CySEC temporarily suspends licensing fast-track scheme

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CySEC licensing fast-track scheme

Despite admittedly toughening up its stance towards its regulated entities and becoming more proactive and strict as to their compliance with their obligations as well as steepening the fines and sanctions it imposes for violations, the appeal of CySEC licensing for firms engaging in the provision of financial and investment services appears not only to be lessening but growing instead.

Back in early November 2015, the regulator of the Republic of Cyprus, which is a popular hub for retail brokers and other entities operating in the broader financial services sector, had announced the implementation of a “fast-track” scheme for the examination of applications for authorisation. The timeframes set in this accelerated procedure were reduced considerably, when compared to those of the normal examination process, thus providing a very convenient and swift method for interested entities to obtain their license.

The scheme was so successful that CySEC received a huge number of such “fast-track” applications. In fact, the exceedingly large number of applications received for participation in the Scheme is exactly the reason why the Commission has decided to temporarily suspend the operation of the Scheme. One can conclude that due to the volume of the applications, CySEC could not cope with the volume of work required to be carried out on its part in tight timeframes. 

It is true that though reports in the local press, CySEC officials have often referred to and complained about the fact that they are seriously understaffed. The relevant announcement suspending the fast-track scheme clarifies that the Commission will process the applications received to this day for participation in the Scheme, but it will not accept any more applications.

However, the good news is that CySEC also announced that it will be re-launching the said scheme as from 1st April, 2016 with the same procedures and time schedules that applied for the initial launching of the scheme that was announced in November 2015. The relevant timetable for actions both on behalf of the applicant and on behalf of the regulator can be seen at the table below:

actions time inside

The only difference will be that from April 2016 onwards new fees will apply for the applicants wishing to participate in the fast-track scheme. A simple glimpse at the table listing the previous and the new fees set by CySEC, which is shown below, proves the steep increase that CySEC decided to impose. It could be that CySEC decided to capitalize and monetize its appeal to applicants, while through imposing higher fees the regulator is also perhaps aiming to encourage only the prosperous and serious entities from seeking to obtain its license through the fast-track scheme.

CYSEC FAST TRACK SCHEME FEES

APPLICANT

 New FEES(€)

Old fees(€)
Investment firms

5,000

1,500

UCITS Management Co

Alternative Investment Fund Managers

6,000

 

                   1,700

Internally managed UCITS

5,000

1.700, which shall increase by €240 for each additional investment compartment for the first 15 investment compartments and by €150 for each investment compartment thereon

UCITS/AIFs

4,000

€1.100, which shall increase by €240 for each additional investment compartment for the first 15 investment compartments and by €150 for each investment compartment thereon 

AIFs with Limited Number of Persons

3,500

€800, which shall increase by €180 for each additional investment compartment for the first 15 investment compartments and by €150 for each investment compartment thereon 

 

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