The Law applies to credit purchasers of a creditor’s rights under a non-performing credit agreement, or of the non-performing credit agreement itself, issued by a credit institution established in the Union in accordance with applicable Union and national law.
It also applies to credit servicers licensed by the Central Bank of Cyprus (“CBC”) or by a competent authority of another member state that perform servicing activities in the Republic of Cyprus and/or in another member state.
The Law also governs outsourcing activities, where the credit servicer uses a credit service provider to carry out any of the credit servicing activities. In such cases, the credit servicer retains full responsibility for fulfilling all obligations arising from the provisions of the Law.
Credit Purchaser
Credit Purchaser is a natural or legal person who/which purchases the creditor's rights arising from a non-performing credit agreement or the non-performing credit agreement itself, in the course of its trade, business or profession. When a credit purchaser does not itself perform credit servicing activities, a credit servicer needs to be appointed to provide its services in respect of the management and enforcement of a creditor’s rights under a non-performing credit agreement, or of the non-performing credit agreement itself, on the basis of a credit servicing agreement with the credit purchaser. If the credit purchaser chooses to service the credit facilities itself, it must be licensed as a credit servicer.
Credit Servicer
Credit Servicer is a legal person that, in the course of its business, manages and enforces the rights and obligations related to a creditor’s rights under a non-performing credit agreement, or to the non-performing credit agreement itself, on behalf of a credit purchaser, and carries out at least one or more credit servicing activities. The CBC is the competent authority for licensing Credit Servicers whose home member state is the Republic of Cyprus. Legal persons interested in obtaining authorisation to operate as a credit servicer must submit an application to the CBC and provide all required information, so that the CBC can assess that all the conditions set forth in the legislation are met.
Licensing Procedure
A legal person that intends to be authorised as a Credit Servicer, must complete form No. CS/Q1 titled “Application for the granting of authorisation as a Credit Servicer Under Sections 6 and 8 of the Credit Servicers and Credit Purchasers and Related Matters Law of 2024” and submit it to the CBC.
A legal person interested in holding directly or indirectly a “qualifying holding” in a Credit Servicer, must complete form No. CS/Q2, titled “Questionnaire for Direct and Indirect Corporate Shareholders in a Credit Servicer” and submit it to the CBC.
A natural person interested in holding directly or indirectly a “qualifying holding” in a Credit Servicer must complete form No. CS/Q3, titled “Questionnaire for Direct and Indirect Shareholders (Natural Persons) in a Credit Servicer” and submit it to the CBC.
Appointees for members of the management body or key function holders of a licensed credit servicer or an applicant credit servicer must complete the questionnaire No. CS/Q4 titled “Personal Questionnaire for the assessment of Suitability of the Members of the Management Body and Key Function Holders of Credit Servicers”.
In relation to the licensing process and the associated licensing and supervision fees, the following Guidelines of the CBC remain in effect, insofar as they concern credit servicers, until they are updated:
Submission of applications
Applications and relevant documentation should be submitted via the CBC’s e-platform. It is noted that the relevant applications must include a receipt of the payment of the relevant application fee which should be deposited in the account - "APPLICATION FEES" with IBAN CY65 0010 0001 0000 0000 0772 3042. For further details and relevant instructions please send an email request to licensingsection@centralbank.cy
Passporting out credit servicing activities
The right of freedom to exercise credit servicing activities on a cross border basis, is regulated by sections 14 and 15 of The Credit Servicers and Credit Purchasers and Related Matters Law of 2024. The entities which have been licensed by the CBC to operate as Credit Servicers and are willing to exercise this right or intend to change their current activities, shall complete the following template and submit it to the CBC.
B. Laws governing the sale and purchase of credit facilities and the appointment of credit servicers, relating to the transfer of creditor’s rights under a credit agreement, or the transfer of the credit agreement itself, that took place before 8 November 2024
The Laws regulating the Sale of Credit Facilities and Other Related Issues of 2015 to 2024, apply to the sale and purchase of credit facilities and to the appointment of a credit servicer, relating to credit facilities that do not fall under the scope of the Credit Servicers and Credit Purchasers and Related Matters Law of 2024, which include, inter-alia, credit facilities that are transferred by an Authorised Credit Institution to a natural or legal person after 8 November 2024, including any subsequent transfers.
Purchaser of Credit Facilities
Legal persons that are allowed to purchase credit facilities under the Sale of Credit Facilities and Other Related Issues Laws of 2015 to 2024 are the following:
In the event that the purchaser is a person provided for in paragraph (a) above and chooses to manage all or part of the credit facilities on its own, is obliged to be authorised as a Credit Servicer, pursuant to the provisions of article 6 and subsections (1) to (5) of article 8 of the Credit Servicers and Credit Purchasers and Related Matters Law of 2024. Otherwise, the purchaser need to assign the servicing of the credit facilities to a legal person that carries out servicing activities, as these are defined in article 2 of the Sale of Credit Facilities and Other Related Issues Laws of 2015 to 2024.
Servicer of Credit Facilities
A Credit Servicer licensed by the CBC pursuant to the provisions of the Credit Servicers and Credit Purchasers and Related Matters Law of 2024 is considered a licensed Servicer of Credit Facilities under the Sale of Credit Facilities and Other Related Issues Laws of 2015 to 2024.
Credit Acquiring Companies and Servicers of Credit Facilities
According to the transitional provisions (article 26), with the entry into force of the Sale of Credit Facilities and Other Related Issues (Amending) Laws of 2024, credit acquiring companies and servicers of credit facilities that provided, before the 8 November 2024, credit servicing activities as per the provision of the Sale of Credit Facilities and Other Related Issues Laws of 2015 to 2022, can continue to provide these services and are automatically authorised as Credit Servicers. The CBC’s Register of Credit Servicers has been updated in this respect and can be found below.