EU Experts Inspect Cyprus's Finance Laws

by Lorys Charalambous, Tax-News.com, Cyprus

10 July 2001

A delegation from the European Union's Peer committee began an inspection of Cyprus's financial sector yesterday to determine if Cyprus has sufficiently aligned its laws with EU directives governing banking, the stock exchange, offshore institutions, the insurance industry and co-operative credit institutions.

According to the Xak online news service, the Peer committee visit is the first time that EU experts have examined the Cypriot 'financial and supervision mechanisms' in place. Giorgos Vassiliou, head of the Cypriot EU negotiating team, said not only must Cyprus to enact all the relevant legislation in the financial sector, its supervisory systems must also be up to scratch in order to enforce those laws.

During their visit the EU experts will examine three key areas: the stock market, financial and monetary services, and the banking sector. As far as the stock market is concerned the independent status of the Securities and Exchange Commission (SEC) will be studied as well as: investor protection, relations between the Cyprus Stock Exchange (CSE), the SEC and the Central Bank, stock market transactions and controls, complaints procedures and the supervision of IPOs and collective investment schemes.

With regard to financial and monetary services, the investigation will include the banks' ability to impose the legislation, confidentiality, credit risk controls, depositor protection, money-laundering, and the supervision of co-operative entities.

For insurance matters, the effectiveness of the new laws, the distribution of duties between the Finance Ministry and the Insurance Commission, the level of harmonisation with the acquis communautaire, and compatibility with EU legislation will also be on the agenda.

Recommended