The Cyprus Securities and Exchange Commission (CySEC) has
announced the launch of a thematic review concerning the management of
uninvested funds by Cyprus Investment Firms (CIFs) on behalf of clients.
This review, referred to as ‘the Exercise,’ aims to evaluate
how CIFs handle these funds, including matters such as the payment of interest
or returns.
Regulatory Compliance Assessment
The primary objective of the Exercise is to assess CIFs’
procedures in this regard to ensure compliance with applicable regulatory
standards. Key areas under scrutiny will include the methods and operational
frameworks employed by CIFs, the transparency of information provided to
clients, and the internal controls CIFs have in place to meet regulatory
obligations, particularly concerning marketing communications.
CySEC emphasizes that the Exercise aligns with the
regulatory framework, focusing on safeguarding investor interests and ensuring
compliance.
To conduct this review, CySEC will employ a desk-based
methodology targeting a selected sample of CIFs. In the upcoming days, CySEC
plans to distribute a detailed questionnaire to these CIFs, who must respond
within a specified timeframe and furnish supporting documentation as required.
Upon completion of the Exercise, CySEC will issue a
comprehensive circular outlining its findings and any necessary actions
resulting from the review process. This initiative underscores CySEC’s
commitment to upholding regulatory standards and enhancing investor protection
within the Cyprus financial market.
MiCA Regulation Impact
Meanwhile, CySEC
has initiated a consultation seeking feedback on proposed fees and
reporting requirements under the Markets in Crypto-Assets Regulation (MiCA).
This consultation aims to gather stakeholders’ perspectives to shape the
regulatory framework. Responses are due by July 17, 2024, as reported by Finance Magnates.
MiCA, effective from May 31, 2023, aims to establish a
unified regulatory framework for crypto-assets in Europe, focusing on assets
that are fungible but not financial instruments.
The regulation categorizes
crypto-assets into asset-referenced tokens (ARTs), electronic money tokens, and
others. CySEC will supervise entities such as crypto-asset offerors and ART
issuers, excluding credit institutions.
This article was written by Tareq Sikder at www.financemagnates.com.
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