CySEC updates CIF license application form

The Cypriot regulator, CySEC updates CIF license application form. I have listed the amendments and the new part introduced in the updated form.

23 February, AtoZForex – Cyprus Securities and Exchange Commission (CySEC) has issued an announcement, informing about the amendment in the CIF license application form. The updated application form requires submission of additional information mainly a more detailed business plan.

What are the amendments in CIF license application form?

In order to facilitate the Cyprus Investment Firm (CIF) license authorization procedure, they have listed the following amendments in CIF license application form:

"In the updated form, there is an addition of Part B relating to the operations of a Multilateral Trading Facility (MTF). This further explains that the applicant should report about the proposed instruments to be traded on the platform. (including a detailed instrument specification) and the proposed market participants (including market makers, etc.)."

Moreover, the applicant is supposed to provide information about the trading process and finalization of transactions. In addition, CySEC has issued a Checklist to understand this application section more easily.

New business plan criteria for CIF applicants

There is an addition in relation to the contents of the business plan of the CIF authorization applicant. This section explains that the applicant should submit a detailed description of the business plan. Also, it should include the list of markets. In which the applicant is willing to operate (EU and third countries).

This appendix should also explain the nature of operation there (via branches, introducing brokers, tied agents). Moreover, it should offer information about the marketing strategy. That the applicant will use to attract clients and description about the customers the company will target, etc.

Additional requirements and reporting

  • There is an addition of a new Appendix. According to this, the applicant should provide information on a draft Internal Capital Adequacy Assessment Process (ICAAP). It should be approved either by the Board of Directors. Or by the persons signing the Memorandum and Articles of Association of the applicant.
  • The applicant should provide clarification that their two Executive Directors who will market and sell CFDs. And other speculative products must be residents of the Republic of Cyprus.
  • There is also an addition of a clarification that the applicant. Who will be responsible for marketing and sell CFDs and other speculative products, will not outsource the compliance function.

Introduction of New Leverage Policy and other

Also, there is amendment in the Checklist for the Internal Procedures Manual that accompanies the Application for granting of CIF authorization (Form 144-00-05) with introduction of a new Part XI in relation to the Best Execution Policy, the CIF’s business continuity policy (Part ΙV, point 10.1) as well as the Leverage Policy (Part ΙΙΙ, point 5.1.1). The latter states:

“If applicable please state the leverage policy of the applicant and the measures adopted by the CIF in order to prevent the potential conflict of interests arising between the commercial interests of the CIF offering leveraged products and the interests of a retail client.”

The updated form has been uploaded on CySEC’s website, namely the Checklist for Part B - Operation of a Multilateral Trading Facility that accompanies the Application for the granting of CIF authorization (Form 144-03-04).

Finally, a Guide for Part B of the Application for the granting of CIF authorization (Form 144-03-05) in order to facilitate applicants as well as authorized CIFs has also been prepared and uploaded on the regulator’s website. All applications that are submitted to CySEC from March 15, 2017, onwards should be prepared and submitted using the updated form.

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