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#1 02-01-2020 11:57:39

johnedward
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From: Paris - France
Registered: 21-12-2009
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ESMA slams CySEC as being in "partical compliance" with new rules

ESMA slams CySEC as being in "partical compliance" with new reporting rules


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The European Financial Markets Authority has recently reviewed the new rules for reporting suspicious transactions. The national supervisory authorities of 29 Member States were examined. These rules have been in effect since 2017. 7 member organisations have been classified as "Partially Compliant", the lowest category. CySEC, which has spent the past few years improving its overall monitoring process, has been included in this group. CySEC opposes the conclusions of this report.

ESMA and CySEC have disagreed for a number of years. In 2018, ForexFraud.com said:

"In the first months of this year and last year, CySEC reacted to the strong pressure exerted by ESMA, which asked it to be more reactive in terms of the apparently poor commercial practices of its licensees. A multitude of rule changes, guidelines and procedural revisions quickly hit the island of Cyprus, allegedly to tighten the screws on violators who fell that regulatory surveillance is both lenient and absent."

The evaluation also says:

"However, it is one thing to issue new statements, and another to monitor compliance, find the bad guys and impose fines and penalties. A few minor fines have been imposed, but the jury still doesn't know if the CySEC has changed its ways."

Kalogerou, the CySEC's chief, says that 25.4 million in fines have been imposed in the past few years and that the agency has done much to "establish good corporate governance practices and an ethical culture in regulated entities, reflecting the fundamental principles of integrity, transparency and accountability." Against this backdrop, CySEC opposes ESMA's conclusions, stressing that: "The report don't take into account the market's characteristics."

The report finds a significant increase in reports of suspicious trades and orders and believes that national supervisors can do more to ensure that all financial players play their role in the fight against market abuse. 8 competent national authorities were found to be fully compliant, a dozen others as globally compliant and 7 - including Cyprus - as partially compliant.

In its defense, CySEC officials took note of these additional elements:

Arrow The agency performs a large number of audits of online trades;

Arrow Several investment companies also issue a number of financial instruments which do not fall under the rules of "market abuse regulation";

Arrow ESMA fails to note in its report that CySEC had identified during its audits a certain number of cases of "non-declaration or declaration of poor quality of suspicious trades"; and

Arrow CySEC continues to work diligently with other national authorities to monitor all cross-border trades of a suspicious nature, as defined by ESMA rules.

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