The Cyprus Securities and Exchange Commission , better known as CySEC, is the financial regulatory agency of the Republic of Cyprus.

Since Cyprus became a member of the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 in 2004, CySEC has become part of European MiFID

MiFID

The Markets in Financial Instruments Directive as subsequently amended is a European Union law that provides harmonised regulation for investment services across the 30 member states of the European Economic Area...

 regulation, giving firms registered in Cyprus access to all European markets. This has led to a number of overseas firms registering in Cyprus to take advantage of this regulatory regime. Notably is the number of overseas retail forex brokers that have obtained registration from CySEC.

History

CySEC was launched in 2001 as part of section 5 of the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law of 2001 as a public corporate body.

Cyprus joining the of the EU and adopting the Euro

Euro

The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

 in 2004 significantly changed the financial regulatory framework that CySEC policed for what had been previously been considered a tax haven

Tax haven

A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....

.

A number of changes to legislation were made in conjunction with Cysec between 2007 and 2010 to upgrade the Cyprus financial regulatory framework and bring it in-line with EU recommendations.

Responsibilities

The Cyprus Securities and Exchange Commission has the following responsibilities:

1. To supervise and control the operation of the Cyprus Stock Exchange
   Cyprus Stock Exchange
   The Cyprus Stock Exchange or CSE is a stock exchange located in Nicosia, Cyprus. It was established under the Cyprus Securities and Stock Exchange Law which provides for the development of the securities market in Cyprus and for the establishment and operation of the Cyprus Stock Exchange, and was...
   
    and the transactions carried out in the Stock Exchange, its listed companies, brokers and brokerage firms.
2. To supervise and control Licensed Investment Services Companies, Collective Investment Schemes, investment consultants and mutual fund management companies.
3. To grant operation licences to investment firms, including investment consultants, brokerage firms and brokers.
4. To impose administrative sanctions and disciplinary penalties to brokers, brokerage firms, investment consultants as well as to in any other legal or natural person whom fall under the provisions of the Stock Market legislation.

Structure

CySEC is administrated by a five member Board which is composed of the Chairman, the Vice-Chairman that are employed full time plus three other members. In addition of the Governor of the Central Bank of Cyprus

Central Bank of Cyprus

The Central Bank of Cyprus , is the central bank of the Republic of Cyprus, located in Nicosia. It was established in 1963. Its current governor is Mr. Athanasios Orphanides...

is represented by a non voting board member.

The members of Board are named by the Council of Ministers following a proposal of the Minister of Finance and their service is a five-year term.