CYPRUS Law and Practice Contributed by: Marcos Georgiades, Dominique Pelides and Panayiota Elia, Georgiades & Pelides
Procedure for Applying for Authorisation Application form The application for a banking licence must be made in writing by or on behalf of the applicant to the CBC. The CBC may require applicants to reimburse the CBC for costs associated with the examination of their application. The application form must be accompanied by the following, among others: • questionnaires set out in the policy statement on the licensing of banks in the Republic of Cyprus issued by the CBC; the question - naires can be found on the CBC’s website at www.centralbank.cy; • memorandum and articles of association or any other incorporation document, or a docu - ment determining the establishment of a legal person; and • a business plan that describes the types of activities envisaged and the organisational structure of the applicant. The CBC can require further information and/or documents. Timeline The CBC rejects the application if the appli - cant does not comply with the conditions for authorisation under national law. If the applicant complies with such conditions, the CBC must propose granting the authorisation but the ulti - mate decision is made by the ECB (Regulation 1024/2013). If the CBC rejects the application, it must notify the applicant of its decision and the reasons for it within six months of receiving the application or, where the application is incomplete, within six months of receiving all the information required for the decision. Any decision by the CBC must
in Annex IV to the Banking Law, unless the activ - ity constitutes an ancillary services undertaking (as defined in Article 4(1)(18) of the CRR). There are also restrictions applicable to a bank’s ability to hold real estate. Conditions for Authorisation A banking licence is only granted to a legal per - son established in Cyprus under the Companies Law, Cap. 113 (as amended) (the “Companies Law”) or to a credit institution established and authorised in a country other than an EEA State (a third country) under corresponding legisla - tion of that country in order to operate in Cyprus through a branch. The conditions for granting a banking licence include the following: • the initial capital of the applicant must be comprised of one or more of the items referred to in Article 26(1)(a)-(e) of the CRR, and must be equal to or exceed EUR5 million; • at least two persons must effectively direct the activities of the applicant; • the members of the management body must be of good repute, have adequate knowl - edge, qualifications and experience, and meet the requirements specified in the Fit - ness Directive; • the total composition of the management body must reflect a sufficiently wide range of expertise; and • the applicant must inform the CBC of the identity of its shareholders or members, direct or indirect, that have qualifying holdings (as defined in the CRR) and of the percentage of those holdings or, if there are no qualify - ing holdings, of the 20 largest shareholders or members; the CBC will refuse to grant the licence if it is not satisfied as to the suitability of the members or shareholders.
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