The Cyprus Securities and Exchange Commission (CySEC) has issued a stern warning to the Board Members of Cyprus Investment Firms (CIFs). The regulatory authority called upon them to enhance performance and promote a culture of integrity and high ethical standards. CySEC has already issued a series of warnings to the industry, tightening supervision measures.
CySEC's Expectations and the Regulatory Environment
Dr. George Theocharides, the Chairman of CySEC, emphasized the importance of complying with the regulatory framework and ensuring the best interests of clients. He stated that while Cyprus remains open for business, it welcomes only those who uphold high regulatory standards, fostering a healthy, strong market with innovations in financial technology.
Dr. Theocharides made these remarks while setting out CySEC's expectations and discussing the current regulatory environment during online workshops for CIFs' Board Members. He emphasized the need for strong compliance culture in the face of increasingly stringent regulations by the European Securities and Markets Authority and CySEC.
Dr. Theocharides further noted CySEC's commitment to addressing misconduct by supervised entities through intense supervision and continuous monitoring, ultimately enhancing investor protection and market integrity. CySEC is determined to halt non-compliant operations and strengthen compliance measures.
The provision of cross-border services, particularly high-risk products to retail clients, continues to raise significant investor protection concerns. The rapidly evolving digitalization of financial services and the growing use of social media to promote investments provide retail investors easy access to products with diverse risk profiles, often not fully understood by all.
Interview with CySEC Chairman on Forex and CFDs Industry
Dr. Theocharides spoke with Finance Magnates earlier about the evolving landscape of the forex and CFDs industry in Cyprus. Since assuming his role in 2021, CySEC has strengthened regulatory oversight by imposing compliance measures.
The commission views misconduct seriously and has imposed substantial fines, totaling €5.3 million, over the past three years. Dr. Theocharides highlighted the importance of consolidating entities that struggle with compliance, driven by increased regulatory requirements and a focus on investor protection.
The ultimate goal is responsible growth in the investment sector. CySEC is also actively promoting financial literacy and regulatory awareness campaigns to empower investors. Summarizing his vision, Dr. Theocharides expects more consolidation within the industry as stronger compliance cultures are essential to surviving stringent regulatory environments.
