The Amending Law 100(Ι) of 2009 makes a number of
important changes to Cyprus's Banking Law.
It transposes the provisions of EU Directive 2007/44/EC relating
to mergers and acquisitions of banks into the national law and
increases the maximum limits of investments by banks in the share
capital of any company, as provided for in subsection (1) of
section 13 of the Banking Law, to align them with the maximum
limits permitted under article 120 of EU Directive 2006/48/EC.
In addition, the new law amends the provisions of the Banking
Law regarding banks' obligations to provide the Central Bank of
Cyprus ("CBC") with information on beneficial
shareholders holding 5% or more of their share capital.
With effect from 24 July 2010, the maximum limits of exposures
to each director and to all directors together of each bank will be
reduced from 5% to 2% and from 40% to 20%, respectively.
In addition, the CBC has recently issued two Directives to banks
in accordance with the recommendations of the Basel Committee on
Banking Supervision and the relevant EU Directives on banking
The Amending Directive on the "Framework of Principles of
Operation and Criteria of Assessment of Banks' Organisational
Structure, Internal Governance and Internal Control Systems"
was issued in October 2009 and is intended to strengthen the
overall framework of organisational structure and internal
governance of banks as well as to improve three basic functions of
their internal control systems, namely, internal audit, risk
management and compliance.
The revised Directive on "Communication between the CBC and
the Approved Auditors of Banks", issued in November 2009,
provides a framework for trilateral meetings between the CBC, the
banks under its supervision and their approved auditors, sets out
the circumstances and conditions under which the CBC may invite the
auditors of banks to bilateral meetings and outlines the
circumstances under which the auditors are required to report to
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.
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