Compensation Fund is safe from Suphire saga

The Investor Compensation Fund has not been adversely affected by the recent developments concerning Suphire and is functioning smoothly, according to informed sources.

The fund promises to pay EUR 20.000 or CYP 12.000 to small investors in the event that any member of the CSE (brokerage firm) or financial services firm (EPEY) is unable to meet its obligations.

The five member committee, appointed in May 2004 by the Finance Minister met last Friday to discuss the dispute between Suphire and the Provident Fund of the EAC, following the latter’s allegation that Suphire has created a CYP 9.2 mln shortfall of the assets under its management.

The Committee members decided that since small investors have not been affected by the move, then its involvement in covering any shortfall is not necessary, but asked the SEC to inform the committee of the developments, and specifically if small investors have been affected.

CSE sources confirmed to the Financial Mirror that many individuals have asked for information regarding their holdings, but as yet, no person has lodged any protest regarding shortfalls.

The CYP 1.7 mln Fund, which has been slowly accumulating funds from the contributions of the recognised and approved EPEY’s however, excludes many institutions and specifically bars professional investors from have access to it.

Some of the groups barred from seeking compensation are the EPEY’s, Banks, Coops, Insurance Companies, Mutual Funds, Social Insurance Funds, Professional traders and all those classified by EPEYs as professional, Municipalities, as well as related parties with the affected firm, such as directors, majority shareholders, up to second degree relatives and investors (legal and persons) holding in excess of 5% stakes in the firms.

The Chairman of the Investor Compensation Fund is Alkis Hadjipieris (SEC), Deputy Chairman is Christodoulos Ellinas (EPEY) and the members are Katerina Antoniou (CSE), Nicos Nicolaides (auditor/consultant) and Phaedon Kalozois from the Finance Ministry.