‘Cyprus Securities and Exchange Commission’ the non-governmental public financial supervisory body, is in charge of overseeing the registered retail Forex brokers, financial service providers, financial advisors, investment services, as well as any other financial activities in the Republic of Cyprus. The organization first emerged in 2001, in agreement with section 5 of the Securities and Exchange Commission, and subsequently in 2004 its laws and regulations integrated with the European ‘MiFID’ financial laws allowing all its members to extend their business interests all over Europe. CySEC is run by a board of directors, consisting of five members (Demetra Kalogerou - Chairman, Andreas Andreou - Vice-Chairman, Anastasia Anastasiadi, Nicole Phinopoulou, John Georgoulas), designated by the Council of Ministers following a proposal of the Minister of Finance. CySEC is considered a forerunner in setting new and innovative regulatory policies for the development of the financial markets. CySEC was the first regulatory authority to announce the ‘binary options’ as a legitimate financial tool setting a good example for many other financial authorities to consider and acknowledge the binary options brokers as viable. The organization takes necessary initiatives to update its overall regulatory framework on a regular basis to protect the customers’ assets in the safest, most reliable way possible, in this way CySEC aims to build a worldwide reputation and attract more investments.
CySEC, as expected of any other regulatory bodies to provide safety of funds and peace of mind for their customers, is responsible for regulating the Structure, duties, powers, organization of the Securities and Exchange Commission, and relevant financial activities that fall under the Article 25 of the law, issued in 2009. CySEC is also empowered by ‘The Public Offer and Prospectus Law of 2005,’ ‘The Insider Dealing and Market Manipulation (Market Abuse) Law of 2005,’‘The Public Takeover Bids Law of 2007,’ and ‘The Transparency Requirements (Transferable Securities Admitted to Trading on a Regulated Market) Law of 2007.’ Accordingly, CySEC supervises the following activities:
• It has the power to review, give, suspend, or cancel granted licenses.
• Examine the overall operation status of the Cyprus Stock Exchange and transactions of other financial parties in Cyprus.
• Make sure the agencies follow the laws completely.
• Run regular investigatory operations to ensure both inland and foreign authorities’ role in the financial activities.
• Demand the required information from registered organizations to verify the legality of their operations.
• Administer sanctions, take disciplinary measures, or stop actions altogether if not in accord with the laws.
• CySEC also is to work with other public regulatory authorities of Cyprus regarding information exchange.
The Investor Compensation Fund was founded as a part of CySEC organization to reimburse the clients in case of ICF members’ failure to fulfill their obligations towards their clients. This program was established to protect the clients by refunding their assets if their claim is justified. The Investor Compensation Fund can be applied to all the customers, both Cypriot and foreigner residents who received services from the members of ICF. When the legitimacy of the client’s claim regarding the misdemeanor of ICF member is proved beyond reasonable doubt, the ICF is ready to pay up to 20,000 euros to cover the losses. The compensation amount applies to the whole of the claim regardless of the client’s type of currency, the number of accounts, or the laws regarding the place of services. CySEC would request the member’s presence for further investigation within a short deadline (usually more than three days) which in certain cases may extend up to three months. CySEC then initiates the process of compensation upon proving the negligence of the ICF member regarding their clients’ claims. An invitation (via at least three national newspapers) will be sent to the insured clients to file their complaints against the ICF member in question. The applicants ought to include their name, address, phone/fax number, email, company code with the ICF, the name of the ICF member, covered services (copy), account, deposit and withdrawal statements/documents, the amount of the claim, proof of claim, and any other required information. Then the claim is assessed by one qualified accountant and one or more knowledgeable advocates regarding the legitimacy of the complaint. The applicants can fill out the online application form on the CySEC website or simply submit a letter of complaint to the offices of the ICF with all the required info (as mentioned above). The letter could be either mailed via post or personally delivered to this address: ‘Investor Compensation ICF for IF Clients, 27 Diagorou Str., 1097 Nicosia, Cyprus.’ The complaining parties should review the guideline and directives of the Investor Compensation Fund thoroughly to make sure that their claim is legit otherwise their claim will not be accepted or even after receiving the compensation amount they have to return it to the ICF under review.
The CySEC has listed all the Forex brokerage companies on its website for everyone to access and confirm their license and regulation if necessary. For this purpose, go to the Cyprus investment firms’ page on the CySEC official website, a search box will appear. All you have to do is type in the name or license number of the Forex Broker that you are investigating. As soon as you begin to type the name, a list of companies with similar names might appear, you can scroll down to locate the exact company you are looking for. Once you have located the company in question, you can click on its name and be directed to the relevant page for further inquiry. There is also an alphabetic list (A-Z) right under the search box which can be used to narrow down your search.