The Cyprus Securities and Exchange Commission (CySEC) has taken significant steps to strengthen regulatory enforcement in the financial sector. These measures include the possibility of holding individuals personally liable for non-compliance with regulations, leading to several ongoing administrative proceedings against responsible individuals. CySEC has also shown its commitment to maintaining compliance by rejecting applications for licenses from Cyprus Investment Services Companies (CIFs) and suspending or revoking licenses when supervisory inspections reveal weaknesses or omissions in compliance.

On Monday 23rd October 2023, CySEC’s President, Dr. George Theocharides, emphasised the importance of regulatory compliance and investor protection during web workshops for CIFs’ Boards of Directors. He underlined the need for a strong culture of compliance, particularly in the evolving landscape of cross-border financial services. Dr. Theocharides stressed that only companies with a robust compliance culture can thrive in this intense regulatory environment. CySEC’s actions reflect a dedication to safeguarding investors and ensuring market integrity, promoting ethical standards, and enhancing supervisory infrastructure to enforce these measures effectively.

We should expect more restrictions imposed at EU-level, with regular supervision and where companies fall short of meeting compliance requirements, they will be facing administrative fines and even revoking of their licenses to operate. CySec has issued administration fines of up to EUR 5,3M in the last three years, for violations of the Law Regarding Provision of Investment Services, the Exercise of Investment Activities and the Operation of Regulated Markets Law of 2017.

For more information on Directors’ obligations serving on the boards of publicly listed, and regulated entities particularly investment firms, feel free to reach out to Stella Koukounis, at s.koukounis@solsiduslaw.com.