A Cyprus Investment Firm (CIF) is licensed and supervised by the Cyprus Securities and Exchange Commission (CySEC) regarding the provision of investment services, the exercise of investment activities, and the operation of regulated markets.
The ever-changing regulatory landscape, the stringent regulations, and the highly sophisticated infrastructure propound a challenge for CIFs to obtain and manage their license.
A lack of understanding of the policies and procedures can lead to mismanagement and consequently regulation breaches, penalties, and even litigation.
Requirements For a CIF License
- Be incorporated in Cyprus.
- Four (4) directors; two directors acting as executives and two non-executives; at least three (3) of them must be Cyprus residents; Directors must demonstrate knowledge and experience and must pass the “fit and proper” test of the CySEC.
- Local resident staff members shall be hired on a full-time basis to fulfil the key functions of the Company. Depending on the license selected, a minimum number of personnel must be hired.
- The Company must have a fully operational office in Cyprus.
Capital Requirements For Obtaining a CIF License
- €75,000 for Reception & Transmission, Execution of orders on behalf of clients, Portfolio management, and Investment advice without authorization to hold clients’ funds.
- €150,000 for an STP License, which includes Reception & Transmission, Execution of orders on behalf of clients, Portfolio management, and Investment advice.
- €750,000 for a Market Maker License, covering Reception & Transmission, Execution of orders on behalf of clients, Portfolio management, Investment advice, Underwriting and placing of financial instruments on a firm commitment basis, Dealing on Own Account, and Operation of a Multilateral Trading Facility.
To prepare an application to CySEC for a CIF license, the following are required:
- A comprehensive business plan.
- An internal operation manual, including Anti-Money Laundering Procedures.
- Clearly defined policies and procedures ensuring compliance with all legal obligations.
- An independent compliance unit staffed with qualified individuals.
- Organizational and administrative structures designed to prevent conflicts of interest.
- A distinct risk policy, implemented and managed by a separate risk management unit.
- Membership in the Investment Compensation Fund for Clients and adherence to its obligations.
Employees providing investment services and acting as Compliance Officers must:
- Possess the necessary knowledge and expertise for their assigned responsibilities.
- Be registered in the public register maintained by CySEC.
CySEC’s application fees:
- €7,000 upon submission of the CIF application.
- €3,500 upon submission of an application for license extension, with fees varying based on the license type and extension.
CySEC’s annual fees:
- A fixed charge ranging from €5,000 to €10,000, depending on the services provided.
- A turnover-based charge for turnovers exceeding €500,000:
- 0.75% for turnovers between €500,001 and €1,000,000
- 0.1875% for turnovers between €1,000,001 and €5,000,000
- 0.1125% for turnovers between €5,000,001 and €10,000,000
- 0.0975% for turnovers exceeding €10,000,001
These fees are calculated based on the annual audited financial statements.
How can CX Financia help?
Whether an Asset Manager, IB, EMI, PI, Broker, or a Market Maker institution, CX Financia can provide an integrated, comprehensive solution to Cyprus Investment Firm (CIF) licensing.
Our full suite of services includes:
- Consulting services
Our team will provide guidance and advice on structuring your business to meet regulatory requirements. We’ll design and implement a project plan based on your company’s requirements and goals, based on our experience, and backed by our research.
- CIF License
From collecting information to liaising with local regulators, we will prepare, draft, and submit all licensing applications from start to finish.
- Ongoing support
Our team of professionals will work together with you to identify and manage risks to allow all parties to move forward with greater confidence and transparency.
With a growing array of services available, we can work with you to determine the right solution for your company. Our client base includes a diverse range of investment firms such as Brokers, Investment Advisors, Portfolio Managers, Asset Managers, and Market Makers.
We can work with you to help you obtain and manage your CIF license.