Cyprus Investment Firms (CIFs) licensed by the Cyprus Securities and Exchange Commission (CySEC) will be required to submit detailed transaction reports to meet the new requirements set by the European Securities and Markets Authority (ESMA), the regulator said in a statement directed to CIFs that was published on Tuesday.
The EU mega-regulator announced its guidelines and requirements in late October last year. They will apply from 3 January, 2018, for the relevant regulators that fall under the EU Markets in Financial Instruments Directive (MiFID), as well as financial market participants under their supervision.
CIFs will have to submit information on the volume of the transactions they have executed on behalf of clients for each asset sub-class of financial instruments compared to the total volume of the transactions performed/executed on behalf of clients for all asset classes of financial instruments offered by the entity.
Volume reports should include information regarding leverage, where applicable, as well as to metrics for transactions in contracts for difference (CFDs) that were closed within the reporting period. Transactions with a very short period of time that for rollover purposes were closed and re-opened the next day, should not be included in the reported volume of transactions.
ESMA’s transaction reporting obligations were previously not required for instruments trading on Multilateral Trading Facilities (MTFs) and Organised Trading Facilities (OTFs), and financial instruments which have instruments trading on trading venues as an underlying. Moreover, pre- and post- transparency requirements are to expand to cover different types of financial instruments, not only equities but bonds and derivatives, as well.
Cyprus is among the main regulation destinations of choice for most forex (and binary option) brokers that seek to operate in the EU. A CIF licensees are free to expand within all countries in the European Economic Area (EEA) thanks to a EU directive.
The CySEC licenses, supervises, and regulates players on the local capital market. Its managing board consists of five members, each one of which serves a term of five years.