CIFA: Let’s con­sider Is­lamic bonds

Financial Mirror (Cyprus) - - FRONT PAGE -

Fund man­agers in Cyprus are urg­ing the state to con­sider is­su­ing Is­lamic bonds (Sukuk) sim­i­lar to a 5-year is­sue by the UK govern­ment that raised nearly 200 mln eu­ros, while Lux­em­bourg is also plan­ning some­thing sim­i­lar.

Angelos Gre­go­ri­ades, chair­man of the re­cently-es­tab­lished Cyprus In­vest­ment Funds As­so­ci­a­tion (CIFA) told the or­gan­i­sa­tions in­au­gu­ral ses­sion at the pres­i­den­tial palace that a Sukuk is­sue of just 100 mln eu­ros would be enough to at­tract Is­lamic or Shari­a­com­pli­ant funds.

He said that the Is­lamic funds mar­ket is es­ti­mated at about $2 trln, with an an­nual growth rate of 5%.

“Due to our prox­im­ity to the Mid­dle East, both ge­o­graph­i­cally and in friendly re­la­tions, Cyprus could eas­ily en­ter this mar­ket, just as Bri­tain, Ire­land and Malta are to do by pro­mot­ing them­selves as Is­lamic fi­nan­cial cen­tres,” Gre­go­ri­ades said.

He also called for the Cyprus Se­cu­ri­ties and Ex­change Com­mis­sion (CySEC) to be en­hanced, now that it will un­der­take the su­per­vi­sion of all in­vest­ment funds, so that new ap­pli­ca­tions are pro­cessed much faster and to al­low Cyprus to re­main com­pet­i­tive in this area.

Gre­go­ri­ades said that there are only 102 funds in Cyprus that man­age about 3 bln eu­ros, com­pared to 12,889 funds in Ire­land with 2.5 trln un­der man­age­ment and Malta catch­ing up with 600 funds and 9.4 bln eu­ros.

He added that al­though Cyprus boasts a high leb­vel of ser­vices providers, such as lawyers and ac­coun­tants, we still lack in spe­cialised fund man­agers and trustees.

In his ad­dress to the CIFA event, Pres­i­dent Ni­cos Anas­tasi­ades said that both the econ­omy and the fi­nan­cial sec­tor have been sta­bilised and the coun­try would re­turn to growth in 2015, much ear­lier than ex­pected. Anas­tasi­ades noted that for the first time in months, there has been an in­crease in the reg­is­tra­tion of new com­pa­nies, while un­em­ploy­ment has ceased its up­ward trend.

“Even though chal­lenges still re­main, pub­lic fi­nances are now back on a sus­tain­able path, and Cyprus has only had pos­i­tive as­sess­ments by its Troika part­ners, a track record which we are com­mit­ted to main­tain,” he said.

He re­ferred to the suc­ces­sive up­grad­ings of Cyprus’ rat­ings by credit rat­ing agencies and to the `s re­cent suc­cess­ful is­sue of a 750 mln euro bond in in­ter­na­tional mar­kets, which “con­sti­tutes a clear sign of trust to­wards our econ­omy”.

“All the above trans­late into re­gain­ing the coun­try’s lost cred­i­bil­ity and re-es­tab­lish­ing in­vestors’ con­fi­dence,” he said.

Anas­tasi­ades stressed that his govern­ment “has been work­ing me­thod­i­cally in co­op­er­a­tion with the pri­vate sec­tor, to build a mod­ern, well reg­u­lated and com­pet­i­tive frame­work for the col­lec­tive in­vest­ment scheme in­dus­try.”

He wel­comed the es­tab­lish­ment of CIFA for the pro­mo­tion of the Cyprus’ funds in­dus­try, “which is ex­pected to con­trib­ute in a sub­stan­tive way to­wards achiev­ing these goals.”

As he said, a new bill on Al­ter­na­tive In­vest­ment Funds has been ap­proved by the Coun­cil of Min­is­ters and is now in par­lia­ment for re­view and fi­nal ap­proval, which in con­junc­tion with the en­act­ment of the Ope­nEnded Un­der­tak­ings for Col­lec­tive In­vest­ment Law in June 2012, and the Al­ter­na­tive In­vest­ment Fund Man­agers Law of 2013, will set up a com­pre­hen­sive frame­work for the man­age­ment of of the in­ter­na­tional col­lec­tive in­vest­ment schemes (ICIS).

Cyprus has been one of the first coun­tries to adopt into law the Euro­pean Union’s Al­ter­na­tive In­vest­ment Fund Man­agers

CIFA re­cently joined the Euro­pean Fund and As­set Man­age­ment As­so­ci­a­tion, the rep­re­sen­ta­tive as­so­ci­a­tion of the Euro­pean in­vest­ment man­age­ment in­dus­try, with an ob­server sta­tus for two years.

EFAMA said it re­viewed Cyprus’s adop­tion of UC­ITS IV and the AIFMD be­fore al­low­ing CIFA’s par­tic­i­pa­tion.

CIFA is also work­ing closely with the Cyprus In­vest­ment Pro­mo­tion Agency (CIPA) which first took the ini­tia­tive for the es­tab­lish­ment of CIFA early in 2013 as a nat­u­ral de­vel­op­ment of the progress made thus far in pro­mot­ing Cyprus as a com­pet­i­tive in­vest­ment funds ju­ris­dic­tion.

The first CIFA board is com­prised of highly rep­utable in­dus­try pro­fes­sion­als ex­pe­ri­enced in all as­pects of the in­dus­try, in­clud­ing fund man­age­ment, ad­vi­sory, bank­ing, au­dit and le­gal.

Pres­i­dent - Angelos Gre­go­ri­ades (Head of Tax and Cor­po­rate ser­vices of KPMG); Vice Pres­i­dent - Ioan­nis Gaiga­nis (ex­pert pro­fes­sional in fund man­age­ment and se­cu­ri­ties ser­vices); Sec­re­tary - Mar­ios Tan­nousis (Se­nior In­vest­ment Pro­mo­tion Of­fi­cer at CIPA); Trea­surer - Chris Odysseos (part­ner with PwC’s Global Com­pli­ance Ser­vices (GCS) prac­tice).

The other board mem­bers are: Christo­foros An­to­ni­ades, An­dreas Athin­odorou, Charles Char­alam­bous, Con­stanti­nos Pa­panas­ta­siou, Char­alam­bos Phokas, Omiros Pis­sarides, Ge­orge Rol­o­gis, Demetris Tax­i­taris and An­dreas Yi­asemides.

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