CySEC Greatly Tightens Staff Education and Knowledge Requirements

The Cyprus Securities and Exchange Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term) is continuing its effort to keep Cyprus Investment Firms (CIFs) diligently informed about the latest regulatory updates. The watchdog has reminded brokerages that are regulated on the island that they have to adequately train and monitor their staff.

A CySEC spokesperson commented to Finance Magnates on the matter: “Aggressive sales techniques deployed by certain firms providing Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term instruments are proven to harm investors and damage consumer confidence in the industry as a whole.”

[gptAdvertisement]

“Firms under our supervision must communicate with their clients in a fair and honest manner, in compliance with the regulation we have in place to protect investors. This cannot be guaranteed if sales and marketing functions are outsourced to a third party country outside of the European Union where service providers are not bound by the MiFID regime,” the spokesperson elaborated.

No Investment Advice

CySEC outlines in its latest circular that employees of CIFs must not provide investment advice to the clients of Cyprus regulated brokerages. Only specifically qualified personnel and not support staff should be addressing topics related to investment decisions.

The circular makes clear that both the brokerage and the employee violating CySEC regulations are responsible for any noncompliance. Companies should be supervising their workers’ qualifications and competence.

Testing the knowledge of employees is essential to monitor compliance, and with the rules of MiFID II requiring all communication between clients and brokers to be recorded for a period of several years, the move by CySEC to highlight this aspect of the new regulation is timely.

Real Names and Mandatory Employee Knowledge

CySEC mandates that brokerages themselves place their staff on hot sales and serious violations of the law should be addressed with dismissal. Employees should be mindful of the risks associated with trading financial products.

Costs of transactions, instrument specific characteristics, financial market culture and the impact of economic events are among the key points which employees of CIFs need to be familiar with.

Other aspects of the brokerage business which include anti-money laundering (AML) procedures, market abuse, past and future performance and specific market structures are also highlighted by CySEC.

Outsourcing activities are limited almost entirely to the EU under the new regulations as companies that are outsourcing to non-EU member countries will have a hard time proving their compliance. The circular should be presented to all employees involved in service provision.