CySEC Launches Public Consultation on Legislative Amendment for ASP Authorisation Process

The Cyprus Securities and Exchange Commission (CySEC) has initiated a public consultation regarding a proposed legislative amendment that would change the current regulatory process for Administrative Service Providers (ASPs). The amendment, published in a new Consultation Paper on Wednesday, proposes revisions to the Law Regulating Companies Providing Administrative Services and Related Matters, specifically Law 196(I)/2012, which governs the operation and authorisation of ASPs.

A key element of the proposed amendment addresses the current procedure concerning the lapse of authorisation for ASPs. Presently, the law provides that an ASP’s authorisation automatically lapses upon the submission of an express waiver by the licensed entity. Under the new proposal, this automatic lapse would be replaced by a more regulated and deliberate process. According to CySEC’s suggestion, “an ASP’s authorisation would no longer automatically lapse upon the submission of an express waiver by the licensed entity.”

Instead, the proposed framework stipulates that an ASP’s authorisation “would only cease to be valid following a formal decision of withdrawal by CySEC.” The regulatory body emphasized that this change is intended to strengthen oversight and support the orderly cessation of ASP operations. “This amendment aims to enhance regulatory oversight and ensure the orderly cessation of operations by licensed ASPs,” the Consultation Paper states.

By implementing this change, CySEC will gain the ability to examine the specific circumstances under which an express waiver is submitted and to issue directives to the ASP regarding necessary steps to ensure a smooth and compliant winding down of its activities. This could include measures to protect clients, settle obligations, or preserve data and records in line with legal requirements.

Further, CySEC would be empowered to “review the reasons for the waiver and assess any potential implications for third parties when deemed necessary.” This expanded review mechanism is designed to safeguard the interests of all stakeholders potentially affected by the cessation of an ASP’s activities.

The proposed changes are in line with broader supervisory practices adopted by CySEC for other entities under its regulatory scope. “The approach aligns with regulatory practices applied to other entities under CySEC’s supervision,” the Commission notes.

CySEC is encouraging stakeholders and interested parties to provide feedback and engage with the consultation process. Any inquiries regarding the content of the Consultation Paper can be directed to the Policy Department via email at policy@cysec.gov.cy.

By fLEXI tEAM