The Cypriot Securities and Exchange Commission (SEC) is due to publish a list of firms that have been granted a new EPEY licence under the government's new Financial Services Bill. However, some brokers have pleaded with the government to delay as it is thought this will unfairly disadvantage those firms that have not had a chance to have their application processed.
Under the new law, firms can only legally provide financial services if they have been granted an EPEY licence. Any such company that does not have a licence, or has had their application rejected by the SEC will not be able to trade. So far, it is thought at least three brokerage firms have had their applications turned down, according to a report in the Cypriot Financial Mirror. In all, 27 companies have applied for an EPEY licence. Those firms which have not applied for a licence have been ordered to cease operations after a winding down period.
The licence will also apply to foreign firms providing financial services in Cyprus, though they have been given until June 30th to finalise their applications. Any foreign company which is not granted an EPEY, or does not apply in the appropriate period will be required to cease trading by the 31st August. This has come about due a change in regulatory jurisdiction. Previously, foreign firms came under the regulatory remit of the Central Bank, but they will now be governed by SEC rules, hence the need for EPEY licences.
According to the SEC chairman Marios Clerides, the rules have been designed along a European framework and it is thought that the initiative will be successful in attracting more foreign funds to invest in the Island. It is understood that many European and Russian financial services firms have expressed an interest in opening operations in Cyprus, according to the Financial Mirror.
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