An anonymous professional working at a Cyprus Investment Firm (CIF) has raised concerns about the direction of the Cyprus Securities and Exchange Commission (CySEC), arguing that the regulator has become less effective both in supervising the industry and in supporting Cyprus as an international financial centre.
In a letter published online, the executive said professionals at CySEC-regulated firms believe the regulator’s approach has shifted in recent years, creating greater uncertainty for investment firms.
According to the letter, firms have experienced “lengthy investigations, inconsistent supervisory practices, delays in decision-making and a lack of regulatory predictability,” which some believe have affected their ability to expand operations and introduce new products.
The writer also claimed that some larger firms are considering reducing their presence in Cyprus or relocating certain functions to other European jurisdictions if the regulatory environment does not become more predictable.
“The regulator should act strictly within the boundaries of legislation and regulation, with clear, predictable and evidence-based decision-making,” the letter states. It adds that market participants would like to see “experienced leadership with a deep understanding of how the market functions” and stronger dialogue between the regulator and the financial services industry.
The author also argues that CySEC should continue balancing investor protection with efforts to support the competitiveness of Cyprus as a financial centre. According to the letter, some firms believe supervisory expectations have, at times, extended beyond requirements set out in legislation and European regulatory frameworks, increasing compliance costs and reducing legal certainty.
