CySEC - Establishing a Cyprus Investment Firm (CIF)

To legally offer investment and ancillary services in Cyprus, a Cyprus Investment Firm (CIF) license from the Cyprus Securities and Exchange Commission (CySEC) is required.

The investment services

• Reception and transmission of orders on behalf of clients;
• Execution of orders on behalf of clients
• Dealing on own account
• Portfolio management
• Provision of investment advice
• Underwriting of financial instruments on/or placing of financial instruments on a firm commitment basis
• Placing of financial instruments without a firm commitment basis
• Operation of Organized Trading Facility (OTF)
• Operation of Multilateral Trading Facility (MTF)

Up to Services

• Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management;
• Granting of credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;
• Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;
• Foreign exchange services where these are connected with the provision of investment services;
• Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments;
• Services related to underwriting.

Licensing Process

To obtain a CIF license, a Cyprus-based company must first be incorporated, then submit an application package to CySEC. This package includes legal documents, information on directors and shareholders, organizational structures, clean criminal records, and detailed company procedures, including AML protocols. The process involves 2-3 months of application preparation, followed by CySEC’s review, which may require additional information. If approved, a conditional license is granted, requiring the firm to meet specific conditions like securing office space, hiring employees, and establishing operational infrastructure.

Capital Requirements

Our Services

EUR 150,000 : For CIFs holding clients’ money/instruments and offering services like order execution or portfolio management.
EUR 75,000 : For CIFs offering similar services but not holding clients’ money/instruments.
EUR 750,000 : For CIFs dealing on their own account or underwriting financial instruments.

Incorporation of a Cyprus Company
Bank Account Opening
Promotion of Application to CySEC
License Application Preparation including application forms, drafting of manuals, procedures and policies
Sourcing Key Personnel
Document Review
Activation Process

Crypto-Asset Operations (CASP)

CySEC has established a regulatory framework for Crypto Asset Service Providers (CASPs) under Directive R.A.A. 269/2021,
following the EU’s 5th AML Directive. This requires CASPs to register with CySEC and comply with AML/CFT regulations,
covering operational, governance, and compliance standards essential for operating a crypto-asset business in Cyprus.

Key Regulatory Requirements

1. Registration Obligations

CASPs operating in or from Cyprus must register with CySEC. This requirement extends to entities established outside Cyprus but providing services within its jurisdiction.
The registration process requires the submission a form along with supporting documents, including details on shareholders, directors, and the entity’s governance structure.

2. CASP Notification

Registration in Cyprus:
CASPs operating from Cyprus must register with CySEC to provide crypto-asset services and comply with its rules.
CASPs from another EEA state providing services in Cyprus are also subject to CySEC registration.

EEA CASPs:
CASPs registered with an EEA National Competent Authority (NCA) for AML/CFT are exempt from CySEC registration but must notify CySEC with evidence of their valid registration. If certain services aren’t covered by the NCA registration, they must apply for CySEC registration before operating in Cyprus.

Non-EEA CASPs:
CASPs from third countries must register with CySEC to operate in Cyprus. CySEC evaluates these applications on
a case-by-case basis, considering factors like organizational structure, geopolitical context, and existing
communication with the home country’s authority. CASPs offering services on a limited scale, especially to
institutional clients, are more likely to be approved. Registered third-country CASPs will be listed on CySEC’s
website.

3. Capital Requirements

CASPs are categorized into three classes based on the services offered, each with specific capital requirements:

Class 1 : €50,000 for investment advice.
Class 2 : €125,000 for services referred to in Class 1 and all or any of the following services, a) reception and transmission of client orders, b) execution of orders on behalf of clients, c) exchange between crypto-assets and fiat currency, d) exchange from crypto to crypto, e) participate and/or provide financial services related to the distribution, offering and/or sale of crypto-assets (including initial offering), f) placement of crypto-assets without firm commitment, and g) portfolio management.
Class 3 : €150,000 for services referred to in Class 1 or 2 and any or all of the following services: a) administration, transfer of ownership, transfer of site, holding and/or safekeeping, including custody of crypto-assets or cryptographic keys or means enabling control over crypto-assets, b) underwriting and/or placement of crypto-assets with firm commitment and c) operation of a multilateral system, which brings together multiple third-party buying and selling interests in crypto-assets in a way that results in a transaction.