In Cypriot jurisdiction, highly popular mechanisms for investors are firms dealing with finances. Here, a local financial institution principally engaged in holding, managing and investing securities (shortly, CIF) falls under mandatory supervision executed by CySΕC. This is enforceable in line with terms stipulated by Law 87(I)/2017 referring the delivery of services in terms of investing, and marketplatforms. This national-level case is the Cypriot interpretation of Directive 2014/65/EU on marketplaces in fin. tools. The procedure of Cyprus investment firms licensing is not difficult. Once authorized, a firm is allowed to deliver its offerings via branches within states of the EΕA and the EU via the EU Passport System.
Authorizations given by a CIF license
- Accepting and executing orders in respect of financial tools;
- Executing orders at behest of customers;
- Asset administration;
- Advisory services;
- Dealing with own accounts;
- Underwriting of financial tools and/or placing of such tools;
- Running self-regulated monetary trading venues.
Terms for CIF licensing
For the regulator to issue an approval for operation, an application proceeding needs to be followed, and a number of conditions must be satisfied, the most essential of which are mentioned below.
The min. capital obligation is contingent on the type of offerings delivered:
- For CIF to deliver a full scope of operations as above-mentioned, the min. capital condition is €730,000.
- For limited activity, the min. capital condition is €730,000.
- For a limited CIF license (eligibility to perform any services except dealing on own accounts, the min. capital condition is €125,000.
- For out-of-scope firms (services include processing orders, portfolio managing, and advisory services), the min. capital condition is €50,000.
An applicant should meet regulative obligations, and submit the properly prepared papers and details for completing an applicatiοn pack. Mandatory is the development of policies that have to be involved in the applicatiοn pack, encompassing the business overview, internal controls, AML policy, etc. Local directors must be appointed; they must possess knowledge and expertise to run the firm in the financial sector. An account with a domestic banking institution must be set up to place the paid-up capital.
After consideration of an enquiry, CySΕC authorises the Cypriot investment firm by permitting the delivery of services. Generally, the procedure, from commencement to final approval by the regulator takes approximately 3-4 months.
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