meta_id 3403613

On August 12, 2026, the Cyprus Securities and Exchange Commission (CySEC) issued Circular No. C795 informing Cyprus investment fund managers of a Common Supervisory Action (CSA) launched by the European Securities and Markets Authority (ESMA) with National Competent Authorities across the European Union. The 2026 CSA focuses on the risk management function of UCITS management companies and Alternative Investment Fund Managers (AIFMs). ESMA has identified risk management as a core function supporting investor protection and financial stability. The 2026 CSA examines the effectiveness, independence, and expertise of risk management functions, with particular focus on three areas: governance and organisation of the risk management function; identification, measurement, and monitoring of risks; and reporting to senior management and governing bodies. CySEC recognises that an effective risk management function is essential to the sound and prudent management of UCITS and AIFs, enabling the identification and management of material risks including market, credit, liquidity, counterparty, and operational risks, protecting investors, and ensuring timely escalation of risk-related matters to senior management and boards of directors. CySEC will participate in the 2026 CSA and conduct a targeted thematic review in late 2026 and early 2027, comprising both on-site and desk-based reviews of a representative sample of Cyprus investment fund managers. CySEC expects all Cyprus UCITS management companies, internally managed Cyprus UCITS, Cyprus AIFMs, and internally managed AIFs to review their existing risk management arrangements and confirm these remain appropriate, effective, and proportionate to their activities and the funds under management, in accordance with applicable regulatory requirements.