Read the CySEC Circular C795
Memo #45-2026
CySEC Circular No: C795
Date: 13/08/2026
Subject: ESMA launches a Common Supervisory Action (‘CSA’) with NCAs on Risk management function of UCITS management companies and AIFMs
Purpose: To inform the Cyprus Investment Fund Managers that ESMA has launched the 2026 Common Supervisory Action with National Competent Authorities.
In Summary:
CySEC has issued the Circular C795 on 12/08/2026 to inform the Cyprus UCITS Management Companies and Internally Managed Cyprus UCITS and Cyprus Alternative Investment Fund Managers and Internally Managed AIFs, that the European Securities and Markets Authority (ESMA) has launched the 2026 Common Supervisory Action (‘the 2026 CSA’) with National Competent Authorities (NCAs), on the risk management function of UCITS management companies and Alternative Investment Fund Managers (AIFMs) across the EU.
ESMA notes in its publication that risk management is a core function of investor protection and financial stability.
In accordance with Circular C795, the focus of the 2026 CSA is on the effectiveness, independence and expertise of the risk management function. In particular, the focus areas are set as follows:
• governance and organisation of the risk management function;
• identification, measurement and monitoring of risks; and
• reporting to senior management and governing bodies.
CySEC notes that an effective risk management function contributes to the sound and prudent management of UCITS and AIFs, the identification, measurement, management and monitoring of material risks, the protection of investors and the timely escalation of risk-related matters to senior management and the Board of Directors.
CySEC further informs that it will participate in the 2026 CSA and will initiate a targeted thematic review in late 2026 early 2027, comprising both on-site and/or desk-based reviews, on a representative sample of CyIFMs.
CySEC expects CyIFMs to take due note of the launch of the 2026 CSA and to consider whether their existing arrangements relating to the risk management function remain appropriate, effective and proportionate to their activities and to the UCITS and AIFs under management, in line with the applicable regulatory requirements.
The 2026 Common Supervisory Action launched by ESMA can be found on the following link:
Read the CySEC Circular C795
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