Establish an Investment Firm in Cyprus
Establish an investment firm in Cyprus
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CIF – Investment Services
The operation and supervision of investment firms in Cyprus is regulated by Law 87(I)/2017 on the provision of investment services, the exercise of investment activities and the operation of regulated markets (the “Law”):
A company authorised by the Cyprus Securities and Exchange Commission (“CySec”) as a Cyprus Investment Firm (“CIF”) may provide the below services which are related to any of the financial instruments,
- Reception and transmission of orders in relation to one or more financial instruments;
- Execution of orders on behalf of clients;
- Dealing on own account;
- Portfolio management;
- Provision of investment advice;
- Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
- Placing of financial instruments without a firm commitment basis;
- Operation of Multilateral Trading Facilities (“MTF”);
- Operation of Organised Trading Facilities (“OTF”).
The CIF may also provide any of the below ancillary services that must be provided in combination with any of the investment services, depending on the authorisation requested and granted:
- Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management and excluding maintaining securities accounts at the top tier level (“central maintenance service”), as referred to in point 2 of Section A of the Annex to Regulation (EU) No 909/2014.
- Granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;
- Provision of advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;
- Foreign exchange services where these are connected to the provision of investment services;
- Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments;
- Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
- Investment services and activities as well as ancillary services of the type included under Part I or II of Appendix 1 of the Law related to the underlying of the derivatives included under points 5), 6), 7) and 10) of Part III of Appendix 1 of the Law where these are connected to the provision of investment or ancillary services.
Financial Instruments
The relevant financial instruments are the following:
- Transferrable securities;
- Money market instruments;
- Units in collective investment undertakings;
- Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances, or other derivative instruments, financial indices or financial measures which may be settled physically or in cash;
- Options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;
- Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled;
- Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 6 above and not being for commercial purposes, which have the characteristics of other derivative financial instruments;
- Derivative instruments for the transfer of credit risk;
- Financial contracts for differences;
- Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF;
- Emission allowances consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme).
Authorisation application
For the purpose of obtaining the authorisation to operate as a CIF, a Cyprus company must submit an application to CySec which includes the below information/documents:
- General information on the company;
- Information on capital (among other, initial capital requirement, capital composition, financial resources);
- Information on shareholders (among other, information on direct and indirect qualifying holding, personal questionnaire of shareholders);
- Information on the management body and persons who direct the business (among other, personal questionnaire of each of the relevant persons);
- Financial information (among other, forecast accounting plans, planning assumptions);
- Information of the firm’s organization (among other, program of initial operations; organization structure and internal control system; list of outsourced functions; systems on compliance, internal control and risk management; measures to manage and prevent conflict of interest);
- Confirmations by representative, external auditors and legal advisors .
Timeframe
CySec reviews the application within six (6) months from the date of submission.
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