The Law which provides for the provision of investment services, the exercise of investment activities, the operation of Regulated Markets and other Related Matters (implementing MiFID) Law 144(I)/2007 provides the legal framework for the provision of investment services (including non-core services) as well as for the registration, regulation of operations and supervision of CIFs.
Investment services include any of the following services:
- Reception and transmission, on behalf of investors, of orders
- Execution of such orders
- Dealing for own account
- Managing of investment portfolios
Non-core services include any of the following services:
- Safekeeping services
- Safe custody services
- Granting of credits or loans to clients
- Financial advice
- Services connected to underwriting
- Investment advice
- Foreign-exchange services
CIFs must be licensed by the CySEC, which is the relevant regulatory and supervisory authority. In this respect, a written application to the CySEC must be submitted and accompanied by a number of documents. Some key documents that should accompany the application include:
- business plan
- Articles of Association
- an excerpt of the criminal record, certificates of non-bankruptcy and resumes of the members of the Board of Directors, the executives and shareholders possessing a qualifying holding, as well as their answers to a questionnaire issued by CySEC
- internal regulations (operations manual)
- organisational structure
- description of the computer network and electronic infrastructure
- draft regulations for the prevention of the legalisation of the proceeds of criminal activities
After the granting of the authorization, the CIF must comply with the ongoing obligations provided in the law and the relevant CySEC Directives.
In case that a banking institution (defined as such under the Banking Law) wishes to provide investment services in Cyprus then a relevant authorization is also granted by the Central Bank of Cyprus provided that the additional criteria laid by the Central Bank of Cyprus are fulfilled.