CySEC chairman Demetra Kalogirou told a media briefing on Wednesday that the new directive follows the feedback statement received from stakeholders and after its final review will be replaced “within a few days” with immediate effect.

The key improvements to the TAE include employing dedicated staff, a no-return policy for contributions by regulated funds, withholding funds owed to investors for more than three months after the closure or suspension of a KEPEY due to the inability to contact all affected investors to close their positions, and a revamp of the algorithm that defines TAE contributions, which will now employ a risk-based approach.

Kalogirou said that the TAE fund at present has €15 million in its coffers, most of which will be returned to KEPEY if the company chooses to withdraw or terminate its license. However, from now on, all contributions will remain in the TAE fund.

The CySEC chairman added that in 2018 alone, the regulator imposed fines totalling €7.5 million, the highest annual rate in the past six years when it took charge of overseeing the industry, with the total fines imposed on companies and directors since 2013 reaching €25.5 million.

She said that the financial services and investments sector, with funds under management estimated at €6.3 billion at the end of 2018, is growing rapidly with 666 companies regulated as at January 2019, up 5.4% from year-ago levels and an increase of 169% from the 247 firms in 2011.

Also, some 2,500 people are employed in the sector, with 355 passing the CySEC exam by the end of 2018, from a total of 1,200 who applied.

Kalogirou added that CySEC set up an innovation hub in September last year which has already concluded a consultation process as regards financial technologies (fintech) and blockchain systems, such as RegTech, crypto exchanges, even crowdfunding instruments and will continue to monitor the technologies involved, until such time as the government decides how it wants to get involved in this sector.

Source: Financial Mirror