Cyprus Securities and Exchange Commission (CySEC)
The Cyprus Securities and Exchange Commission (CySEC) it is the highest financial authority in Cyprus. It is responsible for regulating the financial markets and ensuring their security and transparency. Its management committee consists of five members, the president and the vice president being full-time employees, while the other three are collaborators with other professional dedications. All members are suggested by the Cypriot minister of economy and the tenure in the post is five years, although it can be extended for another five.
The main responsibilities of the CySEC are:
- Grant revoke licenses to companies that are under its supervision.
- Supervising the Cyprus stock exchange and other regulated markets.
- Carry out research to achieve their objectives.
- Request the information necessary to comply with the law from market participants.
- To impart discipline in accordance with the law.
- Require the termination of activities when they go against market regulation.
- Apply a competent court for everything related to financial securities.
- Publish the directives regulating the market.
- Cooperate with other Cypriot and international authorities to ensure the smooth functioning of the financial markets.
In addition, the institution is responsible for supervising the Cyprus Investment Firms (CIFs), something very relevant for those who are looking for safe brokers to invest in binary options.
What does it mean for a company to be registered with the CySEC
If you have taken a look at our list with the best online brokers , surely you have noticed that most of them have in common that they are registered with the Cypriot financial authority. If you are new to investing in products such as CFDs and binary options, you may find this surprising. The truth is that in New Zealand there is no regulation on binary options and, therefore, a company registered in Cyprus and in the CySEC is authorized to offer its services in New Zealand, as in the rest of the Dollarpea Union.
As far as security is concerned, registration with this commission basically implies two things: First, that the company is legal in an EU country and has an obligation to comply with the rules established by MiFID and other dollarpeas directives. This is important, because without a doubt the EU is one of the areas that cares most about consumers and investors and, therefore, usually has the most demanding regulations. In addition to this, secondly, companies registered with the Commission will logically have to comply with Cypriot regulations. This includes the Cyprus Investment Services and Activities and Regulated Markets Law of 2007 which has been expressly indicated by the CySEC as the law applicable to binary options since May 3, 2012. This Law stipulates the obligations of entities offering financial services in Cyprus. Among these obligations is that of belonging to the Compensation Fund for Customers of Cypriot Investment Firms (CIFs) or what is the same the Compensation Fund for Clients of Investment Companies. This fund was created to guarantee customers the ability to withdraw their money from entities, with a maximum of $ 20,000. Which means that if your balance at a particular broker is $ 20,000 or less, the fund guarantees you the ability to recover your money in the event that this is not possible due to the broker's failure to comply with the obligations arising from its license. These are clearly published on the commission's website for each broker.
How can I make a claim to the CySEC
CySEC only collects complaints from individuals to issue notices and take general measures if it deems it appropriate. This means that the Commission will not solve your problem if it is something isolated, although you must notify them of your claim. However, the commission recommends a complaint process that we explain to you below:
In the event that you have any problems with a broker registered in Cyprus, complaints must be made, first of all, to the broker itself. Don't just write to their customer service, make a formal complaint. To do this, we recommend sending the claim by email, but also by certified postal mail. Always keep copies of all the broker's answers, for which he saves the emails and also takes screenshots. Do not forget to put basic data in your claim such as your name, surname, type of product, reason for the claim, etc.
Once this is done, the broker has five days to inform you that he has received the complaint and should give you an identification number that you should keep as gold in cloth for all your future actions. From their response, they have two months to write to you informing you that everything has been solved or to tell you that they need more time to do it, for which they have three months from the day of the claim.
If they have not answered you within three months or have not satisfied your complaint, you should contact the Financial Ombudsman of the Republic of Cyprus. They have a website in English and in Greek, but the version that works really well is the Greek one. Since the broker has notified you of its latest resolution, it should not take more than four months until you make your claim with the Financial Ombudsman. If the Financial Ombudsman does not solve your problems either, you will have no choice but to go to court.
The international presence of CySEC
As is the case with other financial authorities such as the CNMV in New Zealand , one of the fundamental activities of CySEC is international collaboration. In the case of the Cypriot authority, this translates into participation in committees of the Dollarpean Securities and Market Authority (ESMA), the Dollarpean Systemic Risk Board (ESRB), the International Organization of Securities Commissions (IOSCO) and in national working groups held in collaboration with the Council of the Dollarpea Union. They also offer support to the permanent representation of Cyprus in the dollarpean bodies.