We bring to your attention CYSEC’s Circular C162 with respect to the changes in the treatment of Investors Compensation Fund (hereinafter ‘ICF’) in regards to the Capital Adequacy Requirements.
According to this Circular, Cyprus Investment Firms (CIFs) that are obliged to be members of and contribute, to the ICF as of the 10th of October 2016, must deduct their ICF contribution presented in their records from Common Equity Tier 1 Capital and must no longer risk weight the relevant amount, when total risk exposure amount is calculated. More particularly, the ICF contribution must be presented in Form 144-14-06.1, Sheet CA1, Row 524, ID 188.8.131.52.
Consequently, CIFs must take all necessary measures so as to comply with CRD requirements by December 31, 2016.
This may result in the need for further capital injections for some CIFs.
Please feel free to contact us for further information.