Financial Market, Protection of Investors and Investments
Christina Panagiotou
Senior Director
Member of the Board
K. Treppides & Co Ltd
The financial markets regulator i.e. Cyprus Securities and Exchange Commission (CSE and/or Commission) has made an excellent effort to discipline the market in Cyprus, especially CFD providers. The European Securities and Markets Authority (ESMA) and several competent national authorities of the Member States have expressed their concerns regarding the practices adopted by Cypriot CFD providers. Responding to the relevant concerns expressed and to restore the reputation of the Cypriot financial market, Cypriot Cypriot Financial Markets took a number of preventive and corrective measures to address the challenges it faces, including strengthening its supervisory activities.
The relevant measures were mainly aimed at strengthening supervisory activities and solving a number of common bad practices adopted by Cypriot CFD providers when offering services on a cross-border basis, threatening investor protection. Among the measures taken, CySEC has imposed historically high fines and additional regulatory expectations, which further increase the high financial needs of financial market participants.
Beyond the obvious, however, there are hidden issues that undermine the integrity of the market. Considering the increasingly demanding market, and in an effort to maintain their financial viability, CFD providers when choosing between the main service providers, intend to choose the most economical solution, taking less into account their integrity and reliability. Undoubtedly, this leads to divergent approaches to the range and quality of services offered, also distorting the conclusions presented to the investment firms themselves and to the regulatory authority the Cyprus Securities and Exchange Commission (EKK).
Indicatively, inconsistencies were observed in the market regarding CASS audit reports – the reports of the external auditors for which article 8 of the delegated Directive (EU) 2017/593 provides – the commonly called “Suitability Report” in Cyprus. Such market inconsistencies significantly expose the safety of clients' funds and essentially threaten investor protection.
The regulatory bodies (SELK and CySEC) had to work together, with the aim of eliminating these inconsistencies and achieving a fair depiction of the real risk in the respective reports. Such information is of vital importance both for the respective Boards of Directors of investment companies to deal with the identified problems in a timely manner, but also for a better understanding of the hidden risks for investors from the regulatory body (CSE).
Considering the above, it is very interesting whether we are heading towards the consolidation of the financial market in Cyprus or an imminent closure of some market participants. What are we really looking for is a shrinking of the market or a focus on identifying and managing hidden risks?
K. Treppides & Co Ltd, is the largest independent consulting company in Cyprus, with an established international presence and offices in Great Britain and Malta. Today, the workforce of K.Treppides & Co Ltd, amounts to 200 professionals. It offers a full range of consulting, tax, accounting services to groups, companies and investors operating on an international basis in various financial and business sectors. The Company, which started operations in 1985, has 36 years of experience and an elite group of experienced executives who can guide and assist investors and businesses during the process of consolidation and subsequent investment activity both in Cyprus and internationally .
Contact Details:
cpanayiotou@treppides.com
www.treppides.com
< strong>Nicosia: Treppides Tower, Kafkasou 9, Aglantzia, CY 2112, Nicosia, Cyprus
Limassol: Andrea Kariolou 38, Ayios Athanasios, CY 4102, Limassol Cyprus
London: 7 Milner Street, London SW3 2QA
Malta: Level 1, Somnium, Tower Road, Swatar, Birkirkara BKR 4012
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