Latest Update – Compliance and Internal Audit Function to take actions! Regulatory Alert – Cyprus!

CYSEC launches a Common Supervisory Action (‘CSA’) with NCAs on Compliance and Internal Audit Functions

🔔 Regulatory Alert – Cyprus!

🔊 Cyprus UCITS Management Companies and Self-Managed Cyprus / Cyprus Alternative Investment Fund Managers and Self-Managed AIFs

📢 Latest Update – Compliance and Internal Audit Function to take actions!

Following the ESMA decision in February 2025 for launching a Common Supervisory Action (CSA) with National Competent Authorities (NCAs) on compliance and internal audit functions of UCITS management companies and Alternative Investment Fund Managers (AIFMs) across the EU, CySEC via its Circular 688 introduced the initiation of its targeted thematic reviews for 2025.

❓ What CyUCITS MCs and CyAIFMs must do:

Take all necessary measures to ensure full compliance with their legal and regulatory obligations regarding the compliance and internal audit functions. In this regard, CyUCITS MCs and CyAIFMs should review and, where necessary, enhance their internal control framework, ensuring that these functions are adequately resourced, independent, and effectively integrated into their governance structures, as well as take corrective actions, where deficiencies are identified, in line with the applicable regulatory requirements.

⛔ Why it Matters:

Compliance and internal audit functions are designed to ensure that the internal control mechanisms to monitor, identify, measure, and mitigate any possible risks of non-compliance with the applicable rules are in place. Therefore, ensuring that the entities have robust internal controls is crucial to avoid investor detriment and preserve financial stability.