The Cyprus Securities and Exchange Commission (CySEC) has issued Circular C487 (‘the Circular’) informing Cyprus Investment Firms (‘CIFs’) on the revised threshold criteria that determine a ‘significant CIF’ for the purposes of the Investment Services and Activities and Regulated Markets Law of 2017, as amended, (‘the Investment Services Law’) in light of a new prudential framework for investment firms (IFR/IFD). It should be noted that, Circular C487 updates and replaces Circular C228 that was issued on 26 July 2017, in relation to the matter.
According to the Circular, a CIF should be considered a ‘significant CIF’ where its on and off-balance sheet assets are on average, greater than EUR 100 million over the four‐year period immediately preceding the given financial year (‘the threshold’).
CIFs should assess/decide within four months from the end of each of their financial year, whether they meet the threshold to become a ‘significant CIF’ for the purposes of the Investment Services Law and for the purposes of sections 22(4) and 27 of the Prudential Law. This assessment is considered as valid, until the next assessment is made for the following year. Where a CIF has been in business for less than four years, for the purposes of the above assessment it shall use its on and off-balance sheet assets for the periods available.
CIFs that after the abovementioned assessment are qualified as ‘significant CIFs’ must make arrangements to establish and have in place sound, effective and comprehensive strategies, processes and systems to achieve compliance with the following requirements:
| Requirement | Reference |
| Limitations on Directorships | Section 9(4) of the Investment Services Law |
| Establishment of Nomination Committee | Section 10(2)(a) of the Investment Services Law |
| Establishment of Risk Committee | Section 22(4) of the Prudential Law |
| Establishment of Remuneration Committee | Section 27 of the Prudential Law |
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