CySEC introduces new digital onboarding rules

The Cyprus Securities and Exchange Commission (CySEC) on Tuesday published its new rules on digital customer onboarding through the release of a Policy Statement (PS-01-2024).

According to the commission, the new rules were developed following extensive stakeholder feedback gathered during a public consultation (CP-02-2020), as well as the finalisation of the European Banking Authority guidelines on the use of remote customer onboarding solutions.

These guidelines, which came into effect in October 2023, provided a critical framework for CySEC’s approach.

CySEC’s Policy Statement outlines several key components of the new rules. First, it allows for the use of remote onboarding solutions by Obliged Entities — as defined under the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 — for the purpose of verifying the identity of customers who are not physically present.

However, this is to be done in accordance with a risk-based approach. CySEC said that “Obliged Entities shall carry out a risk assessment prior to using remote onboarding solutions and notify the intention of such use to CySEC in advance”.

A notable addition to the rules is the introduction of the term ‘identification document,’ which broadens the range of acceptable documents beyond just passports.

Additionally, while the obligation to collect documents that confirm the customer’s address remains in place, CySEC now permits the use of remote onboarding solutions to collect copies of these original documents.

“The confirmation of address when collecting copies of such original documents through remote onboarding solutions is now enabled,” CySEC stated.

Finally, the commission said that queries regarding the details of the policy statement can be directed to CySEC’s policy department via email at policy@cysec.gov.cy.