In a recent announcement, the Cyprus Securities and Exchange Commission (CySEC) has outlined its focus areas for 2024, intending to guide and support regulated entities amidst evolving regulatory landscapes. As trusted advisors, we aim to elucidate these priorities for our esteemed clients, including Cyprus Investment Firms (CIFs) and asset managers, providing clear guidance and actionable insights.

CySEC’s objectives for 2024 revolve around preserving market integrity and safeguarding investor interests. Informed by ongoing market evaluations and regulatory updates, these priorities serve as a compass for regulated entities, steering them towards excellence in compliance amid shifting regulatory dynamics.

A. Key Highlights:

Enhanced Supervision: CySEC stresses the significance of vigilant oversight, particularly for firms involved in cross-border activities with intricate financial products such as Contracts for Difference (CFDs). This heightened scrutiny is designed to mitigate risks and uphold market stability.

Promoting Compliance Culture: Nurturing a culture of compliance is imperative. CySEC urges firms to reinforce governance structures and control functions, fostering a sustainable approach to regulatory adherence.

Proactive Risk Management: Prompt identification and mitigation of risks are paramount. Regulated entities are encouraged to proactively address emerging threats, ensuring business resilience and investor protection.

B. Focus Areas for Regulated Entities:

Investment Services: CIFs are required to adhere to professional conduct rules, enhance organizational arrangements, and embrace technological advancements. Additionally, robust governance frameworks and proactive risk management are emphasized.

Asset Management: Asset managers should prioritize compliance with regulatory mandates, including sustainability requirements and effective asset valuation procedures. Thorough data analysis and oversight of derivative contracts are vital for maintaining financial stability.

C. What Firms Need To Do:

• Review policies, procedures and internal controls arrangements put in place to ensure compliance with the regulatory requirements.
• Implement effective and prudent management practices, with active oversight from the management body.
• Evaluate the adequacy of governance structures and the effectiveness of control functions such as compliance, internal audit and risk management.
• Improve monitoring of marketing communications.
• Implement measures to address risks in the field of ICT and prepare for compliance with DORA.
• Consider investing in technology solutions/tools that complement firms’ efforts to ensure business resilience and regulatory compliance.

D. Next Steps: Firms should expect ongoing engagement from supervisory teams on the areas mentioned above as well as specific feedback, including communication with the board of directors. CySEC aims to take in a timely way, actions commensurate to the problems and shortcomings identified, to effectively prevent, mitigate or bring them to an end, considering repetition or continuation over time as aggravating factors.

Andria Papageorgiou Law Frim is a reputable Firm specializing in regulatory compliance and risk management solutions. With a dedication to empowering clients through tailored strategies and innovative tools, we are poised to support our clients’ journey toward compliance excellence.