The watchdog over Cyprus’s financial regulations is the Cyprus Securities and Exchange Commission, or CySEC. In 2001, CySEC entered the forex market.
Cyprus became a member of the European Union in 2004, and as such, CySEC’s financial rules and practises are compliant with the MiFID financial harmonisation law.
Cyprus is one of the most desirable locations in Europe to establish a forex business because of its favourable fiscal and tax environment. Forex markets have had a mixed reaction to CySEC-regulated brokers, and as for retail traders, you either love them or you loathe them.
The number of Forex brokers in the nation increased exponentially, and soon it was a haven for financial fraud and scams, which finally reduced the nation’s ability to deal with broker irregularities. Because the nation did not want to alienate its investors and risk them closing up shop and doing business elsewhere, the CySEC was also known for letting corporations off the hook with no consequences or only warnings, even for more serious financial crimes. The CySEC’s ability to promote its potential as a reliable regulatory authority was hampered by the absence of a strong regulatory regime.