In light of the ‘New prudential framework for investment firms’ and the ‘The Investment Services Law’, CYSEC has replaced an earlier Circular C228 and redefined the threshold criteria that determine a significant CIF.
The key takeaways from the CySEC’s latest circular are outlined below:
- Limitations on directorships and establishment of nomination/risk/remuneration committees for ‘Significant CIFs’:
- Members of Significant CIFs shall not hold more than one of the following combinations of directorships provided by section 9(4) of the Investment Services Law:
- One executive directorship with two non-executive directorship in any company, and
- Four non-executive directorships in any company.
- Significant CIFs shall establish a Nomination Committee
- Significant CIFs shall establish a Risk Committee
- Significant CIFs shall establish a Remuneration Committee.
- Definition of a ‘significant CIF’ for the purposes of Investment Services Law
- A CIF shall be considered significant where its total on and off-balance sheet assets are on average greater than EUR 100 million over the four-year period immediately preceding the given financial year.
- Frequency of assessment
- CIFs should, within four months from the financial year-end, assess whether they meet the threshold defined above to become a ‘Significant CIF’.
- In case a CIF meets the threshold, it should take all necessary measures to comply with the relevant framework and inform CySEC of the following:
- take all necessary measures to comply with the requirements that apply to a ‘significant CIF’ as per the Investment Services Law,
- take all necessary measures to comply with the relevant requirements of the Prudential Law and
- forthwith inform CySEC accordingly and submit its new organisational structure through CySEC’s portal.
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