The Cyprus Securities and Exchange Commission (CySEC) has redefined the threshold criteria that determines a ‘significant CIF’, in light of the new Prudential Law. The new circular (c487) amends the previous one  (c228).

Definition of a “significant CIF” for the purposes of Investment Services Law

A CIF that has on and off-balance sheet assets  on average greater than EUR 100 million over the four‐year period immediately preceding the given financial year.

Governance requirements for “significant CIFs”

Board of Directors shall not hold more than one of the following combinations of directorships at the same time:

• one executive directorship with two non-executive directorships;
• four non-executive directorships

CySEC also requires the establishment of a nomination committee, a remuneration commitee and a risk committee.

Frequency of assessment

CIFs should, within four months from the end of each of their financial year, assess whether they meet the definition of a‘significant CIF’ . If a CIF is now within the threshold criteria stated above then it should:

• comply with the requirements that apply to a ‘significant CIF’ as per the Investment Services Law,
• comply with the relevant requirements of the Prudential Law and
• forthwith inform CySEC accordingly and submit its new organisational structure through CySEC’s portal.

This assessment is considered as valid until the next assessment is made for the following year. We note that annual assessments should always take into consideration the four-year period immediately preceding the given financial year.

Where a CIF has been in business for less than four years, it shall use its on and off-balance sheet assets for the periods available. If it meets the definition of a “Significant CIF” ,must make arrangements to achieve compliance with the requirements mentioned above.

How can CX Financia help you achieve compliance?

If you are looking for a way to strengthen and organize your Company’s compliance mechanism and provide your employees with the necessary training to help them protect your entity from hefty fines  you should reach us.  We look forward to being of value in covering your needs on your compliance program or personnel training.

We work with Compliance Officers to deliver results in strategy and target operating model definition, organizational transformation and projects.

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