The Cyprus Securities and Exchange Commission (Cysec) said on Monday that it is operating on a shoestring budget, nowhere near enough to exercise oversight over hundreds of registered companies.
Cysec’s budget for 2017 provides for expenditures of €8.7 million.
“We are supervising around 600 entities, and certainly a large part of this are investment firms which offer complex products requiring constant monitoring. A budget of €8 million…is too small,” Cysec chair Demetra Kalogirou told MPs.
In addition to the existing 600 companies, another 130 applications are pending.
Despite an increase in staff from 58 to 100, plus 30 more persons hired on a contract basis, Cysec’s resources remained meagre compared to its functions, said Kalogirou.
“The European Securities and Markets Authority has told us that ‘you are too few to be able to supervise the large market in Cyprus’ through which trillions in transactions are being moved,” she added.
Chiming in, finance committee chair Averof Neophytou (Disy) warned that allocating scanty financial resources to Cysec was an accident waiting to happen.
“Should something come up with the funds, the forex companies and the binaries, we will be scrambling after the fact,” he said.
Neophytou pointed out also that it takes Cysec too long to review applications by companies.
“If it takes six months to get a licence, why should I bother to operate in this country? The first impression on an investor is the time it takes for an application to be examined,” he said.