Financial Crime World

Cyprus’ Financial Regulation Compliance: A Look into Georgiades & Pelides’ Expertise and the Regulatory Landscape

Last Updated: December 12, 2023

In the intricate world of international finance, maintaining regulatory compliance is an indispensable component for any financial institution, including those situated in EU member countries, such as Cyprus. Known for its flourishing financial sector, Cyprus observes rigorous regulatory frameworks. This article explores the essential legislative foundation, authorization process, and control requirements within Cyprus’ financial regulatory compliance landscape, shedding light on Georgiados & Pelides, a leading Cypriot law firm.

Georgiades & Pelides: A Legacy of Expertise

As a renowned Cypriot law firm, Georgiades & Pelides encompasses an extensive practice in banking law. Their legal expertise extends to advising on various facets of banking transactions, project and corporate finance, raising loan finance, and compliance with regulatory requirements. Established in 1998, the firm harmonizes dynamism and experience.

Legislative Framework

The primary legislation governing the banking sector in Cyprus is the Business of Credit Institutions Law of 1997 (Law No 66(I)/1997), which includes provisions related to licensing, ownership, and the winding up of banks. The Central Bank of Cyprus (CBC) has issued several directives based on this law:

  • Assessment of Fitness of Members of the Management Body and Key Function Holders of Authorised Credit Institutions Directive (Fitness Directive)
  • Internal Governance of Credit Institutions Directives (Governance Directives)

Additionally, several European Union (EU) regulations, such as:

  • Capital Requirements Regulation (CRR)
  • Regulation 1024/2013,

apply to banks in Cyprus.

Authorisation

To initiate activities in Cyprus, banks need to secure a banking license from the Central Bank of Cyprus (CBC). Foreign banks authorized in the European Economic Area (EEA) can operate in Cyprus without requiring a local license if their activities are covered by their existing license and they comply with certain notification requirements. Such activities include:

  • Taking deposits
  • Lending
  • Financial leasing
  • Payment services

The licensing process entails significant capital investment, a good reputation, qualified personnel, and satisfactory shareholder arrangements.

Control

Cyprus’ regulatory framework imposes controls to ensure that acquiring or increasing control over a bank in Cyprus is subject to prior approval from the CBC. These controls guarantee the prevention of potential risks and adherence to international standards.

Staying updated on regulatory compliance requirements is crucial for financial institutions in Cyprus. The seasoned team at Georgiades & Pelides is readily available to furnish customized advice and guidance, ensuring their clients remain compliant with all applicable laws and regulations.