The Cyprus Securities and Exchange Commission opened in 2001 after the country's government adopted the Securities and Exchange Law. The Cyprus regulatory body has state status. The main purpose of CySEC is to regulate and control the activities of companies providing investment services in Cyprus. The regulator carries out its activities by issuing licenses to financial market participants and subsequent monitoring of their work.
What is CySEC and what functions does the regulator have?
I will briefly try to describe what kind of organization this is and what it does. CYSEC from English - Cyprus Securities and Exchange Commission - Cyprus Securities and Exchange Commission.
The official website of CySEC clearly defines the mission of the regulator: providing effective supervision to ensure investor protection and development of the securities market.
Today the Commission performs the following functions:
- Controls the operation of the Cyprus Stock Exchange and the transactions carried out on it, its listing companies, brokers and other trading participants (licensed investment companies, collective investment funds, etc.).
- Provides licenses to carry out activities.
- Imposes administrative sanctions and disciplinary actions on brokers and other participants.
History of creation
CySEC was formed in 2001 under Section 5 of the Cyprus Securities and Exchange Law as a public government corporation.
When Cyprus officially became part of the European Union in 2004, CySEC automatically became subject to the rules of the new EU MiFID Directive, which allowed all companies registered in Cyprus to provide services in European markets. However, joining the EU and adopting the euro significantly changed the structure of financial regulation that CySEC created as a tax haven.
Commission structure
CySEC is governed by a Council of five members - the Chairman, the Deputy Chairman and three others, who are appointed by the Council of Ministers on the proposal of the Minister of Finance. In addition, the Governor of the Central Bank of Cyprus is a non-voting member of the Commission's council.
The regulator’s commission itself includes 11 departments that are in charge of the following areas:
- Strategy and international relations.
- Issuers.
- Licensing.
- Anti-money laundering.
- Supervision of general procedures.
- Investigation of violations.
- Legal Department.
- Administration and staff.
- Information Technology.
- Risk Assessment and Statistics Department.
- Internal audit.
Who does the regulator control?
CySEC monitors the transactions of the following entities:
- Cyprus Investment Firms (CIF).
- Cyprus branches of investment firms (IFS) of other EU member states.
- CIF affiliated companies.
- Regulated hedge funds (UCITS) and related entities.
- Administrator companies are trusted and fiduciary providers.
- Alternative Investment Fund Managers (AIFM).
- Regulated markets.
- Central Clearing House (CCP).
- Depositories.
In the near future, the regulator CySEC will also be the supervisory authority for alternative investment funds (AIFs).
Based on what laws does it work?
The main responsibilities, structure and powers of the Commission are set out in Article 25 of the Securities and Exchange Law (L73(I)/2009).
In addition, the Commission also has powers and responsibilities under the following laws:
- Public Offering Act and Prospectus 2005.
- Anti-Illicit Trafficking and Market Manipulation Act 2005.
- Takeover Act 2007.
- Requirements for disclosure of information (on securities admitted to trading on a regulated market) 2007.
- The main tasks and responsibilities of the organization.
The law also, in addition to its main functions, entrusts the Commission with the following responsibilities:
- request and collect information;
- demand the cessation of practices that are contrary to securities market laws;
- apply to the competent court to order the detention, prosecution, freezing or prevention of alienation of property or termination of a transaction with assets;
- issue regulatory directives and decisions;
- cooperate and exchange data with other government departments of Cyprus, as well as with competent foreign authorities and organizations.
Form for submitting funds to CySEC
To receive compensation, the client needs to do the following:
- Fill out the complaint form - span style=»color: #3366ff;»>https://www.cysec.gov.cy/en-GB/complaints/tae/application/.
- Specify a broker who does not refund money.
- Attach existing files and screenshots of communications with the broker, correspondence, court documents (if any) and other documents that will help resolve the dispute.
*Use only English or Greek when completing and submitting documents to the ICF Investor Compensation Fund.
The mission of this independent supervisory government agency, whose area of responsibility is the market for investment services and transactions with transferred securities, is outlined as follows:
Effective supervision of the provision of investor protection and the healthy development of the securities market.
This regulator was created in 2001, and the concept of its activities is defined as:
formation of a securities market representing the safest and most attractive investment direction.
Main vectors of activity of the supervisory authority CySEC
:
- studying applications for licensing the activities of controlled entities;
- suspension and revocation of issued licenses;
- control and regulation of the activities (including transactions) of the Cyprus Stock Exchange;
- investigation of situations related to his duties;
- aggregation of information required for its activities;
- imposition of legitimate sanctions (administrative or disciplinary);
- requirement to cease activities that are in conflict with securities market laws;
- filing lawsuits to suspend operations with assets;
- regulatory decision making;
- cooperation and exchange of information materials with other competent authorities.
The subjects of CySEC regulatory activities are:
- investment firms registered in Cyprus (CIF);
- branches of investment companies from EU countries registered in Cyprus;
- agents associated with CIF;
- obligations for collective investment in securities, as well as related management companies (including their Cyprus branches from EU countries) and agents;
- trusted management service providers;
- regulated markets;
- investment fund managers;
- over-the-counter trading depositories.
You can find out whether a particular broker has a real CySEC license or whether the information on its availability is false by entering its name in the search bar on the regulator’s website https://www.cysec.gov.cy.
How are brokers licensed?
Registering a company in Cyprus on your own is quite problematic. Therefore, there are many service companies that provide a full range of services, including the collection and submission of documents to CySEC. In any case, the company will certainly have to go through several mandatory stages.
Requirements for obtaining a license
- The company's head office must be located in Cyprus.
- A fee must be paid to the Central Bank; its amount will depend on the type of activity of the company.
- All procedures, including internal audit, must be established.
- A mandatory business plan outlining the company's growth prospects.
- High professional level of employees (you will have to prove that the local population is unable or unwilling to take this position).
- Legality of the company’s authorized capital and further investments in the business.
License cost
Filing an application to CySEC, which does not include translation and registration costs, as well as other direct costs, costs 59 thousand euros. But this amount only covers all necessary meetings between employees in Cyprus and Commission employees.
Sanctions against violators
The CySEC regulator can impose sanctions and collect fines (albeit minor) if:
- records of open trading accounts are not kept or kept improperly – from 10,000 euros;
- the terms of payment to investors were violated - from 5,000 euros;
- failure to comply with the broker's charter - from 5,000 euros;
- broker does not respond to client requests - from 5,000 euros;
- underlying assets are not fixed - from 5,000 euros;
- the broker failed to submit reports on time - from 5,000 euros.
Brokers regulated by CySEC
As of October 2021, 250 investment companies were registered with CySEC (some are undergoing re-registration). Among Russian ones, these are mainly Forex brokers, but there are also large investment companies, such as Finam.
Below is a list of brokers licensed by the Cyprus Commission who operate on the Russian market:
- Exness.
- NordFX.
- FxPro.
- Grand Capital.
- TeleTrade Group of Companies.
- IFC Markets.
- HY Options.
- 24option.
- HotForex.
- Finpari.
- ForexMart.
- Alpha Forex.
- FXPRIMUS.
- Swiss Markets.
- LiteForex.
- TrioMarkets.
Verdict
Summing up the results of the review is a verdict for the accused. The facts revealed during the analysis of the pseudo-broker's website - 2 months of age, lack of regulation, false statistics - fully confirm the objectivity of real reviews about Nec-Sc, which constantly appear on the RuNet. Be careful: the international broker Nec-Sc, as scammers present themselves with absolutely no evidence, is a 100% scam.
Do you want to really make money online? Start small, check out the sections:
- Training for beginners
- Free signals
- Trading Strategies
- Reviews about earnings
Brokers that have abandoned regulation
23 companies voluntarily abandoned the regulator’s license (suspended it) after CySEC introduced new rules.
These are mainly binary options traders:
- Asset Management Advisory Services (AMASS) Ltd.
- BO Tradefinancials Ltd.
- Blackwell Global Investments (Cyprus) Ltd.
- Dragon Options Ltd.
- Glestimon Management Ltd.
- Glistentree Holdings Ltd.
- Gobaba FX Cy Ltd.
- Grow Wealth Assets Ltd.
- Hellenic Bank (Investments).
- Lucro Capital Ltd.
- Newcept Financial Markets (EU) Ltd.
- NKB Investments Limited.
- Ouroboros Derivatives Trading Ltd.
- Plasma Enterprises Ltd.
- Reserve Invest (Cyprus) Ltd.
- SA&PM (Cyprus) Limited.
- Saxo Capital Markets CY Limited (ex FT World Ltd).
- Starfish Markets (Cy) Ltd.
- Topic Markets Ltd.
- UPM Ltd.
- Vinson Financials Ltd.
- Xenon Capital Partners Ltd.
List of brokers with sanctions
There are also outright violating companies whose licenses were canceled by the Commission (withdrawn) or suspended for non-compliance with the rules (suspended). Although this is unlikely to console deceived investors.
| PM Investment Capital Limited | Pulp International Business Ltd | Trademarker (Cyprus) Ltd | UBFS Invest Powered By Moneychoice Brokers Ltd | UFS Capital Limited (ex Exscale Investments Limited) |
| License Number: 243/14 (Withdrawn) | License Number: 095/08 (Withdrawn) | License Number: 151/11 (Suspended) | License Number: 239/14 (Withdrawn) | License Number: 137/11 (Withdrawn) |
| License Date: 07/21/2014 | License Date: 06/11/2008 | License Date: 08/08/2011 | License Date: 06/24/2014 | License Date: 04/19/2011 |
| Date of Termination: 06/07/2015 | Date of Termination: 16/03/2015 | Date of Termination: 04/25/2016 | Date of Termination: 28/11/2016 | Date of Termination: 02/02/2015 |
| Company Registration Number: 317840 | Company Registration Number: 232026 | Company Registration Number: 282594 | Company Registration Number: 326309 | Company Registration Number: 270917 |
| Telephone: 25 366 324, Fax: 25 366 326 | Telephone: 25 028 236, Fax: 25 028 235 | Telephone: 22 261 700, Fax: 22 262 003 | Telephone: 25 253 213, Fax: 25 342 634 | |
| Country: Cyprus | Country: Cyprus | |||
Useful articles
We destroy myths about “promoted” forex traders in Russia and the world
How can you make money quickly in Moscow?
Reviews about working as a trader: how beginners are scammed
This is data from the official website of the Commission on the termination of licenses. However, in the News and Warnings section you can find information about minor violations of the rules by other companies. Please note that many Russian brokers work through Cypriot companies and their names are different.
Loud scandals with the regulator
CySEC is perhaps the most scandalous EU regulator. Over the past 5 years, there have been several glaring cases involving corruption and deception of investors by companies holding a Commission license.
IronFX
At IronFX, the first signs of problems appeared in 2014. Traders began to complain that the broker was not paying out money. Six months later, CySEC issued a small fine (335 thousand euros), the company continued to operate under a different name. Even investors’ appeals to the Financial Ombudsman Service did not help: not a single client, as far as I know, received compensation.
Pantheon-Finance
Panteon Finance is one of many pyramids created by Kazakh businessman Pavel Krymov in the CIS.
In February 2015, TsRFIN announced the blacklisting of Panteon-Finance LTD because the CySEC regulator received many complaints from defrauded investors. But I still see reviews online of a non-existent company. Back in October 2015, the company lost the license of another miracle regulator, IFSC (Belize).
And many others
Mr. Krymov has defrauded thousands of investors for over 15 years through various fraudulent projects, including Forex Trend, AGAM, Private FX, Panteon Finance, Questra World and dozens of others. It is strange that regulators such as CySEC are unable to protect depositors. On the other hand, saving a drowning person is the work of the drowning person himself.
Insurance Fund for Victims
CySEC regulation of a broker has some advantages for a simple trader or investor. The fact is that many brokers, in order to grow their own reputation in the eyes of their clients and investors, are simply forced to find a regulator and undergo its certification. But the positive thing is that in order to become a participant, the company has to contribute a certain amount to the compensation fund, which is a kind of guarantee that the regulator will be able to compensate for losses to the victim in the event of a broker’s violation of the agreement.
In the case of CySEC, a fund called ICF was formed, and the trader can expect compensation of up to 20 thousand dollars.
How to write a complaint against a broker to the regulator
Filing a complaint against a broker is relatively simple: the main thing is to make sure that he actually has a license from CySEC.
Here's the algorithm:
- Find the license number on the company's website, then enter it in the search on the Commission's website.
- Fill out the form via the link (https://www.cysec.gov.cy/en-GB/complaints/).
- Please submit your complaint via email to the Financial Ombudsman of Cyprus ( [email protected] ).
Oh yes. The complaint to CYSEC must be in English or Greek.
Advantages and disadvantages of the CySEC license
The advantages of a CySEC license include the relatively low cost of registration, shorter issuance times compared to other regulators, and compliance with European laws. But these are rather advantages for the broker.
For investors, I would first of all highlight the following shortcomings of CYSEC as a regulator:
- deadlines for consideration of complaints;
- deadlines for payment of compensation;
- until now, companies trading binary options can obtain a license (simply disguising their scope of activity);
- An investor can receive a maximum of 20 thousand euros from the state compensation fund. In fact, I have not heard any stories of anyone receiving this compensation.
Loading …
CySEC structure
- the authorization department deals with licensing issues for organizations - it can issue and renew licenses, as well as make changes to them.
- the AML-CFT department deals with issues of combating the laundering of illegally obtained funds by regulated organizations;
- the market surveillance and research department investigates violations related to market manipulation and investor complaints;
- the legal department monitors legislation relating to the securities market and makes amendments to it;
- The information technology department is engaged in the implementation of modern information and communication technologies in order to ensure the efficiency and security of the regulator’s data.
CySEC is a member of:
- agreements with supervisory authorities of other states;
- ESMA (European Securities and Markets Authority);
- ESRB (European Systematic Risk Board);
- IOSCO (International Organization of Securities Commissions);
- National working groups of the EU Council on capital markets.
Which regulator can you trust?
So that you, dear investors, can sleep peacefully, I strongly recommend choosing brokers with licenses from the American SEC (The United States Securities and Exchange Commission), the British FSA (Financial Services Authority) or, at worst, the German Federal Financial Supervisory Authority (Bafin).
Interactive Brokers CapTrader Exante Just2Trade
In fact, the only real major American broker who still works with Russians.
Pros:
- There is support in Russian
- Good commissions
- The deposit can be replenished with rubles (bypassing currency control)
The disadvantages include:
- Minimum deposit $10,000
- Inactivity fee
Read the review for the full set of working conditions.
German IB introducing broker for direct access to foreign markets. This is where my investment portfolio is located.
Pros:
- works with Russians
- Availability of a Russian-language version of the site
- reasonable commissions
- no fee for inactivity
- insurance under US law for $500k
The disadvantages include:
- Support exclusively in English and German
- The support service itself is poor
For a detailed review, see this post.
Another interesting broker for going abroad, and not from the IB family. Unfortunately, contracts are opened for Russians only in Cyprus.
Pros:
- Acceptable commissions
- The fact of successful verification of work by the SEC
- Russian-language website and support
On the downside:
- Cyprus jurisdiction
- Inactivity fee
Read a detailed review here. You can get a $500 bonus when opening an account here.
The company is an American subsidiary of Finam and was created to bring clients from the CIS to the American market.
Pros:
- The easiest way to open an account
- Russian-language support
- Opening an account from $200
Minuses:
- Quite high commissions
- Various additional payments
Read the fullest review here.
What reviews say about Nec-Sc
Judging by the real reviews of Nec-Sc, the fake platform has nothing in common with a reputable international brokerage company, which was proven during a mini-investigation of the service. This means that the scam project does not have access to the interbank market. All that a trader sees after authorizing his personal account and replenishing the minimum deposit ($150) are funny pictures with successful transactions and unbridled growth of the balance. In fact, the first replenishment, additional infusions at the insistent request of the speculator’s curators, payment of non-existent taxes, commissions, fines, and other fictitious tariffs - in general, all the victim’s money immediately ends up in the offshore accounts of the scammers.
