The Cyprus Securities and Exchange Commission (CySEC) has adopted regulatory amendments which require Cyprus Investment Firms (CIFs), forex and binary options brokers included, to obtain the commission’s consent prior to changing their names or trading brands, a notice issued by the CySEC on Tuesday indicated. The decision was adopted on 26 January, 2016.
The new requirement also applies in cases of mergers and acquisitions where one of the parties assumes a new name or changes its branding to correspond with its new identity.
Entities which have changed their names or brand need to include their previous name on any marketing materials and on their website for a period of at least one year after the change took effect.
The regulator believes an entity’s name should reflect its business operations so that clients are not misleaded by an ill-suited name.
“For example, it is permissible/acceptable a CIF, which is licensed to provide the investment service of portfolio management, to include in its name the words ‘asset management’. Conversely, it is not acceptable these words (asset management) to be included in the name of a CIF, which executes client orders concerning contracts for difference (CFDs),” the CySEC said in the notice.
The regulator said it has noticed many entities rename or rebrand for no apparent reason. Overall, with a few exceptions, regulated entites should avoid changing their name or brand in order to avoid deceiving investors.
Moreover, Cyprus-regulated entities should not undergo a name change if the CySEC or any supervisory authority have imposed sanctions against them or if they are under an ongoing investigation.
The CySEC has licensed more than 200 CIFs. It keeps an updated register of entities authorized to operate in the country. In Cyprus, investment companies are not allowed to operate without holding a license by the CySEC or the relevant authorities in any other EU member state. Also, a CySEC license allows entities to provide their services in all EU countries.
The CySEC consists of a managing board of five members, each one of which serves a term of five years.