The supervision of undertakings providing administrative services (Fiduciary Services) to private companies in Cyprus will soon be amended at the request of Moneyval, informed sources told Phileleftheros.
By law, fiduciaries are regulated by the Cyprus Securities and Exchange Commission (CySEC) since 2012.
But at the same time registered lawyers and accountants who have provided fiduciary and corporate services via their respective firms and associated companies have been regulated throughout by their respective professional bodies.
That is, the Cyprus Bar Association and the Institute of Certified Public Accountants of Cyprus, respectively.
However, the latest draft report by the Council of Europe’s Committee of Experts for the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval) indicates that they are not satisfied with the supervision framework.
Because, the report notes, of the fact that fiduciaries are supervised by three bodies and this gives rise to weaknesses such as having different directives by each supervisor for the same type of business.
Moneyval has requested that all fiduciaries are regulated by one single law to avoid loopholes because of the lack of a unified communication platform. A single law will enable supervisors to exchange information on sanctioned, stricken-off and rejected/declined firms to secure access to the profession.
And it will also prevent such firms from continuing their activities by registering under another body once they were banned from one of the three bodies.
However, it is unclear how the island’s single supervision will be applied in practice. That is, whether the Cyprus Bar Association and the Institute of Certified Public Accountants of Cyprus will come under the supervision of the Securities Commission or not.