Following the introduction of the new prudential framework for Investment Firms (IFR/IFD), the Cyprus Securities and Exchange Commission (CySEC) notified in early June the questionnaire regarding prudential supervision for the application of granting a Cyprus Investment Firm (CIF) authorisation.

The questionnaire concerns applicants who are seeking to be authorised by CySEC as a CIF and completing it is considered part of the overall licensing application process. The said questionnaire enables CySEC to assess the applicant’s ability on meeting the IFR/IFD prudential requirements as these are prescribed within:

1. Regulation (EU) 2019/2033 on the prudential requirements of investment firms – IFR
2. Directive (EU) 2019/2034 on the prudential supervision of investment firms – IFD
3. The Prudential Supervision of Investment Firms Law of 2021 – Law 165(I)/2021.

In particular, the information requested is divided into the following three sections:

• Section 1: Prudential Categorisation – The applicant must
  • indicate its IFR/IFD classification as per the proposed investment and ancillary services and activities.
  • declare specific capital criteria that are expected to apply during the first 12 months of operation.
• Section 2: Prudential Capital Information – The applicant must
  • state the expected initial capital required to hold based on its IFR/IFD classification.
  • state if the CIF is seeking permission to act as a depositary of an Alternative Investment Fund (AIF).
  • state if the CIF is expected to meet specific regulatory thresholds/conditions if is applying to carry out any of the activities of dealing on own account or underwriting and/or placing of financial instruments on a firm commitment basis.
  • state the composition of the CIF own funds as at the end of the previous month.
  • prepare and submit the relevant prudential supervision form based on its IFR/IFD classification, along with required supporting documentation.
• Section 3: Prudential Consolidation – The applicant must
  • declare if the CIF is expected to fall under prudential consolidation by CySEC, and if yes, then
    • provide information regarding the other entities that will fall under prudential consolidation by CySEC.
    • prepare and submit the relevant consolidated prudential supervision form based on its IFR/IFD classification.

The SALVUS Investment Firms Licensing team carries extensive experience in the preparation and submission of complete and well-supported applications, covering the entire license application process of varying CIF business models. They coordinate with the SALVUS Risk Management team to prepare the prudential supervision questionnaire, the relevant prudential supervision forms and ensure compliance with pre- and post-licensing capital adequacy requirements.

Do not hesitate to contact us at info@salvusfunds.com or call us at +357 7000 7898 if you would like additional information about the licensing of your CIF or support in fulfilling your prudential supervision reporting obligations.

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