The Application Process
When it has been decided to proceed, Eltoma Corporate services will discuss in detail the application process.
The following table summarises the key documents that are required (please note that the table below is intended as an example and does not constitude a comprehensive list of all documents needed — the table in annex 3 provides a full check list of documents needed for the application).
Document / Task
An Organizational Chart of the company stipulating the Board of Directors, general management and key employees.
At a minimum the CIF should have two executive and two non-executive di- rectors, a compliance officer, a risk manager, an IT officer. However at the commencement stage, depending on the volume of operations, some of the key functions can be conducted by the company's directors.
|Group Structure||A Group Structure Chart of the company needs to be prepared and submitted (if applicable). This is necessary if the CIF is part of a group of companies.|
A detailed Business Plan of the company should be prepared and submitted.
The business plan should include a detailed explanation of the company's Investment Strategy, description of operations, and projected (budgeted) financial accounts for a three year horizon (at a minimum). The budgeted financials should include a full set of accounts prepared un- der IFRS (Profit & Loss, Balance Sheet and Cash Flow Statement). It is also worth mentioning that projected financials should be presented under three alternative scenarios (average, pessimistic, optimistic) and if possible the applicant should assign probabilities to each scenario.
|Outsourced Services and Counterparties||
A detailed description of services that will be outsourced (performed out- side of Cyprus or outside the firm) should be specified.
For example internal audit or IT Support could be outsourced (depending on the volume of operations). Detailed information about all the key counterparties that the company will be working with (i.e. your service providers, example prime brokers, liquidity providers and custodians, internal and external auditors) should be submitted - copies of engagement agreements.
|Anti-money laundering manual||Know your Clients [KYC] Manual and Anti-Money Laundering Procedures Manual should be prepared and submitted.|
|Internal controls procedures manual||Internal controls manual should be prepared and submitted.|
|Executive Directors C.V.s||
The Relevant Industry Experience of the Board of Directors will need to be demonstrated.
It is advisable to submit C.V.s of the board members with the application. Eltoma Corporate Services can assist you in drafting C.V.s that highlight the relevant experience required by CySEC.
|Non-Criminal Record Certificates and Non-bank- ruptcy Certificates.||Non-Criminal and Non-bankruptcy certificates for all the board members and shareholders should be submitted to CySEC. These documents should be submitted in English.|
|Consent to art as Director (primarily applicable to Non-Executive Directors)||If any candidate board member is sitting on the board of directors of another er CIF, a letter of consent from the CIF in question must be provided before the candidate can be appointed as a board member (this provision primarily applies to non-executive directors).|
The following table summarizes the application process:
Preliminary discussion undertaken in order for Eltoma Corporate Services to understand the nature of the business. Upon completion the quotation will be forwarded for the application. Standard application fees for professional services are approximately 25,000 EUR + V.A.T. (if applicable).
Please Note that the above fees do not include company incorporation costs [for incorporating the Cyprus Company to be licensed], any government fees associated with the application, or any costs associated with legalizations of documents that may arise.
Please also note that two of the Directors [nonexecutive] should be Cyprus residents, with experience from the Financial Sector. Therefore you should consider that there will be director ship fees involved (usually in the region of 20,000 EUR per annum).
Upon acceptance of the quotation Eltoma Corporate Services will forward a Letter of Engagement . Please note that payment terms are as follows:
30% of the tees payable upon commencement of the engagement.
30% of the fees payable upon filing the application with the exchange com- mission.
40% of the fees are payable when the exchange commission grants the authorization
Eltoma Corporate Services will forward a questionnaire for the development of the business plan.
Eltoma Corporate Services will incorporate the Cyprus Company to be licensed (please allow two weeks for this process to be completed).
|5||Eltoma Corporate Services will forward a portfolio of Cypriot non-executive directors for selection; two are required as it is obligatory for a CIF to have two non-executive directors.|
|6||Upon selection of two non-executive directors (it is advisable to meet them in person) Eltoma Corporate Services will initiate the process of appointment.|
Eltoma Corporate Services will commence work and gather the documents needed. Due to the volume of documents that need to be collected / prepared, it may take a minimum of three months until completion.
|8||Once the application process has been completed way in point review will take place.|
|9||Once the joint review has been completed the application is filed with the exchange commission.|
|10||The exchange commission will reply with a questionnaire requesting clarifications / points that required explanation based on the application (usually this takes place approximately two months after initial filing).|
|11||Eltoma Corporate Services will reply to CySEC‘s questions.|
|12||The Commission will request that the required share capital is locked in the company's bank account and provide supporting documents verifying this from the bank (this usually takes place two weeks before granting the license).|
The Exchange Commission grants a provisional authorization to act as a Cyprus Investment Firm.
The license is provisional on completing the terms specified in the application. For example hiring the appropriate personnel as per the organizational chart that was submitted.
From the date that the provisional license is granted, there is a period of twelve months to com- ply with all requirements, reply to CySEC, and start offering the investment services for which the license has been granted. If you fail to provide the investment services in question within twelve months, the license will be automatically revoked.
|14||Once key personnel have been recruited and all replies have been submitted to CySEC, opera tions can commence and clients can be solicited.|