Read the CySEC Circular C801
Memo #51-2026
CySEC Circular No: C801
Date: 29/09/2026
Subject: ESMA’s Q&A regarding the interests earned from client funds deposited at a credit institution
Purpose: To inform CIFs regarding ESMA’s Q&A 2785 in relation with interests earned from client funds deposited at a credit institution.
In Summary:
CySEC has issued the Circular C801 on 29/09/2026 to inform the Cyprus Investment Firms (CIFs) for the publication by ESMA of Q&A ‘ESMA_QA_2785’ (“the ESMA Q&A”), under the topic of ‘Safeguarding of Client Assets’, concerning the treatment of interest earned on client funds deposited with credit institutions.
More specifically, the question, published on 23/02/2026, asks whether MiFID II permits investment firms to earn interest on client funds deposited in a savings account with a credit institution. According to the answer published by ESMA on 21/09/2026, the European Commission responded as follows:
“No.
In order to protect an investor’s rights in respect of funds entrusted to a
firm, Article 16 (9) of Directive 2014/65/EU of the European Parliament and of
the Council (MiFID II) stipulates that an investment firm holding client funds
shall make adequate arrangements to safeguard the rights of clients and prevent
the investment firm’s use of client funds for its own account. The investment
firms’ obligation under Article 16 (9) of MiFID II not to use clients’ funds
for its own account includes the obligation for the investment firms not to retain
any interest accrued from those funds (deposited in an account with a credit institution).”
CySEC further informs that in light of the publication of the ESMA Q&A, Circular ‘ΕΓ144-2009-07’ that was issued on 29/09/2009 with subject “Interest derived from bank account of clients’ funds” is hereby withdrawn with immediate effect.
CySEC notes that expects CIFs to review without delay their arrangements relating to interest generated on client funds held with credit institutions and to take all necessary steps to ensure compliance with Article 17(9) of Law 87(I)/2017 and the ESMA Q&A.
CySEC further notes that expects CIFs' senior management to oversee the actions taken in response to the ESMA Q&A and to ensure their timely and effective implementation. In addition, the relevant control functions, including compliance officers and internal and external auditors, shall duly consider these developments within the scope of their reviews and reflect any relevant findings in their reports submitted to CySEC.
Furthermore, CySEC informs that may, in the course of its supervisory activities, request CIFs to demonstrate their compliance with Article 17(9) of Law 87(I)/2017 and ESMA Q&A 2785.
The ESMA Q&A ‘ESMA_QA_2785’ can be found on the following link:
The withdrawn CySEC’s Circular ‘ΕΓ144-2009-07’ can be found on the following link:
Read the CySEC Circular C801
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