What this chapter covers
A Cypriot Investment Firm (CIF) is an investment firm authorised by CySEC under Law 87(I)/2017, the Cyprus law that transposes MiFID II. These notes cover how a firm is authorised, what it must keep doing, and how CySEC can suspend or withdraw its licence, then the rules for its board of directors, governance and senior management.
The later notes deal with the way a CIF does business, through tied agents, with eligible counterparties and, historically, as a crowdfunding platform, and with CySEC's restrictions on CFDs and binary options for retail clients. The last group turns to market infrastructure: SME growth markets, regulated markets and the providers that publish and report trade data.
Several rules have moved on since the exam material was written: the SME test for bond-only issuers changed in 2019, data reporting providers passed to ESMA in 2022, crowdfunding is now governed by an EU Regulation, and new rules on pricing market data apply from 2026. Each note teaches what the exam tests and says what applies today.
The 10 topics
Each note starts with a short answer and a table of the facts to remember.
Authorisation and supervision
- How does a firm become a Cypriot Investment Firm, and what must it keep doing?Who needs a CySEC licence, the six-month decision, the EU passport and the duties that keep a licence valid.6 months6 min
- When can CySEC suspend or withdraw a CIF's authorisation, and what happens to clients?Grounds for withdrawal, total, partial and immediate suspension, and returning clients' money when a firm leaves.12 months6 months6 min
Board and management
- What rules apply to a CIF's board of directors?Fit and proper directors, at least two people in charge, and the directorship cap for significant CIFs.1 + 2 or 4 seats5 min
- What must a CIF's board and senior management do to govern the firm?The board's duties, the chair and CEO split, the nomination committee and the annual reports to senior management.At least annually5 min
Doing business
- What are the rules for tied agents, eligible counterparties and crowdfunding?One principal per tied agent, who counts as an eligible counterparty, and crowdfunding's move to the EU Regulation.1 month3 working days€5 million7 min
- How does CySEC restrict CFDs and binary options for retail clients?The five protections for selling CFDs to retail clients, the margin levels, and the two narrow exceptions to the binary options ban.3.33%–50% margin90 days7 min
Markets and market data
- What is an SME growth market, and how does an MTF qualify?Which issuers count as SMEs, the 50% test for an SME growth market, and when the status is lost.€200 million50%3 years7 min
- How is a regulated market authorised and supervised, and when must it alert CySEC?Authorising a regulated market and its operator, owners with significant influence, and the signals operators report to CySEC.12 months6 months7 min
- How do regulated markets admit instruments and members, and control algorithmic trading?Admitting instruments and members, monitoring trading, direct electronic access and controls on algorithms.6 min
- What are APAs, ARMs and CTPs, and who supervises them today?APAs, ARMs and CTPs, their deadlines and market data pricing, and the move of supervision to ESMA.Next working day90 days6 min
The numbers to know
Every figure in this chapter, with the note that explains it.
| Figure | What it is | Note |
|---|---|---|
| 6 months | Time CySEC has to decide on a complete application for CIF authorisation | Topic 1: How does a firm become a Cypriot Investment Firm, and what must it keep doing? |
| 12 months and 6 months | An authorisation may be withdrawn if unused within 12 months of grant, or if no services were provided for the preceding six months | Topic 2: When can CySEC suspend or withdraw a CIF's authorisation, and what happens to clients? |
| 1 executive + 2 non-executive, or 4 non-executive | Most directorships a director of a significant CIF may hold at the same time, unless CySEC allows one extra non-executive seat | Topic 3: What rules apply to a CIF's board of directors? |
| 3.33% to 50% | Initial margin a retail client must post on a CFD, from major currency pairs to cryptocurrencies | Topic 6: How does CySEC restrict CFDs and binary options for retail clients? |
| €200 million | Average market capitalisation below which a listed issuer is an SME for MiFID II | Topic 7: What is an SME growth market, and how does an MTF qualify? |
| 90 days | Advance notice market data providers, including APAs and CTPs, must give of changes to their fees or terms | Topic 10: What are APAs, ARMs and CTPs, and who supervises them today? |