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CySEC: Q&A on CIF Exams

CySEC: Q&A on CIF Exams

In preparation for the Cyprus Securities and Exchange Commission’s (CySEC) certification exams for employees of Cyprus Investment Firms (CIFs) in September 2014, Forex Magnates spoke with a CySEC spokesperson, who provided details spanning who is required to take the exams to how to prepare for them.

 

As per the legal definition are sales staff/account managers required to take the exam?

 

In accordance with section 52 of Law 144(I)/2007 and with the Directive regarding the certification of persons and the public register (“the Directive”),  an employee of an investment firm who is involved in the provision of investment services or in the carrying out of investment activities, must be registered in the public register of certified persons (after successfully passing the relevant CySEC exams) and fulfill the requirements of the Guidelines to Investment Firms, which stipulate, among other things, the minimum qualifications (academic/professional) that the employees should possess in addition to their registration in the public register of certified persons.

 

Specifically, paragraph 4 of the Directive provides the following:

 

“This Directive shall apply to the following persons:

 

Subject to the provisions of article 15 of the IF Law, the persons who wish to be certified or who are already certified to work in Investment Firms or credit institutions which have obtained an operational licence in the Republic, or by a tied agent established in the Republic and to provide the investment services or to perform the investment activities mentioned below:

 

(a) reception and transmission of orders regarding one or more financial instruments;

 

(b) execution of orders on behalf of clients;

 

(c) dealing on own account;

 

(d) portfolio management;

 

(e) investment advice•

 

(f) underwriting of financial instruments and/or placing of financial instruments on/without a firm commitment basis.

 

Subject to the provisions of article 111(1)(b) of the UCITS Law, to persons who wish to be certified in order to be able to work in a Management Company, or Investment Company of Variable Capital which has obtained an operational licence in the Republic, or to persons who enter into a contract with the UCITS Management Company for the marketing of UCITS units in the Republic, or to their representatives established in the Republic in order to provide the following services:

 

(a) UCITS investment management;

 

(b) marketing of UCITS or other Collective Investment Firm units;

 

(c) investment management by virtue of article 109(4)(a) of the UCITS Law;

 

(d) provision of investment advice for one or more financial instruments by virtue of article 109(4)(b) of the UCITS Law.

 

Do you have any estimate as to how many people already working at CIFs will be applying for certification?

 

A Circular will be published soon to require information from the regulated entities as to the number of persons employed by them that need to be certified in accordance with paragraph 4 of the Directive. We will have a good estimation once we receive the responses to the relevant inquiry.

 

How would you be keeping track of compliance with the certification requirement and what would be your enforcement actions if you find unlicensed employees working at a CIF?

 

Evidence of training in relation to the certification requirements should be available for inspection for five years. Random checks will be made, either remotely or through on-site inspections, in which the continued professional training which certified persons should maintain will be checked and assessed. Details of these checks will be decided on a yearly basis according to the other compliance checks undertaken.

 

As far as the enforcement actions in relation to finding unlicensed employees working at a CIF, the Law provides, as for any other non-compliance cases, for the complete revocation or the temporary suspension of the CIF license or the imposition of a fine on the CIF. The sanctions, which are decided by the CySEC Board, depend on the seriousness of the offense.

 

Many companies are already offering courses on the certification, would you comment whether they are authorised by CySEC to offer these services?

 

The CySEC does not provide authorizations to companies that provide courses on the Certification Exams or preapprove any of these courses. Workbooks will be provided by CYSEC to candidates, upon exam registration, the purpose of which is to be used as self-study manuals for exam preparation and to provide candidates with all the material required for passing the exams.

 

If candidates would like to participate to any of these courses in order to have an additional support toward their preparation for the exams, they are free to compare the available options and select any of the different providers they prefer.  CySEC does not provide authorizations to companies that provide courses on the certification exams; neither preapproves any of these courses.

 

What are the recommended materials that one has to prepare with for the certification examination? 

 

The Cyprus Securities and Exchange Commission has published the material of the examination. Furthermore, workbooks will be provided to candidates, which will include an extensive summary of the material and can be used as study aid by the candidates.  The legal texts will also be available at CySEC’s website to be used for further study.

 

What are the fees associated with the CySEC certification exam?

 

Candidates are obliged to pay to the Commission examination fees of two hundred Euro (€200) for the basic examination and three hundred Euro (€300) for the advanced examination. The fees can be found in paragraph 8 of the Directive.

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