Permissions

Investment Services

The following Investment Services and activities are regulated and subject to granting of a licence prior to commence business. A Cyprus Investment Firm (CIF) has to apply for at least one of the below services:

1. Reception and transmission of orders;
2. Execution of orders on behalf of clients;
3. Dealing on own account;
4. Portfolio management;
5. Investment advice;
6. Underwriting and/or placing of financial instruments on a firm commitment basis;
7. Placing of financial instruments without a firm commitment basis;
8. Operation of Multilateral Trading Facilities.

Capital Requirement

For a Cyprus Investment Firm (CIF) that offers or provides the following services, the minimum paid-up capital is EUR 730.000:

• Dealing on own account;
• Underwriting/placing of financial instruments on a firm commitment basis;
• Operation of Multilateral Trading Facilities;
• Placing of financial instruments without a firm commitment basis.

For a Cyprus Investment Firm (CIF) that holds clients’ assets and/or financial instruments the minimum paid-up capital is EUR 125.000. The following services may be offered or provided:

• Reception and transmission of orders;
• Execution of orders on behalf of clients;
• Portfolio management;
• Investment advice.

For a Cyprus Investment Firm (CIF) that offers or provides the above mentioned services without holding clients’ assets and/or financial instruments, the minimum paid-up capital requirement is EUR 50.000.

The head office of a Cyprus Investment Firm (CIF) must be located in the Republic of Cyprus. It must be fully staffed, and employed persons performing any of the licenced investment services must be holder of a respective certificate issued by the Ministry of Finance after successful examination.

Desfran shall seek to understand your business activities and goals to assist with your business plan drafting that best encompasses this whilst still being compliant with the prevailing regulations. Desfran shall also advise on the possible questions that might be posed by the regulator.

The Board of Directors of a Cyprus Investment Firm (CIF) must consist of at least two executive directors and two independent non-executive directors.

The executive directors that effectively manage the Cyprus Investment Firm (CIF) must provide necessary knowledge, experience and integrity, satisfying CySEC prior to the granting of the licence. The directors of the company must dedicate appropriate time for the execution of their duties, be of good reputation and must have the knowledge, experience and capabilities to manage a Cyprus Investment Firm (CIF) and to clearly understand its activities and the risks of the Cyprus Investment Firm (CIF).

The management of a Cyprus Investment Firm (CIF) must be undertaken of at least two persons – they must be of good reputation and experiences and acknowledged enough to ensure professional, safe and prudent management of the company.

Due Diligence is necessary to formally verify the identity of all clients of the firm. The following documents are required to conduct due diligence for the license application:

• A copy of the photo page of the passport ceritifed by a notary public for each director and shareholder;
• A copy of proof of address (issued within the last 3 months) by a notary public for each director and shareholder;
• Curriculum Vitae (CV);
• Business Plan;
• Financial Forecast;
• Organisation Chart;
• For company directorship or shareholdership, a certified copy of the constitution documents of the company and above details on each director and shareholder of the company;
• Other supporting documents when necessary.

Please note for a company listed on a major stock exchange or subject to regulatory supervision in a country with equivalent AML regulations to Cyprus, evidence of such listing or regulation will suffice in place of the above information. Where the directors to be appointed are employees of such a listed or regulated company, a certified passport copy and confirmation of employment (to include position) will suffice.

Licensed Registration

• Business plan of the applicant

— Forecasted development of the financial sizes in the balance sheet, the statement of profit and loss and the cash flow statement for the first two financial years. These projections must be based on three alternative scenarios (pessimistic, average, and optimistic). Provide an analytical account of all the assumptions and parameters taken into consideration.

— Sources of income (analytically per type of investment and ancillary service, investment activity and other activity).

— Markets in which the applicant intends on operating in.

— Forecasted composition of the applicant’s customers (e.g. retail, professional, eligible counterparties).

— Whether the applicant intends on having clients bringing about more than 10% of its total revenue.

• Annual financial accounts of the applicant—3 years
• Annual consolidated financial accounts of the group—3 years
• Certificate of registration/incorporation and registered office of the applicant
• Certification of the representative for the promotion of the application
• Certified copy of the memorandum and articles of association of the applicant (Greek)
• Suggested amendment of the memorandum of association of the applicant
• Certification of the existence of funds to increase the initial capital
• Copy of the insurance document with regards to the professional indemnity insurance
• Chart of group structure and the organisational structure of the applicant
• Certificate of the applicant’s shareholders and certificate of good standing
• Certified true copies of identification cards or passports and certificates on non-bankruptcy and criminal record (natural persons)

—Certificate of good standing (legal person)—of the direct shareholder of the applicant

—Certified true copies of identification cards or passports and certificates on non-bankruptcy and criminal record of the natural persons

—Ultimate beneficial shareholders

• Certificate of directors and secretary of the applicant
• Certified true copies of identification cards or passports and certificates on non-bankruptcy and criminal record of the directors of the applicant
• Certified true copies of identification cards or passports and certificates on non-bankruptcy and criminal record of the senior management of the applicant
  Certificates of registration/authorization of service providers established in third countries
• Description of the procedures of the central counterparty, clearing and settlement system
• Internal regulation of operation of the applicant
• Copy of authorization of an applicant established in a third country
• Certification by competent authority of the country of origin of the applicant—principle of reciprocity
• Certification by external auditors and legal advisers of the applicant

Bank Account Opening

• Memorandum and Articles of Association
• Certificate of Incorporation / Registration
• Certificate of Good Standing for companies registered abroad if over two years old
• Certificates of Directors and Secretary, Shareholders, Registered Office or Minutes of the subscribers appointing the initial directors and all minutes by the board of directors leading to the current status of the company.
• Trust Deed(s) between the beneficial owner(s) and the registered shareholder(s) acting as nominees (if applicable)
• Ownership/group structure leading to the beneficial owner (diagrammatical or otherwise)
• Proof of business address of Group Principal Trading Offices
• Bank of Cyprus account-opening documents

The Cyprus Securities and Exchange Commission (CySEC) is the independent public supervisory Authority responsible for the supervision of the investment services market, transactions in transferable securities carried out in the Republic of Cyprus and the collective investment and asset management sector. It also supervises the firms offering administrative services which do not fall under the supervision of ICPAC and the Cyprus Bar Association.

Vision

The vision of the CySEC is to establish the Cyprus securities market as one of the safest, most reliable and attractive destinations for investment.

Mission

The mission of the CySEC is to exercise effective supervision to ensure investor protection and the healthy development of the securities market.