CySEC now accepting applications
Cyprus has taken a significant lead in efforts to become an attractive financial centre following the initiative of the Cyprus Securities and Exchange Commission (CySEC) to accept applications from companies engaged in forex trading, futures and other derivative products.
CySEC Chairman George Charalambous told the Financial Mirror that companies that are engaged in foreign exchange trading transactions, which either do not aim to physically deliver the agreed foreign currency or are not materially settled in cash, from now on will be regulated by the CySEC.
“Companies offering Forex and other derivative products, including CFDs, will need to apply to receive the relevant licence to offer their services as Cyprus Investment Firms (CIFs), which once approved, will allow them to their activities across the EU under the EU Single Market Directive,” said Charalambous.
The CySEC will approve the capital and shareholder status, list of directors, management and organisational structure of the applicant companies, promising that approval will be given no later than six months after complete applications are filed.
Charalambous told the Financial Mirror that recent criticism that applications for CIF licenses face extensive delays at the CySEC is not true, explaining that the countdown does not start from when an inquiry is made, but when all necessary documentation is completely filed.
Huge interest
More than 20 companies on the island are engaged in forex services, with more expected to follow now that Cyprus has clarified its position and regulated the sector, in contrast to other EU countries that have no clear-cut rules on how to manage and regulate forex and derivatives trading.
“All those who had previously received temporary permission to carry out such activities, need to apply again,” the CySEC said in an official announcement.
Companies that offer forex and derivative trading based on the trading platform of established banks and financial institutions based abroad also need to apply since the reception and transmission of orders and the execution of orders in relation to the specific financial instruments is considered to be an investment service which can only be provided by an authorised CIF.
The FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over USD 4 trln by the Bank for International Settlements.
