The Cyprus Securities and Exchange Commission, better known as CySEC, has reached a settlement with a CIF (Cyprus Investment Firm) known as RoyalForex Ltd over its possible violations of the Investment Services and Activities and Regulated Markets Law 2017.

The settlement pertains to the company’s compliance - or lack of it - during the period of January 2018 to December 2019. An on-site inspection took place in March 2019, with regard tο:

• Article 5(1) of the Law regarding the requirement for CIF authorisation.
• Article 22(1) as to the authorisation condition of articles 17(2) and 17(5)(a), regarding the organisational requirements with which a CIF is required to comply.
• Article 24, regarding conflicts of interest.
• Articles 25(1) and 25(3), regarding the general principles and information to clients.

No further information about the investment firm's transgressions is forthcoming.

The settlement is for the amount of €270,000, which the company has already paid. All settlement money goes no longer to the regulator but to the Treasury, as is now the custom in nearly all countries during these troubled times. It is interesting to note that the board of CySEC took the decision to fine the firm on 2 August but has delayed the announcement until this week.

The most notable regulatory development in Cyprus this summer has been the Small Alternative Investment Fund Managers Law 2020, which officially came into force on 3rd July. It regulates the establishment and operation of sub-threshold Alternative Investment Fund Managers according to the AIFMD, the European Union's directive on the subject.

The directive allows EU states, of which Cyprus is one, to apply less stringent rules (a) to AIFMs that manage portfolios of Alternative Investment Funds (AIFs) whose assets under management, in total, do not exceed €100 million and (b) for AIFMs that manage portfolios of AIFs whose AuM do not exceed €500 million, as long as the funds in question restrict redemption rights for a period of at least five years and use no debt. Therefore, according to the Law, small AIFMs (or sAIFMs) are managers of AIFs that fall below these thresholds.