Opinion of the European Central Bank of 14 January 2011 on the sanctioning powers of the Cyprus Stock Exchange (CON/2011/2)
Date: 2011-01-14
Institutions: European Central Bank
Subjects: Cyprus, administrative sanction, central bank, financial stability, securities, stock exchange

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 14 January 2011 

on the sanctioning powers of the Cyprus Stock Exchange 

(CON/2011/2) 

Introduction and legal basis 

On 6 December 2010, the European Central Bank (ECB) received a request from the Cypriot Ministry of 

Finance for an opinion on a draft law amending the Laws on securities and the Cyprus Stock Exchange 

(Central Securities Depository and Central Registry) of 1996 to 2010 (hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and the third indent of Article 2(1) of Council Decision 98/415/EC of 

29 June 1998  on  the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft 
legislative provisions1, as the draft law relates to the Central Bank of Cyprus. 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 of the draft law 

The purpose of the draft law is to empower the Board of the Cyprus Stock Exchange to impose fines for 

infringements of the Laws on securities and the Cyprus Stock Exchange (Central Depository and Central 

Securities Registry) of 1996 to 2010 (hereinafter the ‘Basic Law’) and/or any regulatory or administrative 

acts adopted thereunder, as well as bring proceedings for any failure to pay fines that it has imposed.  

2.   Application to the Central Bank of Cyprus 

While not expressly mentioned, the Central Bank of Cyprus is not excluded from the scope of application 

of the draft law. It follows that the Central Bank of Cyprus could be subject to fines imposed by the Board 

of  the  Cyprus  Stock  Exchange  which  raises  the  question  whether  the  draft  law  is  compatible  with  the 

principle of central bank independence in Article 130 of the Treaty. The ECB understands that the Basic 

Law, as amended by the draft law, is not related to and does not interfere with the pursuit, by the Central 

Bank  of  Cyprus,  of  its  core  activities.  Considering  that  (i)  the  purpose  of  the  principle  of  central  bank 

independence is not to immunise national central banks from national laws which are not related to and 

1  

OJ L 189, 3.7.1998, p. 42. 

 
 
 
 
 
                                                 
do not interfere with the pursuit of their tasks specified in their statutes and the Statute of the European 

System  of  Central  Banks  and  the  European  Central  Bank,  and  that  (ii)  any  sanctions  imposed  on  the 

Central Bank of Cyprus may be challenged before the High Court, the ECB is satisfied that the draft law 

is compatible with the principle of central bank independence. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 14 January 2011. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

2