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EU regulatory and supervisory framework, in line with the rest of the EU and it has the responsibility to monitor and regulate the firms to ensure they are fully complying with the capital and transparency requirements, as well as all the other regulatory requirements and provisions which are set to protect the investors,” notes Kalogerou.


Donna Stephenson


“Throughout 2011, as in 2010, we continued to see a lot of recruitment activity in the forex trading sector as existing international FX players and start-up FX companies opened new offices in Cyprus,”


Currently brokers can start operating in Cyprus with relatively low capital requirements (€1-2 million compared to $20 million in United States), while providing customers with up to €20,000 coverage in case of broker default. Te €20,000 coverage is provided by the Investor Compensation Fund for customers of Cypriot Investment Firms and most forex brokers are expected to hold customer funds in segregated bank accounts, which are not used for any other purpose other than customer trading activity.


Other rules include companies having to demonstrate experience in the financial sector or having suitably qualified management, having the capital adequacy of financial resources – initial capital, operating expenses and so on. Regulators also need to see the business plans and proposals in order to evaluate the company’s potential. Tey need adequate technology, management and compliance systems which show an audit trail.


Adapting to market demands


“Cyprus has managed to create attractive conditions for capital markets’ participants and we believe that it will become an even more recognized place for international trading and


INSTITUTIONAL FX SERVICES - THE BROKERS HANDBOOK 2012/2013 | 47


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