The (CySEC) announced this Monday that Cyprus Investment Firms (CIFs) will need to provide information on their cross-border activity for 2019.
Specifically, CIFs that were authorised by the regulator by the 31st of December 2019 will need to provide information on cross border activity during the period spanning from the 1st of January to the 31st of December 2019.
The deadline has been set for Friday, the 16th of October 2020. In its statement today, the Cypriot regulator stresses that it will not be granting extensions for eligible CIFs.
The new form, FPISA-CIF, asks for CIFs to provide information on the European Economic Area (EEA) countries in which they provide investment services and activities to and whether they have more than 300 clients in each country.
Is CySEC preparing for a no-deal Brexit?
Overall, the form does not look difficult to complete. However, the timing of the new form is interesting. Whilst CySEC has not outlined why it has issued the new form, the is fast approaching.
This could be the regulator’s way of looking into passporting issues, by seeing how many CIFs have more than 300 clients in the United Kingdom. With the transition period between Britain and the European Union (EU) set to end on the 1st of January 2021, the UK could very well leave the bloc without a deal in place.
Passporting is when an EEA-registered firm exercises its right to do business in other EEA countries without needing further authorisation in each country. This has allowed UK brokerages and other financial institutions to operate within the EU and vice versa without needing additional authorisations.
Whether this is the motivation behind the new information being sought by CySEC, however, is only speculation at this point. Finance Magnates has reached out to CySEC for clarification as to the reasoning behind this latest form. As of the time of publishing, we have not yet received a response.
Quinn Perrott, the co-CEO of TRAction Fintech, who specialises in EU trade reporting regulation, explained to Finance Magnates: “reading between the lines, this seems to be focused mainly at Brexit, I’m guessing CySEC want to get some quick data on how exposed their brokers could be to a no deal scenario”