On the 13th March 2023, the Cyprus Securities and Exchange Commission (hereby ''CySEC'') published its Policy Statement PS-01-2023 on the application of Regulation (EU) 2020/1503 on European Crowdfunding Service Providers for business (hereby the ''Policy Statement'') and Directive DI73-2009-02 for Crowdfunding Service Providers.


The Policy Statement concerns legal entities which intend to provide crowdfunding services from Cyprus, and legal entities which are providing crowdfunding services from Cyprus and were previously authorised under national law, i.e. as CIFs.

Both the Policy Statement and Directive DI73-2009-02 aim to inform the above legal entities of the next steps towards fully implementing Regulation (EU) 2020/1503.


The aim of Regulation (EU) 2020/1503 (hereby the ''ECSP Regulation'') on European crowdfunding service providers for business is to set uniform rules to enhance market accessibility, the investor protection framework in this area and provide crowdfunding service providers (hereby ''CSPs'') with an EU passport that will enable them to offer their services across the EU with a single authorisation.

More specifically, the above framework is based on:

  • Clear rules on information disclosures for project owners and crowdfunding platforms
  • rules on transparency and marketing communications in relation to the provision of crowdfunding services in the EU
  • rules on governance and risk management for crowdfunding platforms
  • strong and harmonised supervisory powers for national authorities overseeing the functioning of crowdfunding platforms.




Under Directive DI73-2009-02, applicant CSPs are required to submit an authorisation application to CySEC to be granted an authorisation as a CSP. The applicant must be a legal person established in the Republic who intends to provide crowdfunding services.

Under the previous regime, entities offering investment-based crowdfunding services were subject to Cyprus Investment Firm authorisation and supervision procedures by CySEC. It has been clarified by CySEC in its Policy Statement that CSPs which have been authorised under national law – the Investment Services Law – may continue to provide crowdfunding services that fall within the scope of the ESCP Regulation up until the 10th November 2023, or until they are granted an authorisation under the ESCP Regulation, whichever is sooner.

It is further clarified that such entities operating under national law during the abovementioned transitional period shall not benefit from an EU passport.


CSPs that intend to provide their services from Cyprus may submit an application by using the standard application form of the Annex of the Commission Delegated Regulation (EU) 2022/2112 which will be published on CySEC's website. Up until the date of this publication, the application has yet to be published on CySEC's website.

The duly completed application form along with the relevant questionnaires and any additional information and/or required evidence as required by CySEC will need to be submitted either in Greek or in English.


In addition to the various obligations with which a CSP must comply, as stipulated in Directive DI73-2009-02, CSPs also have a duty to:

  • Provide an annual confidential report of all projects funded through their platform to CySEC,
  • Annually disclose the default rates of crowdfunding projects on their lending-based platform over at least the three previous years,
  • Within four months of the end of each financial year, they must prepare and make public an outcome statement,
  • Provide prospective investors with a detailed key investment information sheet ('KIIS') including a statement warning them of possible financial loss.

While the majority of the ESCP Regulation provisions have direct effect, there are some provisions which were left to the discretion of the national competent authorities, such as the KIIS officially- accepted languages and the ex-ante notification of the KIIS.

In relation to the KIIS to be drawn up by the project owner for each crowdfunding offer, this should be drafted in Greek or in English, provided that a KIIS in Greek is also made available.

In relation to the ex-ante notification of the KIIS, CySEC requires an ex-ante notification of at least seven working days before making it available to prospective investors.


Fees payable to CySEC for the examination of the authorisation application are €2,000. Fees also apply for the notification of any change or the intention to provide or to terminate the provision of any services or activities as set out in Article 7 of the Directive DI73-2009-02.

Annual fees payable to CySEC will be the sum of:

  • a fixed fee of €5,000 and
  • accumulated increment according to the product of the turnover of the CSP, provided that the turnover is equal or greater than €250,000 by the respective scale as defined below:
    • €400 for turnover between €250,000 and €499,000,
    • €300 for each extra tranche of €250,000 in turnover.

The calculation in point (ii) above is performed on the basis of the annual audited financial statements of the CSPs of the previous year.

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.