Minister of Finance asks CySEC to show no tolerance to illegal and fraudulent activity in the financial sector

Cyprus’ Minister of Finance Constantinos Petrides said that the Cyprus Securities and Exchange Commission (CySEC) should strive to enhance its abilities and methods so that it serves in the best possible way its primary role, that of the supervisor of the financial sector.

Speaking during the “CySEC 25 Years: The Past, Present and Future of Financial Development and Innovation” Petrides said that

“this can be only be achieved, with efforts for supervisory excellence and no tolerance to illegal and fraudulent activity. Policies should strive for the establishment of a market structure with robust and well governed entities, exhibiting strong market conduct away from opportunistic behaviour.” He also expressed the view that the supervision in the financial sector, would be further augmented in the near future with the use of technology and data analytics.

The Minister referred to his vision for the future of CySEC, saying that the Commission should continue its open-door policy with the regulated entities, so that there is a good understanding of the evolving market but also opportunity to provide the appropriate guidance. As he said, the introduction of the Innovation Hub, is a demonstration of this forward-looking approach by CySEC.

“The Ministry of Finance and the Government will continue to support all efforts by CySEC as well as of the European Union that would foster supervisors and the framework they operate in”, he noted.

The Minister also offered a renewed commitment of the Government that the efforts to achieve sustainable growth, to maintain sound public finances, to promote reforms will not only be maintained, but will be enhanced. “The pandemic has demonstrated once again, that responsible conduct in good times is vital preparation for more challenging times”, he said.

Petrides also pointed out that the defining moment for the capital markets in Cyprus, has been the accession of the country to the European Union. As a member of the EU, he said, Cyprus enjoys significant advantages, most notably a solid legal framework that evolves according to the circumstances, with the efforts and contribution of the European Bodies and member states.

He also said that being part of the European Union, provides also security for future challenges in the financial development and innovation.

At the same time, he added that European privileges come also with obligations and that the legal framework without strong supervision and enforcement, is of no use.

“It is this vital role that CySEC has been called upon to fulfil, a task that is not easy at all. The Government and the Ministry of Finance are well aware of this vital role of the supervisory authority and for this reason, CySEC was one of a few organisations in the broader public sector, where the moratorium on hirings and job creation was not applied to, during the economic consolidation programme in 2013 and onwards. Hirings and job creation continued during this period with permanent posts increasing from 52 in CySEC’s 2014 Budget to 172 in the Budget of 2021”, he said.

Chairwoman of the Cyprus Securities and Exchange Commission, Demetra Kalogerou, referred to the milestones that have marked the development of CySEC over the past 25 years as well as its future as a regulator.

“CySEC has the experience, the determination and the people to make the difference and push toward the further upgrading and development of the Investment services sector, contributing to the Cyprus economy”, she said.

She added that CySEC’s main goal in 2021 and onwards is to develop procedures and a methodology to conduct data-driven supervision, which will allow it to identify any irregularities and risks in the market at an early stage and be more proactive.

She also said that new groups of entities were included under CySEC supervision, marking an important step to fulfil the vision and mission of CySEC to establish the Cyprus’ security market as one of the safest, most reliable destinations for investment and effective supervision, to ensure investor protection and the healthy development of the market.

She added that the increase in the number of supervised entities over 219% from 2011 to 2021 is indicative of the growing interest in Cyprus as a destination of investment services. Today, she pointed out, CySEC supervises 790 entities compared to 247 in 2011, while more than 100 new applications are in the process of being granted a license.

Chairwoman of CySEC also noted that between 2015 and 2021 the Commission has suspended more than 25 companies, closed down more than 13 companies and banned individuals from operating in the sector up to 10 years. She added that from 2013 until today CySEC sent 34 cases to the Attorney General to investigate possible criminal offenses by regulated entities.

Kalogerou added that CySEC established an Innovation Hub in September 2018 to explore the growth and uses of FinTech developments.

In her speech European Commissioner for Financial Services, Financial Stability and Capital Markets Union, Mairead McGuinness said that the European Commission together with the European supervisory authorities plans to develop a strategy on supervisory data that will help ensure that supervisory reporting requirements are unambiguous, aligned and adapted for automated reporting. As she said, it is a new era for supervisors and markets willing to invest in technology and make the push towards sustainable investment.

Source: Cyprus news Agency