The initiative to re-establish the new Pan-Cyprian Cooperative Bank is entering its most critical crossroads after months of technical preparation, a viability study, business model design, and the drafting of the Prospectus. The project now officially comes under the scrutiny of the Cyprus Securities and Exchange Commission first, and subsequently the Central Bank of Cyprus.

The Cyprus Securities and Exchange Commission (CySEC), as the guardian of the capital market, is preparing to take on a decisive role: conducting a detailed review and granting final approval of the Prospectus that will authorise the official launch of the public share offering. This marks the first formal regulatory test for the new Cooperative—one that will largely determine the direction of the entire endeavour.

According to Brief, the Pan-Cyprian Cooperative Association for the Promotion of Cooperation (PSEPS) is finalising the remaining details of the Prospectus, which will soon be submitted to CySEC. The procedure is strictly sequential: without CySEC approval, the public offering cannot begin; and without a successful offering, no final application for a banking licence can be submitted to the Central Bank of Cyprus (CBC).

CySEC’s review does not assess the substance of banking operations nor the valuation of the shares. Its role is regulatory and legal—ensuring that the public offering is addressed to the market with full, accurate, and clear information regarding the risks, facts, and prospects of the new bank.

The Prospectus must be:

First, fully aligned with the European Prospectus Regulation and national legislation. CySEC will check the document to ensure it contains no ambiguities, gaps, or misleading statements.

Second, complete in terms of critical information for investors, including financial data and projections, the use of funds to be raised, the business model and strategic priorities, the governance structure and fitness and propriety of key individuals (fit & proper), as well as a detailed outline of risks.

Third, transparent and understandable for the average citizen, allowing any investor contributing €100 to clearly grasp both the prospects and risks involved.

CySEC may request clarifications, amendments, or additions—potentially extending the review for weeks or even months—until it is satisfied that the final document fully meets transparency standards.

Once CySEC gives the green light, the Prospectus will be officially published and the public share offering will commence.

Based on information announced to date, the plan includes issuing shares—likely priced at €100—with the aim of raising a sizeable amount of equity. Although the Initiative has not disclosed the precise target, estimates suggest that several million euros will be required to meet the strict capital adequacy rules set by the CBC under Basel III. For every €100 in loans, the new bank must hold approximately €15 in own funds. For a new institution aiming to operate safely with long-term prospects, this represents a significant capital requirement.

After securing the necessary capital, PSEPS will submit the full application to the CBC, which will assess:

• the adequacy and quality of capital

• the viability of the business model

• governance and the suitability of Board members

• technological infrastructure and operational framework

• compliance with all European supervisory rules

All stakeholders—supervisory authorities, involved entities, and the Cooperative movement itself—agree that capital is the most challenging obstacle.

While EU law sets a minimum of €5 million, this is generally considered symbolic. A bank seeking nationwide operations, a modern technological platform, and a stable loan portfolio will require a significantly higher amount.

Following CBC’s assessment, the new Cooperative must also receive approval from the European Central Bank (ECB) to operate as a fully licensed credit institution.

Under the European supervisory framework, licensing a new bank is not the exclusive responsibility of the Central Bank of Cyprus. It is completed in two stages, with the European Central Bank holding the final authority. The CBC conducts the primary review of the Cooperative’s application—its capital adequacy, business model, governance, and infrastructure—and then submits its recommendation to the Single Supervisory Mechanism (SSM). The ECB, exercising its mandate to issue banking licences across the Eurozone, carries out a complementary assessment and ultimately decides whether to grant the licence.