Cyprus: Cyprus Chapter Of International Securities Law And Regulation – Second Edition

Last Updated: 19 May 2016
Article by Elias Neocleous and Achilleas Malliotis


In General

The modern era for the securities sector in Cyprus began in 1996 with the inauguration of the Cyprus Stock Exchange (CSE), the first official stock exchange in Cyprus.

The CSE is modeled on current international securities rules and practices and aspires to consolidate the position of Cyprus as a regional business and financial services centre and boost the growth of capital markets in Cyprus.

Sources of Law

The principal legislation governing the issue and trade of securities in Cyprus is as follows:

  • Securities and Stock Exchange Law, 14(I) of 1993, as amended;1
  • Securities and Stock Exchange Regulations of 1995−2005 (Part 1);2
  • Securities and Stock Exchange Regulations of 1995-2005 (Part 2— Supplements);
  • Trading Rules (Regulatory Administrative Act) 409/2006, as amended;3
  • Regulatory Administrative Act 209/2011, as amended;4
  • Securities and Stock Exchange (Central Securities Depository and Central Registry) Laws of 1996−2006;5
  • Securities and Stock Exchange (Registering, Trading, and Settlement of Dematerialised Securities) Regulations 161/2001, as amended;6
  • Regulatory Administrative Act 81/2005, as amended, relating to members of the Cyprus Stock Exchange;
  • Regulatory Administrative Act 166/2005, as amended, relating to the Cyprus Stock Exchange Code of Conduct;7
  • Regulatory Administrative Act 596/2005, as amended, relating to the listing of securities on the Cyprus Stock Exchange, continuous obligations of issuers, and fees; and
  • Regulatory Administrative Act 398/2006, as amended, relating to the operation of the Central Registry and Central Depository.8

Regulatory Authorities

The CSE was established under the Securities and Stock Exchange Law in April 1993. A seven-member Council (CSE Council) is responsible for the day-to-day management of the CSE and the implementation of its policies.

The CSE is supervised by the Cyprus Securities and Exchange Commission (CySEC), which comprises a government commissioner, a representative of the Central Bank, and three other members appointed by the Council of Ministers.

The regulatory regime aims to balance the interests of issuers and investors, by providing proper protection to local and foreign investors, without making it unduly onerous for companies to obtain and maintain a listing on the CSE.

Admission to Cyprus Stock Exchange

The CSE is the only official investment exchange in Cyprus. The roots of the CSE date to 1979 when the Cyprus Chamber of Commerce and Industry established an unofficial over-the-counter exchange to regulate the growing securities market. As a result, a dynamic market had developed by the time the CSE opened its doors.

Market Participants

Only members of the CSE holding the requisite licence from the CSE Council may exercise the profession of stockbroker. The licence is readily granted if the broker satisfies a set of prerequisites relating to educational qualifications, professional experience, and personal and financial integrity.

Types of Traded Securities

Under the Securities and Stock Exchange Law, listed public sector securities, corporate securities of listed companies, and other securities which the CSE Council has declared as Stock Exchange securities can be traded on the CSE. These securities include shares, rights, warrants, corporate bonds, government bonds, and treasury bills.

Types of Transactions

The CSE boasts advanced technology comparable with that of established overseas exchanges. Its fully automated computerised trading system (consisting of the Central Registry Depository and Clearing & Settlement System) became fully operational on 7 May 1999 under section 22 of the Securities and Stock Exchange Law and regulation 33 of the Securities and Stock Exchange Regulations.

Opening Trading Account

All securities traded under the Central Registry Depository and Clearing & Settlement System are in dematerialised form with transfers effected through a central electronic book entry system maintained at the CSE. Investors who wish to execute stock exchange transactions can do so only if they have trading accounts. There are two types of trading accounts, namely:

  • A general trading account where an investor gives discretion to a member of the CSE to effect stock exchange transactions in relation to listed securities; in particular, the member is given the right to sell any security which the investor has or will have transferred to the general trading account, as well as the right to buy any security; and
  • A special trading account where the investor gives discretion to a member of the CSE to purchase (but not to sell) securities which will be transferred to the depository account of the investor as soon as they are acquired; the member is not given access to those securities and does not have the discretion to sell them.

Generally, an investor can open a number of trading accounts with various brokers and for a number of different purposes including for 'buy only' or 'buy/sell' trades. General or special trading accounts are easily opened using the prescribed form of application, namely, Form 10A for a general trading account and Form 11 for a special trading account.

A prerequisite to the opening of a trading account is the opening by the investor of a depository account, irrespective of whether or not there are any securities in the depository account. A depository account is the account in which all the dematerialised securities which an investor holds at the CSE Central Registry are recorded. A person wishing to acquire listed securities for the first time must open a depository account by application to the CSE using prescribed Form 1.

Central Registry and Depository and Settlement System

The Securities and Stock Exchange (Central Securities Depository and Central Registry) Law, 27(I) of 1996, provides for the establishment and operation of a central register for all securities listed on the Cyprus Stock Exchange, the dematerialisation of these securities, the settlement of transactions in respect of dematerialised securities, and related matters.

The Central Registry and Depository contains personal information on individual investors, details of the securities owned by them, and any changes in their shareholdings. More specifically, the Central Depository and Securities Register entails the replacement of share certificates by electronic computer records. Instead of certificates of securities, beneficiaries of registered securities are granted a certification of their status, the securities involved, and any charges they carry.

The Settlement System is the part of the Cyprus Securities Depository by which trades and transactions due for settlement are processed within the CSE. The Settlement System deals with the securities side of settlement at the individual investor level as well as the funds side of settlement at the market participant level (brokerage firms).

Security positions occur automatically within the system on the settlement date, while the settlement of cash positions between market participants and the clearing house occurs on the settlement date through the banking system. The system supports delivery versus payment settlement. There are two settlement methods which are utilised and which have as their intention the reduction of settlement risk and the enhancement of investor confidence and volume of trading. These are as follows:

  • Contractual Netting Settlement — where cash is netted by a market participant who is either a net buyer or a net seller; and
  • Trade-for-Trade Settlement — where each trade is settled for cash separately with no netting.

Over-the-Counter Transactions

As a general rule, the Securities and Stock Exchange Law prohibits over-the- counter trading of securities. However, certain transactions set out in section 23(1) of the Securities and Stock Exchange Law may be executed outside the CSE provided that they are notified to the CSE within three working days. To transfer securities in accordance with the Stock Exchange laws and regulations, the following must be delivered to the CSE:

  • A transfer document in the prescribed form (Form 2), signed by both the transferor and the transferee;
  • A form for notification of practices involving listed securities (Form 3); and
  • Transaction fees payable to the CSE9 in accordance with the Fees for Stock Exchange Transactions, Law Number 161(1) of 1999, as amended.10

To continue reading this article, please click here.


1 Laws 32(I) of 1993, 91(I) of 1994, 45(I) of 1995, 74(I) of 1995, 50(I) of 1996, 16(I) of 1997, 62(I) of 1997, 71(I) of 1997, 83(I) of 1997, 29(I) of 1998, 137(I) of 1999, 19(I) of 2000, 20(I) of 2000, 39(I) of 2000, 42(I) of 2000, 49(I) of 2000, 50(I) of 2000, 136(I) of 2000, 137(I) of 2000, 141(I) of 2000, 142(I) of 2000, 175(I) of 2000, 9(I) of 2001, 37(I) of 2001, 43(I) of 2001, 66(I) of 2001, 79(I) of 2001, 80(I) of 2001, 81(I) of 2001, 82(I) of 2001, 105(I) of 2001, 119(I) of 2001, 120(I) of 2001, 1(I) of 2002, 87(I) of 2002, 147(I) of 2002, 162(I) of 2002, 184(I) of 2003, 164(I) of 2004, 205(I) of 2004, 43(I) of 2005, 99(I) of 2005, 115(I) of 2005, 93(I) of 2006, 28(I) of 2007, 56(Ι) of 2009, 90(I) of 2009, and 171(I)/2012.

2 Regulations 214 of 1995, 342 of 1997, 268 of 2000, 361 of 2000, 59 of 2001, 139 of 2001, 329 of 2001, 141 of 2002, 306 of 2002, 368 of 2002, 614 of 2003, 579 of 2004, and 559 of 2005.

3 Rules 409 of 2006, 228 of 2007, 598 of 2007, 107 of 2008, 193 of 2008, 221 of 2008, 357 of 2008, 396 of 2008, 484 of 2008, 48 of 2009, 100 of 2009, 172 of 2009, 234 of 2009, 346 of 2009, 380 of 2009, 215 of 2011, 366 of 2011, 38 of 2012, 181 of 2012, 189 of 2012, 350 of 2012, 419 of 2013, 447 of 2014, 541 of 2014, 12 of 2015, and 119 of 2015.

4 Rule 508 of 2012 and 421 of 2013.

5 Laws 27(I) of 1996, 62(I) of 2001, 121(I) of 2001, 136(I) of 2002, 43(I) of 2003, 8(I) of 2005, 92(I) of 2006, 100(I) of 2008, 55(I) of 2009, 91(I) of 2009, 100(I) of 2010, 133(I) of 2011, and 148(I) of 2014.

6 Regulations 161 of 2001, 367 of 2002, 393 of 2003, and 123 of 2005.

7 Rule 526 of 2005.

8 Rules 446 of 2006, 22 of 2007, 170 of 2007, 552 of 2007, 604 of 2007, 64 of 2008, 340 of 2008, 21 of 2009, 102 of 2009, 255 of 2010, 317 of 2010, 363 of 2010, 507 of 2012, 48 of 2013, 179 of 2013, 423 of 2013, 449 of 2014, 55 of 2015, and 205 of 2015.

9 The seller of the securities or the person notifying the sale to the Stock Exchange, as the case may be, is the party responsible for the payment of the relevant transaction fees to the Stock Exchange.

10 Laws 167(I) of 2001, 28(I) of 2002, 92(I) of 2002, 231(I) of 2002, 187(I) of 2003, 60(I) of 2005, 150(I) of 2005, 192(I) of 2007, 142(I) of 2009, 177(I) of 2011, and 87(I)/2012.

Previously published by Juris Publishing, Inc

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions