CIFs : Cyprus Investment Firms

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CIFs : Cyprus Investment Firms

CIFs : Cyprus Investment Firms

Directors’ Liabilities in the case of an offence (illegal act)

Any Cyprus Investment Firm (CIF) should have at least two executive Directors on their Board of Directors.

Any independent non-executive Directors will be experienced in their fields, have good reputations, use their abilities and skills to promote their company, and be well known in the business community. The majority of Directors will be Cypriot residents.

Section 138 of the Investment Services and Activities Regulated Markets Law 144 (1) 2007 (the ‘law’) states that the commission may impose a fine of up to €175,000

For any person who violates the provisions of this part. If a violation continues or a relapse occurs then an administrative fine of up to €350,000 may be imposed.

General Liabilities

The board of Directors are totally responsible for applying for a correct, complete and accurate information when in the process of applying for a CIF License. All the documents that accompany the application put forward and signed by the board of Directors must be confirmed that to the best of their knowledge to be truthful and correct.

Section 139 (1) of the Law states that ‘any person under an obligation pursuant to.. to submit or notify the Commission or to make public any details, information, forms or documents, must ensure that the are complete, correct and accurate.

Section 139 (2) of the Law states  that ‘the provision of false or misleading details, information, forms or documents, or withholding any material information when submitting an application to the Commission constitutes as a violation which is subject to an administrative fine as stated in section 141, and also as a criminal offence which is punishable pursuant to section 140. Without prejudice to section 25’.

Criminal Liability

Section 140 of the Law states that a person not complying with Section 139 is guilty of a criminal offence and in the event of a conviction this is punishable by:

  1. Up to but not exceeding 5 years’ imprisonment
  2. A fine of up to but not exceeding €350,000
  3. Both of the above

If the offence is carried out by a registered CIF then any members of the Board of Directors are also criminally liable,

Administrative Sanctions

Any person(s) found violating Section 141 (1) of the law may have an administrative fine of up to but not exceeding €350,000. If a violation or relapse occurs then an administrative fine of up to but not exceeding may be imposed.

Section 141(2) of the Law also states that where a person(s) received financial gains by violating the Law then an administrative fine may be imposed by up to double the gained amount.

Civil Liability

Any criminal offence committed does not relieve the offender from any civil liability.

Section 143(1) of the Law states that anyone who violates the Law must pay compensation to any person(s) that suffer a profit loss, damages or both that are as a result of negligence.

Section 143(2) of the Law states that one or more legalised person(s) can put an application into the courts to request an immediate prohibitive order or a temporary order if necessary against any person(s) that are responsible for, or involved in any violation of the Law that protects the Public, Consumers, Professionals and their rights.

Section 143(5) of the Law also states that the court has the right to issue an immediate prohibitive order, including a temporary order for any of the following:

  1. To impose immediate cessation of the said violation and to take immediate corrective measures as the court thinks necessary.
  2. To take immediate actions to prevent the violation being repeated
  3. To make the public aware of all or part of the courts’ decision.
  4. Any other necessary actions as deemed fit by the courts with regard to the particular case

Any non-compliance with any court orders issued will result in contempt of court and will be
Non-compliance with any court order issued pursuant to this Law constitutes contempt of court and will be brought before the Courts of Justice Law.

Disclaimer: while every attempt has been made to ensure the accuracy of this article we advise anyone to take proper legal advice as every individual situation is different. Please contact us if you would like to obtain specific legal or technical advice and we will arrange for you to speak with one of our professionals.

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