Cyprus Securities and Exchange Commission Warns Investing Firms for AML Non-Compliance

Richard M.

October 25, 2023

3 minutes read

The Cyprus Securities and Exchange Commission (CySEC) warned the Cyprus Investment Firms (CIFs) and the board members, urging them to comply with the AML measures and execute their roles and accountability to uphold all regulatory standards.

The CySEC warns financial firms to comply with the AML regulations, including board members responsible for oversight of the compliance measures. According to the commission, there are various loopholes in firms’ AML screening systems and controls. They emphasised on the board members’ role in upholding international standards to combat money laundering and terrorist financing. The Commission stated in the warning to “enhance their performance and promote a culture of integrity and high ethical standards,” as the previous research shows shortcomings in terms of compliance.

The commission previously discussed on many platforms about the loopholes in the financial sector, but this warning is the introduction of strict supervision on the measures. CySEC stressed that there would be no tolerance for non-compliant companies with the regulations. CySEC chairman, George Theocharides, stated, “Cyprus is open for business, but only to the ones that take into consideration the best interest of their clients by fulfilling at all times their regulatory requirements. This is the basis for a healthy, strong market, with new products and services deploying financial technology and innovation.” He also emphasised that they will arrange webinars and workshops for the local investing firms, board members, and small businesses to depth knowledge about identity verification and investor protection.

Theocharides added the importance of outlining the international regulations to secure cross-border financial activities. CySEC will design rigorous obligations; only adequate compliance firms can survive the fines in these strict compliance structures. Theocharides, explained, “CySEC takes any misconduct by supervised entities seriously and firmly believes that through intense supervision and continuous monitoring, investors’ protection and market integrity will be enhanced. To this end, CySEC is determined to bring non-compliant operations to a halt.”

Theocharides revealed that the swift advancements in the digitalization of financial services and the growing utilization of social media for investment promotion afford retail investors convenient access to financial products that need varied risk assessment, which protect them from financial scams.

CySEC is also investing in human resources and the latest technology to strengthen the supervisory infrastructure, enhancing its efficiency and yielding accurate results.

Potential personal responsibility for the Ultimate Beneficial Owners (UBOs) considered accountable for the CIF’s non-compliance is one of the stricter enforcement and monitoring methods implemented by CySEC. Additionally, there are presently many legal procedures against shell companies. The commission of CySEC underlines the statement, “CySEC has also moved to reject applications for acquiring a CIF license, withdraw licenses, and suspended licenses until specific actions were taken to remediate weaknesses or omissions identified during supervisory checks.”

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