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Many see the securities watchdog CySEC as an ogre, ever so meddling in the affairs of investment or forex companies, that are supposed to be the new bread and butter of the Cyprus economic recovery.
Admittedly, these companies, that have mainly mushroomed in the past decade, have provided job opportunities and a steady revenue stream for the state at a time when the government is having trouble collecting taxes and fees to get the fiscal budget on track again. They have also been feeding business to the support services, such as audit firms, lawyers, market makers and promoters, driving a parallel sector that now relies on the investments sector.
But with more than 200 already operating on the island, surely by now we must have learnt from the mistakes of the past (poor banking regulation) so as not to repeat them, that would subsequently sink the financial services sector again.
The Securities and Exchange Commission is doing the best that it can with the little that it has, to regulate and monitor the investment sector, and to separate the serious players from the charlatans. But from what we have heard, just two people have been left in charge to tackle the mountain of complaints about dubious instructions by forex traders or non-payment by fraudster firms playing hard ball.
From the 58 professionals and admin staff that CySEC currently employs, experts say that it needs almost three times as many, or about 160, in order to be able to follow every lead, investigate every complaint and probe into the activities of every single approved investment company (KEPEY) or their clients.
With binary trading an area where the Cypriot authorities showed patience and professionality, this sector has propelled CySEC to the forefront of the handful around the world who have expertise (if any) to regulate and monitor this high-risk investment tool. As a result, our reputation has partly regained its old glamour, having been tarnished by the incompetent bankers in charge of everyone’s savings that gave us the meltdown of 2013, initiated by the haphazard purchase of toxic Greek government bonds back in 2011.
For Cyprus to retain its position as a serious financial services centre, where proper regulation is synonymous with reputation management, then the government and the House of Representatives should stock dragging their feet and help CySEC any way they can. First, by fast-tracking the “emergency” hirings that need to take place over the next few months, and then apportion a spending budget equal to the earnings that the regulator brings in, both in the form of fees and fines (that go straight into the government coffers), but also in the form of promoting Cyprus as a reliable, reputable, solid and transparent financial services centre.
