CySEC orders investment firms to obtain regulatory approval for name changes

The Cyprus Securities and Exchange Commission (CySEC) today issued a Circular regarding name changes of the entities it oversees.

CySEC logoThe regulator notes that some Cyprus Investment Firms, aka Forex and binary options firms, have been changing their names and/or trade names without any apparent or substantial reason.

The watchdog stresses that such changes should not mislead investors about the nature of the business. For instance, a company offering only CFD trading should not include “asset management” in its name.

CySEC states that:

For purposes of providing accurate information and avoiding possible deception over the investors, and for compliance with the applicable laws and regulations, the Commission neither encourages nor has a positive view for the change of name and/or trade name of the Regulated Entities, other than in exceptional cases, for example in cases of a takeover or merger or when the change of name is made to be in line with the existing trade name of the Regulated Entity.

CySEC says in the circular that regulated entities will not be allowed to change their name and/or trade name without obtaining the approval of the Commission beforehand.

After the name is changed, the company should include, for at least one year from the date of the relevant change, in a prominent place in all of its correspondence, its website and any marketing material, its previous name and new name.

CySEC specifically mentions that the change of name is prohibited for regulated entities that are investigated by the Commission or by other supervisory authorities. The same goes for companies facing allegations from regulators and for businesses under sanctions. If an inspection is taking place in the premises of a given company, it is not allowed to proceed with a name change either.

You can view the full circular from the Cypriot regulator by clicking here.

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