CYPRUS Law and Practice Contributed by: Marcos Georgiades, Dominique Pelides and Panayiota Elia, Georgiades & Pelides
legal public entity and consists of the depos - its of credit institutions guarantee fund (the “Deposits Guarantee Fund”) and the resolution of credit and other institutions fund (the “Resolu - tion Fund”). A management committee (the “Committee”) has been established to serve the purposes of and manage the Deposits Guarantee Fund and the Resolution Fund. The Committee consists of five members. The chairman is the governor of the CBC and the remaining four members comprise two staff members from the Ministry of Finance and two staff members from the CBC (appointed by a decision of the governor of the CBC for a term of five years, which may be extended for a maximum period of three months). The purposes of the DGS are to compensate the depositors of banks that pay contributions to the Deposits Guarantee Fund if a bank becomes unable to repay its deposits, and to fund the implementation of resolution measures. Covered Deposits All deposits (other than deposits excluded by the Deposit Guarantee and Resolution of Credit and Other Institutions Scheme Regulations of 2016 (as amended) (the “Deposit Guarantee Regulations”)), in euro or other currency, held in banks and branches of a bank headquartered in Cyprus that operate abroad but pay a contribu - tion to the Deposits Guarantee Fund (including accrued interest until the maturity date of the deposit or the date the deposit became una - vailable, whichever occurred first) are eligible for compensation from the DGS. The following categories of deposits are exclud - ed by the Deposit Guarantee Regulations from the payment of any compensation from the DGS:
• deposits made by other banks on their own behalf and for their own account; • own funds as defined in Article 4(1)(118) of the CRR; • deposits arising out of transactions in con - nection with which there has been a criminal conviction for money laundering in accord - ance with the provisions of the AML Law; • deposits by financial institutions as defined in Article 4(1)(26) of the CRR; • deposits by investment firms; • deposits the holder of which has never been identified when they have become unavail - able; • deposits by insurance and reinsurance under - takings; • deposits by collective investment undertak - ings; • deposits by pension and retirement funds, subject to certain exceptions; • deposits by public authorities with an annual budget exceeding EUR500,000; and • debt securities issued by a bank and liabilities arising out of own acceptances and promis - sory notes. Amount of Compensation Subject to what is stated below, the maximum amount of compensation for each depositor per bank is EUR100,000. This limit applies to the aggregate deposits held with a particular bank. Deposits resulting from real estate transactions relating to private residential properties and deposits that serve social purposes are covered up to EUR300,000, in addition to the amount of EUR100,000 referred to above, for a maximum period of 12 months from the date on which the amount was credited or the date on which it can be legally transferred to the beneficiary, which - ever is earlier.
140 CHAMBERS.COM
Powered by FlippingBook