In the face of challenging external financial conditions, Cyprus has seen a 12% increase in the number of supervised entities over the past four years. This growth, according to George Theocharides, Chairman of the Cyprus Securities and Exchange Commission (CySEC), signifies Cyprus's ongoing appeal as an investment hub.

Speaking at a press conference about key developments in 2023, Theocharides revealed that as of February, CySEC is reviewing 78 licensing applications. Additionally, the commission imposed administrative sanctions totaling approximately €2.2 million in 2023, with €1 million levied against a single Cypriot Investment Firm (CIF).

The Supervision and AML/CFT Departments of CySEC conducted over 700 on-site and remote thematic inspections in 2023. These inspections focused on compliance with prudential supervision limits and the monitoring of CIFs' adherence to Russia-Ukraine sanctions.

CySEC also reviewed information from supervised institutions regarding their business ties to individuals affected by the European Union's restrictive measures against Russia. Investigations into the transfer of Russian securities and tokens were part of this scrutiny.

In promotional content oversight, over 35 CIFs received guidance to amend misleading materials. The Market Surveillance and Investigations Department undertook investigations in 6 CIFs, completed 42, and had 48 ongoing at 2023's end. One case was referred to the Attorney General to determine potential criminal offenses.

The Issuers Department examined compliance with financial reporting obligations for 2021 and 2022. Theocharides emphasized that the total administrative sanctions over the last three years amounted to €6 million, with €5.3 million imposed on CIFs for legislative breaches.

CySEC requested corrective actions in over 103 cases to ensure compliance with anti-money laundering and counter-terrorist financing laws. Furthermore, 19 CIFs faced license revocations or suspensions, alongside 2 collective investment undertakings.

A significant regulatory development anticipated by the end of 2024 is the implementation of the Markets in Crypto-Assets Regulation (MiCA), addressing crypto-asset service providers. Theocharides underscored the importance of supervised entities preparing for these changes, including system upgrades and appropriate staffing.

He cautioned investors about the high risks associated with crypto-assets, highlighting the need for increased awareness and caution in this volatile market.

Despite current financial challenges, Theocharides remains optimistic about the capital market's future in Cyprus, particularly with imminent regulatory changes in Europe and the increasing role of technology.

By the end of February 2024, the number of supervised entities reached 830, with 82 approvals granted in 2023 alone.

The CySEC is also actively involved in promoting financial literacy and education, participating in various events and forming part of the Ad-Hoc Committee for a National Strategy on Financial Literacy and Education in Cyprus. The commission has also issued warnings about entities falsely posing as CySEC officials and imitative websites.

Addressing the government's plan to create a unified supervisory authority for administrative service providers, Theocharides mentioned an upcoming meeting at the Ministry of Finance to discuss the operation and efficacy of this new body.