According to an announcement made by the Cyprus Securities and Exchange Commission (CySEC), the watchdog signed an updated Memorandum of Understanding (MoU) with the Bank of Russia today.
The move comes after the Russian monetary authority received some additional functions related to the transfer of powers of the Federal Financial Markets Service (FFMS) to the Bank of Russia. The central bank will now oversee and regulate both the banking and the securities sectors.
Cyprus has been serving as an offshore zone for Russian money for a number of years, and a big chunk of the uninsured depositors who suffered in the aftermath of the Cypriot banking crisis were Russian nationals.
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With the integration of CySEC and the Bank of Russia’s efforts toward anti-money laundering (AML) and tax-evasion preventative practices, there will likely be stricter enforcement and greater transparency going forward.
According to the MoU, the exchange of information between the regulators will be facilitated to tackle more effectively prospective violations of securities laws.
The document was signed in Moscow, in the presence of the presidents of Cyprus and Russia, by CySEC chairwoman Mrs. Demetra Kalogerou and the governor of the Bank of Russia, Mrs. Elvira Nabiullina, as part of an official visit of a Cypriot delegation to Russia.
This move comes just months after Russian money began fleeing the country in search of safer alternatives. While the Cypriot banking sector is still licking its wounds from the sovereign debt crisis, it remains one of the preferred destinations for Russian investors to park their money in.