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Credit Acquiring Companies


According to the provisions of the Sale of Credit Facilities and Related Matters Laws of 2015 and 2018 (L.169(I)/2015 and L.86(I)/2018) (the "Law"), any legal person intending to assume the activity of the acquisition of credit facilities in the Republic of Cyprus, is obliged to obtain the prior approval of the Central Bank of Cyprus ("CBC").  It is hereby clarified that according to the provisions of sections 3-(1)(a) and (b) of the Law, the Law applies exclusively for acquisitions of credit facilities granted to specified entities, the total balance of which, per entity and per credit institution, is, at the time of the acquisition, not exceeding the amount of one million euro (€1.000.000).

Notwhistanding the above, according to the provisions of the Law, the following legal persons are permitted to engage in the activity of acquiring of credit facilities without obtaining the prior approval of the CBC:

• A credit institution authorised by the CBC;
• A credit institution that is authorised and supervised by the competent authority of another member state that has the right to provide services or to establish a branch in the Republic of Cyprus;
• A financial institution, which is a subsidiary of a credit institution incorporated in a member state that has the right to provide services or to establish a branch in the Republic of Cyprus.

Authorisation for the operation of a Credit Acquiring Company ("CAC") will only be granted to legal persons that have been incorporated in the Republic of Cyprus, provided that the CBC is satisfied, inter-alia, that: these legal persons are in a position to fully comply with the provisions of the Law; they are able to maintain at all times a minimum paid up share capital of €100.000; their shareholders and directors meet the criteria of fitness and probity; they have an organisational structure that enables them to provide services in accordance with the provisions of the Law; and their planned operations do not raise concerns regarding financial stability in the Republic of Cyprus.

A legal person that intends to establish a CAC in the Republic of Cyprus, may submit to the CBC an application with the accompanying documents specified in section 5 of the Law and in paragraph 3 of the Authorisations of Credit Acquiring Companies Directive of 2016 (the “Directive”).

The Directive was issued by the CBC under the powers vested in it by the provisions of the Law in order to regulate, inter alia, the procedures for granting an authorisation by virtue of the provisions of the Law, the criteria for the fitness and probity of shareholders, directors and key function holders, the internal organisation and governance of the CAC and the outsourcing of operational functions to third parties.

Legal persons interested in obtaining an authorisation to operate a CAC must complete form  No. CAC/Q1 titled “Application for the granting of authorisation as a Credit Acquiring Company under Section 5(1) of the Sale of Credit Facilities and Other Related Issues Law of 2015” and submit it to the CBC.

Direct and indirect corporate controllers of the applicant seeking to acquire a "qualifying holding” in a CAC as defined in Section 2 of the Law, must complete form No. CAC/Q2A titled "Questionnaire for Direct and Indirect Corporate Shareholders in a Credit Acquiring Company" and submit it to the CBC.

Legal persons seeking to acquire a non-qualifying holding of 5% or more in an applicant company which wishes to obtain an authorisation as a CAC should complete form No. CAC/Q2B titled "Questionnaire for Direct and Indirect Corporate Shareholders Seeking to Acquire a Non-Qualifying Holding in a Credit Acquiring Company" and submit it to the CBC.

Direct and indirect controllers (natural persons) of the applicant seeking to acquire a "qualifying holding" in a CAC must complete form No. CAC/Q3A titled "Questionnaire for Direct and Indirect Shareholders (Natural Persons) Seeking to Acquire a Qualifying Holding in a Credit Acquiring Company" and submit it to the CBC.

Natural persons seeking to acquire a non-qualifying holding of 5% or more in an applicant company which wishes to obtain an authorisation as a CAC should complete form No. CAC/Q3B titled "Questionnaire for Direct and Indirect Shareholders (Natural Persons) Seeking to Acquire a Non-Qualifying Holding in a Credit Acquiring Company" and submit it to the CBC.

Natural persons who are candidates as members of the management body of a CAC, current members of the management body who are under any re-assessment procedure and natural persons aiming an exclusive position (i.e. “key function holders”) must complete form No. CAC/Q4 titled "Personnal Questionnaire for the Assessment of the Fitness and Probity of the Members of the Management Body and Key Function Holders ("Persons Under Assessment") of Credit Acquiring Companies" and submit it to the CBC.

Finally, it must be noted that the CBC, acting under the authority vested in it under Section17 of the Law, has issued the Notification of Borrowers and Guarantors Directive of 2016 . The purpose of this Directive is to set out the procedure that relates to the notification of borrowers and/or guarantors, as provided in the Law, by a credit or a financial institution of its intention to proceed with the sale of credit facilities.

 

List of Credit Acquiring Companies