INSIGHTS


Three tier leverage proposed by CySEC for retail clients

On the 30th May 2019 The Cyprus Securities and Exchange Commission (CySEC”) issued a consultation paper on the imposition of National Permeant Measures in Relation to the Marketing, Distribution and Sale of Contracts for Differences “CFDs” in line with the European Securities and Markets Authority’s (‘ESMA’) temporary intervention measures – which are due to lapse in July 2019. The measures which are subject of CySEC’s consultation, include..

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Changes to the “Cyprus Investment Program”. New criteria will apply starting from the 15th May 2019 for investors seeking Cyprus citizenship

he Council of Ministers has approved on Wednesday,  13 February 2019 , a number of changes in regards to the popular “Cyprus Investment Programme” by which investors obtain the Cyprus citizenship. The logic behind such changes according to the Minister of Finance, is to target and encourage the creation of an eco-system of business innovation as well as to facilitate the creation of finance for affordable housing through the mandatory contribution to the Cyprus Land Development Corporation whilst such changes also aim to prevent any overgrowth of the real estate sector through such investments. The main changes, are as follows :

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Modernisation of the laws and procedures of the Registrar of Companies

In the context of modernization and reorganization of the Department of Registrar of Companies and Official Receiver, the Cyprus Parliament has voted a number of amending Laws and Regulations which were published in the Official Gazette of the Republic on the 18th of December 2018. Full digitalisation, amendment of legislation, redesign of the Registrar forms, and revision of fees for the promotion of electronic submission of forms are some of the new characteristics introduced by the new amending Legislation and Regulations aiming at the restructuring of the Department of Registrar of Companies with a view to reduce the time of processing, simplify and expedite the various processes and services provided by the Companies Registrar Department, making it more efficient, and ensure the adequate and timely updating of the register kept by the Companies Registrar and provide high quality services to the public and the business world, which will help attract investment.

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Revised definition of “Shell Companies” by the Central Bank of Cyprus and Practical Solutions to Effective Banking

On the 02 November 2018 the Central Bank of Cyprus issued a circular to all credit institutions under its supervision revising the definition of “shell companies” and the corresponding treatment of such companies under their earlier circular this year dated 14 June 2018.  The rationale and objective of the original circular, said to be orchestrated by foreign correspondent banks, was to combat money laundering and tax evasion facilitated by the use offshore entities. While the underlying objective of the said circular is valid and justifiable, its practical application was viewed by many as a case of destroying  the entire garden for killing some weed.  The arbitrary definition set, ignorant of commercial realities, in combination with extremely risk averse, “check list” approach adopted by Cyprus banks and individual bankers has in practice led to classifying legitimate businesses as “shell companies”  thus treating legitimate, high caliber businessmen as common criminals. This has an extremely adverse effect on Cyprus as an international business center, and basically unwinds what the stakeholders of the professional services industry have for decades tried to achieve, including the government and the banks. This new circular could be said to allow somewhat more flexibility for common sense, without prejudice of course to existing obligations under the anti-money laundering legal and regulatory framework. (...)

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Relaunch of Fast Track Application Process for Cyprus Investment Firms

On the 12th September 2018, The Cyprus Securities and Exchange Commission (“Cysec”) announced its decision to recommence the fast track process for applicants wishing to obtain a licence for Cyprus Investment Firm (“CIF”) in accordance with Investment Services and Activities and Regulated Markets Law of 2017 (Law 87 (I)/2017). 

In accordance with the applicable Announcement issued by Cysec on the 2nd November 2015, the indicative time frame for Cysec to respond to all fast track CIF applications is 8 weeks.

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Cyprus Funds made easy! Alterations in the legal framework regulating the Cyprus Funds Industry.

After ratification from the House of Representatives’ plenary session on Tuesday on the 10th of July, the legal and regulatory framework for collective investment funds is remodelled and upgraded, while investors’ rights are protected at the same time. More specifically, the new bills regarding alternative investment funds will boost the fund industry in Cyprus, as new ways for registration of different kind and types of funds in Cyprus which did not exist so far is introduced now providing investors a range of options.

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Vital Verification Steps Before Buying a Property in Cyprus

This article describes the necessary legal research requirements, also known as the “due diligence” exercise that must be undertaken on behalf of an intended purchaser in connection with the potential purchase of property in Cyprus.  It is imperative for intended purchasers and their advisers to do the following checks before purchasing a property or even commit to purchasing a property by paying a reservation fee or deposit.

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Battling with the uncertainties of CFDs and Cryptocurrency in 2018

In the new age of virtual currency trading, reports indicate that the global value of the cryptocurrency market surpasses $600 billion. Although the markets have seen a spiral momentum, the large businesses continue to thrive, leaving the midsize/small investment brokerage firms under struggle with the harsh impositions that are continually enacted by Cyprus Securities and Exchange Commission (“Cysec”) and The European Securities and Markets Authority (ESMA). The below information evaluates and explores the current restrictions that Cyprus Investment Firms (“CIFs”) are currently facing regarding Contracts for Differences (“CFDs”) and CFDs relating to Virtual Currencies

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Obligations of Cyprus Investment Firms to Ensure the Safeguarding and Segregation of Client Funds

The below information is based on Law 114 (I)/2007 which provides for the Provision of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and other Activities (as amended) (“Law”) and further material provided by the Cyprus Securities & Exchange Commission (“Cysec") which fully explains and evaluates the necessary requirements of a Cyprus Investment Firm (“CIF”) for the safeguarding of client funds.

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The Legal Aspects of Issuing Cryptocurrency

Dominating in today’s business media is the matter of cryptocurrencies, “Bitcoin”, “Litecoin”, “Ethereum”, rollercoaster price fluctuations and the constant new issuances of cryptocurrencies all around the world, now becoming a very popular phaenomenon. There were a number of issuances of cryptocurrency through what is called an “Initial Coin Offerings” or “ICO” which managed to raise great amounts of capital without dealing with any of the legal or regulatory constraints applicable to the customary Initial Public Offerings (IPO) of securities or complying with any other capital-raising restrictions.  The popularity of the issue seems to stem from the excitement around the abrupt appreciation in value, caused by the forces of limited supply and increased demand, however there could be substantial underlying merit in being able to raise funds through cryptocurrency without facing the usual regulatory constrains, making cryptocurrencies an extremely appealing fundraising method, both for businesses and investors. The problem, however, is that cryptocurrencies involve a great deal of uncertainty and also impose a great number of risks somewhat attributable to the lack of specific legislation regulating their nature and operation. The present publication is concerned with the current legal aspects that must be taken into account in connection to issuing a cryptocurrency in or from Cyprus.

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