The following principles set out the standards, which are expected from all those providing international financial services from within Cyprus.
While member firms of CIFSA are bound to fully implement these principles on their own initiative and as part of a policy of best practice, either the ICCS or CySEC as the country’s licensing regulatory authorities, monitors such implementation by way of off-site reviews and on-site examinations of International Financial Services Companies operations.
Integrity and high standards of market conduct
An International Financial Services Company (IFC) should observe high standards of integrity and fair dealing in the provision of its services and its market conduct, including compliance with any rules, standards or guidelines as they apply to IFCs and in accordance with the terms and conditions of its License.
Skill, Care and Diligence
An IFC should act with due skill, care and diligence. Information about clients. An IFC should seek from the clients it advises, or for whom it exercises discretion, any information about their circumstances and investment objectives which might reasonably be expected to be relevant in enabling it to fulfill its responsibilities to them.
Information for clients
An IFC must take reasonable steps to give the clients it advises, in a comprehensible and timely way, any information needed to enable them to make a balanced and informed decision. In this regard an IFC must not recommend a transaction to a client, or act as discretionary manager for him, unless it has taken reasonable steps to enable him to understand the nature of the risks involved. An IFC should similarly be ready to provide a client with a full and fair account of the fulfillment of its responsibilities to him.
Conflicts of Interest
An IFC should either avoid any conflict of interest arising or, where conflicts do arise, ensure equal treatment for all its clients by disclosure, internal rules of confidentiality, declining to act, or any other appropriate action. An IFC should not unfairly place its interests above those of its clients and, where a properly-informed client could reasonably expect that the IFC would place his interests above its own, the IFC should live up to that expectation.
Where an IFC has control of, or is otherwise responsible for, the safeguarding of assets belonging to a client, it should arrange proper protection for them by way of segregation, specific identification or any other suitable method, in accordance with the responsibility it has accepted.
An IFC should ensure that it maintains adequate financial resources to meet its business commitments and to withstand the risks to which its business is subject.
An IFC should organise and control its internal affairs in a responsible manner and ensure that it has well-defined procedures to facilitate compliance with regulatory requirements. Where the IFC employs staff or is responsible for the conduct of investment business by others, it should have adequate arrangements to ensure that they are suitable, adequately trained and properly supervised and that it has well-defined compliance procedures.
Relations with the Regulator
An IFC should deal with the ICCS &/or CySEC in an open and co-operative manner and keep them promptly informed of anything concerning the IFC, which might reasonably be expected to be disclosed to it.