Cyprus Securities and Exchange Commission (CySEC)

Basic Information

The Cyprus Securities and Exchange Commission (CySEC) is the independent financial regulatory authority of Cyprus, established in 2001 under Section 5 of the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law of 2001. As an EU member state regulator, CySEC operates in compliance with European financial harmonization frameworks, including MiFID II. Its headquarters are located at 27 Diagorou Street, CY-1097 Nicosia, Cyprus.

Historical Background

CySEC was created to oversee Cyprus’ securities market and ensure investor protection. Following Cyprus’ EU accession in 2004, CySEC aligned its regulations with EU standards, enabling licensed entities to operate across the European Economic Area. A pivotal moment came in 2012 when CySEC became the first regulator globally to classify binary options as financial instruments, requiring platforms to obtain licenses. In 2019, it permanently banned binary options for retail traders, reflecting its evolving approach to market risks.

Legal Authority and Regulatory Framework

CySEC derives its authority from Law 73(I)/2009, which outlines its structure, powers, and responsibilities. Key regulatory instruments include:

• The Investment Services and Activities and Regulated Markets Law (Law 87(I)/2017)
• EU MiFID II directives
• The Public Offer and Prospectus Law (2005)
• Market Abuse Regulation (EU 596/2014)

It collaborates with ESMA and other EU regulators to enforce cross-border financial standards.

Core Responsibilities and Scope

CySEC oversees multiple financial sectors:

• Market Supervision: Monitoring the Cyprus Stock Exchange and regulated markets
• Entity Licensing: Authorizing Cyprus Investment Firms (CIFs), UCITS, AIFMs, and brokerage services
• Investor Protection: Enforcing client fund segregation rules and negative balance protection
• Compliance Enforcement: Conducting audits, imposing fines (up to €2 million per violation), and revoking licenses
• AML/CFT Oversight: Implementing EU anti-money laundering directives

It specifically regulates leveraged forex trading under strict definitions requiring CIF authorization for non-physical settlement contracts.

Contact Information

• Address: 27 Diagorou Street, CY-1097 Nicosia, Cyprus
• Mailing: P.O. BOX 24996, CY-1306 Nicosia
• Phone: +357 22506600
• Fax: +357 22506700
• Email: [email protected] (general inquiries), [email protected] (compliance matters)

Regulatory Verification Process

To confirm a firm’s CySEC authorization:

1. Visit the official Regulated Entities portal: https://www.cysec.gov.cy/en-GB/entities/
2. Select Investment Firms (Cypriot) under the regulated entities list
3. Search by:
   • License number (e.g., 261/14 for Primus Global Ltd)
   • Legal entity name
4. Validate critical details:
   • Active license status (avoid “Suspended” or “Voluntary Renunciation” markers)
   • Authorization for “9. Financial Contracts for Differences” under Investment Services
   • Matching domain names in the List of Approved Domains