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The business community is frustrated from the mixed signals the Christofias administration is sending out – it claims it can’t employ any more people in government because of a moratorium on new hirings, and yet more than a thousand civil servants have been taken on in the past year and several hundred seasonal workers became permanent part-timers in recent weeks. Is this not a senseless burden on the already bloated public payroll?
On the other hand, the Cyprus Securities and Exchange Commission is faced with increasing pressure from the European Commission to hire more people to help with ongoing supervisory and regulatory duties. And yet the government is dead against recruiting more staff for the SEC, despite the new recruits’ wages being self-funded from the increased duties to supervise and inspect existing and new financial services companies.
Is this not like shooting ourselves in the foot? What is Finance Minister Charilaos Stavrakis waiting for?
The government has changed legislation that will encourage UCITS mutual fund managers to establish offices in Cyprus, while the Central Bank too reportedly wants to pass on the supervision of the private collective investment funds to the SEC.
The European Securities and Markets Authority (ESMA) wants to see more local licensing, supervision, inspection and reporting about the activities of all financial services companies, including rating agencies, of which Cyprus already has two (Moody’s and Capital Intelligence).
Within the present economic crisis, financial services is the only sector that is enjoying growth, while it is also undergoing extensive reforms and restructuring that will make it even more competitive and on the way to becoming the regional financial centre we all aspire Cyprus to be.
There is a large number of applications from new investment firms to secure licensing in Cyprus, with as many as 20 in the pipeline and 10-15 more ready to come forward, injecting funds into the local economy and hiring people at a time of a labour market slump. With 70 such firms already licensed, the new arrivals will propel the total to beyond a hundred that should keep new recruits at the SEC busy all year round.
This is a recurring task that cannot be handed over to private sector contractors in the long term, even though such services may be necessary in the shorter term, until such time as the SEC fills its vacant posts.
Minister Stavrakis needs to see who is blocking the SEC’s request and either fire that civil servant or do the job himself. Otherwise, we will see more companies heading for other jurisdictions and we will again be left out in the cold.
