary investigations.  Hence, persons and firms are obliged to provide the necessary information to CySEC.

Furthermore, the legal team of Michael Chambers & Co. LLC would like to underline that CySEC is responsible for the supervisions of the following entities[1]:

  • Cyprus Investment Firms
  • Cyprus branches of Investment Firms of other EU member-states
  • Tied Agents of Cyprus Investment Firms
  • Undertakings for Collective Investment in Transferable Securities
  • UCITS (Undertakings for Collective Investment in Transferable Securities) Management Companies
  • UCITS Agents
  • Cyprus branches of UCITS Management Companies of other EU member-states
  • Administrative Services Companies – Trustee and Fiduciary Service Providers
  • Variable Capital Investment Companies
  • Alternative Investment Fund Managers
  • Regulated Markets
  • Central Counterparty Clearing House (CCPs) of over-the-counter (OTC) derivatives
  • Trade depositories of over-the-counter (OTC) derivatives

General information about the operation of investment firms:
The investment and finance team of Michael Chambers & Co. LLC will highlight some information an investment firm should take into consideration, i.e. authorisation.  Investment firms are corporate entities that provide invest services on a professional basis inside or outside the Republic of Cyprus.  Furthermore, an investment firm should operate within the limits of its license.

The Law 144 (I)/2007 outlines specific provisions concerning capital requirements and the establishment of branches.  The legal team of Michael Cambers& Co. LLC is able to provide you all the necessary information about capital and other related requirements.

It should be taken into account that investment firms cannot operate without prior authorisation from CySEC.  That is to say, they cannot offer investment services if they have no authorisation from CySEC.  An investment firm must provide all the necessary information to satisfy CySEC in order to get authorisation.  Michael Chambers and his team will guide applicants to gather all the necessary information and submit their applications.  The investment and finance team of Michael Chambers & Co. LLC points out that all investment firms’ authorisations are registered, kept and updated in a register that is accessible to the public.

Investor Compensation Fund:
According to article 59, the Investor Compensation Fund aims at ensuring the protection of clients and investors.  Furthermore, the Investor Compensation Fund secures the claims of clients against investment firms.  That is to say, the provisions of the law protects investors and clients adequately in case an investment firm does not operate sufficiently.  Nevertheless, in case you have a claim against an investment firm you will need a professional legal support so that to file a case to the Court.  The legal team of Michael Chambers & Co. LLC may provide you all the necessary legal and administrative support you might need.  Our lawyers will help you to gather the necessary information that will help you to support your case.

Our services:
Michael Chambers & Co. LLC provides legal services to firms and investors.  On the one hand, investment firms may contact our investment and finance lawyers so that to have a professional assistance and then acquire an authorisation by the CySEC.  On the other hand, investors who might have a claim against an investment firm may contact our legal team so that to provide them with the necessary legal and administrative assistance. If you wish to speak to one of our lawyers, then please contact us: info@chambers.law



[1] Retrieved on the 3rd of February 2016 from: http://www.cysec.gov.cy/en-GB/cysec/vision-mission/