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 Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Read this Term communications.

CySEC emphasizes that the Exercise aligns with the regulatory framework, focusing on safeguarding investor interests and ensuring compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term.

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.