INSIGHTS


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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Key Changes under the 4th Anti-Money Laundering Directive

The EU Commission, with a view to combat money laundering and terrorist financing and further strengthen the currently applicable anti-money laundering legislation making it at the same time more effective, has introduced in May 2015 the fourth Anti-Money Laundering Directive. The 4th AML Directive was expected to be implemented by the Member States by the 26th of June 2017, however, only a very small number of Member States have fully implemented the new AML Directive so far (more specifically UK, Germany and Denmark).  In anticipation of the imminent amendments to the currently applicable Cyprus legal and regulatory framework, the purpose of the present publication, is to briefly present an overview of the key changes the 4th AML Directive is about to bring, the challenges on Members States for its implementation and the expected, quite burdensome, requirements on obliged entities.

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Key Changes Under the New Markets in Financial Instruments Directive (MIFID II)

Following the serious economic crisis of 2008, the European Commission (EC) considered as being necessary the recast of MIFID I and the introduction of an amended version of it, the MIFID II. The MIFID II along with the Markets in Financial Instruments Regulation (MIFIR) constitutes the new legislative framework regulating the trading of financial instruments across the EU and the operation of financial institutions providing financial services within the European Union (EU). MIFID II will be implemented from 3 January, 2018 and its main objectives are the attainment of a greater degree of harmonisation by establishing “a single rulebook applicable to all financial institutions within the internal market”; the significant increase of investor protection; the minimisation of the risks of a disorderly market; the increased efficiency of financial markets and the decrease of superfluous costs for the participants. Moreover, the new MIFID II aspires to encourage competition across the EU financial markets and introduce reinforced supervisory authorities ensuring compliance with the relevant legislative regulations. The purpose of the present publication is to briefly explain what are the key changes MIFID II is about to bring and how these changes will contribute to the realisation of its objectives.

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Obtaining a Legal Entity Identifier (LEI) in compliance with MiFID II

In light of the implementation of the Markets in Financial Instruments Directive 2014/65/EU (MiFID II) and the accompanying Markets in Financial Instruments Regulations 600/2014/EU (MiFIR), in an effort to achieve further transparency and improvement of the functioning of the internal market of the European Union, all entities that must comply with the transaction reporting obligations under MiFID II should apply and acquire their own Legal Entity Identifier (LEI). Such obligation is paramount for the relevant entities, as the reporting of reference data of the transactions under MiFID has already begun and entities who do not obtain their LEI will not be able to trade on behalf of their clients and/or otherwise transact with relevant parties as of the 3rd of January 2018. This publication provides further information on the nature of the LEI, its purpose and effect, the reported information, details on who must obtain a LEI and information on obtaining a LEI by Cypriot entities.  

 

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Damages for loss of goodwill in the context of eviction of tenants from a property subject to Cyprus Rent Control

A tenant occupying a property which is subject to the Cyprus Rent (Control) Laws of 1983, as amended (the “Law”) may, under certain circumstances, claim damages for loss of goodwill in the event of a successful eviction by court order. This publication examines the legal and practical considerations in connection to the said subject matter and specifically discusses: all preliminary considerations, the conditions for eviction, the statutory prescribed compensation, the possibility of damages for loss of commercial value (goodwill),  the requisite legal elements in order to qualify for such compensation, as these arise from applicable case law,  and other practical considerations to be taken into account in the context of a possible out-of-court settlement, such as the length of eviction proceedings in Rent Control Court.

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Key Benefits and corresponding Obligations arising from the General Data Protection Regulation (GDPR)

The European Commission, with a view to further safeguard and protect European citizens’ privacy and personal data in relation to transactions that take place within the European Union (“EU”), has adopted on the 27 April 2016 the General Data Protection Regulation (“GDPR”). The GDPR is expected to take effect from 25 May 2018 and will become directly applicable to all EU Member States, thus replacing the Data Protection Directive of 1995 (Directive 95/46/EC) and becoming binding and directly enforceable in all member states. The purpose of the present publication is to briefly present an overview on the key changes that the new GPRD is about to bring and describe the most significant rights the GDPR provides to EU citizens and the corresponding obligations to organizations which control or process personal data.

 

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Cyprus Tax Residency Now in 60 Days

Up until recently, in order for a person to qualify as a Cyprus tax resident, he had to spend at least 183 days of the calendar year in Cyprus. This is no longer the case as the parliament passed a bill on the 14th of July, 2017 pursuant to which any person that remains in Cyprus for at least 60 days during the tax year can qualify as a Cyprus tax resident provided that certain conditions and criteria are met.

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Effective Techniques for Negotiating Commercial Agreements

 It is no understatement that negotiation is a skill and an art form especially for the multi-issue level negotiation required in the context of commercial agreements.  Effective negotiation can be the difference between a great deal and very bad one. Below is a handful of negotiation techniques that, when properly applied, can facilitate a better negotiated outcome, both in the context of commercial agreement but also in every day negotiations.

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