ESMA Recommends CySEC to Improve Cross-Border Activities Supervision

The European Securities and Markets Authority (ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term) has acknowledged the shortcomings in the supervision of cross-border investment activities in the European Union, particularly in the authority of the Cyprus Securities and Exchange Commission (CySEC).

The EU supervisor has reviewed the supervision of six National Competent Authorities (NCAs) in the area of cross-border activities. These are financial market regulators in the Netherlands, Germany, Czech Republic, Luxembourg, Cyprus and Malta.

It has reviewed the activities of seven particular areas: authorizations, passport notifications, arrangements for ongoing supervision, day-to-day supervision, investigations and inspections, exchanges and cooperation with NCAs and enforcement / sanctioning.

“Effective supervision of cross-border activities by home NCAs is crucial to ensure that retail clients benefit from the same level of protection regardless of where the firm providing those activities is based,” said ESMA’s Chair, Verena Ross.

“As we strive to develop an effective European capital market, and retail investors increasingly access investment opportunities across the EU, ensuring investor protection and the proper functioning of the single market is a key mission for ESMA and NCAs.”

Recommendations for CySEC

The EU regulator further provided two recommendations specifically to CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term, which oversees the financial services companies based in Cyprus. These recommendations were made under ESMA’s Article 16 and it is the first time an NCA received them.

The specific instructions to CySEC aim to Increase the human resources needed for the supervision of the cross-border services of the Cypriot investment firms. Further, the EU regulator wants CySEC to strengthen its supervisory activities around the monitoring and enforcement of compliance measures.

“The recommendations set out in today’s reports aim to significantly reinforce the cross-border supervisory framework. ESMA, in also making recommendations under Article 16, shows it will use its full toolkit to promote effective and consistent high-quality supervision,” Ross added.

Cyprus is home to several financial services companies because of the low barrier of regulatory requirements when compared to its European peers. These companies are passporting their CySEC license to offer financial services across the European Economic Area.

Now, CySEC has two months to respond to ESMA on its compliance or intentions to comply with the recommendations.