Cyprus is a popular jurisdiction for establishing special purpose vehicles with an increased involvement in shadow banking, which takes the form of, among other things, securities lending, repurchase and derivatives transactions. This has resulted in a call for strengthened regulations to mitigate risks and support financial stability. Newly introduced regulations now bring non-financial counterparties, such as limited liability companies, into the ambit of transparency reporting.
The long-awaited, highly politicized EU Takeover Directive (2004/25/EC), which was signed on April 21 2004 and came into force on May 20 2004, should have been transposed into national law by member states by May 20 2006. Although Cyprus missed this deadline, it is expected that the directive will be implemented in Cyprus before the end of the year.