The Cyprus Securities and Exchange Commission (“CySEC”) has issued a new Circular (C526), where it informs the applicable CIFs (i.e. the ones with initial capital requirement of EUR 750K) of the main weaknesses identified during CySEC’s review of the Recovery Plans submitted to them.
Below, we list the main areas of weaknesses identified:
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- Governance arrangements
- Strategic Analysis
- Stress Scenarios
- Recovery Options
CySEC has also listed a few Good Practices that should be considered by the applicable CIFs, such as:
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- Planning
- Feasible Stress Test Scenarios
- Clear assignment and accountability
- Communication with the CySEC
Finally, CySEC reminded the qualifying CIFs that the preparation of the recovery plan is an ongoing process and should be reviewed regularly and updated when the circumstances change, in order to have a plausible plan to respond to any periods of financial stress.
CySEC expects qualifying CIFs to take into consideration all the points raised in the specific circular while preparing their next recovery plan (Form 20-01), which is due to be submitted to CySEC, via TRS only, by 30.9.2022.