Since the beginning of 2014 the Cyprus Securities and Exchange
Commission ('CySEC') has been developing a risk-based
supervision framework. By focusing on the entities and activities
that are of greatest importance in terms of their potential impact
it aims to increase the effectiveness of its regulatory activities.
Consequently, CySEC's assessment of the risk that each
individual entity it regulates poses will determine the intensity
of supervision.
A risk assessment will be performed for all entities at least every
year and the outcome will be used to define each entity's
monitoring program for the forthcoming regulatory period. The
assessment will be based on the impact, or potential harm that
could be caused by a particular set of circumstances, weighted by
the estimated probability of those circumstances actually
occurring. Risk measures may be quantitative or qualitative. Impact
is assessed on the basis of numerical and financial data extracted
from the entity's regulatory returns. Probability is assessed
on a range of criteria including the entity's governance
arrangements and its susceptibility to being used for financial
crime.
Based on the assessment regulated entities will be assigned one of
four risk ratings, with the intensity of supervision varying with
the assessed degree of risk.
CySEC has now issued the risk assessment package relating to
providers of corporate management and fiduciary services, which it
refers to as administrative services providers ("ASPs").
All authorised ASPs are required to complete the specified form for
the reporting period 1 January to 31 December 2014 and submit it
via CySEC's electronic transaction reporting system between 5
and 16 January 2015. ASPs that have not received formal
authorisation are advised to prepare the requisite information in
order to be able to submit it before 16 January 2016, as it is
likely that the authorisation process will be completed before 31
December 2014.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
