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Sale of Credit Facilities Law – What changes?

An amendment (the Amendment) to the Sale of Credit Facilities Law (the Law) came into force in July 2022 after being negotiated for almost a year between stakeholders.

Most importantly:

  • the scope of application of the Law has been broadened and exceptions restricted;
  • the Amendment introduces a requirement for a licence for credit facility servicers (Servicers) and sets out the process for obtaining such licence;
  • the Amendment introduces a regulatory framework for Servicers’ access to information in relation to the credit facilities managed by them; and
  • the Amendment changes the notification obligations for the sale of credit facility portfolios to make mandatory personalised notices in cases where only part of the credit facility portfolio of a Regulated Lender will be sold.



The scope of application of the Law has been significantly broadened. Underthe Amendment:

  • the licensing of Servicers now falls within the ambit of the Law;
  • there is no longer a limit as to the balance of the credit facilities inrelation to which the Law applies. Prior to the Amendment, the Lawonly applied to credit facilities with an outstanding amount up to €1million as at the time of the sale of the credit facilities; and
  • the only transfers of credit facilities in relation to which the Law doesnot apply are:
    • credit facilities governed by foreign law;
    • credit facilities transferred under the Securitisation Law; and
    • credit facilities transferred under the Law for the Transfer ofBanking Business.

Licensing of credit servicing


Credit servicing is now regulated under the Law. The Law sets out certain entities which are allowed to acquire credit facilities (Regulated Lenders). These include authorised credit institutions, credit acquiring companies, banksauthorised in other EU member states etc.

The amended Law provides that in case a Regulated Lender wishes to outsource the servicing of any of its loans (whether such loans were originatedor purchased by the Regulated Lender) to an entity which is not a Regulated Lender itself, it can do so only to the extent that the entity which shall undertake the servicing is licensed for this purpose by the Central Bank of Cyprus (the CBC).

In order to obtain a “servicing” licence, the relevant entity must apply to the CBC. The requirements and the procedure for granting such licence are set out in the Law (noting that these are almost identical to the application for obtaining a credit acquiring company licence).

Once a licence is obtained, Servicers are also required to:

  • enter into a contract for the servicing of the credit facilities with the Regulated Lender which is the lender of record under the relevant facility agreement.
  • comply with any other directives issued by the CBC; and
  • enter into a contract with the Regulated Lender for the processing of personal data for the purpose of the servicing activities.

Access to information


The amended Law provides that a Servicer may obtain access to information relating to the credit facilities it services stored in the ARTEMIS database and the land registry database. Under the amended Law, the level of access to information varies on the basis of the category of activities assigned to the Servicer by the Regulated Lender.

A Servicer is not entitled to access information relating to security providers, persons connected to the borrower or guarantors.

However, the Regulated Lenders may share information from the ARTEMIS database or the land registry database with a Servicer which undertakes certain servicing activities on their behalf, if deemed necessary.

Communication of the sale of the credit facilities to the public


Pre-sale notifications

The Amendment changes the notification requirements in relation to the sale of credit facilities.

Under the amended Law, where the seller sells all of its credit facility portfolio it is only required to publish such intention in the Official Gazette of the Republic of Cyprus and three daily newspapers (Press Publication). Notices to the borrower and its guarantors (Personalised Notices) areoptional in case the seller sees fit to send these out.

However, in case of a seller selling only part of its credit facility portfolio, the seller is required to issue a generic Press Publication and also send Personalised Sale Notices.

Post-sale notifications

The Amendment also changes post sale notification obligations.

The notification obligations following the sale are now on both the transferor and the transferee and require them to notify in writing the borrower, guarantors and security providers as to the sale within 15 business days from the date of sale/transfer.

The Amendment has also introduced a requirement to:

  • notify in writing the Registrar of Companies, the Cyprus Stock Exchange, the Land Registry and any other relevant governmental departments (at which securities are registered) by the day after the sale at its latest; and
  • publish the date on which the sale has become effective in the Official Gazette of the Republic.

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