CYPRUS Trends and Developments Contributed by: Marcos Georgiades and Dominique Pelides, Georgiades & Pelides
largely the same as under the previous regime, as does the supporting information that must be submitted as part of an application for authorisa - tion, the main difference being that applicants must now submit evidence as to the policies and procedures established by the applicant to ensure (inter alia) that it has strong governance arrangements which protect obligors and safe - guard their rights. The CBC is also now subject to a statutory deadline of 90 days (calculated from the date the CBC receives a complete application for authorisation) within which it must determine whether to grant the requested authorisation. A credit servicer authorised by the CBC may provide its services in another EU member state, but must submit certain information to the CBC (eg, address and contact details of its office in the other EU member state and details of the persons charged with servicing the credit facilities, in addition to information regarding the adjustments made to the servicer’s internal procedures and structure to ensure compliance with applicable law regarding obligors’ rights). This information is shared by the CBC with the equivalent authorities of the other EU member state (and, where different, with the authorities of the member state in which the facility was granted). Credit servicers who have been authorised as such under the laws of an EU member state other than Cyprus may offer their services in Cyprus, provided that they comply with the requirements of the legislation in addition to any restrictions placed upon them by their home authorisation. They may begin offering their services from the earlier of (i) the date on which the CBC receives notification from the competent authorities of the servicer’s home EU member state that the servicer has notified them of their intention to
commence providing services in Cyprus; and (ii) two months after submission of the required information to the authorities of the home EU member state (in accordance with the law of the home EU member state). Somewhat confusingly, while the bulk of the regime regarding authorisation of credit servic - ers has been included in the Credit Servicers Law, a number of elements are retained in the Sale of Loans Law (for example, a requirement that CBC consent is obtained prior to the dis - posal or acquisition of a “qualifying interest” in a credit servicer). Amendments to the sale procedure The draft legislation originally proposed last year provided for a degree of simplification to the pro - cedure of sale of credit facilities. However, the revised package of legislation not only retains much of the complexity of the existing regime, but arguably creates further uncertainty through the inclusion of two separate sale procedures in two pieces of legislation (the existing sale procedure under the Sale of Loans Law (with minor amendments), and a new sale proce - dure under the Credit Servicers Law). Although the Sale of Loans Law, as revised, contains an express proviso that it does not apply to credit facility agreements transferred pursuant to the Credit Servicers Law (other than with respect to transfers between authorised credit institutions), it is unclear why the legislature has chosen to maintain two almost identical sale procedures in two separate legislative instruments rather than including all sales of loan portfolios under a single umbrella. It is worth noting in this regard that the Credit Servicers Law is expressed not to apply to the purchase of non-performing credit facilities by credit institutions established in the EU, the
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