CySEC – The Cyprus Securities and Exchange Commission – has announced the establishment of a Temporary Permissions Regime (TPR), which will admit 88 UK-based firms to provide investment services in Cyprus without the need of a physical presence in the country. Under official CySEC directives and policy statements, the new regime will cover UK businesses that wish to provide services exclusively to professional customers and their eligible Cyprus-based counterparties.
CySEC opened the register back in December last year via a press release to engage interested parties in the new policy and subsequently received a significant number of requests from UK-based firms expressing their interest. The large demand saw several notifications coming in after 31st December 2020 (the initial deadline for expression of interest), and CySEc became conscious of the logistical difficulties raised by some companies. Therefore the cut-off date was soon pushed back by two months. UK firms then had until 28th February 2021 to notify CySEC of their interest in using the new TPR.
The Commission has now revealed that it received 96 applications from UK companies overall. Seven of these applications were rejected because they did not adhere to the eligibility criteria set out for the TPR. In contrast, one application was simply withdrawn from the process. Those 88 UK firms that have been granted TPR access to provide their services in Cyprus without a physical presence have now been added to a visible list on the Temporary Permission Register, which can be viewed on the official CySEC website.
The TPR has been set up to offer UK-based firms a temporary European operations gateway following the Brexit deal taking place. Before Brexit, a number of FCA licensed UK companies were able to operate in European countries by simply demonstrating their licensing rights. Still, the final deal meant that such privileges ceased to exist as of the end of 2020.
CySEC explained in an earlier press release that:
The TPR aims at facilitating a smooth transition to new contracts post-Brexit, concluded on a reverse solicitation basis and for UK firms who wish to continue soliciting Cypriot professional clients and eligible counterparties to establish a physical presence in the Republic.
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