Cyprus Regulator Tightens Supervision as EU Presidency Approaches

Key Takeaways

• Supervision Scaled Up: Around 600 inspections in 2025 across investment firms, asset managers, and market infrastructures.
• Enforcement Remains Firm: €2.3 million in fines and settlements imposed in 2025, alongside license suspensions and trading halts.
• EU Presidency Focus: CySEC is positioning itself as an active contributor to EU capital markets policy in 2026.
• Digital and AML Priorities: Expanded use of data analytics, AI, and cybersecurity tools, alongside intensified AML and sanctions oversight.
• Investor Protection Emphasized: Ongoing warnings, education campaigns, and financial literacy initiatives remain central.

Deep Dive

As regulatory expectations rise and market risks grow more complex, the Cyprus Securities and Exchange Commission is showing that stricter supervision, tougher enforcement, and deeper digital capabilities will define its approach heading into 2026, a year that will see Cyprus take on the Presidency of the Council of the European Union.

Speaking in Nicosia on January 21, CySEC Chairman George Theocharides presented the regulator’s review of 2025 and outlined its strategic priorities for the year ahead. He framed the past year as one shaped by rapid technological change, geopolitical uncertainty, and an increasingly demanding regulatory environment, conditions that, he said, require supervision that is both firm and adaptable.

“CySEC continues to approach supervision with consistency, evidence, and adaptability,” Theocharides said, emphasizing parallel investments in regulatory frameworks, transparency, technology, and financial literacy.

A Larger Role on the European Stage

Preparation for Cyprus’ EU Presidency in the first half of 2026 was a defining theme throughout 2025. CySEC officials were actively involved in the handling of major European legislative initiatives, including the Market Infrastructure Package, the Retail Investment Strategy, and the ongoing revision of the Sustainable Finance Disclosure Regulation.

The regulator is also set to host meetings of the European Securities and Markets Authority Management Board and Board of Supervisors in April 2026, reinforcing Cyprus’ growing role in shaping European supervisory priorities.

Theocharides described the Presidency as an opportunity for Cyprus to contribute meaningfully to the development of a more resilient and reliable EU capital markets framework, rather than a purely ceremonial milestone.

Inspections, Fines, and Enforcement Pressure

Supervisory activity accelerated significantly over the course of 2025. CySEC carried out roughly 600 on-site and off-site inspections across Cyprus Investment Firms, asset managers, collective investment entities, issuers, and market infrastructures. Reviews concentrated on professional conduct, capital adequacy, data quality, sustainability risks, and compliance with MiFID II, DORA, and MiCA.

The regulator also moved to address emerging supervisory challenges, including the growing influence of so-called “finfluencers” in the promotion of investment products.

Anti-money laundering controls were another focal point. CySEC conducted 43 thematic AML inspections and increased monitoring of compliance with EU restrictive measures, particularly those linked to Russia.

These efforts translated into enforcement outcomes. Administrative fines and settlements imposed in 2025 totaled approximately €2.3 million, bringing the cumulative total over the past three years to €7.3 million. Beyond financial penalties, CySEC ordered corrective measures in more than 170 cases, suspended or revoked licenses, and halted trading in certain securities on the Cyprus Stock Exchange.

Cases were referred to the Attorney General, the Financial Intelligence Unit, and the police, while CySEC continued its involvement in preparations for the new Anti-Money Laundering Authority and the implementation of Cyprus’ national sanctions framework.

Alongside formal enforcement, the regulator issued dozens of public warnings about unauthorized online entities, reflecting continued concern about digital fraud and unlicensed investment activity.

Market Growth and Digital Investment

Despite a challenging economic backdrop, CySEC approved 47 new licenses during 2025, bringing the total number of supervised entities to 808. Assets under management in collective investment schemes reached €11.4 billion, with a significant share invested in the Cypriot economy.

Internally, the regulator stepped up its digital transformation, investing in new IT systems, data analytics tools, artificial intelligence, and cybersecurity capabilities. Further strengthening of human resources is planned for 2026 as supervisory demands continue to grow.

Investor Protection Beyond Enforcement

Investor protection extended beyond inspections and sanctions. Financial literacy remained a core pillar of CySEC’s work, with education campaigns rolled out across schools, universities, and digital platforms. The authority also participated in international initiatives and developed new educational materials aimed at helping citizens navigate an increasingly digital financial environment more safely.

As Cyprus prepares to take on a more visible role at the EU level, CySEC’s message is clear: tighter supervision, stronger enforcement, and investment in digital capability are not temporary responses, but central features of its regulatory approach going forward.

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