Circular C222 (“the Circular”) dated 07.07.17 regarding the decision of the Cyprus Macroprudential Authority (“the Central Bank of Cyprus”) concerning Recommendation ESRB/2016/4 of the European Systemic Risk Board with regard to the adoption, via reciprocity, of a macroprudential measure adopted by Estonia

Please note that the Circular applies only to CIFs that:

1. are licensed to perform the investment activity of paragraph 4, Part I of Annex III of the Law (Dealing on Own Account); and/or
2. provide the investment service of paragraph 6, Part I of Annex III of the Law (underwriting and/or placing of financial instruments on a firm commitment basis).

Through the Circular, CySEC informs the relevant CIFs on the decision of the Central Bank of Cyprus (“the CBC”) regarding to the adoption of a macroprudential measure adopted by Estonia. Particularly:

1. The CBC, exercising its powers vested to it as the macroprudential authority of Cyprus, decided on 19.06.17 to adopt Recommendation ESRB/2016/4 of the European Systemic Risk Board (“the ESRB”), which amend Recommendation ESRB/2015/2 of the ESRB, that, inter alia, recommends to the relevant authorities of the Member States, the voluntary reciprocity of a macroprudential policy measure that was adopted by Estonia;
2. The Estonian measure constitutes a 1 percent (1%) systemic risk buffer rate, applied in accordance with Article 134 of Directive 2013/36/EU, on all exposures located in Estonia;
3. The relevant ‘CIRCULAR LETTER’ of the CBC dated 26.06.17, is attached as Annex to the Circular.

 

CySEC’s expects that: CIFs with exposures located in Estonia must comply with the aforementioned decision of the CBC when calculating their capital requirements as of the date of this circular (i.e. from 07.07.17 onwards).