CySEC Releases Guide To Enhance Sanctions Screening Systems
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The Cyprus Securities and Exchange Commission revealed that it had released a guide to help firms improve their sanctions screening systems. The guide includes findings from an assessment on how well firms in Cyprus were using these systems.
The Commission said it carried out inspections over a period, reviewing the practices of various firms, including Funds, Fund Managers, and Crypto Asset Service Providers.
CySEC Highlights Sanctions Compliance Measures
The review also covered Cyprus Investment Firms, Alternative Investment Fund Managers, and Administrative Service Providers. These inspections focused on checking if firms followed sanctions rules set by the United Nations Security Council and the European Union.
According to the update, CySEC’s Chairman, Dr. George Theocharides, said all firms had to put in place strong policies, procedures, and controls to follow sanctions rules. He stated firms needed proper screening tools to meet these requirements.
The Commission explained inspections mainly looked at how firms checked names on the United Nations and European Union Sanctions Lists. The review also covered screening practices linked to United States and United Kingdom sanctions. CySEC stated the purpose was to see if firms were correctly identifying sanctioned individuals and following international rules.
The Commission reported inspections found several good practices in sanctions screening. However, some areas needed improvement to strengthen compliance. According to the update, these changes were important for ensuring full adherence to sanctions regulations.
Theocharides wrote in a letter to firms urging them to use CySEC’s guidance as a standard. He explained firms should follow best practices in a way that matched their risks and responsibilities.
CySEC’S Role In Regulating Financial Markets
The Commission reported many foreign retail forex brokers had obtained registration under its supervision. Before a certain period, CySEC had been a popular choice for binary options brokers.
According to the update, CySEC was set up under a law outlining its establishment and responsibilities as a public corporate body. When Cyprus joined the European Union, it became part of the MiFID regulation, allowing firms registered in Cyprus access to European markets.
Joining the EU and adopting the Euro brought changes to the financial rules it enforced, affecting Cyprus’ role as a financial center.
CySEC revealed it had introduced a policy change regarding the classification of binary options. The change required binary options platforms based in Cyprus to be regulated.
According to the update, this positioned CySEC as the first financial regulator to recognize and oversee binary options as financial instruments.
The Commission later announced it had introduced a temporary ban on binary options trading, followed by a decision to enforce a permanent ban on offering these services to retail traders.
