Yesterday’s news about the celebration of the Cyprus Securities and Exchange Commission’s (CySEC) 20th anniversary have come to demonstrate a particular closeness between the regulator and its European boss, the European Securities Markets Authority (ESMA).
After the implementation of the first part of MiFID, CySEC has come under closer supervision by the organization comprised by its European counterparts, which are all members of ESMA. The Cypriot regulator has attracted unwanted attention from a number of its peers as well as from clients of some brokerages which are under the supervision authority of the watchdog.
ESMA Pressure on CySEC to Rein In Supervised Financial Firms
The attendance of the Chair of ESMA, Steven Majoor, at CySEC’s 20th anniversary is a testament to the commitment of the European mega-regulator to drive its Cypriot counterpart to take a harsh line against Cyprus Investment Firms which are not complying with the European regulatory framework, which CySEC is supposed to enforce.
A couple of brokerages which are supervised by the Cypriot regulator have shared with Finance Magnates that the recent changes in CySEC’s policy and the numerous circulars which are flying around in recent weeks have come under significant pressure from ESMA.
ESMA has the authority to supervise national regulators across the regulatory framework under MiFID. This includes all European Union countries, as well as Norway, Iceland and Lichtenstein.
FBS CopyTrade Launches a New Card Scanning Feature!Go to article >>
According to information obtained by Finance Magnates from sources with knowledge of the matter, the French Autorité des Marchés Financiers (AMF) has been one of the most vocal proponents of more pressure on CySEC.
French AMF Key in Demanding a Stricter CySEC
The French regulator has been notorious with a mystery shopper survey, the results of which were published last year and showed that a number of CySEC regulated brokers had not distributed client withdrawal requests to their clients in a timely manner. The study was mainly focused on binary options brokerages, which have been strongly reprimanded by the AMF.
CySEC has highlighted that Mr. Majoor congratulated the Cypriot watchdog for its contribution to the work conducted by ESMA. He has also expressed the hope that CySEC and ESMA will continue to cooperate in order to achieve their common objective of investor protection and the promotion of financial stability in European Union regulated companies.
CySEC Greatly Understaffed for the Amount of Supervised Firms
This serves as a testimony to the intentions of CySEC going forward – to make sure that all Cyprus Investment Firms strictly adhere to the highest standards of a European Union regulation. While the intentions are good, the results are sometimes subpar. The Cypriot regulator has been understaffed for the number of entities which it currently supervises.
The country’s regulator has been vocally criticized by a number of clients of Cypriot brokerages for not being able to protect their interests adequately and this can’t be a surprise when CySEC currently supervises over 500 entities. These include 208 Cyprus Investment Firms (CIFs), 155 Administrative Service Providers and the Cyprus Stock Exchange. A total of 35 fund managers are overseeing the management of €20.3 billion in funds, under the supervision of CySEC.