Demetra Kalogerou, head of CySEC, talks about brokers' call centers:
“Investment firms licensed under MiFID may outsource technology and marketing. While outsourcing the technological support abroad does not generally pose problems, we are troubled by the latter. When it comes to outsourcing of marketing, we know that some CySEC regulated firms cooperate with call-centers in EU member-states and third countries. Marketing of financial instruments and services is a very important function, but some of these call centers may employ aggressive marketing and thus risk misleading or pressuring the investors. It is imperative to ensure that qualified individuals are recruited and somebody is there and in charge to directly oversee them. Of course, CIFs must have in place effective internal mechanisms to monitor at all times the activities outsourced to call centers.
Based on CySEC’s experience so far and having identified deficiencies in the monitoring of these call centers, CySEC is considering to require the CIFs to only perform these activities internally from their offices in Cyprus or only through a branch, tied agent or regulated entity based in another jurisdiction. It is provided that all sales people will be well trained and pass CySEC’s exams.”