Cyprus Securities and Exchange Commission
|Jurisdiction||Republic of Cyprus|
|Employees||42 (2009) |
As CySEC is part of the European MiFID regulations it has attracted a number of overseas firms registering in Cyprus to take advantage of what is seen as light regulations that give access to the rest of Europe. Notably is the significant number of overseas retail forex brokers that have obtained registration from CySEC as they generally see this as an easy way to get a license without having to meet stringent requirements that would be imposed by other European financial regulators, yet still qualify under MiFID and so completely free to operate in all European Union member countries.
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.
Since Cyprus became a member of the European Union in 2004, CySEC has become part of European MiFID regulation, giving firms registered in Cyprus access to all European markets. This has led to a number of overseas firms registering in Cyprus to take advantage of this regulatory regime.
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 many of the platforms are based) had to be regulated. This made CySEC the first financial regulator to globally recognise and regulate binary options as financial instruments.
The Cyprus Securities and Exchange Commission has the following responsibilities:
- 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.
- To supervise and control Licensed Investment Services Companies, Collective Investment Schemes, investment consultants and mutual fund management companies.
- To grant operation licences to investment firms, including investment consultants, brokerage firms and brokers.
- 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.
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.