On Apr. 7, 2025, CYP SEC issued Cir C699 updating on Cross Border Activity exercise.
Exercise initiated by ESMA addressed to all Investment Firms providing investment services in other EEA Member States (i.e. including Norway, Iceland, Liechtenstein).
Post C694, information re completion of online questionnaire via EU’s online platform.
The information is addressed to CIFs that fulfil conditions in point 1.1 of Circular C694.
Email with link, password to access online questionnaire will be sent out to all CIFs that fulfil conditions in C694; participating CIFs must complete and submit contribution for each host State that qualifies, by May 26, 2025, at the latest.
Upon successful submission, message Contribution Successfully Submitted and contribution ID will be populated on screen (further details).
CIFs advised to save contribution ID for each Member State for reference purposes.
Specific instructions to complete Online Questionnaire provided; failure to promptly and duly comply may bear administrative penalties of section 37(5) of CYP SEC Law.
CYP SEC will not send reminder to participating CIFs that fail to promptly, duly comply.
On Mar. 27, CYP SEC detailed a cross-border data collection exercise.
CYP SEC notified Cyprus Investment Firms (CIFs) of an ESMA exercise covering all the investment firms providing services in other member States of the EEA, including Norway, Iceland, and Liechtenstein, other than their home Member State, during 2024.
Exercise Overview
Similar to last year, exercise will be conducted via EU’s online platform with format of an electronic form with ESMA providing updated, comprehensive reporting template.
Relates to investment firms with cross border activity to retail clients and to clients treated as professionals on request, according to Section II of Annex II of MiFID II.
CYP SEC confirmed that all CIFs must complete the online form if they were authorized by Dec. 31, 2024, and have provided cross-border services to over 50 retail clients.
Information collected through the cross-border online questionnaire on the CIFs’ cross border activity refers to the reporting period Jan. 1, 2024 through to Dec. 31, 2024.
CIFs should exclude inactive clients from reporting, and for purposes of this exercise, clients are considered to be inactive if various conditions set out are cumulatively met.
CIFs may use the residence of the client to assess whether investment services and activities are provided in other member States, as well as other information as set out.
CIFs that fall under the scope of this exercise must provide a single, valid, company email address to CYP SEC to which the cross-border electronic form will be forwarded.
CIFs that do not meet the conditions i.e. those that do not reach materiality threshold of more than 50 active retail clients, in at least one EEA member State, should inform CYP SEC of the fact that they are not required to complete the required form, by email.
Potential Penalties
Any failure to promptly and duly comply with the above may bear the administrative penalties of section 37(5) of the CYP SEC Law, and it is further noted that CYP SEC will not now send any reminders to all those CIFs, which fail to promptly and duly comply.
Next Steps
Detailed information on completion of the cross border electronic form, as well as the deadline of submission, will be sent via a new Circular, to be published in due course.
Effectiveness
The date for confirming that firms do, or do not fall under the exercise is Apr. 4, 2025.
Apr. 2025 Update
On Apr. 7, 2025, CYP SEC issued Cir C699 updating on Cross Border Activity exercise.
Exercise initiated by ESMA addressed to all Investment Firms providing investment services in other EEA Member States (i.e. including Norway, Iceland, Liechtenstein).
Post C694, information re completion of online questionnaire via EU’s online platform.
The information is addressed to CIFs that fulfil conditions in point 1.1 of Circular C694.
Email with link, password to access online questionnaire will be sent out to all CIFs that fulfil conditions in C694; participating CIFs must complete and submit contribution for each host State that qualifies, by May 26, 2025, at the latest.
Upon successful submission, message Contribution Successfully Submitted and contribution ID will be populated on screen (further details).
CIFs advised to save contribution ID for each Member State for reference purposes.
Specific instructions to complete Online Questionnaire provided; failure to promptly and duly comply may bear administrative penalties of section 37(5) of CYP SEC Law.
CYP SEC will not send reminder to participating CIFs that fail to promptly, duly comply.
