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1. Legal form

What legal form can the administrative services provider have?

The Administrative Service Provider (ASP) must be a company registered as per the Company Law. Natural persons cannot submit an application or obtain an ASP license

Interpretation - article 2

2. Legal persons exempted

Article 3(5) of the Law refers to legal persons that are exempted from the scope of application of the Law in the case they are 100% owned by a licensed person. What happens in the case that the same natural person is the single shareholder of the licensed person and of another company which is not licensed and provides administrative services? Will the second company be exempted from the scope of application of the Law under article 3 (5)?

Article 3(5) refers to companies that are 100% owned by the licensed person. Therefore the company which is owned by the same natural person does not qualify for the exemption of article 3(5). To qualify for the exemption it must be 100% owned by the licensed person.

Scope of application – article 3

3. Legal persons exempted

Can a person resident out of the Republic, duly authorized to provide administrative services in a member state or a third country, also provide administrative services in the Republic?

The provision of the administrative services, mentioned in article 4 of the Law, in the Republic requires licensing from CySEC, even in the case of duly authorised persons to provide administrative services in other member states or third countries.

Scope of application - article 3

4. Scope of application - article 3

An ASP currently works with international trust/corporate service providers, for whom it provides managed trust services for their Cyprus operations. Do the international service providers need to apply for licensing in their own right? Can they operate under the umbrella of the Cyprus ASP, once it is licensed?

In the case that the international service providers are just clients of the licensed ASP then they do not need to be licensed. However, if they operate under the umbrella of the Cyprus ASP or appear to their clients as if operating from Cyprus or under the license of the Cyprus licensed firm then they have to be licensed.

Αrticle 9(3)

5. Legal persons exempted – 100% subsidiaries

An ASP’s 100% subsidiaries are excluded from the scope and do not need a separate ASP License as they fall under the umbrella of the licensed ASP. Can these subsidiaries be Cyprus and foreign companies?

Article 3.5 refers to legal persons and does not limit them to companies register in Cyprus; therefore such subsidiaries can be registered in Cyprus or abroad. If a subsidiary has as registered shareholder the employee of the licensed person but the licensed person is 100% the ultimate beneficial shareholder then the subsidiary is considered 100% owned by the licensed person. In practice we recommend ownership to be held directly by the ASP. Please note that ALL subsidiaries of the licensed person must be disclosed to CySEC at all times (article 3(5). All 100% subsidiaries of the licensed person will be published in the registry of article 25.

Scope of application - article 3.5

6. Legal persons exempted – Notification of 100% subsidiaries

An ASP must, on an ongoing basis, notify CySEC of its 100% subsidiaries. What must this notification include? Does the ASP need to send any supporting documents?

When the ASP notifies CySEC of such information he must disclose (a) the name of the subsidiary, (b) the shareholders (see our approach in question 4.1), (c) the directors and the state of domicile. No supporting documents/certificates must be sent.

Scope of application - article 3.5

7. Strike off a subsidiary company from the companies Register in the Registrar of Companies

In case of an ASP decides to strike-off a subsidiary, when does it need to notify CySEC for this change?

When the ASP decides to strike-off a 100% subsidiary and notifies the Registrar of Companies, at the same time it needs to notify CySEC accordingly, so that CySEC can update its online Register with the indication ‘pending strike-off at the Registrar of Companies’ next to the subsidiary’s name.

Strike off – 100% subsidiaries – Article 3(5)

8. Employees of 100% subsidiaries of ASP

Should the employees of 100% subsidiaries of ASP, who can offer Administrative Services, be notified to CySEC by the ASP?

The employees of the subsidiary are not exempted from the provisions of the Law. Article 5(1) makes specific reference to employees of ‘eligible persons’. If the employees of the 100% subsidiary are not the same as those of the ASP then they are not exempted from the provisions of the Law.

Prohibition of exercising administrative services without authorization – Articles 3(5) and 5(1)

9. Administrative services scope – escrow agreement

Does acting as escrow agent, fall within the scope of administrative services?

Yes it does, as it is covered by article 4.1(b) (vii).

Administrative services – article 4

10. Opening or managing bank accounts

In cases of ASPs which (i) are duly authorised to provide administrative services in other member states/third countries, (ii) have no representative office in Cyprus, (iii) are owned by a foreign UBO and (iv) act as introducers of foreign (only) clients to local banks, i.e. in cases where the only Cypriot element is the introduction of clients to local banks, is a licence from CySec still required or does the relevant activity fall outside the ambit of the term "administrative services"?

If a Cypriot or foreign company only introduces clients to Cyprus banks then it does not fall under the ASP Law. If on the other hand they are the signatory for the opening and or management of the account then they fall within the ambit of the Law. Always remember to check the exemptions for physical persons as quoted in article 4(3).

Administrative services – article 4(1)(b)(vii)

11. Trust Services and nominee services

For example, a Swiss company is a Trustee of a Guernsey Trust and holds on behalf of that Guernsey Trust dividend shares in a Cyprus based entity. Does the Swiss company fall under the scope of the Law?

If we have foreign nominee holding shares in a Cyprus entity then it would not be permitted and authorization would be required. If we have a trustee of a foreign trust governed by foreign law, even if the assets include Cyprus shares, as per the above example, then there is no service offered in Cyprus as the trust is not governed by Cyprus Law.

Administrative Services – Article 4

12. Company directors acting as signatories

Does a company’s director, if not an ASP or eligible person, need to have an ASP authorization to act as signatory for the management if the company’s bank account?

No, in this case we consider the director to be acting within his duties as company director and does not need an ASP authorization. Note however, that the director must be legally appointed in this position, as per the provision of the Law (for example under article 4(3).

Administrative Services – Article 4(1) (b) (vii)

13. Administrative Services provided by natural persons – Directorships

According to Article 4(3)(a)(vii) the provision of Administrative Services by a natural person does not require any license, if the Administrative Services are not advertised in order to attract clients. Is this right?

Article 4(3)(a)(vii) states that natural person do not need a license to provide their services as directors to companies if the services are provided to LESS than 10 companies and if the provider of the service does not control the board of directors. If the natural person provides directorship to more than 10 companies he/she should incorporate a company and apply for a license to CySEC. The said article covers only the provision of directorships and NOT any other administrative services.

Regulation of Administrative Services – Article 4(3)(a)(vii)

14. Persons that effectively direct the business – article 7

The management of the licensed person must be exercised by a minimum of 2 persons. Are non-executive directors included?

Management must be exercised by, at least, 1 executive director and 1 senior manager or 2 executive directors or 2 senior managers. Non-executive directors are not considered part of management. The above persons must be employed and be part of the personnel of the licensed person. CySEC could accept one of the two to be employed on a part-time basis, if this is justified by the size and complexity of the company’s operations.
The above explanation refers to the management company and not to the members of the Board of Directors. The Board of Directors must be comprised of, at least, two persons, which can either be two executive directors (the members of the management) or one executive and one non-executive director.

Non-executive directors

15. Residency of management

The management of the licensed person must be exercised by, at least 2 persons. Can they be non-residents?

Those 2 persons must be residents of Cyprus. In case the management is exercised by more than 2 persons, then CySEC may permit non-residents. However, the majority of the management must always be Cyprus residents.

Persons that effectively direct the business - article 7

16. Information to be submitted the Commission

What information is needed to be submitted to the Commission for an appointment or change of appointment of persons that effectively direct the business of the ASP after its authorisation?

The ASP must immediately notify, in writing, the Commission regarding changes in the persons that effectively direct the business (i.e. Directors and senior management) by providing the following information to the Commission:

1. Full name of the person who resigns (if applicable). Reference also must be made if the said person acted as a compliance officer, as well.
2. Full name of the appointed person and country of residence. We note that in the case the new person will be acting as a Compliance Officer as well, he/she will be appointed only if prior to his appointment he/she is authorised by the Commission [article 9(4)].
3. The composition of the new board of directors of the ASP - providing details as to the full name, country of residence, capacity (i.e. executive or not).
4. A copy of the Registrar of Companies new certificate of directors – whenever that may be issued.

We note that any change to the persons who effectively direct the licensed person shall not be subject to approval by the Commission. The Commission, however, retains the right, at any time, either to oppose any extension or amendment of the authorisation, or request from the licensed person additional documents or, information or indicate amendments.

Each licensed person must ensure that these persons meet the requirements of the Law so that they will be able to contribute to the sound and prudent management of the company and to protect the interests of the company's clients.
The Commission may seek to satisfy what the company considered/evaluated when appointing/ recruiting a person. The Commission therefore advises the licensed persons to keep proper internal records so that they can justify the said appointments.

Changes in the persons that effectively direct the business - article 7(4)

17. Residency of shareholders

Can the beneficial owners of a licensed person be non- residents?

Yes

Shareholders – article 8

18. Shareholders with different capacities in the ASP

The Beneficial Shareholder is also the Executive Chairman of the company. Should we fill in F196-2012-02 twice for him, or just once and mention both of his identities?

Definitely not twice. It is sufficient to mention his different capacities on one questionnaire

Form F196-2012-02

19. Nominee shareholders

Can an ASP just appoint a nominee shareholder (e.g. a lawyer) in order to be exempted from the Law? How will CySEC know the beneficial owner of a fiduciary firm in case of the appointment of a nominee shareholder?

Definitely no. CySEC will examine who are the beneficial owners and not the nominee shareholders.

Article 8(1) states that:

“The Commission shall not authorise the provision of administrative services, until it has been informed of the identity of the shareholders, whether direct or indirect, and the beneficial owners of the applicant irrespective if these are natural or legal persons: It is provided that in respect of legal persons, the applicant or the licensed person must provide information of the identity of the natural persons managing them as well as that of
their shareholders, reaching up until the final natural persons.”

The above is supported by the information requested for submission to CySEC via the relevant application form and questionnaires.

Shareholders – article 8

20. External legal advisor

Does an ASP maintaining a business relationship with a law firm on an annual basis need to proceed with a formal written agreement?

This is up to the ASP to decide. No further guidance will be provided from CySEC. However, the ASP must be able to submit proof of that business relationship upon CySEC’s request.

Persons employed by a licensed person – article 9(2)

21. Internal legal advisor

What is meant by internal lawyer?

The internal lawyer does not need to hold a practicing certificate from the Pan Cyprian Bar Association. The term ‘lawyer’ will be substituted by ‘legal advisor’ in a subsequent amendment of the Law.

Persons employed by a licensed person – article 9(2)

22. Appointment of compliance officer

The licensed person must appoint a compliance officer. What is meant by ‘appointment’?

Appointment means employment, either full or part time, depending on the size and complexity of the company’s operations. Appointment does not include external outsourcing. The wording “appoint” in article 9(3) will be substituted with “employ” in subsequent amendment of the Law.

Persons employed by a licensed person – article 9(3)

23. Compliance officer

Can one of the executive directors or senior managers be appointed compliance officer?

Yes, if this is justified by the size and complexity of the company’s operations.

Persons employed by a licensed person – article 9(3)

24. Compliance officer

Is the compliance officer allowed to be involved in the provision of administrative services as well?

Yes, if this is justified by the size and complexity of the company’s operations. The applicant must provide justification so as to convince CySEC that this will not affect the proper exercise of the compliance function. CySEC can reject the applicant’s request.

Persons employed by a licensed person – article 9(3)

25. Residence of employees

Can the employees of the ASP be non-residents?

It depends. The compliance officer must be resident of Cyprus. The heads of departments must also be residents of Cyprus unless for a certain department the ASP can prove to CySEC that the quality of the service to clients is not affected and that CySEC’s supervisory ability will not be hindered by this fact. Other employees can be non-residents. This will be dealt on a case by case basis when examining an application.

Persons employed by a licensed person – article 9

26. Fit and Proper Evaluation Criteria

What criteria are examined in the evaluation of fit and proper of the management and the compliance officer?

Honesty, ethics and creditworthiness

1.1 Certificate or copy of certificate of non-bankruptcy, certifying that the person is not bankrupt.
1.2 Certificate or a copy of criminal record certificate from the competent authorities of the country of residence of the person [for the last five (5) years], attesting that the person has no criminal record.
1.3 Questionnaire completed by the person.

Skills, knowledge and expertise
1.4 Secondary education degree or an equivalent qualification or certificate
1.5 University or postgraduate degree or other equivalent qualification in a field related to law, economics or finance, including banking and finance, or business administration, or accounting and
1.6 Professional experience for at least two (2) years in full time occupation relevant to the provision of administrative services (in the case of management) or relevant to the duties of compliance officer (in the case of compliance officer)
In the case criterion 1.5 is not met the professional experience must be 3 times the one mentioned in 1.6 above. Also in the case of part time employment it will be converted to full time based on the number of hours.

Persons who direct the business and employees of the ASP - articles 7 & 9

27. Filing of Application

Where does an ASP submit its application?

The ASP must submit its application in a box file (with the numbered appendixes) and pay the application fee at CySEC’s offices, 27 Diagorou str, 1097 Nicosia.

Granting of authorization - article 10

28. Academic qualifications and professional experience

How many years back should be given information on the professional experience of the persons who effectively direct the business of the ASP and of the compliance officer?

Following the answer provided in Question 16, information should be given for, at least, the last 2 years in case the criteria of paragraph 1.5 of Question 16 apply. If the criteria of paragraph 1.5 of Question 16 do not apply, then the relevant information should be given for, at least, 6 years.

General

29. Certificates of academic and professional qualifications

Is it necessary to submit to the CySEC copies of certificates of academic and professional qualifications for the shareholders, directors, senior management and the compliance officer of the Applicant?

No, information on the academic and professional qualifications of the persons is given in the Form F196-2012-02 and there is no need to provide copies of them. CySEC reserves the right of requesting certificates of academic and professional qualification regarding the said persons, on a case by case basis.

General

30. Notification

Should all ASPs notify CySEC that they are in operation (even those which are exempted)?

Exempted entities do not need to notify CySEC.

Transitional provisions – article 11

31. Application process and form - Form F196-2012-01 (Annexes 13 & 14)

Does CySEC require the submission of policies and procedures manual along with the application form?

Yes and it should cover all the AML procedures and policies of AML Directive DI144-2007-08 of 2012(Annex 13 of application form). Also a brief summary of the actual policies and procedures of articles 18-21 is required as a separate document (Annex 14 of application form), which should only include policies and procedures that the ASP will actually carry out. For example if the ASP will not provide the article 18 services then Annex 14 should be submitted for articles 19, 20 and 21 but not for article 18.ASPs that want to provide a policies and procedures manual covering also the provision of the administrative services are encouraged to do so

Granting of authorization - article 12

32. Application process and form – F196-2012-01-1 (nominee shareholders)

In case the natural or legal person listed in the shareholders of the applicant is acting as a nominee shareholder, i.e. is holding the shares on behalf of another legal entity or natural person, should the information required in paragraphs 4.1.1 and 4.1.2 of the Form F196-2012-01-1 be submitted for that nominee shareholder as well, or only for the beneficial shareholder?

If the nominee shareholder does not exercise control, or is not involved in the decision process of the company, then the information required in paragraphs 4.1.1 and 4.1.2 of the said Form should be submitted only for the beneficial shareholder.

Granting of authorisation – article 12

33. Application process and form – form F196-2012-02

In relation to work experience, form F196-2012-02 par. 2.4, do applicants need to include directorships held as part of administrative service provision?

No, director positions to clients that the ASP provides administrative services are excluded and should not be mentioned.

Granting of authorization - article 12

34. Application process and form – promoter of the application, form F196-2012-01

Who can act as representative for the promotion of the application form F196-2012-01-1 Point 1.14?

It can be anyone the applicant chooses as representative.

Granting of authorization - article 12

35. Application process and form – organisation chart, appendix 15 of form F196-2012-01-1

What would the chart of Appendix 15 of the application form include?

The organisation chart should show:
- the levels of management,
- the reporting lines (up to the ASP’s board of directors)
- all departments/functions including number of employees and the names of senior management and departmental heads
- any Committees
- reference whether the board of directors, senior management, heads of departments and the compliance officer will be CY-based and reference to their terms of employment (full/part time)

Granting of authorization - article 12

36. Application process and form – record keeping

What if the records kept are not yet in compliance with the record keeping obligations of the Law?

The applicant should still submit its application and inform CySEC in writing, in a
cover letter, as to the expected date of completion of any outstanding record keeping obligations.
Applicants not in compliance with all the record keeping obligations of the Law cannot proceed
for approval. This, of course, is not applicable to newly set up companies.

Granting of authorization - article 12

37. Application process and form – supporting documents

What if many supporting documents/appendixes are missing from an application?

CySEC will be calling applicants not in compliance with their obligations to submit
documents/appendixes to come and collect their applications and asking them to resubmit them.
This will be the case where an application is of very poor quality with a lot of missing
information and supporting documents. CySEC will not be examining such applications. In such
cases the applicant will not have to pay the application fee again when he resubmits his
application. If upon resubmission of the application again the quality of the application is poor
then CySEC will reject the application.

Granting of authorization - article 12

38. Application process and form – supporting documents by a person who holds more than one position

Could you please advise whether we need to annex to the application form multiple copies of individuals’ I.D’s, passports e.tc if they hold more than one position in the company. If, for example, the same person is a shareholder and a director will one set of documents suffice?

One set of documents will suffice. For our ease and where applicable/needed, you can
make cross reference to the relevant section/appendix where they are filed.

Granting of authorization - article 12

39. Right of appeal

What happens if for whatever reason authorisation is declined? Is there an appeal procedure?

This is a constitutional right. Under the constitution of Cyprus (article 146) you may
file an appeal at the Supreme Court. There is no appeal procedure with CySEC.

Granting of authorization - article 12

40. Information to be submitted the Commission

What information is needed to be submitted to the Commission for the extension or amendment of authorization?

The ASP must immediately notify, in writing, the Commission regarding its extension or amendment of authorisation by providing the following information:

1.     A new list of the administrative services provided clearly identifying which are the new ones.
2.     A revised organizational chart (if applicable). In case this is not applicable, it must be specifically stated in the notification letter.
3.     Where applicable, the procedures of articles 18 – 21 of the Law. (This depends on the administrative services to be provided).

Please note, that in accordance to article 13(3) of the Law, where the new service to be offered is that of article 4(1)(a) then the ASP must notify CySEC without any delay.

We note that the Commission does not approve the extension of an ASP’s license to additional administrative services but retains the right, at any time, either to oppose any extension or amendment of the authorisation or request from the licensed person additional documents or information or indicate amendments. The licensed person must comply with any demand and/or indication made by the Commission.

Application for extension or amendment of authorisation - article 13

41. Appointment of compliance officer

What is the purpose of article 17(4)?

Article 17(4) will be deleted in a subsequent amendment of the law as it is of no
substance since the duties of the compliance officer cannot be outsourced.

Outsourcing - article 17(4)

42. Outsourcing of Administrative Services to third parties

To whom can the ASP outsource the provision of administrative services referred in article 17 of the Law?

The ASP may proceed to outsource to third parties the provision administrative services following the criteria set in paragraph 16 of Directive DΙ144-2007-01 of 2012, (R.A.D. 473/2012) which you can find on CySEC’s website. The said Directive will be amended to cover ASPs on some paragraphs.

Outsourcing – article 17

43. AML reporting – Internal Audit function

The AML Directive DI144-2007-08 of 2012 refers to the requirement for monthly and annual reporting to CySEC. Will this also apply to ASPs?

All the requirements of the AML Law and Directive DI144-2007-08 apply to all ASPs – including those pending authorisation.
The monthly report must be submitted, following the ASP’s authorization whereas the annual reporting must be submitted irrespective to where authorisation has been received or not.

Continuous obligations - article 23

44. AML reporting –Internal Audit function

Is it compulsory for the ASP to have the Internal Audit function?

Answer: Yes, it is compulsory for an ASP to have an Internal Audit function. An ASP is an obliged entity as per Article 2A of the Prevention and Suppression of Money Laundering and Terrorist Financing Law (‘AML Law’).

Article 58(d) of the AML Law states the following:
’58. An obliged entity applies adequate and appropriate policies, controls and procedures, which are proportionate to its nature and size, so as to mitigate and manage the risks of money laundering and terrorist financing effectively, in relation to the following:
…
(d) internal control, risk assessment and risk management in order to prevent money laundering and terrorist financing;’

Paragraph 6 of the CySEC’s Directive for the Prevention and Suppression of Money Laundering and Terrorist Financing states that:
‘6. The internal audit department of the Obliged Entity reviews and evaluates, at least on an annual basis, the appropriateness, effectiveness and adequacy of the policy, practices, measures, procedures and control mechanisms applied for the prevention of money laundering and terrorist financing. The findings and observations of the internal auditor are submitted, in a written report form, to the board of directors which decides the necessary measures that need to be taken to ensure the rectification of any weaknesses and/or deficiencies which have been detected. The minutes of the abovementioned decision of the board of directors and the internal auditor’s report are submitted to the Commission within twenty days from the relevant board meeting and not later than four months from the end of the calendar year.’.

Continuous obligations - article 23

45. Monthly Prevention Statement for the Prevention of Money Laundering and Terrorist Financing

Can you give us more information on how this statement is prepared/filed?

CySEC has issued on May 24 2013 a circular numbered CI144-2013-17, addressed to
CIFs and ASPs, which provides useful guidelines and information on the this issue. The circular
can be found on CySEC’s website under the circular for CIFs and ASPs
http://www.cysec.gov.cy/circulars_en.aspx

Continuous obligations - article 23

46. Internal Audit Function

Can the ASP that belongs in a group be monitored by the Internal Auditor of the group who is not based in Cyprus?

Yes, this is possible under the following conditions:

(a) The Internal Auditor will fully comply with the AML Directive requirements - DI144-2007-08. It is pointed out that the Internal Auditor should not rest solely on the risk-based approach and allocate its function resources to group members which are bigger in size and risk.

(b) The ASP shall, immediately upon the appointment of the Internal Auditor, provide the Commission with all necessary information, including all of its contact details. Any changes to the contact details of the Internal Auditor should be immediately notified to the Commission.

(c) The Internal Auditor must be reachable at all times by the Commission.

(d) The Internal Auditor must be able, upon the Commission’s request, to travel on short notice and be present at the registered offices of the ASP on the day of a scheduled inspection or investigation.

Continuous obligations - article 23

47. Registry of licensed persons

Will the license and the registry state the administrative services for which the ASP has been authorized?

Yes, the registry will include the administrative services for which license is granted, as
these are categorized in the application form. The Registry will also include the ASP’s
subsidiaries.

Registry of licensed persons- article 25

48. International Trusts and Trust deeds for nominee shareholding

Does the Trust Register concerns only the International Trusts and Local Trusts or does it also apply to the trusts arising under article 4(1) (b) (iii)?

Trust deeds under article 4(1) (b) (iii) are not registered in the Trust Register.

Registration of Trusts – Article 25A

49. International Trusts and Trust deeds for nominee shareholding

Does the Trust Register concerns only the International Trusts and Local Trusts or does it also apply to the trusts arising under article 4(1) (b) (iii)?

Trust deeds under article 4(1) (b) (iii) are not registered in the Trust Register.

Registration of Trusts – Article 25A

50. Registration of Trusts by non ASP Trustees, Lawyers or Accountants

In case where the trustee is a company 100% owed by the settlor or by the beneficiary of the Cyprus trust (i.e. the trustee is not an ASP) does it need to be registered under the Trust Register provided by CySEC (excluding the Cyprus Bar Association and the Institute of Certified Accountants)?

Yes, the obligation to register applies to both trustees who are ASPs and any other person who is not a lawyer or accountant, as per article 25A (4) of the ASP Law.

Establishing Trust Registers – Article 25A (4)

51. Director of the trustee providing administrative services

In case where the director of the trustee company is an ASP or a physical person, does it still need to be registered under CySEC’s Register of Trusts?

Yes, the identity of the director of the trustee company does not interfere with the obligation to register.

Establishing Trust Registers – Article 25A (4)

52. Accountants and lawyers simultaneously acting as trustees

In case where a trust has one trustee who is an accountant and another who is a lawyer, who should register the trust and under which Competent Authority?

One of the two Competent Authorities (ICPAC/CBA) could be chosen in order to register the trust (under article 25A of the ASP Law). The important thing is to have your trust legally registered under a Competent Authority’s Register.

Establishing Trust Registers – Article 25A (4)

53. Foreign Trustees

The assets of the Trust consist of money in Cyprus and the beneficiaries are, for example, British Citizens. The shareholder and director of the Trustee company is also a British citizen. Do I proceed and apply for its registration under the CySEC Trust Register?

As per Article 25A of the ASP Law 196(I)/2012 (amended with Law 109(I)/2013) all trusts should be registered. Under article 5(2) all trusts governed by Cyprus Law MUST have at least one Cypriot Trustee – failure to comply is a criminal offence (article 26). Then based on the Cypriot trustees’ identity (lawyer, accountant, ASP or any other person) you should register the trust in the appropriate Registry.

Establishing Trust Registers – Article 25A

54. Trust Registration by Non ASP Trustees

According to Article 25A(4) of the ASP Law an individual, who is a Cypriot national and resident, and acts as trustee for a family trust which is governed by Cypriot Law, is obliged to register the trust regardless of the fact that the said individual does not require any license for the provision of administrative services and regardless of the fact that is not regulated by CySEC or by any other competent authority. Can you please confirm that the said trust needs to register at the Commission’s Register of Trusts.

Article 25(4) states that ‘the Commission establishes and keeps a Register of Trusts with respect to every trust governed by Cyprus Law which does not fall under the provisions of paragraphs (2) and (3)’. Any trust whose a trustee is not regulated by any other Competent Authority (ICPAC and CBA) should be registered to the Commission’s Register of Trusts.

Establishing Trust Registers – Article 25A (4)

55. CySEC powers

Can CySEC have access to the company’s confidential KYC information at any time instantly and without a Court order?

Yes. CySEC’s investigatory powers are defined in the Law Regulating the Structure,
Responsibilities, Powers, Organization of the Securities and Exchange Commission and other
Related Issues.

Competent Authority and powers - article 30

56. Methods of supervision

Is there any guidance from CySEC as to the method of supervision (monitoring visits, etc.) and the applicable regulations?

CySEC will be carrying out the same level of supervision for all licensed entities.
Supervision methodology will include desk monitoring and on-site investigations/inspections.
AML procedures and record keeping obligations as well as other obligations arising from the
Law will be part of CySEC’s supervision.

Supervisory authority – article 30

57. Methods of supervision

Will CySEC proceed with inspection/investigation of the files kept by the licensed person for its clients as to the maintenance of appropriate records of minutes of meetings of the board of Directors or AGM, service agreements with the clients/agents? If yes, will this apply to the client companies incorporated before the publication of the Fiduciary Law, as well?

Request of the above may be part of CySEC’s investigation and it applies to all clients
of the ASP.

Supervisory authority – article 30

58. Presence of non-executive directors

Is it necessary to have non-executive directors on the Board?

Non-executive directors are not required by the Law, but CySEC encourages their
appointment.

General

59. Compliance with the Law date

When must the ASP comply with the Law?

The ASP must take all reasonable steps to comply with the Law before the submission
of its application for authorization and must be in full compliance with the Law from the moment
of its authorization.

General

60. Discrepancies between Greek and English versions of the Law

In case of discrepancies between the Greek text of the Law and the translated English version of the Law as uploaded to the official website of CySEC which is binding?

The English text is unofficial. The binding text is the Greek one.

General

61. Procedure for an exempted person who wishes to apply for an ASP authorisation.

I would like to ask you on the procedure to be followed for exempt persons who decide to apply for a licence to the CySEC. The Law permits exempted persons to apply at any stage, if they so wish, for a CySEC authorisation. What is the procedure to be followed by these persons?

Exempted persons, as you correctly put it, may at any stage apply for a CySEC ASP license. The procedure is the same as that of a newly set up company – as per article 10 of the Law. The only difference is that those exempted persons are allowed to continue providing their services while their license is under examination. Also note that these applications – same as new applications – will be examined within a 4 month period deadline (article 12(1).

General – Exempted persons