Cyprus: Parliament Votes For Return To Non-Prepaid Transactions On The Stock Exchange

by Lorys Charambolous, Tax-news.com, Cyprus

20 April 2001

According to reports, Cyprus' House Finance Committee has decided to uphold a proposal to scrap the ban on transactions made on credit at the Cyprus Stock Exchange with the recommendation that the new law takes effect from 12 July, 2001. Parliament is set to vote on the bill this week.

House Finance Committee Chairman, Markos Kyprianou, told the Cyprus media that the political parties and stockbrokers favoured a return to the system of allowing investors to perform transactions without having to prepay. But this is with the proviso that certain issues regarding the clearance of transactions are dealt with first such as transaction guarantees, mechanisms to protect brokerages and the requirement that investors pay for transactions carried out on their behalf by the end of the third day from the day the transaction took place.

The House Finance Committee has also discussed a bill on transactions clearance which was passed back to parliament for amendments after it was found to contain a serious error allowing the value of transactions to be restricted at twice the value of the net capital of a brokerage. Mr Kyprianou said the Committee was now in agreement that stockbrokers should be permitted to process transactions with a worth of up to no more than four times the value of the assets of their brokerage - although the CSE Council will still have the right to lower this amount.

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