Cyprus to request additional information from new CIF license applicants

Cyprus to request additional information from new CIF license applicants

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The Cyprus Securities and Exchange Commission (CySEC) has updated the application form for entities that seek to be granted Cyprus Investment Firm (CIF)  authorization, according to an announcement issued by the regulator. The updated forms will be into effect for applications submitted from 15 March, 2017, onwards and will request additional information from applicants.

The move aims to facilitate the authorization procedure, according to the Cypriot watchdog. The new application form has already been uploaded on the CySEC’s website.

One of the key revisions of the CIF license application is the addition of a separate section concerning the operation of a multilateral trading facility (MTF). It includes certain requirements regarding the outline of MTF’s operations, their trading and transaction completion processes, as well as pre-trade and post-trade transparency.

In addition, license applications need to provide information on their business plan, such as their business model, where and how it intends to operate (via branches, tied agents, introducing brokers, or else), marketing strategy for attracting clients, source of income, forecasts for the financial performance, fee structures and other income streams generated.

The new form also has additional clarification that those CIFs that intend to market and sell speculative products, such as contracts for difference (CFDs), are forbidden to outsource the compliance function.  Moreover, the Cypriot regulator emphasizes on the requirement that the two Executive Directors of applicants that intend to offer CFDs should be local Cypriot residents.

The new application form also features as an attached appendix a draft Internal Capital Adequacy Assessment Process (ICAAP) approved by Board of Directors of the applicant or by the persons signing the Memorandum and Articles of Association of the applicant.

The CySEC licenses, supervises, and regulates players on the local capital market, including forex and binary option brokers. Cyprus is among the main regulation destinations of choice for most brokers that seek to operate in the EU. CIF licensees are free to expand within all countries in the European Economic Area (EEA) thanks to a EU directive.

To view the new application form, follow this link.

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