EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 26 June 2009 
on the regulation of finance leasing and leasing companies’ activities 
(CON/2009/57) 
 
Introduction and legal basis  
On 20 May 2009 the European Central Bank (ECB) received a request from the Cypriot Ministry of 
Finance for an opinion on a draft law regulating finance leasing and the activities of leasing companies (hereinafter the ‘draft law’). 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and on the third and sixth indent s of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions
1, as the draft law relates to the Central Bank of Cyprus (CBC) and to rules 
applicable to financial institutions insofar as they materially influence the stability of financial institutions 
and markets. In accordance with the first sentence of  Article 17.5 of the Rules of Procedure of the 
European Central Bank, the Governing Council has adopted this opinion. 
 1.  Purpose and contents of the draft law 1.1 The purpose of the draft law is to lay down a fra mework for the provision, to the public, of finance 
leasing services in Cyprus and to establish a prude ntial supervision regime applicable to finance 
leasing service providers (finance leasing companies
2, banks and cooperative credit institutions). 
Accordingly, the draft law governs (i) the typ es of business in which finance lease service 
providers may engage, (ii) eligible lease propert y, (iii) licensing and regulatory requirements for 
finance leasing service providers, (iv) the form and contents of a finance lease agreement, (v) the 
rights and obligations of the parties to a fi nance lease and (vii) enforcement measures and 
sanctions. 
1.2 As stated in Article 3(2) of the draft law and reiterated in the explanatory memorandum 
accompanying the consultation request, the draft law does not apply to finance leasing services 
where (i) they are not offered to the public in Cypr us or (ii) they relate to the sale and purchase of 
movable property where the sum total of the fi nance provided does not exceed EUR 5 000 per item 
                                                 
1 OJ L 189, 3.7.1998, p. 42.  
2  Companies financing the purchase of tangi ble assets designated by the lessee in vi ew of their subsequent lease to such 
lessee. 
2 of movable property purchased or (iii) the credit peri od foreseen in the finance lease is inferior to 
three months. 
1.3 This opinion only covers the provisions of th e draft law that directly relate to the CBC.  
 2. New central bank tasks The draft law entrusts the CBC with novel licensing and supervision tasks in connection with finance 
lease service providers other than cooperativ e credit institutions or their subsidiaries
3. Significantly, the 
draft law recognises the CBC’s powers of entry and i nvestigation, requiring a dditional expenditure and 
sufficient human and material resources. For the C BC to be in a position to perform its new tasks in 
parallel with its Eurosystem-related and other task s under the Laws on the Central Bank of Cyprus of 
2002 to 20074, it is essential for the CBC to dispose of th e abovementioned resources. The ECB notes, in 
this regard, that the draft law5 explicitly foresees the reimbursement  of the CBC’s expenses arising from 
the performance of its newly assigned tasks. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 26 June 2009. 
   
The President of the ECB 
Jean-Claude TRICHET 
                                                 
3  See in particular Article 2. 
4  Law 138(I)/2002, Episimi Efimerida tis Dimokratias , Annex I(I), No 3624 of 19.07.2007. 
5  Article 13(5).