The Cyprus Securities and Exchange Commission ("CySEC") has issued a circular to entities it regulates regarding changes of name. It makes clear that the name of an entity must not be misleading, but should reflect the type of services the entity is licensed to undertake and in fact provides. For example, it is appropriate for an entity that is licensed to provide portfolio management services to include the words 'asset management' in its name, but it is not acceptable for an entity that does not provide such services (for example one that merely executes client orders) to do so.
Having become aware of several instances in which entities have changed their name or trading name for no satisfactory reason CySEC has decided to implement the following policies and procedures regarding entities it regulates:
- Changes of name are permissible only in exceptional cases, for example in the event of a takeover or merger or when the name of the entity is to be changed in order to correspond with its existing trading name.
- Regulated entities against which complaints have been made, or that are subject to regulatory investigation or sanctions, may not change their name or trading name.
- With immediate effect, regulated entities must obtain authorisation from CySEC before taking any steps to change their name or trading name, or to start using a trading name. CySEC's decision will be based on the principles summarised above.
- If a change of name or trading name does take place, the entity concerned should prominently indicate its former name on all communications, including its website and marketing materials, for at least one year after the change.
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