“In order to return to growth, we need to restore Cyprus’s credibility abroad,” said CySEC Chief Demetra Kalogerou. She outlined some of the actions taken by the Commission in 2013, mainly in an effort to curb the potentially disastrous effects of the Eurogroup decisions on the Cyprus financial system, especially during the critical period shortly after the decisions. CySEC initiated close contact with other countries’ supervisory bodies in order to provide information on the true status of the Cyprus economy, and rectify false perceptions caused by inaccurate reports in international media.
At home, the Commission kept a close eye on developments, ensuring adequate education of entities under supervision, and providing assistance in promptly resolving any issues they faced. “We surveyed investment firms in order to identify the challenges they faced, as well as their intentions in the short term, sustaining communication channels with entities under supervision so that we could be informed of any problems and, where possible, offer solutions.”
The CySEC chairwoman also commented on completed, as well as ongoing, investigations on instances of non-conformity with banking regulations, handing out the maximum amounts allowed by law in fines for a total of €850,000 in 2013. “Ongoing investigations concerning the banking sector relate to potentially misleading information and/or reporting in previous years,” Kalogerou said. The cases being looked at involve provisions for loans granted, investments in Greek bonds, and imprudent asset valuation, as well as allegations of market manipulation made against the executive of a Cypriot bank, regarding which the Commission is in contact with the German watchdog as the case purportedly involves Germany’s Commerzbank. “These investigations may reveal criminal liability,” Kalogerou noted, declining to offer more information. With regard to fostering more effective supervision, Kalogerou said that 2013 saw increased checks on organisations in the Commission’s remit.
Also, the preparation of a risk-based supervision framework was outsourced to a consultancy firm. The framework is expected to be fully implemented by 2015, and aims to evaluate organisations by assigning risk factors, focusing supervisory resources on high-risk entities. The watchdog has also assumed an active role on the issue of misleading promotion of securities to depositors by the Bank of Cyprus and Marfin Laiki Bank, by proposing the creation of arbitration tribunals to decide on individual claims. A committee comprising the CySEC, the Central Bank of Cyprus and the Attorney General’s office has been assigned decision on the make-up of the tribunals.
Asked whether the tribunals are expected to face congestion issuess, Kalogerou acknowledged that a large number of plaintiffs were likely to resort to the tribunals, but said that “the goal is to settle cases very swiftly.” Creation of the tribunals has been earmarked to take place by May at the latest.
Source: Cyprus Mail