CySEC guidance on regulated entities’ compliance with reporting and other obligations

The Cyprus Securities and Exchange Commission (‘CySEC’) has issued a circular (C191 dated 1 March 2017) to entities that it regulates clarifying the scope of their obligations to submit reports, returns and other information to CySEC.

The circular makes clear that regulated entities are subject to the relevant Cyprus and European legislation from the date of their authorisation, and are therefore required to comply with all their obligations regarding the submission of reports and other information arising from that legislation, and regarding the payment of fees and contributions towards the CySEC, from that date.

The date of authorisation is the date when the entity obtains its authorisation from CySEC, irrespective of whether it has yet made use of its authorisation. If a regulated entity has been authorised or has taken up duties as external manager for an Alternative Investment Fund or a UCITS, and was not operational for part of the year, reports for that year must be submitted to CySEC and annual fees and contributions must be paid in proportion to the time-period for which it holds its license.

The circular cites the following illustrative scenarios:

  • An AIFM which takes up its duties as external manager of an AIF in December 2016 is obliged to submit the compliance officer’s annual report regarding prevention of money laundering and terrorist financing for the year 2016 even if the AIF did not raise capital from investors during 2016.
  • A company whose sole purpose is the management of an AIFLNP which takes up its duties as external manager of an AIFLNP in December 2016 is obliged to submit the requisite information under article 4(3) of the Alternative Investment Fund Managers Law for the year 2016, even if the AIFLNP did not raise capital from investors during 2016.
  • A regulated Cyprus investment firm or administrative services provider which receives authorisation during December 2016 is obliged to submit monthly reports on anti-money laundering operations for each month after its authorisation, whether or not it was operational.

Even if a report relates to a non-operational period, it must contain the minimum required information specified in the relevant CySEC or European regulations.