The foreign exchange (forex) sector must operate within a framework that prioritises investor protection, transparency and financial literacy, Finance Minister Makis Keravnos said on Wednesday, stressing that market development cannot come at the expense of safeguards.
Addressing the CY Economy Forex Conference ’26 in Nicosia, Keravnos said that, as with all investment services, the forex market requires “strong emphasis on the protection of investors, proper information and the cultivation of financial education.”
In a written address read by Avgi Chrysostomou Lapathioti, Director of Financial Services at the finance ministry, the minister said the government’s standing priority remains macroeconomic stability and the sustainability of public finances, which he described as the foundation for sustainable growth and improved living standards.
He added that the aim is “a more competitive economy that leverages its comparative advantages and strengthens its productive base,” noting that a central pillar of policy is securing “adequate and efficient financing for the economy.”
Keravnos said efforts are under way to develop modern, equity-based financing tools to address funding gaps, particularly for small and medium-sized enterprises and innovative start-ups, including the use of an Equity Fund and initiatives linked to financial technology (FinTech).
“ Our goal is a financial sector that strengthens the real economy, attracts quality investment, creates opportunities for businesses and citizens and operates under rules that build trust,” he said.
He also referred to Cyprus’ Presidency of the Council of the European Union in the first half of 2026, saying the focus includes strengthening the effectiveness, transparency and competitiveness of European capital markets. Particular importance, he said, is attached to the Savings and Investments Union (SIU), which aims to improve how European savings are channelled into productive investment.
600 checks and €2.3m in fines
Cyprus Securities and Exchange Commission (CySEC) chairman George Theocharides said the regulator carried out around 600 on-site and remote thematic inspections of Cyprus Investment Firms (CIFs) in 2025, focusing on organisational requirements and conduct of business rules under MiFID II.
Administrative fines totalling approximately €2.3 million were imposed in 2025, of which €1.3 million concerned CIFs, he said. Over the past three years, total administrative penalties reached about €7.3 million, including €5.3 million imposed on investment firms. All amounts are deposited into the Consolidated Fund of the Republic.
Theocharides said two cases were referred to the police and five to the Attorney-General in 2025 to assess potential criminal offences, while information on two further cases was forwarded to the anti-money laundering unit Mokas.
CySEC currently supervises 808 entities, including 252 CIFs, whose total assets stood at €4.5 billion at the end of the third quarter of 2025. Of these, 162 firms primarily offer contracts for difference (CFDs), which he described as complex, high-risk leveraged products, while 89 firms provide traditional products such as shares, bonds or exchange-traded funds. One firm operates a multilateral trading facility, and 29 new CIF applications are under review.
“Cyprus is open to the provision of investment services and maintains a leading role in Europe in this sector,” Theocharides said, adding that the regulator will further strengthen digital resilience and cybersecurity, including through the use of artificial intelligence.
Calls for effective supervision
Philokypros Rousounidis, secretary-general of the Cyprus Chamber of Commerce and Industry (Keve), said Cyprus has developed into one of the leading centres for forex companies in Europe, citing a clear regulatory framework, competitive taxation and access to the EU single market.
He stressed that although Cyprus attracts a significant number of forex firms, strict supervision and alignment with EU law remain in place, while warning that forex trading is inherently high-risk and requires responsible participation.
Demetris Vakis, first vice-president of the Employers and Industrialists Federation (Oev), said the sector offers prospects but also carries responsibilities. Sustainable development, he said, cannot be achieved without effective supervision, clear rules and meaningful investor information.
Vakis added that Cyprus’ macroeconomic outlook remains positive, with real GDP growth projected at around 3 per cent, inflation stabilising near 2 per cent and unemployment at historically low levels. Public debt is expected to fall below 50 per cent of GDP, while the fiscal balance is projected to remain in surplus at around 2.9 per cent of GDP.
He said these conditions reinforce the country’s credibility and provide a stable framework as Cyprus assumes the EU Council Presidency.