CySEC, Setting up a CIF, types & application fees
Continuing the series of articles dedicated to Cyprus Investment Firms (CIFs), in this one, we provide details on the different types of CIFs based on their capital requirement and provide complete information on the fees payable to CySEC, accompanied by the CIF application of a new CIF license and the initial contributions to the Investor Compensation Fund (ICF). It is worth mentioning, that the legal framework of the Investors Compensation Fund (ICF) was upgraded no less than 6 months ago, introducing new fees and other changes.
The different types of CIFs available for license by CySEC
The minimum capital required in order to operate a CIF with CySEC license is depended on the investment services and ancillary services the firm apply for within the application, that suit the business model and objectives. A detailed description of the investment and ancillary services can be found here.
Most of the companies currently licensed under CySEC are brokerages offering access to online trading of financial instruments in the form of Contracts of Difference (CFD). Ohers are Asset Managers and Wealth Managers, with a few also or solely performing Portfolio Management and Investment Advisory.
There are two types of online brokerages, both holding clients’ funds;
1. Straight through processing (STP) brokers: where the broker transmits ALL orders to the market, without the CIF holding any market risk in its books.
2. Market Maker (MM) broker: the CIF can deal on own account and according to its risk management mandate can hold part or ALL of the market risk arising from clients’ orders.
Read More…
