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Cyprus – CySEC’s Chairman Hints to Potential Changes for CIF’s Call Centers

CySEC’s Chairman has hinted that CySEC is considering to amend its regulations to force Cyprus Investment Firms (“CIFs”) to have their call-centers based in Cyprus, a fact which would enable CySEC to, amongst others, provide actual oversight of how the marketing is performed, which persons are involved in such marketing efforts and what qualifications they hold.

This came in a recent interview which the Chairman of CySEC, Mrs. Demetra Kalogirou, gave to GOLD Managize, and in which she stated:

Do the call centres create problems, and in what way?
Investment firms licensed under MiFID may outsource technology and marketing. While outsourcing the technological support abroad does not generally pose problems, we are troubled by the latter. When it comes to outsourcing of marketing, we know that some CySEC regulated firms cooperate with call-centres in EU member-states and third countries. Marketing of financial instruments and services is a very important function, but some of these call centres may employ aggressive marketing and thus risk misleading or pressuring the investors. It is imperative to ensure that qualified individuals are recruited and somebody is there and in charge to directly oversee them. Of course, CIFs must have in place effective internal mechanisms to monitor at all times the activities outsourced to call centres.
Based on CySEC’s experience so far and having identified deficiencies in the monitoring of these call centres, CySEC is considering to require the CIFs to only perform these activities internally from their offices in Cyprus or only through a branch, tied agent or regulated entity based in another jurisdiction. It is provided that all sales people will be well trained and pass CySEC’s exams.”

The full interview can be found here