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

Since we started the Full Brokerage Solution package, one of the main questions we receive regarding licensing, is the requirements necessary to submit a CySEC license application for a CIF.

allFX-Consult outsources this to experienced offices in Cyprus that specialize in this regard. We do not undertake licensing projects, in any jurisdiction.

Everybody sells “experience” but if you choose the wrong office for your project, you will unnecessarily lose loads of time and money.

We’ve been in the FX industry for more than 10 years; we have worked with almost every office offering services so let us point you to 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).

 

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
  • Organizational 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

 

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
Important Notes

 

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.

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).

Leave a Reply

Your email address will not be published. Required fields are marked *

*