What this chapter covers
Law 87(I)/2017 transposes the EU's MiFID II Directive and has applied in Cyprus since 3 January 2018. It sets out whom the rules on investment services cover, which firms and activities are exempt, and how firms from outside the EU may serve clients in Cyprus. The first notes cover the Law's scope, third-country firms and the exemptions.
The middle notes deal with the supervisors, CySEC and the Central Bank of Cyprus: their powers, their cooperation with other authorities, and the offences the Law creates. The last group explains the Investor Compensation Fund: who must join, how it is funded and invested, and when and how much it pays.
Several points in the exam material are out of date: data reporting service providers left the Law in January 2022, the commodity-dealer exemption has needed no yearly notice since February 2022, and CySEC now sets how often it reviews each investment firm by the firm's size and complexity, instead of reviewing every firm at least once a year. Each note teaches what the exam tests and says what applies today.
The 8 topics
Each note starts with a short answer and a table of the facts to remember.
Scope and market access
- What does Law 87(I)/2017 cover, and who must follow it?What Law 87(I)/2017 covers, whom it applies to, and where banks and data reporting services fit in.3 January 20188 min
- How can a firm from outside the EU serve clients in Cyprus?How firms from outside the EU may serve clients in Cyprus: the ESMA register, Cyprus branches and reverse solicitation.7 min
- Which firms and activities does Law 87(I)/2017 exempt?Who is outside the Law, the own-account dealing exemption and its limits, and the commodity-dealer exemption.8 min
Supervisors and enforcement
- Who supervises investment firms in Cyprus, and what happens if someone misleads them?The two competent authorities, their powers, the single contact point and the offences under the Law.8 min
- What must CySEC do as supervisor, and how does it work with other authorities?CySEC's register, its review of firms and shareholders, and cooperation and information exchange with other authorities.9 min
Investor Compensation Fund
- What is the Investor Compensation Fund, and which firms must join it?What the Investor Compensation Fund is for, who must join, and what happens when a member leaves.6 min
- Where does the ICF's money come from, and how must it be invested?How members fund the ICF, when it may borrow or insure, and how it invests its money.70% / 10%6 min
- When does the ICF pay compensation, to whom, and how much?When the ICF pays, how claims are made and added up, and the compensation limit.€20,00090%3 months6 min
The numbers to know
Every figure in this chapter, with the note that explains it.
| Figure | What it is | Note |
|---|---|---|
| €20,000 · 90% | Most the ICF pays a client: the lower of 90% of the client's combined claims or €20,000 | Topic 8: When does the ICF pay compensation, to whom, and how much? |
| 3 months | Time the ICF has to pay compensation after notifying its decision on a claim | Topic 8: When does the ICF pay compensation, to whom, and how much? |
| 2 newspapers | Minimum number of widely read newspapers in Cyprus in which the ICF calls for claims | Topic 8: When does the ICF pay compensation, to whom, and how much? |
| 70% · 10% | Minimum shares of the ICF's assets held in safe placements, and in interest-bearing current accounts with banks in Cyprus | Topic 7: Where does the ICF's money come from, and how must it be invested? |
| 3 January 2018 | Date from which Law 87(I)/2017 has applied, replacing most of Law 144(I)/2007 | Topic 1: What does Law 87(I)/2017 cover, and who must follow it? |
| 1 January 2022 | Date from which data reporting service providers have been outside Law 87(I)/2017 | Topic 1: What does Law 87(I)/2017 cover, and who must follow it? |