The Cyprus Securities and Exchange Commission (CySEC) has announced a change to the policy on the provision of investment and ancillary services or activities in third countries through the Cyprus Investment Firms (CIFs).

CySEC changes policy on the provision of investment services in third countries

These changes have been included in a new circular issued by the CySEC after a board meeting on Thursday last week. The adjustment requires that CIFs provide a relevant certificate from a regulatory body of a third country if the third country does not need the authorization to offer the services listed in the provision.

Third countries are those not within the European Union of the European Economic Areas. The CySEC is also seeking a legal opinion issued by a qualified lawyer or legal authority of the jurisdiction where these firms are situated.

The old circular says that CIFs are needed to include a list of third countries where they are planning to offer services. It adds that in each country, whether the firm has acquired authorization from a competent regulatory body or a legal opinion. No authorization was needed. However, the new circular does not have the provision for a legal opinion in this step.

CySEC maintains most rules in the new circular

The CySEC has maintained most of the old rules in the new circular. One of the retained provisions is that CIFs planning to offer investment and ancillary services or activities in third countries are mandated to alert the CySEC of such developments. The notification should be made through a letter of intent.

Before a CIF starts offering services and activities in third countries, it will be required to obtain authorization from the relevant legal bodies of the third countries. Moreover, CIFs must share a certified copy of the authorization with the CySEC. The authorization should be issued by the third country’s regulatory authority.

The CySEC has also added that obtaining the needed authorization from third countries remained the sole responsibility of the CIF. Moreover, these firms are also mandated to provide information about the operations of the third country using the CySEC portal.

The other provision that has also been retained is that these firms still need to notify their market supervisor in writing if there are any changes to the third countries where they operate.

The two circulars also state that all the newly established and existing CIFs must be transparent in their operations in third countries. They are required to post the names of the third countries to which they provide their services or conduct activities on their websites.