CySEC Conducts 850 Audits and Imposes €2.76 Million in Fines in 2024

The Cyprus Securities and Exchange Commission (CySEC) presented its key regulatory activities and market oversight initiatives during a press conference in Nicosia on Tuesday. The commission detailed legislative and technological advancements influencing the capital markets in 2025, emphasizing the growing institutional and regulatory requirements, digital transformation, and the rise of sustainable investing as major trends impacting securities markets and investment funds in Cyprus and across Europe.

Investor protection and fostering a stable and transparent financial market remain at the core of CySEC’s mandate. The commission reiterated its commitment to enhancing market confidence and financial services sector stability. CySEC Chairman George Theocharides highlighted that 2025 will bring substantial regulatory changes through various European directives and regulations, reinforcing the supervisory framework that governs investment services. He pointed out that significant regulatory updates will stem from initiatives such as the AML Package, the European Single Access Point (ESAP), the EU Sustainability Framework, AIFMD II, the Financial Data Access Regulation (FiDA), the MiFIR Review, EMIR Refit, and the Retail Investment Strategy. He further noted that the European Union’s Savings and Investments Union Plan will also play a crucial role in shaping market developments.

In 2024, CySEC conducted over 850 on-site and remote thematic audits of supervised entities. “These audits help ensure compliance with prudential supervision requirements and European Banking Authority guidelines while strengthening oversight of remuneration policies, internal risks, and business models,” Theocharides explained. The commission also reviewed 510 annual compliance officer reports and internal audit assessments related to anti-money laundering (AML) compliance. In addition, CySEC maintained oversight of Cyprus Investment Firms, Administrative Service Providers, Managers of Collective Investment Funds, and Crypto Asset Service Providers.

The commission audited 89 collective investment funds while also assessing transaction and derivatives reporting requirements from 33 fund managers. The Investigations and Market Surveillance Department concluded 44 investigations in 2024, with another 52 still ongoing by the end of the year. “In cases of misleading promotional material, CySEC has intervened to ensure corrections,” Theocharides noted. He emphasized that firms failing to comply faced penalties.

Throughout 2024, CySEC imposed approximately €2.76 million in administrative fines, of which €2.12 million targeted Cyprus Investment Firms for regulatory violations. Over the past three years, total fines issued by the commission reached €7.82 million, with €6.3 million of that sum levied against investment firms. “In 321 cases, supervised entities were instructed to take corrective measures, while over 70 entities were given specific timeframes to fully comply with AML regulations,” Theocharides stated. Furthermore, seven investment firms had their operating licenses revoked or suspended, while two Reserved Alternative Investment Funds also lost their licenses.

A key priority in 2024 was the implementation of the Markets in Crypto-Assets Regulation (MiCA), setting new compliance requirements for crypto-asset service providers. “Several companies have already expressed interest in obtaining relevant licences from CySEC,” Theocharides confirmed. Additionally, the Digital Operational Resilience Act (DORA) took full effect in January 2025, establishing uniform cybersecurity requirements for the financial sector. “CySEC will be gathering data from supervised entities regarding their cybersecurity measures,” he added.

The financial sector continued to grow in 2024, with 80 new entities receiving authorization, bringing the total number of supervised firms to 834. However, one application for a Cyprus Investment Firm license and four applications for crypto-asset services were rejected, while 13 applications, including three for Alternative Investment Fund Managers, were withdrawn.

Looking ahead, Theocharides stated that CySEC will continue to strengthen cybersecurity and resilience in 2025 by acquiring new specialized systems to manage licensing processes and ongoing supervision. He also reaffirmed that investor education remains a central focus. CySEC actively participated in international financial awareness campaigns in 2024, including Global Money Week and World Investor Week, aiming to improve financial literacy. “We are committed to advancing digital financial education and enhancing the use of digital financial products,” Theocharides said.

The commission also introduced an annual award for economics students at both public and private universities, recognizing two students from the European University of Cyprus during the 2023–2024 academic year. “These efforts reflect our broader commitment to ensuring a transparent, robust, and investor-friendly financial market in Cyprus,” Theocharides concluded.

By fLEXI tEAM