The voting of the new Investment Services Provision law in combination with the recent tax reform is likely to bring more than a hundred offshore financial companies under the supervision of the SEC.

The president of the Cyprus SEC. Marios Clerides, told StockWatch, that the offshore companies will no longer be supervised by the Central Bank but by the SEC. “This causes a big headache to the Commission”, as we are still examining ways to smoothen the transition period.

The Central Bank maintains, on its behalf, that the institutional context that governs the supervision of such companies does not necessarily ‘surrender’ the regulation of offshore financial companies to the SEC.

Yet, Clerides insists however: “For us it is clear. With the tax reform and the abolition of the article 3 Paragraph 2 (d) under which the offshore companies are exempted from the control of the SEC, there exists not the slightest of doubt for the change of the institutional framwork”.

Regarding the tax reform, Clerides added that, in essence, the tax reform abolished modified significantly the status of the offshore companies, by treating them as any other Cypriot-owned.

Furthermore, Clerides revealed that SEC and the Central Bank had a preliminary meeting to discuss the issue, during which matters such as the briefing of the offshore companies and the translation of the new law in English were raised. “The 100 offshore financial companies, need, first of all, to become aware of the institutional framework within which they would have to operate,” Clerides concluded.