Cyprus investment firms told to report on cross-border services

The Cyprus Securities and Exchange Commission (CySEC) has issued a circular directing Cyprus Investment Firms (CIFs) to complete an electronic questionnaire regarding their cross-border activity during the 2025 calendar year.

This reporting exercise has been initiated by the European Securities and Markets Authority and targets firms providing investment services in other member states of the European Economic Area, including Norway, Iceland, and Liechtenstein.

Firms are required to report data specifically for host member states where they provided services to more than 50 retail clients, including those treated as professionals on request.

The data collection focuses on services provided under the freedom to provide services and should exclude any activities conducted through a physical branch.

Inactive clients must be excluded from the report, provided they have been inactive for at least one year, received no services, and generated no revenue for the firm.

Firms should still account for clients who have held an empty securities account for over a year if the firm continues to receive fees, such as account maintenance charges.

A separate contribution must be submitted for every individual host member state that meets the 50-client threshold.

Relevant firms will receive an email containing a link and a password to access the online questionnaire through the European Union survey tool.

The deadline for submitting these contributions for each qualifying host member state is March 27, 2026.

Any enquiries regarding the completion of the form must be sent to the regulator by March 20, 2026 at the latest.

The regulator noted that this year’s survey tool does not allow firms to save a draft or edit a contribution once it has been submitted.

Upon submission, firms must also email the regulator to specify how many of their reported complaints were directly related to anti-money laundering or counter-terrorist financing obligations.

This request covers instances where clients were dissatisfied due to account restrictions, delays in deposits from source of funds checks, or withdrawal limitations.

Other examples of relevant complaints include account closures resulting from missing due diligence documentation or verification issues.

Firms are reminded that these examples are for statistical reporting purposes and do not represent an endorsement of any specific compliance practice.

When completing the turnover section of the form, firms must use whole numbers and only use a full stop as a decimal separator if necessary.

The regulator warned that failing to comply promptly and correctly could result in administrative penalties under the law.

No reminders will be sent to firms that fail to meet their reporting obligations, the commission concluded.