The CSE Council has sent a detailed letter answering to the questions asked by MPs, members of the House Finance Committee and now hopes that the draft law amending the CSE law and the operations of the
Central Depository will be finalised and tabled before the last Parliamentary session of 13 April 2006 for a final vote.
Last week, HFC members requested from the CSE Council to provide clarification on the procedure and foreign exchange commissions for transactions in EUR, the conversion of share prices from three decimal
places to two decimal places and the applicability of the minimum share price criterion on the ASE.
With respect to the conversion of Cyprus pounds into euros and back when trading in shares, the CSE Council said the first official change will be based on the Central Bank mid-point closing price prior to the conversion. Thereafter, investors need to negotiate individually with their banks regarding the conversion charges.
On concerns regarding the fact that on the CSE, share prices are quoted up to three decimal points while on the ASE the price quotation is up to two decimal points, the CSE says all prices below 50 cent will be rounded to two decimal places. For example, if the third decimal is EUR 0.325, then the rounding will be performed towards the higher price EUR 0.33. If the quotation is 0.072, then the price will be rounded down to 0.07. Given that most shares that fall in this category are characterised by very low liquidity the Council does not expect any negative effects arising from the rounding to two decimal places. The CSE may also allow up to 100% daily fluctuation on such titles.
Regarding concerns that the ASE may exclude stocks with a very low price because they fall below its minimum price level, the CSE says all Cyprus titles will be included in the Common Trading Platform.
According to an earlier statement by CSE Chairman, Akis Kleanthous, the Common trading platform will commence 2 to 6 weeks after the approval of the Law by Parliament.
Any delay in the approval of the Draft Laws by the Parliament beyond 13 April 2006 is likely to cause a delay in the launch of the Common Trading Platform until possibly the end of the year.
