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Cyprus: New SEC Bill Continues To Provoke Opposition

Lorys Charambolous, Tax-news.com, Nicosia

17 January 2001

During a House Finance Committee meeting earlier this week, Cyprus Central Bank Governor Afxentis Afxentiou condemned the proposal to relax regulations governing banking confidentiality.

The Committee was discussing the new Securities and Exchange Commission (SEC) Bill which includes a measure lifting banking secrecy. Mr Afxentiou urged the Committee to remove the provision from the Bill. He said such a measure would be "disastrous", stating: ''It would mean that any SEC employee could walk into a bank and ask to see the accounts of any client.' Unless a court ruling permits it in special cases, he argued, this should not be allowed to take place.

Mr Afxentiou's outburst is just the latest in a long line of controversies to emerge from the proposed new SEC Bill, the aim of which is to strengthen the supervisory role of the SEC to enable it to become independent by clearly defining its powers, that have hitherto been complex and often misinterpreted. The Cyprus Stock Exchange has recently complained that the Bill would remove many of its powers, and the Cyprus Stockbrokers Association and interested investor groups have argued that the Bill will see the SEC come under the control of the Finance Ministry and not be as independent as it should be. The debate looks set to continue for a while yet.

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