Key Data

• Name: CySEC (Cyprus Securities and Exchange Commission)
• Area of responsibility: Cyprus
• Supervision of the business units: Control of online brokers, investment firms or other companies from the financial sector
• Location: Limassol
• Key People: George Theocharides (Chairman), George Karatzias (Vice Chairman)

CySEC stands for the Cyprus Securities and Exchange Commission. It is the financial regulatory agency of the Republic of Cyprus, responsible for overseeing and regulating financial markets and investment firms operating within the country.

CySEC’s primary objectives are to maintain a stable and transparent financial market, to protect investors, and to prevent financial crime. It is responsible for licensing and regulating investment firms, monitoring their compliance with regulations, and imposing penalties and sanctions where necessary.

CySEC is a member of the European Securities and Markets Authority (ESMA), which is an independent EU authority that promotes investor protection and supervises financial markets across Europe. As a member of ESMA, CySEC is required to adhere to EU-wide regulations and guidelines for financial markets and investment firms.

Fines

As the financial regulatory agency of the Republic of Cyprus, the Cyprus Securities and Exchange Commission (CySEC) has the authority to impose fines and penalties on investment firms and other entities for violating laws and regulations under its jurisdiction.

Some of the fines that CySEC can give include:

1. Administrative fines: These are monetary penalties imposed on investment firms for failing to comply with regulatory requirements, such as submitting required reports on time or failing to maintain adequate capital reserves.
2. Civil penalties: These are fines imposed for violations of civil law, such as breach of contract or consumer protection laws.
3. Criminal penalties: These are fines imposed for violating criminal laws, such as money laundering or fraud.

The amount of the fines imposed by CySEC can vary depending on the severity of the violation, the level of cooperation by the entity involved, and other factors. CySEC can also impose other sanctions, such as suspending or revoking licenses, depending on the circumstances.

International Role 

CySEC is an important regulator for Forex brokers within the EU. This is also because Cyprus is the preferred regulatory regime for financial companies from Israel. Many brokers from Tel Aviv, barely an hour’s flight away, settle in Cyprus and operate within the EU as a Cyprus Investment Firm (CIF) regulated by CySEC. As an EU member state, CySEC‘s financial regulations and operations comply with the European MiFID financial harmonization law.

The financial industry around the approximately 250 regulated CIFs and payment processors is an important revenue source for the small EU member.

Problems

CySEC is criticized by many for the lax oversight of CIFs. Cyprus is considered a portal to the EU financial market for non-EU companies. Due to EU license passporting, Israeli, Russian, and other non-EU companies and entrepreneurs can participate in the EU single market with a CySEC license.

• WEEKLY WARNINGS

Conclusion

We rate CySEC Orange for not taking real measures to fight financial cybercrime, and other regulators such as Consob, CNMV or FCA have had to constantly take action against CySEC-regulated investment firms for using fraudulent measures to attack their own citizens in their respective regulatory systems.