After so many years of consultations, the new Fiduciary Law was finally passed on December 12th by the plenary of the House of Representatives.
A fiduciary is a person who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust, confidence and loyalty.
Provisions of the draft law
Special exemptions from applying (but subject to the same duties and obligations, registration and licensing requirements)
• Advocates practicing in Cyprus.
• Persons qualified to be appointed as auditors in Cyprus.
• Entities controlled and where the majority interest is beneficially owned by locally-registered advocates, banks, investment firms or cooperative credit societies (as defined in the respective domestic legislation).
• Any person regulated by a competent regulator in any other EU Member State, provided that there is reciprocity between Cyprus and that Member State.
Know your client
The trustee and the management company must have a clear understanding of:
• the client’s identity; and
• the client’s business and activities.
The new Fiduciary Law passed on December 12th 2012 will organise and raise the standard of the fiduciary industry and services and will regulate the fiduciaries, administration businesses and company directors. Cyprus has now moved a step forward in managing these services, even though there are still various issues they need to consider and address in order to ensure homogeneity and fairness in the provision of fiduciary services.
The Cyprus Securities & Exchange Commission (CySec) is the new responsible regulator. According to the new fiduciary law, fiduciary firms have certain time-frames for notifying and informing CySec of their activities and subsequently for applying for a licence.