Outgoing CySEC Chairwoman calls on her successor to continue with vision for safe and reliable capital market

Outgoing Chairwoman of Cyprus Security and Exchange Commission (CySEC) Demetra Kalogirou said that her successor should not forget the Commission’s vision to establish the safest and most reliable capital market as an attractive investment destination, through effective supervision, a vision that was formed after Cyprus financial crisis in 2013.

In an interview with Cyprus News Agency, Kalogirou said that the "most important milestone" for CySEC in her ten years term was the timely harmonization with all new European directives and the modernization of the institutional framework. She pointed out that they were the first supervisors in Europe, who had harmonized the legislation for investment firms with  MiFID II.

She also highlighted the imposition of administrative fines on the banking sector amounting to € 11 million after the banking crisis in Cyprus, but also the fines totaling € 31 million imposed in the last eight years on supervised entities.

“CySEC has carried out a thorough, but also impartial investigation of a number of cases, with the aim of achieving full transparency and accountability, in order to regain investor confidence in the financial sector”, she said.

At the same time, she referred to the development by the CySEC of the collective investment sector, so as to provide alternative forms of financing to companies with the total assets of the managed funds currently amounting to € 10.7 billion, of which one third is invested in Cyprus.

In addition, the President of CySEC said that "in difficult conditions amid financial crisis, CySEC have created a strategic plan of three to five years with the aim of restoring investor confidence in Cyprus and abroad.

She added that this concerned her vision for the implementation of enhanced supervision, in order to turn Cyprus’ capital market, as one of the most reliable investment destinations, focusing on investor protection and further development of the Sector.

Kalogrou also said that the Commission contributed decisively together with the other Cypriot authorities in all the evaluations made on money laundering (AML) by Moneyval and Global Form, with positive results.

Kalogirou also said that they have strengthened the organizational structure of CySEC with a new specialized Department, which focuses on checking the compliance of all supervisors in relation to the legislation concerning money laundering.

She also referred to the creation of an Innovation Hub for attracting innovative products, the “Crowdfunding Platform” which gives the opportunity to innovative companies or small and medium enterprises to receive financing of up to €5 million through the Cypriot Investment Firms.

Cryptocurrencies supervision

Replying to a question on cryptocurrencies, Kalogirou said that currently cryptocurrencies are not supervised in Cyprus, saying however that a significant change in the legislation has been made recently with the 5th directive on issues of prevention of illegal money.

She added that the directive has been issued and next week CySEC will circulate a Policy Statement in relation to the cryptocurrencies, that will include the relevant forms to be filled in by the interested parties, in order to be registered. “That way we can see who is behind these transactions”, she said.

"It`s time to supervise cryptocurrencies as well, but only concerning that cryptocurrencies being traded, do not come from illegal activities," she said.

She added that CySEC cannot protect an investor or give back the money someone lost, as in case of investment firms, because cryptocurrencies will not be fully supervised.

She also said that unlike investment firms, there’s not an information procedure between the national supervisors, for cryptocurrencies coming from abroad. If a cryptocurrency comes to Cyprus, there should be information on whether or not it is supervised by another authority, she said, adding that if it is not monitored, then the CySEC should take over.

Significant development of the market

The outgoing Chairwoman also said there are currently about 800 entities in the Cypriot market, compared to 247 in 2011, recording an increase of 223%.

"In the course of time, we have significantly developed the market, many foreign investors came and set up in Cyprus supervised by CySEC Investment Companies, that deal with transactions, through Cyprus, in foreign stock exchanges for various and complex products," she pointed out.

She said that these companies currently employ around 20,000 people and at the same time contribute directly to the Cypriot economy through the payment of taxes and indirectly through the payment, of consultants, the purchase of offices, homes and more. She added that investment funds have also their contribution to the economy through investment in real estate, large projects and corporate financing.