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  • Writer's pictureFAI Comply

Insights from the Chairwoman of CySEC at ACIFF’s Annual General Meeting

The Chairwoman of CySEC, Mrs Demetra Kalogerou, was one of the spokespersons at ACIFF’s annual general meeting that was held online on 25th of November 2020. Mrs Kalogerou analysed the latest developments in the securities market and answered questions of the participants, sharing her view on matters that are currently in the epicentre of the Commission’s work. Highlights from the Chairwoman’s speech below:

The Appropriateness Test

Mrs Kalogerou mentioned that generally, Appropriateness Tests implemented by CIFs are not to the standard CySEC requires. CIFs should take measures to enhance their tests and be more diligent when implementing the test due to the increased number of Retail clients wanting to trade online whilst at home due to Covid-19.

Inactivity Fees

Reference was also made to the Commission’s Thematic Review of July 2020 on the Inactivity Fees charged by CIFs highlighting the opinion of the Commission that firms should ensure to provide fair fees and focus the profit-making effort on the actual services they provide instead of earning unproportionate profits from inactivity fees.

Code of Conduct

Another point of great concern is the increase in the number of client complaints and the amount paid to the Commission from Settlements by Cyprus Investment Firms to CySEC. The Commission’s opinion is that a number of firms are not acting in the best interests of their clients, with the behaviour of their employees being occasionally unethical.

This led the Chairwoman on to the importance of Circular C181 and it was revealed that the Commission will soon touch upon this matter again either with a Thematic Review, Circular or Dear CEO letter.

In addition, Mrs Kalogerou informed participants that the Commission is still considering introducing a CySEC Exam requirement for employees working in Sales Department(s) of CIFs or promoting and providing information to clients on financial instruments and services offered by the CIF; the Commission considers the assessment of knowledge of staff as a key factor for the fair treatment of clients.


Mrs Kalogerou referred to the publication of CySEC’s review of compliance with ‘MiFIR’ related Transaction Reporting, highlighting the shortcomings identified in CIFs reports and the need for CIFs to nominate a person responsible for these reports.


Reference was also made to the fifth (5th) AML Directive (AMLD5) which is to be incorporated into local legislation soon and how Virtual Currencies will be coming under the auspices of CySEC.

The Future

At the end of her presentation Mrs Kalogerou listed the following as new products the CySEC was championing: Crowd Funding, Sustainable Finance and Green Fintech Solutions, including the CySEC Innovation Hub, as the new products with particular interest for CySEC.


To conclude, it was made clear once again that the Commission emphasises on transparency and accountability required by CIFs while performing its supervisory and regulatory duties.


The Association of Cyprus International Financial Firms (ACIFF) is a representative body of Financial Firms regulated in Cyprus.

The mission of ACIFF is the representation of its members’ views and interests, in all aspects of their activities, including the prompt and reliable briefing of the legislation, regulations, directives and any relevant information, which is related to their daily operations.

Written by Constantinos Constantinides, Director of FAI Comply


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