Summary of CySEC's Circular C418

Memo #60-2020

CySEC Circular No: C418
Date: 27/11/2020
Subject: Enhancement of procedures regarding safeguarding of client funds held by CIFs
Purpose: To provide information about the enhancement of procedures regarding safeguarding of client funds held by CIFs.

In Summary:

The Circular C418 issued on 27/11/2020 by CySEC provides information about the enhancement of procedures regarding safeguarding of client funds held by Cyprus Investment Firms ('CIFs').

Specific, this Circular C418 refers about:

A. Regulatory framework for the safeguarding of clients assets

B. Requirement for holding separate clients’ accounts

C. Use of Payment Service Providers (PSPs) and Electronic Funds Institutions (EMIs)

D. Due diligence and diversification of institutions holding clients’ funds

E. Depositing clients’ funds with a bank or qualifying money market fund of the same group as the CIF

F. Use of Title Transfer Collateral Arrangements (“TTCAs”

G. Maintaining a ‘buffer’ in clients’ bank accounts

H. Single officer for the safeguarding of client financial instruments and funds
 
I. Reconciliation of clients’ funds

Also this Circular C418 refers about other matters such the signatory powers of persons in a CIF for clients' accounts with entities of paragraph 4(1) of the Directive DI87-01, who can be appointed by a CIF as the signatories of the clients’ accounts with entities of paragraph 4(1) of the Directive DI87-01 and how a CIF can use the clients’ accounts with entities of paragraph 4(1) of the Directive DI87-01.

Read the CySEC Circular C418

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