CySEC Removes Leverate’s ICF Membership and CIF Authorization
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The Cyprus Securities and Exchange Commission (CySEC) released a public statement regarding the Investors Compensation Fund (ICF). It addressed the revocation of Leverate Financial Services Ltd’s membership status.
According to the announcement, the removal of Leverate’s ICF membership does not indicate the loss of rights for covered clients. The clients can still claim compensation for investment transactions. These transactions are carried out before the loss of membership status and the criteria for compensation continue to be relevant.
CySEC Seeks To Maintain The Transparency Of The Financial Markets
CySEC’s decision to withdraw Leverate ICF membership came after the company voluntarily gave up its Cyprus Investment Firm (CIF) authorization. On December 4, 2023, CySEC withdrew the CIF authorization, effectively stoping Leverate’s operations under CySEC’s supervision. The absence of any mentioned judicial review indicates that the decision is final, unless there are any legal changes.
In 2023, CySEC carried out inspections comprising more than 700 checks, both on-site and remotely, on supervised entities. Moreover, fines exceeding $2.2 million were levied to uphold regulatory compliance and protect investors. Thematic audits were directed toward firms impacted by the Russia-Ukraine sanctions. The idea was to scrutinize their business connections and examine forced transfers of Russian securities.
The Market Surveillance and Investigations Department concluded 42 investigations, leading to one case being referred to the Attorney General for potential criminal prosecution. Additionally, there were 48 ongoing inquiries by the end of the year. CySEC imposed administrative fines totaling around €2.2 million, with one Investment Company facing a penalty of €1 million.
CySEC Aims To Address Potential Challenges In The Evolving Financial Landscape
Furthermore, the CySEC stopped or cancelled two collective investment undertakings and 19 investment companies. In an exclusive interview, the Chairman of CySEC, George Theocharides, stated that artificial intelligence and crypto are the crucial regulatory concerns. He foresees their significant impact on the financial sector.
Over a period of three years, total fines of €6 million were imposed, mainly targeting investment companies that violated regulations. The UK Financial Conduct Authority took steps by canceling licenses and imposing record totaling £52,802,900 for 1,266 unauthorized companies.
In comparison, U.S. have imposed fines exceeding $9 billion. CySEC also told companies to address issues in 103 cases, with 35 firms mandated to comply with counter-terrorist financing laws and anti-money laundering regulations.
