The Cyprus Parliament has passed a new law aimed at protecting
investors from companies which delay their entry into the stock
market and sit on money already subscribed.
Under the new law any company that does not list on the Cyprus
Stock Exchange (CSE) within 3 months of applying will be forced
to return advance funds received from investors with 6% interest
on top. Companies failing to comply will be subject to penalties.
The new law will stop companies profiting from sitting on investors' funds when long delays occur in the IPO process. Given the current backlog of companies waiting to list on the CSE and the slow rate at which they are being processed, the new law will be a welcome relief for investors who are becoming increasingly nervous following the recent downturn in the CSE and 'dirty tricks' allegations against brokers.
The legislation also includes special provisions for CSE applicant companies who collected advance funds prior to the passage of the new law. These companies now have 2 months to complete their applications to the CSE and must float their shares within 3 months.
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