The board of the Cyprus Securities and Exchange Commission (CySEC), the financial regulatory agency of the Republic of Cyprus, will convene today Tuesday morning to decide whether the Cyprus Stock Exchange will remain closed.

Speaking to CNA, Chairwoman of the Commission, Demetra Kalogirou said the CSE would have to remain closed in the event the banks are not open either because it will not be able for financial transactions to be cleared through the banks.

If the banks open, she added, the CySEC would discuss the possibility of suspending the trading of securities that are included in the CSE bank trading, in view of developments.
She also said that the CySEC would take into consideration the decision, which the CSE will take during a board meeting at 0800 local time (0600GMT).

The CySEC is in communication with the CSE authorities as well as the Athens Stock Exchange and the Greek Securities and Exchange Commission since the shares of the two banks in question, Bank of Cyprus and Popular Bank, trade in both stock exchanges.
Kalogirou told CNA that the CySEC has sent a letter to Finance Minister Michalis Sarris, asking to be informed whether funds, which are deposited into client accounts of the Cyprus Investments Firm totaling 1.5 billion euro will be subject to the levy proposed by Eurogroup.

She said what was mentioned during today’s meeting of the House Finance Committee is that these funds cannot be exempted.

Kalogirou underlined that “a way should be found to exempt those funds because they are funds that are solely used for the execution of clients’ transactions who are mainly foreign nationals. She said the purpose of these accounts are not to receive interest but to facilitate the execution of clients’ orders with the least possible risk, noting that these accounts enjoy additional protection, according to the existing legislation and regulations, even in the event of a credit foundation facing bankruptcy, so that its clients do not lose their money as they do not belong to general debtors.

She further said that there are funds, which are being kept by fiduciaries for escrow purposes and these funds are not deposits for which the levy should be imposed.
Kalogirou said that despite the fact that the CySEC does not supervise insurance companies, any levy on clients’ funds which these companies hold would create a viability problem for these companies