In 2023, the Cyprus Securities and Exchange Commission (CySEC) executed a rigorous oversight campaign involving over 700 inspections of entities under its purview, utilizing both on-site and remote methodologies, culminating in fines exceeding $2.2 million.
These inspections were part of thematic audits focused on reinforcing regulatory compliance and investor protection.
In light of the ongoing Russia-Ukraine conflict, CySEC specifically scrutinized investment firms for compliance with sanctions, probing into their affiliations with sanctioned individuals and the management of Russian securities.
The Market Surveillance and Investigations Department was notably active, finalizing 42 investigations and progressing with 48 others.
A noteworthy case was forwarded to the Attorney General due to its potential criminal implications.
The financial penalties imposed for the year amounted to approximately €2.2 million, with a significant portion, €1 million, levied on a single entity.
This action is part of a broader three-year effort that has seen €6 million in sanctions, primarily targeting investment firms for non-compliance.
This disciplinary action by CySEC compares to international counterparts, such as the British Financial Conduct Authority (FCA) and the combined efforts of the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), which have also taken significant measures against regulatory breaches.
CySEC’s enforcement extended to corrective directives in 103 instances, compliance orders related to anti-money laundering to 35 entities, and the revocation or suspension of licenses for 21 firms.
Dr. George Theocharides, CySEC’s Chairman, in an interview, underscored the regulatory focus on emerging technologies like cryptocurrencies and artificial intelligence (AI).
He acknowledged AI’s potential to revolutionize the securities market but also noted the infancy of these technologies.
Dr. Theocharides stressed the importance of building trust for widespread adoption of AI and highlighted the imminent Markets in Crypto-Assets Regulation (MiCA), set to enhance crypto-asset market integrity and investor protection.
Cyprus’s attractiveness as an investment hub is evident in the approval of 82 new entities in 2023, expanding the regulated entity roster to 830.
Dr. Theocharides cited a 12% growth in supervised entities over four years, reflecting Cyprus’s continued appeal as an investment destination.
CySEC’s commitment to financial literacy and public awareness was also emphasized, with participation in numerous educational initiatives and warnings against fraudulent schemes posing as regulatory authority representatives.