Insider Economy Primary aim to safeguard smooth functioning of market (opinion)

Primary aim to safeguard smooth functioning of market (opinion)

By Demetra Kalogerou*

The Coronavirus (COVID-19) pandemic has led to an unprecedented economic and societal crisis, creating conditions of uncertainty. In these completely new circumstances that we are experiencing, it is crucial that the financial system continues to operate uninterrupted, thereby supporting the economy.

A main prerequisite for the proper functioning of the financial system is that markets are left open, so as to ensure that prices are adjusted to reflect the new situation and so that investors will have the opportunity to make their choices based on the prevailing situation.

In view of the direct challenges facing the financial sector, the protection of investors remains a top priority for CySEC. In this context, the Commission is closely monitoring developments and taking appropriate actions where necessary. Already, corresponding to the extraordinary circumstances that the country is facing, CySEC has issued more than 20 circulars/announcements both for companies listed on the Cyprus Stock Exchange – to safeguard the smooth functioning of the market – as well as for the rest of the supervised entities, in relation to their own obligations.

Specifically, in order to contribute to the seamless continuation of the operations of market participants, it has requested that all entities under its supervision prepare and minimise the potential disruption of their turnover, by determining key operational risks, while it has issued guidelines on how they can better safeguard the health of their personnel.

Moreover, it has called on all issuers to evaluate the potential economic consequences, as well as the risks and uncertainties that may result due to the spread of the coronavirus to their activities and issue a relevant announcement, updating the investing public. The listed companies continue to be subject to the notification obligations stipulated in article 17 of Regulation 596/2014 on Market Abuse and need to update the investing public of any inside information that directly relates to them as soon as possible.

Furthermore, acknowledging the fact that the current circumstances may affect the ability of issuers – whose transferable securities are admitted to trading in a CSE-regulated market – to publish their economic reports within the timeframe provided by the legislation, CySEC has decided that it will not be taking any supervisory measures against them, for a period of two months after the expiry of the deadline stipulated in the relevant Law.

Additionally, taking into account the potential material damages incurred by the spread of the coronavirus in Cyprus and the uncertainty it may have caused on the operations of supervised entities, CySEC has extended the deadline for the submission of information and documents, including TRS and AML reports, as well as clarifications in relation to the requirements for the recording of telephone conversations. Furthermore, we have decided to postpone certification exams and extend the period of exemptions where applicable.

CySEC has also taken a series of measures with a view to primarily safeguard public health and specifically the welfare of its employees and all market stakeholders. Among other things, CySEC’s meetings are exclusively held via teleconference or phone in order to ensure the seamless resumption of its operations, while it has made arrangements so that all staff are able to work from home. The Commission’s crisis management team visits the CySEC building only when it is absolutely necessary for the management and settlement of urgent matters.

CySEC remains in constant communication with the supervised entities and market stakeholders, encouraging them to visit the specially-created space on its website, which lists all the coronavirus-related actions and measures of the Commission https://www.cysec.gov.cy/covid-19/.

We maintain an open channel of communication with the European Securities and Markets Authority (ESMA) and the supervisory authorities of other member-states, standing ready to swiftly address this unprecedented situation. As always, CySEC is ready to take all appropriate actions to safeguard the interests of the investing public and ensure economic stability.

*Chairwoman of the Cyprus Securities and Exchange Commission

 

 

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