CYPRUS Law and Practice Contributed by: Marcos Georgiades, Dominique Pelides and Panayiota Elia, Georgiades & Pelides
be issued within 12 months of receiving the application. If the CBC recommends the ECB grant the authorisation, the draft decision of the CBC is deemed to be adopted unless the ECB objects within a maximum period of ten working days, extendable once for the same period in duly justified cases. The ECB can object to the draft decision only where the conditions for authorisa - tion set out in relevant EU law are not met. The ECB must state the reasons for the rejection in writing. Branches Banks established in Cyprus cannot maintain a branch or representative office outside Cyprus without the prior approval of the CBC. Banks established outside Cyprus may not maintain a representative office in Cyprus without the prior approval of the CBC. In each case, the approval may be issued subject to any conditions deemed appropriate by the CBC.
“Qualifying holding” is defined in the CRR as a direct or indirect holding in an undertaking that represents 10% or more of the capital or of the voting rights of such undertaking, or that makes it possible to exercise a significant influence over the management of that undertaking. Assessment Criteria From the date it acknowledges receipt of the notification and all documents required to be attached to the notification, the CBC has a maxi - mum of 60 working days to assess the suitabil - ity of the prospective acquirer and the financial soundness of the proposed acquisition. The CBC takes the following criteria into account in making such assessment, among others: • the reputation of the proposed acquirer; • the reputation, knowledge, competencies and experience (as defined in the Fitness Direc - tive) of any member of the management body who will direct the business of the bank as a result of the proposed acquisition; • the financial soundness of the proposed acquirer; • the bank’s (continued) ability to comply with the supervisory requirements of the Banking Law and the CRR; and • whether there are reasonable grounds to suspect that, in connection with the proposed acquisition, money laundering or terrorist financing is being committed or attempted or has been committed or attempted, or that the proposed acquisition could increase the risk thereof. Other Reporting Requirements The Banking Law requires banks incorporated in Cyprus to inform the CBC upon becoming aware of any acquisitions of qualifying holdings in their capital that increase the thresholds referred to above. Additionally, persons who intend to
3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank Qualifying Holding
Under the Banking Law, anyone who individu - ally or in concert with others decides either to acquire, directly or indirectly, a qualifying holding in a bank established in Cyprus or to increase, directly or indirectly, such a qualifying holding, as a result of which the proportion of the vot - ing rights or of the capital held by such person would reach or exceed 20%, 30% or 50% or so that the bank would become its subsidiary, must give prior written notice to the CBC, setting out the size of the intended holding and other information required under the Banking Law.
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