CySEC oversight on 50 companies ‘unacceptable’

Oversight on 50 of the biggest service-industry firms is not the way to ensure compliance, Bar Association chairman Michalis Vorkas charged on Wednesday.

Making distinctions based on how small or large the company is should not be the criterion to determine whether a firm is scrutinised for compliance, he argued at the House legal committee.

MPs were discussing the contentious oversight authority after Finance Minister Makis Keravnos announced its creation last month. It still has to go through the hurdle of discussions in parliament before it goes to plenum.

According to Vorkas, the finance ministry is currently discussing having the Cyprus Securities and Exchange Commission tasked with overseeing 50 of the country’s biggest service-provider companies.

He questioned why the 50 companies should be distinct from the rest of the firms, while he argued it was unacceptable to put limits on how many clients a service provider should have.

Vorkas said the government did not invite any of the involved parties such as the bar association to dialogue.

They have been invited to a presentation slated for March 22.

Monitoring communication

Chair of the committee Disy MP Nics Tornaritis called on the government to carry out consultations, adding that oversight should be done on all levels but should not violate a lawyer’s confidentiality.

Vorkas rebuffed suggestions that the association’s disagreement with the oversight authority raises issues of transparency.

“No sane person will feel the necessary security when they know the executive branch will be able to monitor their communication with their lawyer at any time. This will come into conflict with established principles of law and with what applies today at the European Union,” he underlined.

As the committee begins to discuss the authority, representatives from involved bodies such as the bar association and the accountants’ association (Selk) along with finance ministry officials, will be invited for discussions.

Industry associations have expressed their disagreement over how the authority is envisioned.

In their words, not because they do not agree with oversight, but because of concerns they have on how the government plans to do so, which they argue clashes with client confidentiality.