CySec informs Cyprus Investment Firms regarding their obligations to clients 

The Cyprus Securities and Exchange Commission (CySec) has issued a Circular to inform the Cyprus Investment Firms for their obligations when providing information to clients on the services and instruments offered.

According to the Circular, CySec wishes to set important standards to assist the Cyprus Investment Firms (‘the CIFs’) in meeting their obligations to act in the best interest of their clients. This circular establishes standards for the assessment of knowledge and competence for staff¹ who are involved in the provision of information to clients regarding investment and ancillary services and financial instruments that a CIF offers.

The relevant regulatory requirements are those stated below:

i. Articles 18(2)² and 36³ of the Investment Services and Activities and Regulated Markets Law of 2007, as in force (‘the Law’).
ii. Paragraph 4⁴ and Part V⁵ of Directive DI144-2007-01 of 2012 of the CySEC (‘the Directive’).
iii. Part III6 of Directive DI144-2007-02 of 2012.

Further to ESMA’s publication of the paper ESMA/2015/1886 – Guidelines for the assessment of knowledge and competence (‘the Guidelines’) on 17 December 2015 and in preparation for its entry into force on 3 January 2018, CySec encourages CIFs to take measures to apply the Guidelines the soonest possible.

CySec includes in the circular the below:

Α. Scope of this circular
B. Organisational requirements for the Staff
C. Criteria for knowledge and competence of the Staff
D. Outsourcing these activities to third parties/service providers
E. Monitoring of the Staff and its activities – compliance function
F. Actions required by CIFs

To read the Full Circular issued by CySec, please click CySec’s Circular on the obligations of CIFs when providing information to clients

1 It means natural persons (including tied agents) providing relevant services to clients on behalf of the firm.
2 Organisational requirements
3 Conduct of business obligations when providing investment services to clients
4 General organisational requirements
5 Outsourcing requirements
6 Provision of information to clients and potential clients

Source: CySec – CySec’s Circular on the obligations of CIFs when providing information to clients

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