The Cyprus Securities and Exchange Commission (CySEC) is mandating a substantial effort for companies that are regulated on the island. Cyprus Investment Firms (CIFs) will have to supply additional information in relation to the upcoming implementation of MiFID II.
The changes are nothing unexpected and are merely full compliance by the Cypriot regulator with the new financial regulations.
The EU-wide regulatory framework that is set to take effect in January 2018 is coming with a list of substantial new obligations for brokerages in the foreign exchange and CFDs trading industry. The regulator is outlining that firms will have to report transactions beyond instruments that are traded on multi-lateral trading facilities MTFs and organized trading facilities OTFs.
MiFID II is aiming to address systemic issues for the financial system that are giving information to the regulators about exposure in certain markets, especially in derivatives. The framework is adding substantial red tape for brokers around Europe, by mandating certain supervisory requirements that force brokers to keep a lot of data about their client’s behavior.
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Amongst the most traded instruments by retail clients, the CySEC is mandating reporting on CFDs, shares, bonds, ETFs, futures, interest rate, equity and FX derivatives and, last but not least, binary options.
The regulator highlights that companies have to provide volumes that include leverage information and transactions on CFDs that have been closed within the reporting period.
The requirements have the potential to create additional technological requirements for brokerages that haven’t been prepared with their own reporting tools or haven’t contacted a third party that offers such services.
Transactions that are closed and reopened on the following day are exempt from the reporting requirements.
MiFID II has been designed with the institutional investor in mind and retail brokers could have fewer trades to report than expected.