CySEC announced its supervisory plan for 2021 in order to support the regulated firms in complying with their regulatory obligations. The main priorities and supervisory activities for 2021 that have been set by CySEC are:
A. Cyprus Investment Firms (CIFs)
1. Monitoring the compliance of high-risk and medium-high risk CIFs with all their operational regulatory obligations.
2. Monitoring the compliance of medium-to-low and low-risk CIFs, focusing on regulatory areas that entail significant risks to investors or market stability.
3. Analysis of current events related to each sector as a whole and investigating potential drivers of poor outcomes for investors and market stability:
i. product governance requirements;
ii. obligations to provide certain information to clients or potential clients, including marketing communications;
iii. appropriateness and suitability assessment requirements;
iv. obligations in regard to the national product intervention measures in relation to the marketing, distribution or sale of CFDs and Binary Options;
v. transparency requirements;
vi. cost and charges requirements;
vii. governance requirements;
viii. clients’ funds requirements; and
ix. enhancing the quality of data for the various reporting regimes.
4. Monitoring the compliance with the reporting requirements as required under the MiFIR, EMIR, CSDR, STFR and Securitization Regulations.
5. Concerning prudential framework, emphasis will be given to safeguarding of clients’ assets, risk management procedures, capital adequacy requirements (Pillar I, Pillar II and Pillar III requirements).
Furthermore, CySEC will be emphasized on the smooth transition of the Cyprus Investment Firms from the existing prudential framework (CRD/CRR) to the new one, which consists of the Directive (EU) 2019/2034 (IFD) and the Regulation (EU) 2019/2033 (IFR)) and will enter into force on 26th June 2021.
B. Managers and collective investment undertakings
1. Monitoring the compliance with their regulatory obligations, with emphasis given on the below regulatory requirements:
i. UCITS liquidity risk management requirements;
ii. UCITS cost and fees requirements focusing on ongoing charges;
iii. AIF valuation policies and procedures requirements; and
iv. AIF requirement of raising of minimum capital from investors.
2. Monitoring their compliance with the requirements for reporting the information as referred to in the AIFM Directive (2011/61/EU) and the European Commission Regulation (2013/231).
C. Data driven supervision
Designing and developing processes and methodologies that focus on the use of data-driven supervision in the implementation of the European Regulations EMIR, MIFIR and SFTR. Data driven supervision aims at enabling CySEC to quickly screening data, representing large and varied trading volumes, in order to automatically detect risks and irregularities at an early stage (i.e. through alerts) and react more quickly over those risks and irregularities.