The Cyprus Securities and Exchange Commission (CySEC) is projecting a €2 million budget deficit for 2025, as its proposed budget is set to be discussed during a meeting of the House finance committee.

The budget reflects an 8.6 per cent increase compared to 2024, translating to an absolute rise of €1.4 million.

Revenue and expenses are estimated at €15.5 million and €17.5 million, respectively.

According to a report submitted to the House, CySEC’s budgets for 2026 and 2027 are also expected to show deficits of €3.4 million and €3.9 million, with expenses projected at €19.2 million and €19.7 million.

Despite the deficit, CySEC’s cash reserves of €2 million as of January 1, 2025, are expected to partially offset the shortfall.

Revenue for 2025 is forecast at €15.5 million, a 3.6 per cent decline compared to 2024, largely attributed to reduced contributions and fees.

However, revenue is expected to rebound in 2026 and 2027, reaching €15.9 million.

On the other hand, expenses for 2025 are projected to rise by 8.6 per cent, reaching €17.5 million.

This increase is attributed primarily to higher personnel costs, which account for €11.6 million—a jump of 8.2 per cent compared to the previous year.

The rise is due to new hires in 2024, adjustments for inflation, and the addition of 16 new positions.

Operational expenses will also see an 8.9 per cent increase, amounting to €4.8 million, driven by higher costs for maintaining IT systems and legal fees related to lawsuits involving the participation of the chair of the board in the resolution authority.

Additionally, capital expenditures for 2025 are set to rise by 14.2 per cent to €1 million. This includes allocations for new IT equipment, AI tools for data analysis, and the development of a regulatory sandbox for market innovation.

CySEC, established in 2001, is an independent public supervisory authority tasked with overseeing investment services, securities transactions, and collective investments in Cyprus.

It also supervises administrative service providers outside the jurisdiction of the Cyprus accountants’ association (Selk) and the Cyprus Bar Association, as well as providers of services related to crypto-assets.