Trade unions are raising objections over the privatisation of the Cyprus Stock Exchange (CSE), warning that staff rights have not been fully safeguarded under the draft law currently before Parliament.

During Monday’s session of the Finance Committee, representatives from Sek and Peo said that while agreements had been reached with the Finance Ministry during earlier consultations, several of them were later altered or omitted entirely from the final bill.

They cited the abolition of vacant promotion posts, the disregard of collective agreements, and the removal of supplementary staff transfer plans as examples of what they described as a unilateral rollback of established labour rights.

The unions have written to Minister of Finance, Makis Keravnos, asking for his personal intervention.

The Secretary General of OHO-Sek Andreas Elias, said the ministry acted without warning in deciding to abolish the welfare fund, a move he claimed contradicts earlier government assurances that it would be maintained.

“The troika didn’t even demand that in 2013,” he said.

Nikos Gregoriou, the general secretary of Peo and Sidikek, stated that key agreements had been modified and insisted that the rights of CSE staff remain unprotected.

He criticised the introduction of proportionality rules on retirements and promotions, calling it a mechanism that did not exist in prior plans.

Members of the committee called on the Finance Ministry to resume talks with trade unions to resolve the issues before the legislation is passed.

Under the bill, CSE employees will either be transferred to the Finance Ministry or receive compensation under a voluntary early retirement scheme.

Strategic investors will also be able to purchase services from employees who opt to leave.

The legislation, officially titled ‘The Law of 2025 on the Privatisation of the Cyprus Stock Exchange, the Central Depository, the Central Registry of Securities and the Transfer of CSE Personnel to the Ministry of Finance’, outlines the privatisation process and the full transfer of the CSE’s operations, assets, and liabilities to a special purpose company, created specifically for this purpose.

A special purpose company, made up of a parent entity and three subsidiaries, has been created to facilitate privatisation.

Through this structure, the state can proceed with the sale of up to 100 per cent of the CSE’s share capital to a private investor.

The bill was approved by the council of ministers on June 4 and subsequently submitted to the House, as previously reported by the Cyprus Mail.

According to the legislation, the privatisation process will be conducted by the Finance Ministry, beginning with an open call for expressions of interest.

Only entities meeting the definition of a “strategic investor” will be invited to submit financial offers.

The highest bidder will be selected, subject to the signing of a share purchase agreement.

Although the original timeline under the ‘recovery and resilience plan’ called for the selection of an investor by the end of 2025, the ministry is now considering a revision, with a public tender likely to be launched by year-end instead.

The delay is linked to the time needed to complete the legal review of the tender documents, finalise staff transfer agreements and the voluntary retirement plan, and establish the legal framework governing the privatisation.

According to the council of ministers’ 2022 decision, the state is allowed to sell between 75 and 100 per cent of the CSE’s share capital, retaining a minority stake for a limited transitional period if it wishes.

MPs have stressed that the final selection should not be based on price alone.

Several argued that the investor’s credibility, experience, and commitment to developing the Cypriot capital market must be weighed equally during evaluation.

The decision to privatise the exchange is part of a broader strategy to boost competitiveness and investor confidence.

Following years of low turnover and persistent losses, the cabinet approved the move in 2020, following recommendations from an independent consultant.

The model aligns with international trends in stock exchange management, where government-owned exchanges are increasingly being converted into private entities to improve efficiency, reduce public sector involvement, and attract capital.

Yet while the legislative process moves ahead, the outcome of trade union negotiations may ultimately determine whether the transition is both effective, and equitable.