The Parliamentary Finance Committee gave a 15-day deadline to the Cyprus Auditors Association, the Cyprus Bar Association, the Ministry of Finance, and the Cyprus Securities and Exchange Commission to resolve any disputes regarding the establishment of legislation regulating the formation and operation of Management Companies for Collective Investment Organizations and related issues.

The Committee continued its discussion on the matter, which is seen as strengthening the collective investment sector, which had €9.1 billion under management at the end of the first quarter of the year.

During the session, the General Director of the Cyprus Auditors Association, Kyriakos Iordanou, reiterated the Association's support for the bill but again expressed concerns about the high costs for companies that will be licensed. He requested clearer definitions of the services provided to avoid overlap with Administrative Service Providers (ASP) or Management Companies of Collective Investment Organizations (MCCIO), which might need to be licensed anew. He also referred to the increased costs that the proposed bill might entail.

The Cyprus Bar Association also raised concerns about the range of services included in the bill's annex.

Representatives from both the Ministry of Finance and the Cyprus Securities and Exchange Commission noted that the bill aims to define which administrative and accounting services a Collective Investment Organization Manager can delegate to another service provider. It was also mentioned that existing European directives allow Alternative Investment Fund Managers to delegate services to a Cyprus Management Company of Collective Investment Organizations (MCCIO).

The goal is to upgrade the product Cyprus offers in this sector, said the representative of the Ministry of Finance.

Taking the floor, the Chair of the Committee, Christiana Erotokritou, emphasized that "it is crucial for the country to finally have clear, fair, and transparent frameworks governing the economy."

Stating that she cannot leave the bill pending for two years, Ms. Erotokritou expressed her desire for the bill to be passed into law before the budget discussions and gave the involved parties a 15-day deadline to reconcile their differences.

Moreover, the Committee continued discussing six bills concerning the framework governing loan managers and credit acquisition companies.

AKEL, through its MP Andreas Kavkalias, reiterated concerns about the protection of borrowers regarding abusive clauses, access to justice, and spoke about maintaining the "provocatively unbalanced framework in favor of banks and credit acquisition and loan management companies." He also referred to the absence of provisions ensuring that credit management or acquisition companies are subject to public interest restrictions.

During the session, concerns were raised about whether Cyprus is in infringement proceedings by the European Commission regarding abusive clauses.

A Director from the Ministry of Finance, Avgi Lapahtioti, explained that Cyprus is in infringement proceedings only concerning the directive on credit managers, with the deadline for transposing the directive into national law set for the end of 2023.

A representative from the Ministry of Commerce noted that there is no violation concerning the directive on abusive clauses, for which compliance has been achieved.

In reference to Mr. Kavkalias' remarks about Commissioner Reynders' written response to a question from the party's MEP George Georgiou about abusive clauses, the representative explained that this was a misunderstanding.

The Chair of the Committee requested that the two Ministries clarify the issue with written responses to the Committee.