The amended Bill of The Purchase and Sale of Credit Facilities and Related Matters (Amended) Law of 2021 (“the Bill”) was drafted, in order to establish the creation of a framework and supervision of credit facility acquiring companies.
The aforementioned Bill prescribes that this will enable the corporations to receive access to the borrower’s bank data under their management, and it will be done in compliance with the provisions of the EU law of the General Data Protection Regulation (‘GDPR’), in order to assess their creditworthiness and better equip them with viable restructuring solutions.
More specifically, the amended Bill aims to discontinue differentiating between the rights and obligations of borrowers, credit acquiring companies and credit servicing companies; and aim at providing the same corresponding tools to those companies as the ones already available to credit institutions. This will effectively promote loan restructuring in accordance with the procedures of the established secondary legislation.
The Bill provides that the amended article 5 of the law will grant wider powers to the Central Bank so as to include provisions for the licensing, supervision, suspension or withdrawal of an administrator’s licence. Firstly, this power will only be made available to the persons that are not already specially licensed by the Central Bank, and secondly, only to the legal persons that are set out in article 4(1).
In addition to the above, the Bill seeks to modify article 4 in order to simplify the scope of the law, so as to implement the buying and selling of credit facilities, and to include as buyers, the legal entities now encompassed under article 4(1) i.e. a credit facility administrator.
Moreover, the legal entities (set out in article 4(1)), will also qualify in situations of the assignment of the portfolio management of credit facilities, and they will be licensed by the Central Bank since it will have a wider scope of powers. The public will be updated via the Official Gazette of the Republic, including three different newspapers. The relevant notice should be send to the said borrower, the guarantors and/or the providers of its collateral. An exception to the above obligations, is the purchase and sale of credit facilities amongst the same group of companies.
Lastly, the final amendment the Bill seeks to make in order to help credit facility administrators assess the creditworthiness of the borrowers (including the guarantors and their collateral) under their management, is to give them access to the ARTEMIS database and to the Department of Lands and Surveys.
On 14.04.2022, the Parliament adopted The Purchase and Sale of Credit Facilities and Related Matters (Amended) Law of 2021.