Cyprus To Have Derivatives Market

by Lorys Charalambous, Tax-News.com, Nicosia

06 March 2002

The latest step on the road to reinvigorating the moribund Cyprus stock market, still reeling from the after effects of the binge which came to an end in 2000, takes the form of a co-operation agreement between the Cyprus Stock Exchange (CSE) and the Athens Stock Exchange (ASE), which will include provision for the setting up of a Cyprus derivatives market.

In a joint announcement issued yesterday, the CSE, the ASE and the Athens Derivatives Exchange (ADE) said the protocol would be signed later this month during a visit to Cyprus by the ASE chairman. The protocol will focus on joint initiatives and an exchange of know-how relating to legislation, trading and settlement of transactions and derivative products.

In addition, before the end of April the ASE and ADE will give the CSE a complete study on the establishment of a derivatives market in Cyprus. The proposal will include practical steps towards establishing a derivatives market in Cyprus as soon as possible, the announcement said.

A working committee made up of members of the ASE and CSE will be set up to complete the work needed to align the two exchanges, which will include listing requirements, setting up a joint order book for the two markets and ensuring that respective members of the two stock exchanges are mutually recognised. A deadline of December 31 has been fixed for completion of the work.

In recent months the CSE index has hovered around the 100 mark, down from more than 600 at its peak, and with daily volume sometimes as low as CYP1m. Yesterday the index rose by 2% to close at 113 on volume of CYP2.2m.

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