• Prudential reporting: CIFs must ensure timely and accurate submission of prudential and remuneration reports via CySEC’s XBRL portal, adhering to Article 54 of the IFR.
• Compliance with prudential requirements: CIFs are required to continuously monitor and meet prudential obligations under Articles 9, 11, and 43 of the IFR, taking immediate corrective actions when deficiencies arise.
• Data consistency: Material discrepancies between prudential reports and other financial documents (e.g., audited statements) must be avoided. CIFs should ensure accurate data mapping during report preparation and are urged to refer to Commission Implementing Regulation (EU) 2021/2284 for guidance.
• Remuneration policies: Class 2 CIFs must ensure compliance with sections 24 and 26 of Law 165(I)/2021 regarding remuneration policies, including deferral of variable pay and adherence to EBA Guidelines.
• Governance committees: CIFs must establish Risk and Remuneration Committees as per Law 165(I)/2021, ensuring proper composition, gender balance, and compliance with governance standards.
• Internal governance: CIFs should enhance policies on conflicts of interest in the context of loans and other transactions with members of their management body and their related parties to align with the EBA’s guidelines.
• Liquid assets: CIFs must ensure that items be accurately recorded as liquid assets under Article 43(1) of the IFR. Unencumbered short-term deposits should qualify as liquid assets only if they are unencumbered short-term deposits at a credit institution, therefore amounts held with Electronic Money Institutions (EMIs) or Payment Service Providers (PSPs) are excluded. CIFs are advised to refer to EBA Q&A 2021 6299 for further guidance.
• Prudential consolidation: CIFs must regularly assess alterations to group structures to accurately assess whether entities qualify as financial institutions or union parent investment firms. Entities that fall under those definitions must ensure compliance with IFR prudential consolidation requirements.
• Audited financial statements: CIFs must accurately disclose modified auditor opinions and Pillar III links by ensuring that the relevant form is completed fully and accurately.

Next steps: CIFs are urged to review their practices to ensure full compliance with applicable laws, regulations, and guidelines. CySEC will continue monitoring and may impose sanctions for non-compliance.

For further details, CIFs are encouraged to consult the full circular here