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ARTICLE · 08 OCTOBER 2024

CySEC Issues Circular C659 On Fractional Exposure In Shares

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The Cyprus Securities and Exchange Commission (CySEC) has released a new circular to clarify the treatment of fractional exposure in shares, especially concerning investment services under Cyprus law.

CyprusFinance and Banking
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The Cyprus Securities and Exchange Commission (CySEC) has released a new circular to clarify the treatment of fractional exposure in shares, especially concerning investment services under Cyprus law.

This guidance, based on the Investment Services and Activities and Regulated Markets Law (Law 87(I)/2017) transposing MiFID II, outlines when fractional exposure would be treated as full exposure to shares, and the resulting regulatory obligations for Cyprus Investment Firms (CIFs).

Purpose of the Circular

CySEC's circular is designed to guide CIFs on how fractional ownership in shares qualifies as share exposure under MiFID II and Law 87(I)/2017. When fractional exposure qualifies as share exposure, CIFs authorized under this law must comply with obligations related to share trading and holding as laid down in both MiFID II and MiFIR (Markets in Financial Instruments Regulation).

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