Plans by the Cyprus Stock Exchange to hook up with the Athens Stock Exchange through a common trading platform where brokers from both countries would have access to the other country stocks are due to be delayed by at least three months.
Instead of the planned January 1, 2006 launch date, the CSE Chairman Akis Cleanthous confirmed that the launch date has been pushed back to April 3, 2006.
Cleanthous was speaking at a joint press conference organised by the CSE with the Listed Public Companies and Members of the CSE, the financial services firms.
Cleanthous said the two exchanges need at least until mid-January to overcome the technical hurdles associated with the launch of a the common trading platform and assuming that all the regulatory work needed will be passed in time, then its safe to expect that the platform will be operational end of the first quarter 2006.
Euros
Once trading begins, hooking up the two markets, then the CSE will start making its stock quotations in euros, thus becoming the first institution that will make the shift over, ahead of the January 2008 official adoption of the euro.
However, bankers say none of the problems associated with euro clearance in terms of reduced fees have been cleared.
Cleanthous has held extensive contacts with the Cyprus Bankers Association and with the support of the Central Bank and the Finance Ministry, efforts are underway to persuade the banks to offer special rates with regard to stock trading in euros.
“I want to believe that the banks will offer their most competitive rates for equity trading in euros, but as yet, there is no firm commitment on the level of the fees, commission and the rate,” said Kleanthous.
BROKER COMPENSATION FUND
Through the efforts of the CSE, both exchanges have agreed that their respective members (brokers-financial services firms) will be eligible to become members of the other exchange without difficulty, provided they pay the one-off EUR 200.000 compensation fund fee.
For a EPEY or financial services firm to be able to trade through the common trading platform on the other exchange, the firm needs also to become a member of the other exchange.
Dealers will have access to live prices through remote trading and those who are members of both exchanges, the ability to trade stocks on both exchanges.
The fact that local stocks will start trading in euros also means the removal of the exchange risk factor.
The CSE will also need to expand its working hours in order to be compatible with those of the ASE, which starting from October when the new International Sophocleous index made its debut, will extend working hours on the prospective 90-100 stocks included in the index to 5.00pm. The CSE will be organising road shows in Greece as well as in Cyprus to familarise journalists and institutional investors with the concept.
