Cyprus Investment Firms Must Align with EU Sustainability Laws, CySEC Says ⋅ Crypto World Echo
Cyprus Investment Firms (CIFs) must ensure compliancewith EU-wide regulations, according to a recent notice from the Cypriot regulator. The Cyprus Securities and Exchange Commission (CySEC) has outlined several CIFs’ regulatory obligations.
These rules reportedly align with the European GreenDeal and require firms to integrate sustainability considerations into theiroperations. From transparency in investment strategies to enhancedrisk management, CIFs must now ensure compliance with EU-wide regulations aimedat promoting a greener financial sector.
Sustainability-Related Obligations
CySEC’s circular highlights several legislative actsthat CIFs must adhere to, ensuring they incorporate sustainability risks andfactors into their financial services. These obligations are in light of major EUregulations, including the Sustainability-Related Disclosures Regulation(SFDR), the EU Taxonomy, and updates to MiFID II.
Under SFDR, CIFs offering portfolio management andinvestment advice must reportedly provide transparent sustainability-relateddisclosures.
According to the watchdog, CIFs must publish policies detailing how theyintegrate sustainability risks into their investment decisions and remunerationpolicies. Additionally, the firms must inform clients about sustainabilityrisks in pre-contractual documents, websites, and periodic reports.
Ε683 – Υποχρεώσεις των ΚΕΠΕΥ σχετικά με τις βιώσιμες επενδύσειςhttps://t.co/34Y4Zm8g5VC683 – Sustainability-related obligations of CIFs
— CySEC – Cyprus Securities and Exchange Commission (@CySEC_official) February 13, 2025
Firms promoting environmental or socialcharacteristics must meet additional disclosure obligations. The EU TaxonomyRegulation complements SFDR by providing a classification system forenvironmentally sustainable activities. This framework aims to combat greenwashing and helpinvestors make informed choices.
MiFID II and Sustainability Integration
MiFID II has also been updated to incorporatesustainability considerations into investment services. CIFs must also integratesustainability risks into organizational processes, risk management frameworks,and conflict-of-interest policies.
These changes took effect on August 2, 2022,reinforcing the need for firms to embed sustainability into their advisory andportfolio management services. CIFs that manufacture or distribute financialinstruments must incorporate sustainability objectives into their productdesign and distribution strategies.
The European Securities and Markets Authority provides additional clarification on regulatory expectations, which CIFs shouldactively engage with.
This article was written by Jared Kirui at www.financemagnates.com.
