A wave of regulatory changes is set to reshape Cyprus’
financial sector in 2025 as the Cyprus Securities and Exchange Commission
(CySEC) intensifies its supervision of investment firms, funds, and crypto
service providers.
In 2024, the regulator carried out over 850 audits,
issued €2.76 million in fines and revoked multiple operating licenses. As new
EU regulations take effect, CySEC is now doubling down on compliance efforts to
strengthen investor protection and financial stability.
CySEC Chairman Dr. George Theocharides outlined the
organization’s priorities during a recent press conference, emphasizing that
“protecting investors and the further development of a healthy
market” remain central to its mission.
“In 2025 and beyond, a series of significant
regulatory changes will be implemented through European directives and
regulations which are expected to strengthen the supervisory framework
governing investment services,” Theocharides said.
New Regulatory Landscape in 2025
Several key EU regulations, including the AML Package, European Single Access Point (ESAP), EU Sustainability Framework, AIFMD II, Financial Data Access Regulation (FiDA), MiFIR Review, and EMIR Refit, are expected to reshape the financial sector in the coming year.
Additionally, the EU’s Retail Investment Strategy is
set to bring new requirements for transparency and investor rights. The
regulator also highlighted the EU’s Savings and Investments Union Plan as a
major driver of market transformation.
These inspections targeted a wide range of financial
firms, including Cyprus Investment Firms (CIFs), Administrative Service
Providers (ASPs), fund managers, and crypto-asset service providers (CASPs).
Additionally, CySEC reviewed 510 annual compliance
reports and monitored derivatives transactions for 33 investment funds. The
regulator also reportedly investigated misleading promotional materials and
identified fake websites impersonating CySEC representatives.
As a result, it issued numerous public warnings and
worked with European authorities to address fraudulent activities.
Administrative fines in 2024 totaled €2.76 million, with Cyprus investment
firms accounting for €2.12 million of that sum.
Supervisory Actions and Compliance Crackdown
Over the past three years, CySEC has reportedly
imposed fines exceeding €7.82 million, reflecting its increasingly strict
stance on compliance failures. Seven Cyprus investment firms had their licenses
revoked or suspended, and two Reserved Alternative Investment Funds lost their
authorization.
Crypto-assets remain a priority for CySEC as the
Markets in Crypto-Assets Regulation (MiCA) takes full effect. The regulator has
already received interest from multiple firms seeking licensing under the new
framework.
Despite the heightened scrutiny, Cyprus’s financial
sector continued to expand in 2024. CySEC authorized 80 new entities, bringing
the total number of supervised firms to 834. However, the regulator also
rejected five licensing applications and saw 13 firms voluntarily withdraw
their applications.
In 2024, CySEC also enforced the Digital Operational
Resilience Act (DORA), which mandates stringent cybersecurity requirements for
financial entities.
A wave of regulatory changes is set to reshape Cyprus’
financial sector in 2025 as the Cyprus Securities and Exchange Commission
(CySEC) intensifies its supervision of investment firms, funds, and crypto
service providers.
In 2024, the regulator carried out over 850 audits,
issued €2.76 million in fines and revoked multiple operating licenses. As new
EU regulations take effect, CySEC is now doubling down on compliance efforts to
strengthen investor protection and financial stability.
CySEC Chairman Dr. George Theocharides outlined the
organization’s priorities during a recent press conference, emphasizing that
“protecting investors and the further development of a healthy
market” remain central to its mission.
“In 2025 and beyond, a series of significant
regulatory changes will be implemented through European directives and
regulations which are expected to strengthen the supervisory framework
governing investment services,” Theocharides said.
New Regulatory Landscape in 2025
Several key EU regulations, including the AML Package, European Single Access Point (ESAP), EU Sustainability Framework, AIFMD II, Financial Data Access Regulation (FiDA), MiFIR Review, and EMIR Refit, are expected to reshape the financial sector in the coming year.
Additionally, the EU’s Retail Investment Strategy is
set to bring new requirements for transparency and investor rights. The
regulator also highlighted the EU’s Savings and Investments Union Plan as a
major driver of market transformation.
These inspections targeted a wide range of financial
firms, including Cyprus Investment Firms (CIFs), Administrative Service
Providers (ASPs), fund managers, and crypto-asset service providers (CASPs).
Additionally, CySEC reviewed 510 annual compliance
reports and monitored derivatives transactions for 33 investment funds. The
regulator also reportedly investigated misleading promotional materials and
identified fake websites impersonating CySEC representatives.
As a result, it issued numerous public warnings and
worked with European authorities to address fraudulent activities.
Administrative fines in 2024 totaled €2.76 million, with Cyprus investment
firms accounting for €2.12 million of that sum.
Supervisory Actions and Compliance Crackdown
Over the past three years, CySEC has reportedly
imposed fines exceeding €7.82 million, reflecting its increasingly strict
stance on compliance failures. Seven Cyprus investment firms had their licenses
revoked or suspended, and two Reserved Alternative Investment Funds lost their
authorization.
Crypto-assets remain a priority for CySEC as the
Markets in Crypto-Assets Regulation (MiCA) takes full effect. The regulator has
already received interest from multiple firms seeking licensing under the new
framework.
Despite the heightened scrutiny, Cyprus’s financial
sector continued to expand in 2024. CySEC authorized 80 new entities, bringing
the total number of supervised firms to 834. However, the regulator also
rejected five licensing applications and saw 13 firms voluntarily withdraw
their applications.
In 2024, CySEC also enforced the Digital Operational
Resilience Act (DORA), which mandates stringent cybersecurity requirements for
financial entities.
This post is originally published on FINANCEMAGNATES.
