The Cyprus Securities and Exchange Commission has issued a Policy Statement (PS-02-2020) in order to notify its decision to launch a Temporary Permission Regime for the provision of investment services to professional clients and eligible counterparties based in Cyprus by UK Investments Firms. It is well known that United Kingdom has left the European Union on the 31st of January 2020. As a result of this decision a transitional period was decided until the 31st of December 2020. During the Transitional period the cross-border provision of investment services and/or investment activities, including any relevant ancillary services, within the meaning of Directive 2014/65/EU, also known as “MIFID Passport”, will be possible to or from the UK. On the 1st of January 2021, after the expiration of the Transitional period, UK Investment Firms will be considered to be as Third Country investment Firms. CySEC has proceeded to the amendment of the Directive DI87-04 to enable the smooth phasing out of contracts established on a solicited basis.
According to the said provisions it will be allowed to UK Investment Firms, after having become Third Country Investment Firms, to provide Investment Services in the Republic of Cyprus without having a branch in Cyprus. Such services will be offered only to professional clients and/or eligible counterparties, within the meaning of the Cyprus Investment Firm Law (L44(I)/2020) up until the 31st of December 2021, unless a relevant decision is taken by the European Commission as to the existence of an equivalence (or not) pursuant to Article 46(2)(a) of MiFIR.
The UK Investment Firm must complete and submit to CySEC the Form 87-04-01 until the 31st of December 2020 in order to be able to provide investment services under the Temporary Permission Regime.
From 1st of January 2022, UK Investment Firms who provided investment services on the basis of the Temporary Permission Regime and who wish to continue soliciting Professional Clients and/or Eligible Counterparties based in the Republic of Cyprus, they will need to establish at least a Branch.
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