A previously announced meeting between Demetra Kalogerou, Chairwoman of the Cyprus Securities and Exchange Commission (CySEC), and a consortium of brokerage executives is underway. However, the early indications of the meeting suggest a heightened level of friction between the regulator and industry brokers.
A routine meeting featuring 400 participants took a hostile twist today after the Ms. Kalogerou reportedly took a cursory tone with brokers, showing signs of wearing patience. According to sources in the meeting, Ms. Kalogerou expressed her discontent, pointing to a number of practices that some Cypriot brokers have engaged in.
The chairman of the CySEC elaborated that cases where CIFs offer services in third countries without obtaining the necessary authorization from the competent authority of the third country are unacceptable. The regulator is committed to take action to against CIFs that are on the warning lists of other competent authorities and IOSCO to prevent damaging the reputation of Cyprus.
Companies will not be able to offer services in third countries without first obtaining CySEC’s authorisation for which they must submit written approval from the host regulator. CySEC’s chairman explained that for existing CIFs, thematic checks will be taking place.
The meeting was originally called in a letter, seen by Finance Magnates, which invited shareholders, senior executives and compliance officers to a meeting with the regulator in Nicosia. The pretext of the meeting was to discuss “the latest and future developments of the forex and binary options industries in the European Union”.
The tone echoes a sentiment reverberating across the industry, with a string of recent withdrawals, most notably, issues surrounding IronFX clients ultimately plaguing the Cypriot industry’s reputation as well as the credibility of CySEC. Since 2015, CySEC has taken a more direct approach to regulation, issuing fines and suspensions for multiple brokers and providers.
A previous version of the story incorrectly attributed to Mrs Kalogirou a statement that was never actually made.