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CySEC roundtable: Technologies, legislation the biggest challenges facing European markets

New financial technologies and legislative developments at the EU level constitute the biggest challenges facing European markets, the chairs of the Cyprus and Greek securities and exchange commissions said during a roundtable discussion in Nicosia.

The discussion, organised by the Cyprus Securities and Exchange Commission (CySEC), was also attended by Finance Minister Makis Keravnos, Deputy Minister to the President Irene Piki, members of the Parliamentary Committee on Finance and other stakeholders.

In his presentation, CySEC Chairman George Theocharides referred to the rapid technological evolution of capital markets and the growing demand for sustainable investments, which, he said, are significantly reshaping the global investment landscape and require close supervision.

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He also referred to the challenges of the current period, such as the uncertainty in the markets regarding the level of interest rates and consequently inflation, which is causing problems for both the European and the global economy and is diversifying the playing field between the US, Europe and Asia.

For her part, the Chair of the Hellenic Capital Market Commission, Vasiliki Lazarakou, highlighted the cost of the green growth transition, as well as the volatile political environment in many parts of the world, including the US and the EU, with crucial elections taking place throughout this year.

The two supervisors also referred to the implementation of the Markets in Crypto-Assets Regulation (MiCA) before the end of 2024, as well as the adoption of the Digital Operational Resilience Act (DORA), aiming to enhance the operational resilience of the financial sector.

They also agreed on the need for closer cross-border cooperation between supervisors, given the changes in financial legislation, and coupled with the development of new technologies and the demand for more sustainable investment products, which they said ensures speed in information exchange on and the robust management of supervisory issues.

In a brief intervention after the presentations, Finance Minister Keravnos commented on the different approaches between America and Europe in dealing with investment, adding that the EU has a tendency to over-regulate that hurts competitiveness and economic growth. He also said that Cyprus is in favour of an EU capital markets union, as such a development would provide greater security for investors.

During the discussion, questions were also asked to the heads of the two supervisory authorities on the main internal challenges they face as institutions, with Larazakou noting the difficulty of staffing due to complex procedures, while Theocharides pointed to the benefits of a possible privatisation and financial independence of CySEC without the need to rely on state sponsorship.

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