by Andria PapageorgiouCySEC New Directive for the Registration of Crypto Providers
The Cyprus Securities and Exchange Commission (CySEC) issued on Friday a directive about the registration and operating conditions of providers of services related to cryptocurrencies. According to the guidelines, published only in the Greek language, CySEC provides certain procedures to follow in order to comply with the recent transposition of AMLD5 measures taken in the European Union (EU) to combat Anti-Money Laundering and Counter-Terrorist Financing.
The registration fee for the providers who want to apply before CySEC for authorization under the said directive would be EUR 10,000, and the renewal fee shall be EUR 50,000. In terms of the board’s composition, there should be a minimum of four members: two executives and two non-executives. Furthermore, among the conditions set out in the said directive, the companies should comply with some requirements such as good reputation, appropriate policies, systems and procedures, relevant security policies, and remuneration requirements, as specified by the CySEC.
In addition to the said directive, it is expected that the CySEC will issue a policy statement very soon clarifying other relevant matters. Additionally, there is a CySEC application file available with the updated regulatory requirements to follow the AMLD5 rulings.
It is well admitted by CySEC, who shares the position of the European Securities and Markets Authority (ESMA), that some crypto assets, including the so-called virtual currencies, such as Bitcoin, are highly risky and speculative, and investors must be alert to the high risks of buying and/or holding these instruments, including the possibility of losing all their money. Crypto assets come in many forms but the majority of them remain unregulated in the EU including Cyprus.
In light of all the above, it is quite evident that the incorporation of crypto-asset businesses under the scope of the EU AML legislation under the amended 5th AML Law in Cyprus is a very significant step.
Should you have any further questions, please do not hesitate to contact us at [email protected].
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
by Andria PapageorgiouESMA Guidelines (ESMA35-36-1952) on certain aspects of the MiFID II compliance function requirements
The European Securities and Markets Authority (ESMA) has published the Guidelines on certain aspects of the MiFID II compliance function requirements (‘the Guidelines’), on 6 April 2021 translated in all official languages of the EU. These Guidelines, replace the previous ESMA guidelines on the same topic issued in 2012.
The Guidelines apply in relation to the requirement of the Regulated Entities who, as part of their obligations under the Investment Services and Activities and Regulated Markets Law of 2017 (‘the Law’), must ensure that the compliance function fulfils the requirements set out in Article 22 of MiFID II Delegated Regulation 565/2017 by maintaining an efficient compliance function in accordance with Article 17(2) of the Law.
The Guidelines’ objective is the establishment of consistent, efficient and effective supervisory practices and to ensure the common, uniform and consistent application of certain aspects of the MiFID II compliance function.
Therefore, these Guidelines aim at requiring the Regulated Entities to have a robust governance framework by implementing systems and controls, policies and procedures, establishing an independent and effective compliance function to manage risks and ensure compliance with their regulatory obligations.
In brief, the said Guidelines focus on the below areas:
- Guideline on the compliance risk assessment;
- Guideline on the monitoring obligations of the compliance function;
- Guideline on the reporting obligations of the compliance function;
- Guideline on the advisory and assistance obligations of the compliance function;
- Guideline on the effectiveness of the compliance function;
- Guideline on the skills, knowledge, expertise and authority of the compliance function;
- Guideline on the permanence of the compliance function;
- Guideline on the Independence of the compliance function;
- Guideline regarding the proportionality with regard to the effectiveness of the compliance function;
- Guidelines on combining the compliance function with other internal control functions;
- Guidelines on outsourcing of the compliance function;
- Guidelines on the review of the compliance function by competent authorities;
The Guidelines apply from two months of the date of publication of the guidelines on ESMA’s website in all EU official languages, i.e. 07 June 2021.
CySEC adopts these Guidelines by incorporating them into its supervisory practices and regulatory approach.
Regulated Entities must take the necessary actions in order to ensure their compliance with the Guidelines.
Should you have any further questions, please do not hesitate to contact us at [email protected].
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.