CySEC details disclosure rules required to prove funds in segregated bank accounts in fact belong to individual investors.
As we reported earlier, the Central Bank of Cyprus has agreed to NOT apply the dreaded ‘haircut’ to bank balances above €100,000 at Laiki Bank and Bank of Cyprus, for bank accounts where the ultimate beneficiaries are smaller individual investors. Essentially, this means that bank accounts in which client funds were held by FX brokers will not be confiscated — very good news indeed for Cyprus’ FX brokers.
Cyprus’ financial regulator CySEC has now detailed the procedure necessary to get those funds released. Cyprus based FX companies will have to do the following:
- Provide a detailed list of clients
- Name each individual client along with ID/Passport number
- Release the balance of each client as at 26th March, 2013
- Provide copies of client Passports and/or ID numbers and all legal documents necessary to show these are segregated client accounts with small customers exempt from the “haircut”
CySEC expects the Central Bank of Cyprus to conduct random checks of the information provided, to ensure that the leniency given to protect smaller individual clients is not taken advantage of by individuals having large, greater-then-€100,000 balances, which will still be haircut.
Note that CySEC has made it clear that disclosing all this detailed private client information will not contravene any EU or Cyprus privacy laws.
To see the full press release from CySEC click here.