2020 Cyprus Country Report

CSE’s goal for
2020 is to be
recognised as
an essential
growth
lever for the
development of the Cyprus
economy. The aim is to attract
new companies to list on CSE’s
markets, so they may develop
and expand their activities
and provide new investment
opportunities to investors.
CSE is also focusing on new
alternative areas and sectors
to enhance our markets,
services and products.
Nicos Trypatsas
Acting General Manager
Cyprus Stock Exchange
which provides a transparent fund profile and
credibility to investors. It has fast and simple
listing procedures with minimum bureaucracy,
advanced technology, infrastructure and effectiveness
at a low cost. There is great potential for listing
Collective Investment Schemes, of both UCITS
and Alternative Investment Funds (AIFs) on the
CSE, allowing fund promoters to attract greater
interest from institutional investors. The favourable
environment provided by Cyprus attractive
tax regime, the legal framework which is harmonised
with EU Directives, and the vast pool of
skilled professionals provide the necessary prerequisites
for enabling the future growth of the funds
industry. The Cyprus Stock Exchange has already
accepted listings for 17 non-tradable Collective
Investment Schemes – more specifically, two
single scheme UCITS funds and 15 sub-funds of
one UCITS umbrella scheme. Additionally, two
AIFs are also listed on the non-tradable Collective
Investment Schemes, one single scheme and one
umbrella scheme with two sub-funds.
The island is positioning itself as a cost-effective
alternative to the larger European fund
centres like Luxembourg and Ireland, and many
in Cyprus believe the sector has a great future
ahead, estimating that AuM could reach €12
billion in the next five years.
CROSS-BORDER CONNECTIONS
A key strategy of the Cyprus Stock Exchange
is one of regional growth and collaboration
with neighbouring stock exchanges, by signing
Memorandums of Understanding with other exchanges.
The CSE offers fully computerised online
trading, clearing and settlement. Investors have
access to the Securities listed on the CSE Market
as well as to the securities listed on the Athens
Exchange Market (Athex Group) through the
Common Trading Platform established between
the two Exchanges. Through this platform, Greek
market participants (members and custodians)
have access to view and trade the securities listed
on the CSE and vice versa. The CSE also provides
a successful service to non-listed companies that
wish to submit their registries for handling by the
Cyprus Central Depository and Central Registry.
Additionally, the Exchange also introduced
a regulatory framework for the operation of
the Depository Interests (DIs) to facilitate the
clearing and settlement of cross-border trades
between the CSE and London Stock Exchange
(LSE) for dually listed companies.
The CSE has also been appointed by the
Cyprus Securities and Exchange Commission
(CySEC) as the Officially Appointed Mechanism
for the Storage of Regulated Information (OAM)
for Cyprus, according to the provision of the
Transparency Directive – a system that makes use
of digital signatures. Regarding digital signatures,
the CSE has been assigned the role of a Local
Registration Authority (LRA) of an authorized
Registration Authority (RA). The CSE, as an LRA
of an authorized RA, mediates for the issue of:
Qualified Certificates for Electronic Signatures
(natural person), Qualified Certificates for
Electronic Signatures (natural person associated
with legal person) and Qualified Certificate for
Electronic Seal (legal person). Organizations or
Companies can obtain from the CSE qualified
certificates for electronic signatures/ seal, which
they may use in their operations. An increasing
number of organisations and companies choose
to adopt the use of qualified electronic signatures
to replace procedures requiring documents in
printed form (ratified by seals and signatures).
In addition, the CSE acts as the auctioneer of
Greenhouse Gas Emission Allowances (EUAs) in
the Republic of Cyprus. The Exchange is responsible
for the supply of allowances to be auctioned
in the primary market on behalf of the Cyprus
government.
The CSE issues Legal Entity Identifier Codes
(LEI) to interested legal entities. This service
is provided by the CSE in cooperation with the
London Stock Exchange/Unavista, and the issuance
of LEI codes is done through the Unavista
platform. The CSE also continues to successfully
provide the FISN, ISIN and CFI codes to interested
market participants as the official national representative
for Cyprus, as appointed by ANNA.
RAISING FUTURE FUNDS
Unfortunately, the economic consequences of the
global Covid-19 pandemic cannot be easily assessed.
Even though the majority of listed companies
announced to the investing public the
effects of the pandemic on their businesses, there
remains uncertainty about the future. The CSE
has an important role to play in the recovery of
the Cyprus economy and as such it has the necessary
tools to attract new companies to raise funds
through the listing of their securities thus providing
investors new investment opportunities.
Over the years, Cyprus has time and time
again proved its resilience, and armed with numerous
comparative advantages – such as its
geostrategic location, EU membership, investorfriendly
environment and strong professional
services sector – there is much potential to be
harnessed in developing a stronger and more
dynamic market and cement the country’s foundations
as a key EU player in the wider region. n
Discover more at www.cyprusprofile.com
Sector Profile
Country Report CYPRUS 2020 65