fintechview sat down with Christoforos Panayi, Deputy CFO at ECOMMBX, to discuss the financial sector in Cyprus and how is thriving as the Cyprus Securities and Exchange Commission (CySEC) continues to receive applications and issue licences to a steady flow of Cyprus Investment Firms (CIFs). Such licences, however, are not granted indiscriminately. Indeed, CySEC has created a robust regulatory framework for monitoring such CIFs according to Law 87(I)/2017, based on the Markets in Financial Instruments (MifID II) Directive.

Given the strict level of regulation, what brings investment firms to Cyprus in your opinion?

The Cyprus formula is actually quite simple – and very persuasive. The country’s strategic location, combined with an attractive tax regime which offers both individuals and legal entities a series of incentives, creates an investment landscape that is more than appealing to investors from the CIS, Middle East Asia Pacific countries. More recently, even investors from the United States are eyeing our island as an option for investment growth. At present, CySEC licenses, regulates, and monitors 818 CIFs. Compared with 2020, this represents an increase of 2.28% while efforts are being made to achieve further steady increase over the coming years. 

How easy is for a CIF to obtain its license?

For a CIF to obtain its licence, it must satisfy a set of strict criteria and conditions as defined by CySEC. On average, the application assessment process takes approximately six months, depending on the range of services the applicant wishes to provide. In addition to CySEC’s requirements, the applicant must also fulfil various substance requirements, such as maintaining office space on the island and appointing a minimum required number of native company directors. Key personnel – including the AML and Compliance Officer – must also be present in Cyprus.

Tell us few things about the monitoring and regulatory controls in place

It is important to note that the licenced CIFs’ operations and regulatory compliance are constantly monitored and subject to CySEC’s supervisory reviews. During the past year alone, a total of 308 desk-based reviews were conducted and fines amounting to €1.34 million have been imposed for the irregularities identified in the process.

To further reinforce its supervision, CySEC has considered the adoption of additional tools including new technology applications, the expansion of its current supervisory team and the adoption of data management systems. New technologies will allow CySEC to monitor the licensed CIFs’ entire marketing and social media activities and to detect any announcements or mention of the CIFs on global media platforms, forums and news websites. CySEC is currently leaning towards digitalization of its systems, in terms of data processing, storage and reporting, which will further optimize the monitoring and supervision of its licensed entities.

The intervention measures and new legislative amendments that were introduced by the European Securities and Markets Authority (ESMA) in 2015 led to essential reforms of the standards under which CIFs operate, aimed at creating a safer and more stable environment not only in Cyprus but across Europe. New measures included the banning of any trading incentives and bonus promotions as well as outsourced call centres that may be used to boost incoming traffic, along with aggressive marketing practices.

CySEC’s monitoring and supervisory role is of paramount importance, as it ensures that high market standards and compliance with EU directives and regulations are maintained – which, in turn, has stimulated growing interest among investors.  Indeed, as a result of the solid regulatory framework and safe investment environment it delivers, Cyprus is emerging as a continuously growing, investment-friendly jurisdiction that is well equipped, willing and able to welcome more investment firms on the island.

ECOMMBX is authorised as an EMI by the Central Bank of Cyprus. What does this authorisation enable you to deliver?

ECOMMBX is fully authorized by the Central Bank of Cyprus as an Electronic Money Institution with License No. to provide services within the relevant Law. The company provides payment services to reputable SMEs reliant on fintech payment and account management solutions. ECOMMBX provides its services to customers that operate in a wide range of industries and include tourism and leisure companies, retail and online shops, companies for wholesale imports and exports, shipping companies as well as fintech companies. We take pride in our offering secure account opening for various jurisdictions. ECOMMBX is well positioned to be the intermediary for multiple banks across the globe, providing customers a faster and more secure global transactional environment. 

Who is who

Christoforos is holding the position of Deputy CFO at ECOMMBX, a qualified chartered accountant (ACA), holder of the Advanced Diploma in International Taxation (ADIT) and BA in Accounting and Financial Management by Sheffield University.

Christofors has a vast experience in various sectors, being previously employed by Pafilia Property Developers Limited , in the role of Head of Business Development in Cyprus Market, in combination with holding the position of Non-Executive director in a CIF , while he has over 12 years of experience in roles of Audit & Assurance, Corporate Compliance and Tax advisory department in PwC.

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