The regulatory agenda for 2024 remains centered around the following key priorities:
Strengthen the supervision of high-risk and medium to high-risk companies, with special attention to cross-border activities, to prevent harm to consumers caused by the distribution of complex financial products such as price difference contracts.
Promote a compliance oriented culture among the management structure and key functional leaders within the company, aiming to cultivate sustainable compliance behavior.
Promptly and effectively proactively handle and manage any potential adverse events to minimize their impact.
Cultivate a compliance oriented culture
Another key aspect of the CySEC agenda involves promoting a compliance oriented culture within its registered entities. This measure aims to gradually instill sustainable compliance behavior and ensure that the company complies with regulatory standards and ethical practices in its operations.
The regulatory agency emphasizes that "by 2024, CySEC's main areas of focus include assessing practices that may have negative impacts on investors and the market, such as providing small stock services, informing investors of costs and fees, communicating through affiliates and influencers, implementing sustainable development requirements, implementing pre transaction controls, and replicating the use of transactions."
In the field of investment services, CySEC's priorities include implementing effective organizational arrangements, ensuring compliance with professional conduct rules, evaluating practices that may have negative impacts on investors and the market, and evaluating the resilience of the company's business model.
Preparation for regulatory changes
In addition, CySEC is preparing for upcoming regulatory changes, including the implementation of the Digital Operations Resilience Act and the Crypto Asset Market Regulation. These preparations highlight the commitment of regulatory agencies to adjust their regulatory methods to adapt to industry changes.
In addition, CySEC aims to strengthen the supervision of data on investment funds investing in commercial real estate and derivative contracts, thereby enhancing financial stability. CySEC utilizes various regulatory tools such as daily monitoring, on-site inspections, off-site inspections, thematic reviews, and regulatory meetings to effectively assess and respond to risks.
Cyprus investment companies should expect their professional conduct rules to be subject to stricter scrutiny, particularly regarding information provided to potential clients, including marketing communication, client registration processes, and national intervention measures related to the provision, distribution, and sales of price difference contracts.
