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June 19, 2022 INSIDER • GOAL • IN-CYPRUS • PROPERTY • CYPRUS-IS • CAREER LIKE • GOING OUT • XRYSES SYNTAGES • ACTIVE • PHILGROUP NEWS & nbsp; SOCIETY & nbsp; INSIDER & nbsp; OPINIONS & nbsp; GOING OUT & nbsp; CULTURE & nbsp; SPORTS & nbsp; AUTO & nbsp; GOOD LIFE & nbsp; USEFUL & nbsp; PRINTED EDITION & nbsp;
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Next Previous Dr. George Theocharidis: Investor protection shield EKK HOME • INSIDER • ECONOMY • Dr. Giorgos Theocharidis: EKK
& nbsp & nbspEvagora Prokopiou & nbsp; & nbsp;
The electronic register of cryptocurrency service providers will be launched very soon
In a complex economic environment such as the one we are currently going through, the role of the Cyprus Securities and Exchange Commission (CCP) is important. & Nbsp; The main goal of the ECC is to act as a shield for investors through the exercise of effective supervision while finding the tools to keep pace with any developments and technological needs required by the sector. The chairman of the committee, Dr. George Theocharidis, refers to the tools that she will have in her quiver in the next period for a better supervisory control. Among other things, he tells us that applications have been accepted from a number of companies that have expressed interest in offering digital currency distribution platforms and that a license has already been issued.
READ ALSO: & nbsp; The “CyTBOR” of the Hellenic Capital Market Commission is in operation on 17/5
What are the objectives of the Hellenic Capital Market Commission for 2022 and on what issues will give priority?
At the same time, the ECC is in the process of developing procedures and methodologies, which, with the appropriate technological infrastructure, will enhance the exercise of surveillance using data, arising from Regulations such as EMIR, MIFIR and SFTR, in order to automatically identify potential risks and irregularities at an early stage. The project is already in progress and will be completed in various phases.
The completion of the system of import, processing, storage and reporting of transaction data for the supervision of the entities in the market is expected in the next period. & Nbsp; The system will connect to the ESMA node and download and import relevant data, allowing the ECC to store it securely. & Nbsp;
In addition to further & nbsp; staffing of supervisory departments with additional staff, emphasis will be placed on strengthening in-depth supervisory controls, especially for the highest risk entities, such as online trading platforms. Also, in 2022 we intend to review the rules concerning customers' money.
The Register of Real Beneficiaries of Explicit Trusts and Similar Legal Arrangements was recently launched, which is & nbsp; a very important project for the ECC, but also for Cyprus, as it is another tool for enhancing transparency and efforts to combat money laundering and terrorist financing.
At the same time, we aim to transform the Innovation Node into a Regulatory Sandbox, so that in this controlled environment, start-ups, technology companies and other entities will be able to test their innovative products or services in real conditions under the supervision of the supervisory authority. p>
The introduction of the new ECC exams is expected before the end of the year. These exams will be addressed to the financial information providers of the CIF, who come in contact with investors. Our goal is to ensure that only professionals with knowledge of the relevant regulatory framework will be certified for employment in the investment services sector. & Nbsp; & nbsp; & nbsp; & nbsp;
THE CHANGES TO COME >
What are the most important changes expected in the relevant regulatory framework and the provision of new services in 2022?
Within 2022, the further discussion or adoption of a series of legislative and regulatory regulations at European Union level is expected. Among them is a package of four legislative proposals on combating money laundering and terrorist financing, which take into account new and emerging challenges related to technological innovation. In particular, it includes, among other things, a proposal for the establishment of a European Anti-Money Laundering and Terrorist Financing Authority (AML Authority (AMLA) and a regulation on due diligence with respect to the client and the actual ownership, cryptocurrency service providers or other supervisors, such as Equity Financing platforms. & nbsp;
The European Digital Operational Resilience Act (DORA) is in progress, which aims to ensure that all participants in the financial system, such as CIFs, AIFMs and UCITS management companies , have the necessary safety valves to mitigate cyber attacks and other operational risks. Another important European regulation under discussion is the MiCA (Markets in Crypto-Assets Regulation), which will regulate the initial offering, trading and provision of services of crypto-assets, including the so-called ‘stablecoins’. Furthermore, the proposed European Regulation known as the DLT Pilot Regime will regulate on a pilot basis and for a limited period of time the trading (secondary market) of certain financial instruments issued using DLT. The aim is to draw conclusions for a definitive future settlement.
At the local level, the bill for the regulation and operation of the companies providing administrative services to AIF (fund administrators) has been completed, which is expected to be submitted before the end of the year before the House of Representatives for a vote. The administrator, who is licensed and fully supervised by the ECC, will be able to outsource such services. & Nbsp; & nbsp; & nbsp;
& nbsp; THE CHECK, THE NUMBERS AND THE FUTURE OF THE CAP/p>
Where does the ECC focus its supervisory audits?
Market practices, governance and risk management processes, customer attraction, eligibility requirements, and anti-money laundering issues are among the issues that are under strict control. In particular, on-the-spot checks are carried out to verify the compliance of the supervised and remote checks, ie on a series of documents, the main findings of which are published on the ECC website.
In particular, with regard to the supervision of CIFs, among other things, it will emphasize the conduct of remote controls on a number of CIFs regarding the organizational requirements and the rules of the code of conduct, & nbsp; thematic audits, by sector of activity, to investigate practices that may adversely affect investors and markets, & nbsp; confidentiality checks on customer acceptance, account opening and transaction requirements, & nbsp; controls on the number of CIFs related to the requirements for the protection of customers' money and the requirements for reporting transactions, monitoring of advertisements and the compliance of CIFs with the requirements for capital adequacy and finally monitoring the compliance of CIF number with these requirements, resulting from the MiFIR, EMIR, CSDR, STFR and Securitisation Regulations. & nbsp; Emphasis will also be placed on conducting thematic audits of a number of Managers of Collective Investment Organizations, in the framework of the ESMA Joint Supervisory Action, regarding the requirements for the valuation of the assets of the funds under their management. & Nbsp; & nbsp; Further in 2022 the thematic controls will be completed & nbsp; on cost requirements & nbsp; and UCITS charges, the assessment of compliance of UCITS Management Companies with the findings of audits on liquidity management requirements, costs and charges.
Regarding the Issuers, EKK will focus mainly on their compliance with the obligation to prepare their annual financial report based on the European Single Electronic Format, and emphasis will be placed on increasing the number of ratings of their financial statements. Issuers to determine their degree of compliance with International Financial Reporting Standards.
In cases where the audits reveal non-compliance or weaknesses or omissions are identified, the ECC imposes administrative fines and instructs the supervisors to take a series of measures to correct their internal procedures, regulations and practices, in order to fully comply with their liabilities. From 2020 until today, administrative sanctions have been imposed in excess of € 5 million, of which approximately € 4 million were imposed on CIFs for violating the legislation governing investment services known as MiFID II. & Nbsp; Over the last nine years, fines of approximately € 32 million have been imposed. .
What are the prospects of the CIF sector in particular, for 2022?
The sector recorded a good growth in the previous years, which continues. At the present stage, the licensed CIFs amount to 245, while 48 applications for obtaining a CIF license are under consideration. & Nbsp; Those who have submitted complete data and meet the criteria will obtain the relevant permit. & Nbsp; & nbsp; & nbsp; & nbsp;
What are the main reasons why CIF licenses are suspended?
EKK proceeds to suspend the operating license of a CIF in case there are suspicions of possible non-compliance with the provisions of the relevant law. In these cases, a short period of time is given to the CIF to comply. When the investigation is conducted again and it is found that the company has complied, then a reactivation permit is granted. If the company continues to fail to comply, depending on the data, the ECC either gives a new extension of compliance or proceeds with the complete revocation of its operations. In cases where serious violations of the legislation are identified, the ECC proceeds directly to the full revocation of the operating license of the CIF. & Nbsp;
Were there cases where the Commission revoked the operating licenses of the CIF?
From 2015 until today, ECC has revoked the CIF license 17 times. & nbsp;
UNDER THE SHADOW OF PENALTIES
Are there any difficulties in the implementation and supervision that the Hellenic Capital Market Commission is called upon to manage with regard to the sanctions imposed on Russia?
The sanctions imposed so far are complex and include various issues that need to be addressed. That is why the ECC from the first moment of imposing the first sanctions is in close contact with the Ministry of Finance and other local competent authorities as well as relevant European regulatory authorities, taking all necessary measures to ensure the smooth operation of the capital market in Cyprus. and the EU. & nbsp; In particular, the ECC has issued a number of circulars to the supervised entities in order to inform them about compliance issues with the sanctions and to collect information regarding their business relationships with persons subject to sanctions and the measures they take. Based on the information received by the ECC, the sanctions have affected a number of supervised entities, and depending on the case, proceed with the provision of guidance or supervisory action as deemed necessary. & Nbsp; & nbsp; & nbsp; & nbsp;
CRYPTO BEGINS THE PRINCIPLE
Will we soon see cryptocurrency service companies under your supervision?
The ECC is the supervisory authority for Cryptocurrency Providers, which it supervises only in relation to their compliance with the prevention of money laundering and terrorist financing. & Nbsp; So far 18 applications have been submitted. One company has been approved by the ECC, but has not yet activated its license while the examination of another 7 applications is underway. The electronic Register of Crypto Assets Services Providers will be launched very soon. & Nbsp; It is particularly important for investors to be aware that they do not have access to protection or protection at this stage, as cryptocurrencies and related products and services do not fall within the existing scope of protection under current EU financial services rules. Recently, as EKK, we participated in the joint campaign of the European Financial Supervisory Authorities regarding a series of warnings to consumers about the dangers of cryptocurrencies. & Nbsp;
From the June issue of Insider magazine
