2020 Cyprus Country Report
The 2020 Cyprus Country Report features in-depth articles on the economy, foreign direct investment, international trade and headquartering as well as detailed sector profiles and insights from Cyprus’ 100 most influential political, economic and business leaders shaping the future of their country and its industries.
The 2020 Cyprus Country Report features in-depth articles on the economy, foreign direct investment, international trade and headquartering as well as detailed sector profiles and insights from Cyprus’ 100 most influential political, economic and business leaders shaping the future of their country and its industries.
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CSE’s goal for<br />
<strong>2020</strong> is to be<br />
recognised as<br />
an essential<br />
growth<br />
lever for the<br />
development of the <strong>Cyprus</strong><br />
economy. The aim is to attract<br />
new companies to list on CSE’s<br />
markets, so they may develop<br />
and expand their activities<br />
and provide new investment<br />
opportunities to investors.<br />
CSE is also focusing on new<br />
alternative areas and sectors<br />
to enhance our markets,<br />
services and products.<br />
Nicos Trypatsas<br />
Acting General Manager<br />
<strong>Cyprus</strong> Stock Exchange<br />
which provides a transparent fund profile and<br />
credibility to investors. It has fast and simple<br />
listing procedures with minimum bureaucracy,<br />
advanced technology, infrastructure and effectiveness<br />
at a low cost. There is great potential for listing<br />
Collective Investment Schemes, of both UCITS<br />
and Alternative Investment Funds (AIFs) on the<br />
CSE, allowing fund promoters to attract greater<br />
interest from institutional investors. The favourable<br />
environment provided by <strong>Cyprus</strong> attractive<br />
tax regime, the legal framework which is harmonised<br />
with EU Directives, and the vast pool of<br />
skilled professionals provide the necessary prerequisites<br />
for enabling the future growth of the funds<br />
industry. The <strong>Cyprus</strong> Stock Exchange has already<br />
accepted listings for 17 non-tradable Collective<br />
Investment Schemes – more specifically, two<br />
single scheme UCITS funds and 15 sub-funds of<br />
one UCITS umbrella scheme. Additionally, two<br />
AIFs are also listed on the non-tradable Collective<br />
Investment Schemes, one single scheme and one<br />
umbrella scheme with two sub-funds.<br />
The island is positioning itself as a cost-effective<br />
alternative to the larger European fund<br />
centres like Luxembourg and Ireland, and many<br />
in <strong>Cyprus</strong> believe the sector has a great future<br />
ahead, estimating that AuM could reach €12<br />
billion in the next five years.<br />
CROSS-BORDER CONNECTIONS<br />
A key strategy of the <strong>Cyprus</strong> Stock Exchange<br />
is one of regional growth and collaboration<br />
with neighbouring stock exchanges, by signing<br />
Memorandums of Understanding with other exchanges.<br />
The CSE offers fully computerised online<br />
trading, clearing and settlement. Investors have<br />
access to the Securities listed on the CSE Market<br />
as well as to the securities listed on the Athens<br />
Exchange Market (Athex Group) through the<br />
Common Trading Platform established between<br />
the two Exchanges. Through this platform, Greek<br />
market participants (members and custodians)<br />
have access to view and trade the securities listed<br />
on the CSE and vice versa. The CSE also provides<br />
a successful service to non-listed companies that<br />
wish to submit their registries for handling by the<br />
<strong>Cyprus</strong> Central Depository and Central Registry.<br />
Additionally, the Exchange also introduced<br />
a regulatory framework for the operation of<br />
the Depository Interests (DIs) to facilitate the<br />
clearing and settlement of cross-border trades<br />
between the CSE and London Stock Exchange<br />
(LSE) for dually listed companies.<br />
The CSE has also been appointed by the<br />
<strong>Cyprus</strong> Securities and Exchange Commission<br />
(CySEC) as the Officially Appointed Mechanism<br />
for the Storage of Regulated Information (OAM)<br />
for <strong>Cyprus</strong>, according to the provision of the<br />
Transparency Directive – a system that makes use<br />
of digital signatures. Regarding digital signatures,<br />
the CSE has been assigned the role of a Local<br />
Registration Authority (LRA) of an authorized<br />
Registration Authority (RA). The CSE, as an LRA<br />
of an authorized RA, mediates for the issue of:<br />
Qualified Certificates for Electronic Signatures<br />
(natural person), Qualified Certificates for<br />
Electronic Signatures (natural person associated<br />
with legal person) and Qualified Certificate for<br />
Electronic Seal (legal person). Organizations or<br />
Companies can obtain from the CSE qualified<br />
certificates for electronic signatures/ seal, which<br />
they may use in their operations. An increasing<br />
number of organisations and companies choose<br />
to adopt the use of qualified electronic signatures<br />
to replace procedures requiring documents in<br />
printed form (ratified by seals and signatures).<br />
In addition, the CSE acts as the auctioneer of<br />
Greenhouse Gas Emission Allowances (EUAs) in<br />
the Republic of <strong>Cyprus</strong>. The Exchange is responsible<br />
for the supply of allowances to be auctioned<br />
in the primary market on behalf of the <strong>Cyprus</strong><br />
government.<br />
The CSE issues Legal Entity Identifier Codes<br />
(LEI) to interested legal entities. This service<br />
is provided by the CSE in cooperation with the<br />
London Stock Exchange/Unavista, and the issuance<br />
of LEI codes is done through the Unavista<br />
platform. The CSE also continues to successfully<br />
provide the FISN, ISIN and CFI codes to interested<br />
market participants as the official national representative<br />
for <strong>Cyprus</strong>, as appointed by ANNA.<br />
RAISING FUTURE FUNDS<br />
Unfortunately, the economic consequences of the<br />
global Covid-19 pandemic cannot be easily assessed.<br />
Even though the majority of listed companies<br />
announced to the investing public the<br />
effects of the pandemic on their businesses, there<br />
remains uncertainty about the future. The CSE<br />
has an important role to play in the recovery of<br />
the <strong>Cyprus</strong> economy and as such it has the necessary<br />
tools to attract new companies to raise funds<br />
through the listing of their securities thus providing<br />
investors new investment opportunities.<br />
Over the years, <strong>Cyprus</strong> has time and time<br />
again proved its resilience, and armed with numerous<br />
comparative advantages – such as its<br />
geostrategic location, EU membership, investorfriendly<br />
environment and strong professional<br />
services sector – there is much potential to be<br />
harnessed in developing a stronger and more<br />
dynamic market and cement the country’s foundations<br />
as a key EU player in the wider region. n<br />
Discover more at www.cyprusprofile.com<br />
Sector Profile<br />
<strong>Country</strong> <strong>Report</strong> CYPRUS <strong>2020</strong> 65