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The '''Cyprus Securities and Exchange Commission''', ({{lang-gr|Επιτροπή Κεφαλαιαγοράς}}) better known as '''CySEC''', is the financial regulatory agency of [[Cyprus]]. As an [[EU]] [[Member state of the European Union|member state]], CySEC's financial regulations and operations comply with the European [[MiFID]] financial harmonization law. Notably a significant number of overseas [[Retail forex trading|retail forex brokers]] and [[binary option]]s brokers have obtained registration from CySEC.<ref>[http://www.fxempire.com/forex-brokers/cysec-regulated-brokers FX Empire: CySEC Regulated Brokers]</ref><ref>[http://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/ Cypriot Investment Firms]</ref><ref>[http://fairreporters.net/economy/largest-forex-brokers-by-volume-in-2015/ Largest Forex Brokers by Volume in 2015]</ref><ref>[https://www.hg.org/article.asp?id=32676 HG: Cyprus Investment Firm (CIF)]</ref><ref>[http://www.pwc.com.cy/en/tax-legal-services/cypriot-investment-firms.html PwC: What is a Cypriot Investment Firm (“CIFs”)]</ref><ref>[http://www.fbscyprus.com/?pageid=621 Focus Business Services: Cyprus Forex Company Formation]</ref>
The '''Cyprus Securities and Exchange Commission''', ({{lang-gr|Επιτροπή Κεφαλαιαγοράς}}) better known as '''CySEC''', is the financial regulatory agency of [[Cyprus]]. As an [[EU]] [[Member state of the European Union|member state]], CySEC's financial regulations and operations comply with the European [[MiFID]] financial harmonization law. Notably a significant number of overseas [[Retail forex trading|retail forex brokers]] and [[binary option]]s brokers have obtained registration from CySEC.<ref>[http://www.fxempire.com/forex-brokers/cysec-regulated-brokers FX Empire: CySEC Regulated Brokers]</ref><ref>[http://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/ Cypriot Investment Firms]</ref><ref>[http://fairreporters.net/economy/largest-forex-brokers-by-volume-in-2015/ Largest Forex Brokers by Volume in 2015]</ref><ref>[https://www.hg.org/article.asp?id=32676 HG: Cyprus Investment Firm (CIF)]</ref><ref>[http://www.pwc.com.cy/en/tax-legal-services/cypriot-investment-firms.html PwC: What is a Cypriot Investment Firm (“CIFs”)]</ref><ref>[http://www.fbscyprus.com/?pageid=621 Focus Business Services: Cyprus Forex Company Formation]</ref>
[[File:Themistokli Dervi Avenue Nicosia financial sector buildings background Republic of Cyprus Spring.jpg|thumb|Nicosia financial district]]


==History==
==History==
⚫
CySEC was launched in 2001 as part of section 5 of the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law of 2001 as a public corporate body. When Cyprus became a member of the [[European Union]] in 2004, CySEC simultaneously became a part of the European [[MiFID]] regulation, giving firms registered in Cyprus access to all European markets. However, joining the EU and adopting the [[Euro]] significantly changed the financial regulatory framework that CySEC policed for what had been previously considered a [[tax haven]].<ref>[http://www.nakedcapitalism.com/2013/03/repeat-after-me-cyprus-is-was-not-a-tax-haven.html Naked Capitalism: Repeat After Me, Cyprus Is (Was) Not a Tax Haven]</ref><ref>[http://business.time.com/2013/03/25/cyprus-rescue-the-destruction-of-a-tax-haven/ TIME: Cyprus Rescue: The Destruction of a Tax Haven]</ref><ref>[http://www.investment-gateway.eu/credible_jurisdiction.asp Investment Gateway: Cyprus Investment Credibility & Credible Jurisdiction]</ref><ref>[http://www.eurodad.org/uploadedfiles/whats_new/reports/eumapping_financial_regulation_final.pdf Financial Regulation in the EU]</ref>
CySEC was launched in 2001 as part of section 5 of the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law of 2001 as a public corporate body.

⚫
When Cyprus became a member of the [[European Union]] in 2004, CySEC simultaneously became a part of the European [[MiFID]] regulation, giving firms registered in Cyprus access to all European markets. However, joining the EU and adopting the [[Euro]] significantly changed the financial regulatory framework that CySEC policed for what had been previously considered a [[tax haven]].<ref>[http://www.nakedcapitalism.com/2013/03/repeat-after-me-cyprus-is-was-not-a-tax-haven.html Naked Capitalism: Repeat After Me, Cyprus Is (Was) Not a Tax Haven]</ref><ref>[http://business.time.com/2013/03/25/cyprus-rescue-the-destruction-of-a-tax-haven/ TIME: Cyprus Rescue: The Destruction of a Tax Haven]</ref><ref>[http://www.investment-gateway.eu/credible_jurisdiction.asp Investment Gateway: Cyprus Investment Credibility & Credible Jurisdiction]</ref><ref>[http://www.eurodad.org/uploadedfiles/whats_new/reports/eumapping_financial_regulation_final.pdf Financial Regulation in the EU]</ref>


On May 4, 2012, CySEC announced a policy change regarding the classification of [[binary option]]s as financial instruments. The effect was that binary options platforms operating in Cyprus (where most of the platforms are based) had to be regulated.<ref>[http://www.investoo.com/regulated-binary-options-brokers/ InvestToo: CySEC]</ref> This established CySEC as the first financial regulator to globally recognise and regulate binary options as financial instruments.<ref>{{cite web|last1=CySEC|title=Announcement|url=http://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=45fcde10-1c07-4acc-87d5-a4a6050ea69b|website=CySEC|accessdate=22 April 2015}}</ref>
On May 4, 2012, CySEC announced a policy change regarding the classification of [[binary option]]s as financial instruments. The effect was that binary options platforms operating in Cyprus (where most of the platforms are based) had to be regulated.<ref>[http://www.investoo.com/regulated-binary-options-brokers/ InvestToo: CySEC]</ref> This established CySEC as the first financial regulator to globally recognise and regulate binary options as financial instruments.<ref>{{cite web|last1=CySEC|title=Announcement|url=http://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=45fcde10-1c07-4acc-87d5-a4a6050ea69b|website=CySEC|accessdate=22 April 2015}}</ref>
[[File:Skyscrapers Financial Destrict Nicosia Cyprus.jpg|thumb|Nicosia financial district]]

==Responsibilities==
==Responsibilities==
CySEC has the following responsibilities:<ref>{{cite web |url=http://www.cysec.gov.cy/cysec_en.aspx |title=CySEC Responsibilities |publisher=CySEC |accessdate=March 16, 2011}}</ref><ref>[http://www.mondaq.com/cyprus/x/322030/Fund+Management+REITs/Cyprus+Investment+Firms+CIFS Mondaq: Cyprus Investment Firms (CIFS)]</ref>
CySEC has the following responsibilities:<ref>{{cite web |url=http://www.cysec.gov.cy/cysec_en.aspx |title=CySEC Responsibilities |publisher=CySEC |accessdate=March 16, 2011}}</ref><ref>[http://www.mondaq.com/cyprus/x/322030/Fund+Management+REITs/Cyprus+Investment+Firms+CIFS Mondaq: Cyprus Investment Firms (CIFS)]</ref>

Revision as of 11:35, 13 April 2016

Cyprus Securities and Exchange Commission
Επιτροπή Κεφαλαιαγοράς
Agency overview
Formed2001 (2001)
JurisdictionRepublic of Cyprus
HeadquartersNicosia, Cyprus
Employees42 (2009) [1]
Agency executive
  • Demetra Kalogirou, Chairperson
Websitecysec.gov.cy

The Cyprus Securities and Exchange Commission, (Greek: Επιτροπή Κεφαλαιαγοράς) better known as CySEC, is the financial regulatory agency of Cyprus. As an EU member state, CySEC's financial regulations and operations comply with the European MiFID financial harmonization law. Notably a significant number of overseas retail forex brokers and binary options brokers have obtained registration from CySEC.[2][3][4][5][6][7]

Nicosia financial district

History

CySEC was launched in 2001 as part of section 5 of the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law of 2001 as a public corporate body. When Cyprus became a member of the European Union in 2004, CySEC simultaneously became a part of the European MiFID regulation, giving firms registered in Cyprus access to all European markets. However, joining the EU and adopting the Euro significantly changed the financial regulatory framework that CySEC policed for what had been previously considered a tax haven.[8][9][10][11]

On May 4, 2012, CySEC announced a policy change regarding the classification of binary options as financial instruments. The effect was that binary options platforms operating in Cyprus (where most of the platforms are based) had to be regulated.[12] This established CySEC as the first financial regulator to globally recognise and regulate binary options as financial instruments.[13]

Nicosia financial district

Responsibilities

CySEC has the following responsibilities:[14][15]

  1. To supervise and control the operation of the Cyprus Stock Exchange and the transactions carried out in the Stock Exchange, its listed companies, brokers and brokerage firms.
  2. To supervise and control Licensed Investment Services Companies, Collective Investment funds, investment consultants and mutual fund management companies.
  3. To grant operation licences to investment firms, including investment consultants, brokerage firms and brokers.[16]
  4. To impose administrative sanctions and disciplinary penalties to brokers, brokerage firms, investment consultants as well as to in any other legal or natural person whom fall under the provisions of the Stock Market legislation.[17]

Structure

CySEC is administrated by a five-member Board which is composed of the Chairman and the Vice-Chairman, that are employed full-time, plus three other members. In addition the Governor of the Central Bank of Cyprus is represented by a non voting board member. The members of Board are named by the Council of Ministers following a proposal of the Minister of Finance and their service is a five-year term.[18][19]

Regulation & Processing

CySEC has experienced very high growth rates of registrations and pioneering legislation in regards to Binary Options. As such, the monitoring and regulation requirements for the organization are continually under adjustment. The process has been under scrutiny from other EU regulators and CySEC registered Brokerage houses.[20][21]

Regulation

CySEC has received criticism from traders and industry commentators who believe the organisation is "too light touch" when it comes to the regulation of financial services. They suggest that fines being levied by CySEC tend to be much smaller than those handed out by other EU regulatory organizations. Most of the criticism comes in regards to specific binary option brokers.

Processing

Since CySEC is the only global financial regulator to treat binary options as a financial instrument binary option brokers, including prominent ones, are either registered (or attempting to register) with CySEC to be able to legally operate within the Eurozone or trusted internationally. Some of them have been requesting faster processing procedures and processes[22][23][24]

Response

CySEC has implement sweeping changes to both the registration and regulation processes of all registered entities. Changes include more transparency regarding existing listed entities, tougher fines, Broker suspensions and license revoking.[25][26][27] It has also set a strict regulatory approval for name changes. In a circular in 2016, the regulator explains that "the name of the regulated entities, or the use of words within their name, should reflect the work/activities they are engaged in, for purposes of not misleading the investors".[28][29] The organization has also set up a new structure in order to improve the handling of investor complaints.[30]

See also

References

  1. ^ "Annual Report 09" (PDF). CySEC. December 31, 2009. p. 26.
  2. ^ FX Empire: CySEC Regulated Brokers
  3. ^ Cypriot Investment Firms
  4. ^ Largest Forex Brokers by Volume in 2015
  5. ^ HG: Cyprus Investment Firm (CIF)
  6. ^ PwC: What is a Cypriot Investment Firm (“CIFs”)
  7. ^ Focus Business Services: Cyprus Forex Company Formation
  8. ^ Naked Capitalism: Repeat After Me, Cyprus Is (Was) Not a Tax Haven
  9. ^ TIME: Cyprus Rescue: The Destruction of a Tax Haven
  10. ^ Investment Gateway: Cyprus Investment Credibility & Credible Jurisdiction
  11. ^ Financial Regulation in the EU
  12. ^ InvestToo: CySEC
  13. ^ CySEC. "Announcement". CySEC. Retrieved 22 April 2015.
  14. ^ "CySEC Responsibilities". CySEC. Retrieved March 16, 2011.
  15. ^ Mondaq: Cyprus Investment Firms (CIFS)
  16. ^ Crowe Horwath: Setting Up A Cyprus Investment Firm (CIF)
  17. ^ EY: Banking Dynamics - Issue 1
  18. ^ Bloomberg: CySEC
  19. ^ The Economist: Demetra Kalogerou
  20. ^ CySEC: Regulatory Framework Updates
  21. ^ A.G Paphitis: Regulatory (FX, BO, EMI, PI, AIFs)
  22. ^ Cyprus needs better legislation to monitor high risk investment firms
  23. ^ BinaryEX: New CySEC Broker Complaints Procedure
  24. ^ CySEC Binary brokers
  25. ^ CySEC Fines EZ Trader Operator €340,000
  26. ^ IronFX Settles to Pay CySEC €335,000
  27. ^ Leap Rate: CySEC suspends ACFX license for one month
  28. ^ Binary Option Wire: What’s in a name? CySEC toughens up on name changing as well
  29. ^ Fair Binary Options: CySEC Rules on Name Changing
  30. ^ Binary Options Broker: CySEC facilitates binary option complaints for investors
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