The Cyprus Securities and Exchange Commission has issued anamending directive restricting the marketing, distribution, and sale ofcontracts for difference to retail clients. The update revises the existingrules on CFDs to retail investors.Under the amendment, a 10% notional value cap has beenintroduced for CFDs on certain previously unlisted commodities and stockindices, limiting the leverage retail investors can take. The directive takeseffect from its publication in the Official Gazette of the Republic.Cyprus Regulator Revises CFD Investor LimitsCySEC said the measure aims to strengthen investorprotection by limiting exposure to high-risk CFD products. The amendeddirective and the original framework from 2019 will now operate together,covering the period from 2019 to 2025.It seems CySEC is trying to limit regulatory arbitrage bytightening rules, positioning itself as a stricter regulator in line with morerestrictive EU jurisdictions.CySEC Updates Oversight, Sanctions, and CapitalRequirements for BrokersCySEC continues to strengthen oversight of the financialsector. Chairman Dr. George Theoharides highlighted thecommission’s focus on investor protection, market stability, andresponsible growth, noting rising regulatory demands, digital transformation,and upcoming MiCA and DORA regulations. CySEC supervises over 830 entities andhas a 2025 budget of €17.5 million for staff and technology.CySEC has also introduced a framework to enforceEU and UN sanctions more effectively across all regulated firms, includingCFD brokers. The framework establishes procedures for identifying breaches andcreated the National Sanctions Implementation Unit under the Finance Ministry.Firms must enhance controls, monitor transactions, and report suspiciousactivity.From early 2025, CySECwill implement new European Banking Authority guidelines for FX and CFDbrokers operating as Cyprus Investment Firms. The rules clarify the groupcapital test under the Investment Firms Regulation, covering capital adequacy,risk management, and governance. Low-risk firms may apply for reduced capitalrequirements, while CySEC retains authority to revoke permissions if conditionschange.This article was written by Tareq Sikder at www.financemagnates.com.