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Principles for the Provision of International Financial Services from within
Cyprus
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, the Central Bank of Cyprus,
as the country’s licensing regulatory authority, 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 Exchange Control
Law permit.
- 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 fulfil 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 fulfilment 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.
- Clients Assets. 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.
- Financial Resources. 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.
- Internal Organisation. 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 Central Bank of Cyprus. An IFC should deal with
the Central Bank of Cyprus in an open and co-operative manner and keep the
Central Bank of Cyprus promptly informed of anything concerning the IFC, which
might reasonably be expected to be disclosed to it.
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