THE CYPRUS Stock Exchange warned last night it would impose fines on brokerages guilty of delays in processing paperwork and discussed ways to allow transactions directly between investors when the stock exchange is closed.
The announcement came at the end of a marathon meeting designed to reexamine trading rules ahead of next Monday’s reopening of the beleaguered exchange, closed for four weeks to clear a monumental backlog of transactions.
“All late documents will face a fine of £30 a day from October 20,” Stock Exchange Chairman Dinos Papadopoulos told reporters after last night’s meeting. He added that for the time being no penalties would be imposed on issuing companies.
The Stock Exchange also agreed in principle to a limited liberalisation of transactions, but only under certain circumstances.
Papadopoulos said buyers and sellers should be able to bypass brokers to deal directly with the stock exchange when the market was closed and provided the transaction was agreed between the parties concerned.
Brokers had warned earlier yesterday that any move to sideline them would undermine the stock market and cause chaos.
In a statement, the brokers accused the exchange authorities of acting vengefully and denied that they were clinging to a monopoly on trading.
“If that happens, then there will be a quasi-stock exchange in the coffee shop, football stadium, even in the barbers,” Louis Klappas, chairman of the association of brokers, said before last night’s meeting.
Investor groups have said that allowing investors to trade among themselves would cut down on paperwork and tasks going through brokerages.
Last night’s decision was the latest chapter in the saga over the backlog of unprocessed transactions which had dogged the market for weeks, forcing it to close its doors on three different occasions in two months.
The move is also likely to prolong and embitter the battle-of-wills that has been raging for months between the island’s 50-plus brokers and the exchange’s authorities over the question of the backlog and other issues.
The market was first closed for two days in late July. It pulled down its shutters again for a week in August and is now in its fourth week of closure. It is scheduled to reopen on October 4.
The number of transactions has dramatically increased since May, when a fully automated trading system was introduced. This, together with the arrival of thousands of new investors attracted by the prospect of a quick profit in a bullish market, saw volumes shoot through the roof.
The market’s gains stand at more than 360 per cent on the year.
The huge volumes have somewhat isolated small investors from the increasingly busy brokers who, according to investor groups, had time only for big and institutional investors.
