Cross-Border CySEC Regulation to Improve After ESMA Recommendation

ESMA has officially issued recommendations from CySEC to improve its cross border regulatory activities, as part as a bigger effort to increase the effectiveness of the overall EU-based cross-border investment activities. However, CySEC has been target by the  European Securities and Markets Authority of its shortcomings.

ESMA's own chair, Verena Ross, commented that “Effective supervision of cross-border activities by home NCAs is crucial to ensure that retail clients benefit from the same level of protection regardless of where the firm providing those activities is based,” ESMA wishes to provide a safe and fiar trading environment far all EU traders and brokers, and this seems like a reasonable step toward the right direction.

ESMA has scanned the activities of a total of seven particular areas in CySEC and other regulators in Europe. These are inspections and investigations; day-to-day supervision; cooperation with NCAs; implementing sanctions when need be; good old authorizations; passport notifications, ongoing supervision activities;

However, to the Cypriot regulator ESMA issued two recommendations: to increase its human resources capacity to cover supervision of cross-border services, and to strengthen its the implementation of supervisory activities by increasing its effectiveness in monitoring.

CySEC currently has two months to comply with these demands. Cyprus is home to a ton of brokers, both big and small, and has a relatively low set of requirements when compared to other European regulators.