The Cyprus Securities and Exchange Commission - CySEC - is the financial regulatory department of Cyprus. As an EU member state, CySEC's operations and financial regulations adhere with the European MiFID financial harmonisation laws.
CySEC was launched in 2001 as part of section 5 law, including the establishment and responsibilities as a public corporate body. Cyprus became a member of the EU in 2004 and CySEC was automatically made part of the European MiFID regulation, giving firms registered in Cyprus a gateway to all European markets. Subsequently, it should be noted that CySEC has become the largest government-owned regulatory agency of forex and binary options globally. Many global super major finance brands are now regulated by CySEC.
CySEC's responsibilities include supervision and control of the Cyprus Stock Market, monitoring investment services companies, investment funds and related services, applying penalties or administrative sanctions for non-compliance of regulatory requirements, granting operation licenses to investment firms, consultants and brokers. Regulated brokers under CySEC are required to retain sufficient capital to meet the capital adequacy ratio requirement.
As part of the regulatory requirement, CySEC's regulated brokers are bound to submit an independently audited fiscal report to the regulator on an annual basis in conjunction with the end of each financial year.
CySEC is administered by a five-member Board which includes a Chairman and Vice-Chairman. Additionally, the Governor of the Central Bank of Cyprus is represented by a non-voting board member. The Council of Ministers appoints the members of the Board for a five-year term following a submission from the Minister of Finance.
Based on the statistics for the 4th quarter of 2021, CySEC has under its supervision in total 310 Management Companies and Undertakings of Collective Investments (UCIs). The total number of companies includes, 198 Externally Managed UCIs, 45 Internally Managed UCIs and 67 External Fund Managers. The total number of Management Companies includes 38 AIFMs, 66 Sub-threshold AIFMs, 4 UCITS Management Companies and 4 dual licence entities (AIFMs and UCITS Management Companies). The Total Assets Under Management (AUM) for the 4th quarter of 2021 reached €11.6 billion, managed by the Management Companies and had a Net Asset Value (NAV) of €9.8 billion. Approximately 57% of the AUM relate to Assets managed by the AIFMs, 14% by the Sub-threshold AIFMs, 21% by the AIFMs and UCITS Management Companies, 7% by the UCITS Management Companies.