The Cyprus Securities and Exchange Commission has rolled out a new legal framework aimed at enforcing international sanctions more effectively. The changes took effect immediately and apply to all firms regulated by CySEC. This includes Cyprus Investment Firms that offer contracts for difference to retail clients.
The move aligns Cyprus with recent European Union developments on sanctions enforcement. It sets out clear procedures for identifying and managing potential breaches of EU and United Nations sanctions.
A new national body has been created to support these efforts. Known as the National Sanctions Implementation Unit, it operates under the Ministry of Finance. Its role is to coordinate sanctions enforcement across the country.
New Rules Impact CFD Brokers
Although the directive is not tailored to CFDs, its scope covers all CIFs. This includes brokers that deal primarily with retail traders in leveraged products like CFDs.
You may find it interesting at FinanceMagnates.com: Cyprus Stock Exchange Suspends Three Firms Following CySEC Directive for Reporting Failures.
CFD brokers will need to review their internal controls to meet the new compliance standards. CySEC has told firms to improve how they monitor transactions, report suspicious activity, and escalate issues when needed. Non-compliance could result in administrative penalties.
CySEC Requires CIFs XBRL Reporting
Meanwhile, CySEC has issued two circulars affecting CIFs, including those offering CFDs. The circulars concern changes in submitting prudential and statistical data.
Starting with the reporting period ending this year, CIFs must submit prudential reports only in XBRL format through CySEC’s portal. The Excel submission option, previously allowed during the transition, will end after the August reporting deadline.
This change follows updates to the European Banking Authority’s taxonomy requiring software that can produce and validate XBRL files. Reporting covers own funds and capital requirements.
