British companies are returning to Cyprus. 88 temporary permits to start with

If Brexit was to hinder the operations of investment firms in Cyprus, it may have hampered, but not for long. Cyprus Securities and Exchange Commission (CySEC) has just announced that it has created a so-called a system of temporary permits (TPR) that will allow you to operate under the regulations of this country.

When Great Britain left the European Union, and Prime Minister Boris Johnson was negotiating on the verge of blackmail, he made passionate speeches and alienated more politicians from the Old Continent, in the privacy of their offices, people wondered how to make the financial market lose as little as possible. One of the problems were international agreements, previously concluded by the entire European Union with countries such as Cyprus, where investment companies are willing to locate - obviously due to favorable taxation, but also other regulations. 

Almost 100 applicants for a temporary permit

We now know that the wicket that has been lifted by the Cyprus Securities and Exchange Commission (CySEC) has been even forcefully balanced. Formally, only companies that provide services to professional clients could apply for a temporary permit, allowing to operate under Cypriot regulations. In practice, one such client and 99% of the business aimed at individual customers were enough to submit the application. 

CySEC has therefore been inundated with applications. 96 companies had submitted them, so the commission was lagging behind and the original deadline for accepting them, which was supposed to be at the end of 2020, was postponed to the end of February 2021. Now we know how the fate of those willing to pay taxes in Cyprus and act on the basis of the leverage on financial instruments offered by the laws of this country turned out. Out of 96 companies, 7 were rejected and one resigned. So there are 88 left, which are already in the register, they may be based on the regulations in Cyprus, but - most interestingly - by the end of this year, even one representative of the company does not have to come to this country for one day. Among the accepted applications, we have applications from such big names as, for example, Goldman Sachs, Tickmill, Interactive Brokers, CMC Markets, AT Markets, LMAX or Finalto. 

It is worth emphasizing that the regulations in Cyprus are not only a tax advantage for British companies. Thanks to them, they also have wider access to clients from Europe, which was difficult after Brexit. 

Great Britain financially still in the European Union

Brexit initially caused a lot of trouble for British companies. Previously, they operated on the European market on the basis of a license issued by the local financial supervision, i.e. Financial Conduct Authority (FCA). After leaving the European Union, guidelines for trading in British stocks in the European Union were quickly prepared.

“We put our faith in global competition and an open market that will itself regulate trading in a way that is best for trading financial instruments. We believe in the freedom of companies to choose where to raise capital for their operations and trade in securities, regardless of the currency in which the securities are denominated " - announced shortly after Brexit in special regulations prepared by the FCA.

Interestingly, representatives of the European Securities and Markets Authority (ESMA) had a different opinion. The EU regulator issued “Share Trading Obligation”which explains how to trade the shares of European companies in the UK. However, the possibility of issuing temporary allowances was created, which, although introducing additional bureaucracy at the beginning, ultimately made any British platform that wanted to trade shares within the European Union the appropriate permission.