Who appoints a temporary or a special administrator, and what can each one do?

The temporary administrator is the last rung of early intervention under Law 20(I)/2016. If CySEC considers that replacing the senior management or management body is not enough, it may appoint one or more temporary administrators to the CIF. On appointment it decides whether the administrator temporarily replaces the management body or works with it, and sets powers proportionate to the circumstances, together with the limits of the role, such as running all or part of the business. Where the administrator works alongside the board, CySEC also defines the administrator's role and any duty of the board to consult it or obtain its consent first.

The appointment is made public, unless the administrator has no power to represent the CIF. CySEC must ensure the administrator has the qualifications, ability and knowledge needed and no conflict of interest. Only CySEC appoints and removes: it may remove the administrator at any time for any reason, vary the terms at any time and require its prior consent for certain acts. The administrator may call a general meeting and set its agenda only with CySEC's prior consent.

The appointment lasts no more than one year. It may exceptionally be extended if the conditions for the appointment still hold; CySEC decides whether they justify keeping the administrator and explains that decision to the shareholders. The exam material gives the one-year limit without the extension, which has been in Law 20(I)/2016 since 18 March 2016.

A special administrator belongs to resolution. The exam material teaches it alongside early intervention, but since 18 March 2016 Law 22(I)/2016 has treated it as a crisis management measure for an institution under resolution. The resolution authority, the CBC, may appoint one or more persons to take over the management of the institution, a CIF included, and announces the appointment in the way it decides. They are chosen on strictly professional criteria, meaning experience and training in banking or related matters, and on personal criteria the resolution authority sets. They take on no other work during the appointment unless the resolution authority has approved it in advance, and must act with diligence, professionalism and integrity, and with discretion and confidentiality. The institution pays their remuneration and costs; if it cannot, the resolution authority may require the Resolution Fund to cover them.

The special administrator has access to all the institution's data and holds all the powers of its shareholders and management body, but uses them only under the resolution authority's control. Within the terms of the mandate it may require, or set conditions for, a capital increase, a reorganised ownership structure, a narrower scope of business, revised or abolished policies and strategic decisions, revised lending and deposit-taking policies, limits on or bans of particular transactions or investments, removal or replacement of managers, set levels of liquidity and own funds, take-overs by sound institutions, and any other measure. The exam material says it may do these things at its discretion. Since 18 March 2016, the law has tied them to the mandate and the resolution authority's control.

Since 8 July 2022, the special administrator may appoint or place staff in any post, and engage outside legal, financial or other advisers, under the control of the resolution authority. The exam material still uses the earlier wording, under which this needed the resolution authority's approval. Within 30 days of appointment, or a period the resolution authority decides, it reports with at least an updated balance sheet at fair value, a projected balance sheet, an assessment of how effective the resolution measures have been, a list of assets by risk category and, where appropriate, recommendations to add, revise or revoke measures. Progress reports and a final report follow.

The first appointment lasts no more than one year and may be renewed exceptionally if the resolution authority finds the conditions still met; the authority may remove the administrator at any time. Until 8 July 2022 renewal was limited to six months; Law 102(I)/2022 removed that cap. The exam material gives the one-year limit and does not mention renewal.