Cyprus Securities and Exchange Commission (CySEC) plans to strengthen its oversight of firms engaged in cross-border activities to mitigate risks in complex financial products, such as Contracts for Difference (CFDs).
According to the regulator's supervisory priorities for 2024, CySEC aims to safeguard investors' interests and maintain market integrity by strengthening its supervisory framework. The strategy of the financial watchdog involves meticulous assessment of risks and obligations faced by supervised institutions.
Fostering a Compliance-Oriented Culture
Another crucial aspect of CySEC's agenda involves promoting a compliance-oriented culture within its registered entities. This initiative seeks to instill sustainable compliance behavior, ensuring that firms adhere to regulatory standards and ethical practices in their operations.
CySEC has emphasized the importance of proactively addressing and managing potential adverse events to minimize their impact on the financial ecosystem. By promptly responding to emerging challenges, the regulatory body aims to maintain stability and resilience in the market to safeguard investors' assets.
The regulator highlighted: "In 2024, CySEC 's primary area of focus includes assessing practices that may have negative impacts on investors and markets such as providing services in fractional shares, informing investors about costs and charges, communication through affiliates and influencers, implementation of sustainability requirements, application of pre-trade controls, and the use of copy trading."
Within the investment services sector, CySEC's priorities include the implementation of effective organizational arrangements, ensuring adherence to professional conduct rules, assessing practices with potential negative impacts on investors and markets, and evaluating the resilience of firms' business models.
Preparation for Regulatory Changes
Besides that, CySEC is preparing for upcoming regulatory changes, including the implementation of the Digital Operational Resilience Act and the Markets in Crypto-Assets Regulation. These preparations highlight the regulatory's commitment to adapting its supervisory approach to the changes in the industry.
Additionally, CySEC aims to enhance oversight of data pertaining to the exposure of investment funds to commercial real estate and derivative contracts, thereby bolstering financial stability. CySEC employs a variety of supervisory tools, including day-to-day monitoring, onsite inspections, offsite reviews, thematic reviews, and supervisory meetings, to effectively assess and address risks.
