The Cyprus Securities and Exchange Commission (CySEC) has outlined its supervisory priorities for 2024.

The supervisory agenda for 2024 remains centered on the following key priorities:

1. Enhancing supervision of high and medium-high risk firms, particularly focusing on the cross-border activities to prevent any consumer detriment arising from the distribution of complex financial products like CFDs.
2. Promoting a compliance-oriented culture among management bodies and key function holders within firms, aimed at fostering a sustainably compliant behaviour by firms.
3. Proactively addressing and managing any potential adverse events promptly and effectively to minimize their impact.

In 2024, CySEC’s primary areas of focus include ensuring adherence to professional conduct rules, encompassing information addressed to (potential) clients, including marketing communications, clients’ onboarding processes, including categorization, appropriateness and target market assessment, personnel remuneration, conflicts of interest, product monitoring, national intervention measures in relation to provision, distribution and sale of CFDs, as well as cross-border provision of services.

The regulator will also carefully assess practices that may have negative impacts on investors and markets such as: providing services in fractional shares, informing investors about costs and charges, communication through affiliates and influencers, implementation of sustainability requirements, application of pre-trade controls, and the use of copy trading.

CySEC will also assess the resilience of CIFs’ business models, focusing on the arrangements put in place to monitor their capital adequacy (Pillar I, and II). It will examine the compliance with reporting requirements and disclosure of relevant information (Pillar III).

Another priority is establishing and implementing measures by CIFs where early signs of financial distress exist to ensure their sustainability.

The regulator will also evaluate the adequacy of CIFs’ governance framework with an emphasis on effective procedures for identifying, monitoring and managing the risks to which they are exposed, or could be exposed, as well as on remuneration policies.

The Commission will asses the implementation of measures to address risks in the field of ICT and preparation for the implementation of the DORA.

Further, the regulator will examine the preparation for the implementation of MiCA.

The assessment of the abovementioned would be carried out utilizing a variety of supervisory tools using a risk-based supervisory approach, including but not limited to day-to day monitoring, onsite inspections, offsite/desk based reviews, thematic reviews, supervisory meetings, or other actions as necessary.