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Cyprus: Standards for insolvency specialists

The Insolvency Practitioners Law, 64(I) of 2015 was published in the official gazette on May 7 2015

Elias Neocleous
The Insolvency Practitioners Law, 64(I) of 2015 was published in the official gazette on May 7 2015. Enacted as part of the agreement between the Cyprus government and international providers of financial support, it is aimed at providing a modern, effective and well-regulated legislative framework for insolvent companies and individuals. The new law sets minimum standards of qualification and regulation for persons fulfilling the role of insolvency practitioner, and restricts certain activities, including acting as liquidator, provisional liquidator, receiver, administrator or examiner under the Companies Law or as trustee in bankruptcy of a natural person, to persons meeting those standards or to the official receiver.

Licensed insolvency practitioners must be members of a recognised professional body which has appropriate practice rules specifying the matters to be taken into account in deciding whether a person is fit and proper to act as an insolvency practitioner.

In order to obtain authorisation, the individual must meet the standards prescribed in article 14 of the law: (a) a university degree or equivalent qualification; (b) at least three years' experience as a lawyer, chartered accountant, actuary, officer or examiner in the government insolvency service, or equivalent experience in the financial sector; (c) recent practical experience of insolvency work (600 hours or 10 cases within the two years preceding the application); (d) success in an examination of professional competence recognised for the purpose of the law; and (e) adequate professional indemnity insurance.

Article 23 of the law contains various grandfathering provisions. The first of these allows officeholders in existing insolvency proceedings to continue in office until the proceedings have been completed. Article 23(2) provides that the provisions of article 14 relating to experience and success in an examination of professional competence ((b) to (d) inclusive above) may be waived by ministerial order for up to one year after the law comes into force, subject to the person concerned successfully completing an approved training seminar within five months of receiving an insolvency licence.

Article 23(3) provides that for an initial period from the date the law enters into force, until a date to be specified by a ministerial order, the requirements described in (b) to (d) are replaced by at least eight years' relevant professional experience as a lawyer, chartered accountant, actuary, officer or examiner in the government insolvency service, or equivalent experience in the financial sector, combined with proven practical experience of insolvency work of 1,800 hours or 20 cases within the five years preceding the application.

Elias Neocleous

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