Cyprus Board members obliged to announce deals

Members of the Board of Directors of Cyprus Stock Exchange listed companies in the Main/Shipping and Major Contracts markets where it is compulsory to implement the CSE’s Corporate Governance Code will be obliged to publicize their dealings with the companies on whose board they sit in excess of EUR 170.000.
During a joint press conference hosted by Finance Minister Charilaos Stavrakis, CySEC Chairman George Charalambous and CSE Chairman George Koufaris, it was mentioned that the new rules will come into effect probably by next week when the directive will be published in the official gazzette.
“We want shareholders to be aware of all dealings that a public company implementing the CSE’s Corporate Governance Code has with its Board members and senior or high ranking executives,” said Stavrakis.
So if a board member or executive takes a loan from the company, sells products or services to the company, an official announcement will need to be filed when the amount exceeds EUR 170.000.
For previous balances or contracts until the implementation of the law there is no requirement for such announcements.
Charalambous of CySEC said the action is being taken in coordination and following consultation with other EU member states and is part of the attempt to increase transparency in capital markets.
CSE Chairman Koufaris nevertheless clarified that companies listed in the Parallel and Alternative market are not required by law to make public such transactions since for the Parallel market only some aspects of the Corporate Governance Code are applied on a voluntary basis while no such requirements exist for those listed in the Alternative market.
A major grievance for the authorities is also executive pay and the need for new transparency both as regards the level of compensation (salary, bonus and share options) as well as the methodology according to which the Remuneration Committee decided to give the pay package.
Charalambous said that companies listed in the Main/Shipping sectors that fail to make public connected person dealings in excess of EUR 170.000 will be prosecuted under the “Market Abuse” law and regulations, which carry huge fines and imprisonment.