Amendments to the law relating to deposit guarantees and the resolution of credit and other financial institutions

The Cyprus parliament recently approved new legislation to align domestic law with articles 1, 2, 3, 4, 7, 10, 11 and 14 of Directive 2014/49/EU of the European Parliament and Council of 16 April 2014 in relation to deposit guarantee schemes and articles 1, 2, 105 and 110 of Directive 2014/59/EU of the European Parliament and Council of 15 May 2014 in relation to the establishment of a framework for the recovery and resolution of credit and investment firms. The Deposit Guarantee Scheme and Resolution of Credit and Other Institutions (Amending) Law of 2018, Law 41(I)/2018, came into force on 21 May 2018 when it was published in the Official Gazette of the Republic of Cyprus.

The amending law amends the definitions of terms including ‘credit institution’, ‘institution’, ‘contribution’, and ‘unavailable deposit’ in the existing legislation in order to bring them into line with the corresponding definitions of these terms as set out in the two directives. It also extends the scope of application of the law to include investment firms and generally ‘institutions’ as defined in EU Regulation 575/2013, and makes additional amendments to the effect that previous references to ‘covered institutions’ should be read as references to ‘credit institutions’ in the current legislation.  Finally, the amending law introduces a requirement for the local Deposit Guarantee Scheme to inform the European Banking Authority regarding any written agreements it may enter with its counterparts in other EU member states or third countries regarding the exchange of information or other cooperation arrangements in relation to cross-border matters.

For further information please contact Achilleas Malliotis or your usual contact at Elias Neocleous & Co LLC.