One of the main goals of the work that Cyprus Securities and Exchange Commission (CySEC) has been doing in order to help tighten the reigns on the financial industry is to up the criteria for business processes. CySEC has sent out a memo addressed to Cyprus Investment Firms (CIFs) which explains in detail the new definition of the ‘significant’ CIF and how to self-asses to fit into the category.
The memo has made it clear that if the CIFs total assets are more than 43 million euros, from the latest financial statement, or if the annual commissions or turnover goes above 50 million euros in the 12 months prior to assessment, the CIF is considered to be ‘significant’.
Also, if a company has more than 60 million euros in client money or it administers clients assets that go over 2 billion euros, the term will also be applied.
CySEC also highlights that the CIFs themselves have the responsibility of doing a periodical assessment of the conditions that might allow them to be termed ‘significant’. If a CIF concludes that it does fit the requirements for a ‘significant’ CIF then it must make and apply a comprehensive strategy and systems that are necessary within the scope of responsibilities of the new term. This should be done within 3 months of becoming a ‘significant’ CIF.
CIFs also must immediately inform CySEC that they have found to fit the criteria necessary for a new designation and they should, also, submit their new organizational structure that aligns with this procedure and title.
All of this is a part of work and necessary measures developed and put into place by the CySECs head chairwoman Demetra Kalogerou in the attempt to better supervise and regulate the CIFs and to make sure that the new regulations are being followed.
CySEC is also hoping that the new instructions and obligations will allow and encourage CIFs to adopt the culture of self-assessment and self-regulation which would in turn help make the system run smoother.