The Cyprus Securities and Exchange Commission (Greek: Επιτροπή Κεφαλαιαγοράς), also known as CySEC, is the financial regulator of Cyprus. As an EU member state, CySEC’s financial regulations and activities comply with European MiFID financial compliance laws.
Numerous overseas retail forex brokers and binary options brokers are registered by CySEC.
CySEC was launched in 2001 as a public institution as part of the Cyprus Securities and Exchange Commission (Act on Establishment and Responsibilities). When Cyprus became a member of the European Union in 2004, CySEC has simultaneously become an institution that allows registered companies in Cyprus to access all European markets and is also part of the European MiFID regulation. However, joining the EU and accepting the Euro as a currency has significantly changed the reputation of the country, which previously seemed to be a tax haven, and is now accepted as a European Union institution.
On May 4, 2012, CySEC announced a policy change regarding the classification of binary options as financial instruments. This also meant the regulation of binary options platforms operating in Cyprus. This made CySEC the first financial regulator to globally recognize and regulate binary options as a financial instrument.
Duties of CySec:
- To supervise and control the functioning of the Cyprus Stock Exchange and the transactions performed at the Stock Exchange, companies, and brokers.
- To supervise and control licensed Investment Services Companies, Collective Mutual Funds, investment advisors and mutual fund management companies.
- To issue operating licenses for investment firms, including investment consultants, brokers.
- To apply administrative sanctions and disciplinary penalties to institutions, investment advisors and any legal or natural person entering into the provisions of the Stock Exchange legislation.
Especially after the European Union membership, CySec received applications from many financial service providers. Therefore, monitoring and regulatory requirements for the organization are constantly adjusted. This regulatory process is closely monitored by other EU regulators and brokerage companies worldwide.