Summary of CySEC's Circular C431

Memo #07-2021

CySEC Circular No: C431

Date: 11/03/2021
Subject: ESMA launches a Common Supervisory Approach with NCAs on MiFID II Product Governance rules
Purpose: To inform the Regulated Entities that the ESMA published on 01/02/2021 an announcement regarding the 2021 CSA and that CySEC is planning to conduct on-site visits and/or desk based reviews on a sample of Regulated Entities.

In Summary:

CySEC has issued the Circular C431 on 10/03/2021 to inform the Cyprus Investment Firms, UCITS Management Companies (Management companies when providing services pursuant to section 109(4) of Law 78(I)/2012, as in force) and Alternative Investment Fund Managers (AIFMs when providing services pursuant to section 6(6) of Law 56(I)/2013, as in force) that the European Securities and Markets Authority (‘ESMA’) published on February 1, 2021 an announcement regarding the 2021 Common Supervisory Approach (‘CSA’) on ‘MiFID II Product Governance rules ’.

As per the aforementioned announcement, ESMA is launching the CSA 2021 with national competent authorities (NCAs) on the application of MiFID II product governance rules across the European Union (EU). The CSA will be conducted during 2021.

With this Circular CySEC informs the Regulated Entities that is planning to conduct on-site visits and/or desk based reviews on a sample of Regulated Entities that fall within the scope of the said CSA providing investment services to retail clients. This action will allow CySEC to assess how the Regulated Entities apply the MiFID II product governance rules and it will also enhance the protection of investors in line with ESMA’s objectives.


CySEC also informs that the purposes of the CSA 2021, CySEC will consider the following regulatory framework:

a. Articles 17 (3) and 25 (2) of Law 87 (I) / 2017
b. Part III of Directive DI87-01 of the Cyprus Securities and Exchange Commission
c. Guidelines on MiFID II product governance requirements (ESMA 35-43-620)
d. Questions and Answers on MiFID II and MiFIR investor protection and mintermediaries topics (ESMA 35-43-349)
e. CySEC Circular 236

CySEC expects the Regulated Entities to adhere to the content of this Circular C431 as this will form part of CySEC’s supervisory review for the purpose of the 2021 CSA.

The Guidelines on MiFID II product governance requirements (ESMA 35-43-620) can be found on the following link:

 https://www.esma.europa.eu/sites/default/files/library/esma35-43-620_report_on_guidelines_on_product_governance.pdf 

The Questions and Answers on MiFID II and MiFIR investor protection and intermediaries topics (ESMA 35-43-349) can be found on the following link: https://www.esma.europa.eu/sites/default/files/library/esma35-43-349_mifid_ii_qas_on_investor_protection_topics.pdf 

Read the CySEC Circular C431

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