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What is a Tied Agent?

Michalaki, Pitsillidou Law Firm > English Articles  > What is a Tied Agent?

What is a Tied Agent?

Introducing Tied Agent:

A tied agent is an individual who established in a member state, who, acting under the full and unconditional responsibility of only one Investment Firm on whose behalf it acts, promotes investment and/or ancillary services to clients or provides the services of either receiving and transmitting instructions or orders, placing financial instruments or providing investment advice in respect of the financial instruments and services provided by the Cyprus Investment Firm.

 

Key Points:

  • Some minor changes are made to the rules relating to tied agents, including one clarifying that tied agents will be able to hold money belonging to clients.
  • Member states will be required to implement a tied agent regime in their own state (whereas previously it was optional).

 

Object and scope of application of Tied Agents:

(1) This Directive shall determine and specify the provisions of article 40 of the Investment Services and Activities and Regulated Markets Law of 2007 to 2012, as in force from time to time, for the appointment of tied agent, its registration and deletion from the register.

(2) It is implemented by:

  1. ‘Cyprus Investment Firm’ intending to appoint a tied agent established in the Republic.
  2. ‘Investment Firm’ of another Member State intending to appoint a tied agent established in the Republic.
  3. ‘Cyprus Investment Firm’ intending to appoint a tied agent established in another Member State which does not allow the appointment of a tied agent.

 

Interpretation:

  1. “Principal” shall mean the ‘Cyprus Investment Firm’ or ‘Investment Firm’ intending to appoint a tied agent.
  2. “Services susceptible to representation” shall mean the services that the tied agent may provide under article 40(1) of the Law.
  3. “Notification” shall mean the notification submitted to the Cyprus Securities and Exchange Commission by the Principal in accordance with paragraph 4 of the Directive.
  4. “Register” shall mean a register that is freely accessible by the public, where those tied agents are registered under article 40(6) of the Law.
  5. “Law” shall mean the Investment Services and Activities and Regulated Markets Law of 2007 to 2012 as in force from time to time.
  6. “Directive” shall mean this Directive.

(2) Without prejudice to the provisions of the previous subparagraph, terms used in this Directive that are not interpreted differently, shall have the meaning given to them by the Law.

(3) Where in this Directive reference is made to the Law, this includes any Regulations issued pursuant to this Law.

 

Notification of appointment of a tied agent

The principal who intends to appoint a tied agent in accordance with article 40 of the Law, shall give notification to the Cyprus Securities and Exchange Commission before commencement of partnership between the principal and the tied agent.

 

Conditions of Tied Agents:

  • Registered in the registrar or republic.
  • Can be established in the republic or member state and should be of good repute and knowledge.
  • Cannot hold clients’ funds and/or financial instruments.
  • Must notify Cysec immediately of any change of details.

For more information and guidance please email Michalaki, Pitsillidou & Co LLC – Cyprus Lawyers, at info@impklawyers.com or visit our website at www.impklawyers.com.Tel. +357 25660092 – Fax +357 25 660097.

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