CySEC License – What is a CIF and what are the application requirements?


 

Updated 2020 – Since allFX-Consult started offering complete Forex Brokerage Solutions, one of the main questions we’ve been receiving regarding licensing, relates to the requirements necessary to submit a CySEC license application for a CIF.

Depending on your structure, whether you are an already established brokerage, a forex IB or white label, a CySEC license is one of the most reputable forex licenses to have. Not only for the protection it provides to traders but also for your banking structures, for maintaining top organisational setups, for the EU passport and the possibilities it opens up for further development.

A full license is of course the way to go, but there may be more options to consider that allow for manageable operational costs and a viable future. For the past decade, we’ve been supporting small, medium and large brokerages enter the EU area the right way, so let allFX-Consult point you in the right direction and your next moves can be viable.

 

What is a Cyprus Investment Firm (CIF)?

 

  • A registered, regulated and supervised firm, reporting in regular intervals to the Cyprus Securities and Exchange Commission (CySEC).
  • CIFs must be licensed by the Cyprus Securities & Exchange Commission, which is the relevant regulatory and supervisory authority.
  • A CySEC license application is necessary to be submitted, with the Investment and ancillary services the CIF is planning to provide (Please see below all services).

Find out which brokers are licensed in Cyprus today as well as the country’s latest economic data.

 

CySEC License – Investment Services

 

  • Reception and transmission of orders in relation to one or more financial instruments;
  • Execution of orders on behalf of investors/clients;
  • Dealing in financial instruments on own account;
  • Portfolio management;
  • Investment advice;
  • Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
  • Placing of financial instruments without a firm commitment basis;
  • Operation of Multilateral Trading Facility.

 

CySEC license – Non-Core – Ancillary Services

 

  • Safekeeping and administration of financial instruments for the account of clients (includes custodianship and related services such as cash-collateral management);
  • Granting credits or loans to an investor (to allow investors to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction);
  • Advice to undertakings (relating to capital structure, industrial strategy and related matters and consulting, and services in relation to mergers and the purchase of undertakings);
  • Foreign Exchange services (in cases when they are connected to investment services);
  • Investment research and financial analysis (relating to transactions in financial instruments);
  • Services relating to underwriting.

 

The CySEC license application requires the following documents:

 

  • Completed application form as provided by the CySEC (recent)
  • Information about the directors, managerial staff and shareholders with special participation (for example CVs, completed questionnaires as provided by CySEC etc)
  • Company legal documents (certificate of incorporation, Memorandum and Articles of Association etc)
  • Certificates of the registered office in Cyprus
  • Certificates by the Republic of Cyprus confirming the Directors & Secretary of the Company
  • Group structure
  • Organisational structure
  • Clean criminal records and Certificates of Good Standing of the shareholders with special participation, the Board of Directors and employees of the Company
  • Company procedures manual for all activities and operations
  • Together with the above document bundle, a three year business plan, the internal procedures manual and anti-money-laundering and know-your-client procedures must be filed with the application.

 

Share Capital Requirements

 

125,000 Euro:
  • Reception & Transmission
  • Execution of orders on behalf of clients
  • Portfolio management
  • Investment advice

 

730,000 Euro:
  • Dealing on own account (market maker)
  • Provision of underwriting services in respect of issues of financial instruments
  • Reception & Transmission
  • Execution of orders on behalf of clients
  • Portfolio management
  • Investment advice

 

Looking to obtain a CySEC License? Contact us to look into the details

 

Employees of the CIF – Managerial positions may require certificates (Basic/Advanced examination)

 

  • 3 Resident Directors and 1 non-resident (if need be)
    • Two Executive Directors
    • Two Non-Executive Directors
  • Money laundering, risk manager and compliance officer
  • Head of each department
    •    – Dealing Room
    •    – Sales,
    •    – Backoffice
    •    – Dealing on own account
    •    – Accounting
  • Internal and External Auditors

 

Initial/internal assessment

Before allFX-Consult and/or any of its associates takes on a project, an internal assessment is carried out to determine the validity/viability of an application. The background of the people that will effectively direct the business (primarily shareholders) as well as proof of source of funds to be used as capital, must be evaluated and assessed prior to any engagements.

 

Important Notes

The forex license acquisition of already approved licenses (CySEC and offshore) has become very popular in recent years. Although we don’t recommend this due to the costs associated with it (unlike applying for a new CySEC license or partnering as a White Label/Tied Agent), it is definitely a way to avoid bureaucratic delays, especially offshore. If you are looking to buy or sell a forex license, we almost always have a counterpart (buy side & sell side).

It’s important to consider that the above is for information purposes only. The actual requirements will be thoroughly discussed with the application promoter that will handle your CySEC license. Our partners/associates have years of experience to guide you through the requirements.

There is no “guarantee”, no matter what people/companies tell you regarding the time frame to receive a license and/or a successful application outcome. The granting or rejecting of the application as well as the complexity of each application determines the outcome and the CySEC committee is the sole decision maker.

CySEC is an independent public supervisory Authority, currently supervising over 500 entities, of which 208 are Cyprus Investment Firms, 155 are Administrative Service Providers, the Cyprus Stock Exchange and 12 issuers registered in foreign markets (information taken from a public document published on CySEC website at the time this article was written).


 

How allFX-Consult can step into this picture:

allFX-Consult is a boutique forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer, ensuring we can meet any corporate challenge relative to how to start a forex brokerage.

Because of this, allFX-Consult always has a counterpart/partner for any corporate structure. Before we make any recommendations, we thoroughly examine all possibilities. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss any forex related topic through the contact form or one of our emails at info@allfx–consult.compartners@allfx-consult.com. We specialise in training sales teams and forex corporate structures for individuals that want to Start a Forex Brokerage.

 

You might also be interested in:

Top EU and Offshore jurisdictions | Including brokers registered there & the country’s economic data 

Comprehensive list of worldwide regulators and supervising bodies

What is a Tied Agent | Definitions and detailed information

 

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