CSE demands vision-driven approach to market growth

The Cyprus Stock Exchange (CSE) Council on Monday expressed “deep concern and disappointment” over what it deems to be “the exclusion of meaningful incentives for the capital market” in the government’s proposed tax reform.

“Despite submitting well-documented recommendations to both the government and the technical team at the University of Cyprus’s Economic Research Centre, the final provisions in the draft bills currently under public consultation fail to include any substantial measures supporting the capital market,” the exchange said.

“On the contrary, the proposed regulations contain clauses that even weaken existing tax incentives, and and especially negatively impacting the emerging companies market,” it added.

The CSE further explained that “the tax reform represents a unique opportunity to boost business activity through company listings on the Cyprus Stock Exchange”.

“It also offers a chance to raise new capital for growth within a transparent and reliable framework,” it added, stressing that it could “attract strategic investments to the country”.

“Instead of capitalising on this opportunity, the reform advances regulations that limit the role and mission of the stock exchange, at a time when its privatisation process is ongoing,” the CSE said.

“Strengthening the market,” it continued, “is critical to increase its attractiveness and to draw a credible strategic investor with the experience and capacity to contribute to its further development.”

The Cyprus Stock Exchange stated that it will submit its positions during the tax reform’s public consultation phase and actively participate in parliamentary discussions.

It also called on the government and the House of Representatives to reconsider the regulations and incorporate necessary incentives to strengthen the market, aligned with the current and future needs of the economy.

“Internationally, many countries implement policies to support their capital markets through tax incentives, recognising their role as drivers of growth,” the CSE said.

“Within the European Union, coordinated efforts are underway to unify and strengthen markets, with initiatives such as the Securities and Investment Union aiming for stronger and more competitive corporate development,” it added.

“Development through the capital market must be a long-term, transparent, and strategic national objective with vision and prospects, not a restrictive technocratic exercise,” the announcement concluded.