Financial Services Licensing
Due to the vast amount of advice and management available, particularly online, investors are looking to ensure the safety of their funds and a benchmark for those providing the financial services prior to investing. Regulation and licensing provides assurance to investors.
In recent years, FAI Comply has assisted a number of the leading Forex and traditional brokers to obtain authorisation across a number of jurisdictions both as dealing desk and non-dealing desk models.
In addition, FAI Comply's experience extends to portfolio management and investment advice firms, where the art and science of making decisions about investment mix and policy and matching investments to objectives is key.
What can FAI Comply do for your business?
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Consult on the services to be applied for/to be set up, for example:
- a broker (STP) / principal (market maker)
- investment advisor / asset management -
Provide assistance with completion of the application pack to be submitted to the regulator
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Assist with the design of the firm structure
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Prepare the required internal operations manual according to relevant regulations
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Prepare the business plan and financial projections
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Prepare the procedures manual for the prevention of money laundering and terrorist financing
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Assist in the preparation of the personal questionnaires for shareholders, directors and senior management
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Follow up the application during the process of assessment by the regulator
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Assist in company personnel appointments (senior management & service providers)
Payment Services Licensing
The payments landscape has evolved rapidly, money is becoming more mobile and increasingly accessible online. International trade expansion and globalisation are growing the demands, which has resulted in corporates, non-banks and banks wanting reduced fees and improved services with increased pressure on traditional payment models.
This, coupled with the implementation of a number of regulations across the EU and globally, has created an expanding market in which payment service providers for both retail & merchant markets, are increasingly in demand.
Companies wishing to provide these services should now consider regulation as a priority and requirement, whether they wish to accept and provide electronic payments through credit cards, bank-based payments or provide gateways for multiple payment service providers.
Some of the popular services we see today are:
The issuing of electronic money and providing e-wallets
Money transmission services
Payment processing services
Money exchange services
What can FAI Comply do for your business?
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Consult on the services to be applied for, for applications to enter a variety of markets
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Provide assistance with completion of the application pack to be submitted to the regulator
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Assist with the design of the firm structure
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Prepare the required internal operations manual according to relevant regulations
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Prepare the business plan and financial projections
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Prepare the procedures manual for the prevention of money laundering and terrorist financing
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Assist in the preparation of the personal questionnaires for shareholders, directors and senior management
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Follow up the application during the process of assessment by the regulator
Funds Licensing
FAI Comply assists with the submission of applications to CySEC in order to obtain an AIF, AIFM, AIFLNP, RAIF license & provides ongoing services including:
Advising on setup and structuring
Assisting with preparing the application to CySEC
Private offering memorandum
Ongoing compliance services throughout the life of the fund
What can FAI Comply do for your business?
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Alternative Investment Fund (AIF)
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Alternative Investment Fund Managers (AIFMs)
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Alternative Investment Fund with Limited Number of Persons (AIFLNP)
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Registered Alternative Investment Fund (RAIF)
Alternative Investment Fund (AIF)
An AIF available to the public can be established in three different forms:
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A company (with fixed or variable capital)
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A common fund
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A limited liability partnership
All three legal forms allow for legally segregated sub-funds to be created and there are no limits to the number of investors. An AIF has the following characteristics:
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Can have retail clients
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Able to market freely via passport application
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Can be internally or externally managed
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A depository may or may not be required
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Subject to minimum capital requirements of €125,000 in case of self-managed and €300,000 if managed by an AIFM
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No limits on number of investors
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No restrictions regarding types of investments
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Subject to certain investment restrictions for risk spreading and liquidity purposes
Alternative Investment Fund Managers (AIFMs)
Hedge funds and private equity funds and their investment managers (AIFMs) have not been subject to the same rules to protect the investing public as mutual (including UCITS) and pension funds and their managers. In general, the lack of financial regulation is seen by some to have contributed to the severity of the global financial crisis. The AIFM directives and laws are aimed at redressing this perceived regulatory gap with supervising authorities.
In 2015 the AIFM Law was applied to non-EU AIFMs having designated Cyprus as their “member state of reference” for their management and/or marketing activities in the EU.
The AIFM Law applies in particular to the following activities:
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A Cyprus AIFM managing Cyprus AIFs or AIFs of another member state or third country
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An EU or third country AIFM managing Cyprus AIFs
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A Cyprus AIFM marketing units or shares of AIFs they manage in other member states or third countries
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An EU or third country AIFM marketing units or shares of AIFs they manage in Cyprus
Alternative Investment Fund with Limited Number of Persons (AIFLNP)
An AIFLNP has the following characteristics:
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up to 75 investors, who are professional and well-informed
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Can be internally or externally managed
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Assets under management should not exceed €100 million with leverage and €500 million without leverage
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No minimum initial capital requirements
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No investment restrictions
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No investment diversification rules
Registered Alternative Investment Fund (RAIF)
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RAIFs are not subject to ongoing monitoring by CySEC
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They must be externally managed by an AIFM established and licensed in Cyprus or in any other EU / EEA member state
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It is for the AIFM to ensure the general supervision and compliance in accordance with its own regulatory regime
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RAIFs established as limited partnerships may appoint as managers UCITS management companies or a Cyprus investment firms (CIFs) authorised under MIFID II, instead of AIFMs. In these situations the RAIF would need to be close-ended and invest a minimum of 70 percent of its funds in illiquid assets
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Professional and well-informed investors only (minimum deposit €125,000)
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Certain limits on marketing
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Can be listed on an exchange