Amendments To The Law On The Financial Instruments Market

Original Language Title: Grozījumi Finanšu instrumentu tirgus likumā

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Read the untranslated law here: https://www.vestnesis.lv/ta/id/224996

The Saeima has adopted and the President promulgated the following laws: the law on the financial instruments market to make the law on the financial instruments market (and of the Parliament of the Republic of Latvia Cabinet of Ministers rapporteur, 2004, no. 2; 2005, 10, 14; 2006, nr. 14. No; 2007, 10, 22 no; 2008, 13, 14, 23 no; 2009, 7., no. 22) the following amendments: 1. Replace the entire law, the word "Euro" with the word "Euro".
2. Supplement article 1 with 65 points by the following: ' 65) free capital — the assets belonging to the person that the context of this person's reduced value and the value of the assets that are to be considered as a long-term investment. "
3. Article 3: turn off the second part of paragraph 4 of point "a", the words "giving this law, article 3, paragraph 5 of the fifth part of that additional services";
Add to paragraph 4 of the second paragraph with "i" section in the following wording: "i) currency trading transactions, which have this point" a "or" f "referred to in the financial derivatives;";
turn off the third;
turn off the fifth subparagraph in paragraph 2, the words "as the other side of the transaction".
4. Express 32. the second paragraph of article 4 as follows: "4) it is not possible to ascertain the identity, reputation, or in free capital adequacy, which the market Organizer is a significant interest;".
5. Add to article 34, paragraph 10 by the following: ' 10) is found, the market organizer's shareholders with a qualifying holding of shares belonging to them voting rights and it lasts more than six months. "
6. Express article 61 ninth subparagraph by the following: "(9) calculation of the first paragraph of this article, the voting rights of the shareholders is based on the information disseminated by the company in accordance with this article the eighth part."
7. Express article 106 of the fifth subparagraph of paragraph 2 as follows: "2) which is sufficient to free up capital and financial instruments forming the mining law might well documented;".
8. Put 108. the second subparagraph of article 6 and 7 point as follows: "6) it is not possible to ascertain the identity, reputation, or in free capital adequacy the investment brokerage company has a significant interest, or if the Commission finds that the financial resources invested in the investment brokerage company, obtained unusual or suspicious transactions and documentary evidence or not this financial legal mining;
7), the Commission finds that the impact of the persons who acquired a substantial holding in an investment brokerage firm, won't provide the financially stable, cautious and investment brokerage companies regulatory laws and appropriate control. "
9. Supplement article 111 of the first part of paragraph 10 by the following: ' 10) investment brokerage company's shareholders with qualifying holdings of shares belonging to them to vote ban, and it lasts more than six months. "
10. To make 122. article as follows: "article 122. Investment brokerage company exposure limits (1) the risk of the transaction qualifies as a great, if the size of the transactions from the same client or group of connected clients exceeds 10 percent of the investment in public equity.
(2) investment brokerage company observes the following exposure limits: 1) with a single customer or a group of related client group risk transaction amount must not exceed 25 percent of the investment brokerage firm's own funds;
2) if the customer is a credit institution or an investment firm, which has applicable capital regulatory requirements in accordance with the financial instruments market-regulating laws, or related group of customers includes one or more credit institutions or investment firms, the extent of exposure to such customer or group of connected clients must not exceed 25 percent of the investment in public equity, or the equivalent of 100 million euro in dollars by the Bank of Latvia the rate depending on that amount is the largest, while noting that the amount of exposures with all other customers in this group of related clients that are not credit institutions or investment firms, shall not exceed 25 percent of the investment in public equity. If the 100 million euro in lats equivalent at the rate of the Bank of Latvia is more than 25 percent of the investment in public equity, an investment brokerage company itself determines the exposure with the client about the limit in such a way that the risk does not exceed the total amount of investment of public equity. This limit shall be set, taking into account the investment brokerage company's risk management policies and procedures;
3) total exposures to persons associated with investment brokerage firm, may not exceed 15 percent of the investment in public equity. This limitation does not apply to exposures to investment brokerage company's parent company, subsidiaries, its parent company and the subsidiary company to the investment public participation in share capital of its subsidiary and the company share capital in which the investment company has a presence.
(3) the interrelated group of customers within the meaning of this law, be considered as two or more persons who constitute the investment brokerage firm to one joint venture, if: 1) one of the following persons have control (directly or indirectly) over another person or other persons, except persons who have control (directly or indirectly) over another person or other persons, does not constitute an investment brokerage firm to a common risk and it has been proven;
2) they are related in such a way that one's personal financial problems, including the provision of financing or debt payment difficulties may cause to another person or other persons for the provision of financing or debt payment difficulties, although between these parties do not exist in this part referred to in paragraph 1.
(4) The persons associated with investment brokerage company within the meaning of this law, be considered to be persons who have: 1) investment brokerage company's shareholders (participants) to whom the investment brokerage company has a significant interest;
2) investment brokerage company subsidiaries and companies in which the investment company has a direct or indirect participation, which obtained makes it possible to significantly affect the company's financial and operational policy;
3) investment brokerage firm Council (if one exists), Chairman of the Board and members of the internal audit service's Director and staff, the company's controller and other brokerage firm employees whose job responsibilities include investment brokerage company operations planning, management and control and responsible for it;
4) communities in which these parts 1 and 3. the persons referred to in point have a significant interest.
(5) restriction of exposures exposures total, this business about the procedures for the determination of possible exceptions to the extent of the exposure limits set by the Commission. The Commission may authorise the exposure limits for the trading book exposures if the investment brokerage company followed the excesses of the additional capital requirements.
(6) in the second paragraph of this article, determine the exposure limits are not attributable to the investment brokerage firms: 1) which license does not permit to provide this law, article 3 of the fourth part 5 and 6 referred to investment services;
2) which corresponds to the initial capital of this law, article 120, first paragraph, point 3, but about the investment brokerage firm deals on own account only with the purpose to execute the customer's orders or provide customer access to the clearing and settlement system or the regulated market, acting in the capacity of financial intermediaries or executing client orders;
3) whose initial capital corresponds to article 120 of this law, first paragraph, point 3, but about the investment brokerage firm deals on own account only, and enforcement of these transactions and settlement used the clearing Center. This investment brokerage company does not perform client financial instruments and funds held, and it has no external client. "
11. Make the first paragraph of article 123.2 as follows:

"(1) investment brokerage company public information about its operation to the risk management objectives, methods, and policies for the same capital requirements and capital adequacy, as well as its remuneration policy and its marketing practices for the investment brokerage firm officials or staff whose professional activities have a material effect on its risk profile. The Commission shall lay down the requirements for the disclosure of this information. Disclosure requirements in respect of the remuneration policy and its realization in practice of the investment brokerage company that has a binding regulatory capital adequacy requirements in accordance with article 121 of this Act, taking account of this law article 119.1 terms, and which gives this law, article 3 of the fourth part 5 and 6 referred to investment. "
12. Add to article 124 of the first subparagraph of paragraph 11 with "d" paragraph by the following: "(d) the remuneration system;").
13. Express article 129.2 the following: ' article 129.2. Investment brokerage company and a credit institution ensure that sworn auditor at least once a year, check that the measures taken are sufficient to comply with article 125 of this Act 4.1, 4.2, 4.3 and in the fifth subparagraph, article 129 and 129.1. Sworn auditor shall submit to the Commission a written report of the examination referred to in this article. "
14. Add to article 138 of the third part with the points 11 and 12 as follows: ' 11) to determine the percentage limits investment brokerage company's net income, which may be about the use of the performance of the independent pay to ensure stable investment brokerage firm's own funds corresponding to the amount of maintenance;
12) require an investment brokerage firm used profits investment equity elements. "
15. To supplement the law with article 139.1 of the following: ' article 139.1. Investment brokerage company the major branches (1) registered in a Member State of the investment firm, which has applicable capital regulatory requirements in accordance with the financial instruments market-regulating laws and large exposure limits established in the Republic of Latvia, a branch can be recognized as significant. The Commission, stating the reasons, send the investment brokerage company's management authority of the Member State of origin or the consolidation group, which includes such investment brokerage company with a branch registered in the Republic of Latvia, the surveillance authority request to match the views of decision (hereinafter referred to as a coherent decision) to the Republic of Latvia registered affiliate recognized as significant.
(2) To an affiliate of a relevant recognised, having regard to its compliance with the following criteria: 1) branches in the suspension or termination of the host Member State may affect the financial market liquidity and payment and settlement systems;
2) branches in volume of transactions and the number of customers is important for the host Member State, capital markets or financial system.
(3) the Commission and the Member State of origin of the branch, the supervisory organ or of the supervisory organ of the consolidation group shall cooperate and take all necessary action to two months from the first paragraph of this article the date of dispatch of the request in the adoption of a coordinated decision on the recognition of the importance of the branch.
(4) in the third subparagraph, the decision may be appealed to the consolidated supervision institutions or branches in the country of origin of this country appeals regulatory laws.
(5) If, within two months from the first paragraph of this article the request is not accepted, the Commission agreed, subject to the supervisory authority of the Member State of origin or the consolidation group of a management authority, a further two-month period without a consensus deciding to admit the affiliate to be significant.
(6) a management authority of another Member State may apply to the Commission with a request to recognize in that Member State, registered in the Republic of Latvia registered the investment brokerage firm affiliate to be significant, or if the Commission's consolidation group supervisory body to recognize the request included in the consolidation group of the investment brokerage company established in another Member State of the branch as significant. The Commission shall take all necessary action to two months from the date of receipt of the request the adoption of coordinated decision on the recognition of the importance of the branch.
(7) in the sixth paragraph of this article, the decision can be appealed to the administrative court.
(8) the decision on the recognition of the relevant branch shall communicate to the Commission the relevant supervisory bodies of the Member States.
(9) the Commission shall cooperate with the Republic of Latvia recorded major investment brokerage firm affiliates host Member States ' supervisory bodies, receive information about investment brokerage company of negative developments that may significantly affect the investment brokerage companies, as well as sanctions and monitoring measures by the management authority of the host Member States in respect of the investment brokerage firms, including the obligation to maintain higher capital levels than the minimum capital requirements total and any restrictions on advanced measurement approach for operational risk for use. The Commission is participating in the preparatory activities and emergency measures to overcome them, including emergency situations, which may lead to an investment brokerage firm financial deterioration or adverse financial markets development. Emergency situations for monitoring activities include the preparation of a joint assessment of the situation, the crisis management plan implementation and the provision of public information. The information exchange process as is used for the exchange of information already established ways of crisis management.
(10) if the Commission finds, as well as emergency financial market adverse developments affecting the situation in the investment brokerage firm, that, subject to the availability of limited disclosure rules and using existing information-sharing ways to immediately alert you to emergency operators national central bank or other monetary systems and the competent authority responsible for the supervision of the authorities of the host Member State and notify all the tasks associated with the relevant information.
(11) If the Republic of Latvia registered investment company has significant branches in other Member States, but the investment brokerage firm is not included in the consolidation group, the Commission shall establish and manage a monitoring board with the supervisory authorities of host Member States, which is a registered investment company's significant subsidiaries, to ensure cooperation with the Member State concerned, the supervisory bodies, making this article the ninth and tenth part. The Commission consists of the College, supervised a co-operation agreement with the host Member State supervisory authorities.
(12) the Commission, taking into consideration the planned or coordinated supervisory activities in host Member States the importance of the supervisory bodies and the potential impact on the stability of the financial system in the Member States concerned, in particular in emergency situations, the monitoring bodies which have the responsibility to participate in the meetings of the Board of supervisors.
(13) the Commission shall in due time inform all members of the College of supervisors the Board meetings, the main issues under consideration and the planned activities, as well as the decisions taken at the meetings or the measures taken. "
16. Make 142. article as follows: "article 142. Consolidated supervision Commission of the Republic of Latvia made a parent investment brokerage company and registered in the Republic of Latvia in the European Union of the parent investment firm's consolidated supervision, after the analogy of the investment brokerage company consolidated monitoring application of the law of credit institutions, the provisions of chapter VII1 as mother of the Republic of Latvia and the Republic of Latvia of the credit institution of the European Union established in the parent credit institution, supervision on a consolidated basis. "
17. To supplement the law with the G1 title as follows: "G1 section external credit assessment institutions (rating agency) registration and supervision article 147.1. Rights and duties of the Commission (1) the external credit assessment institutions (rating agency) registration and monitoring by the Commission of the European Parliament and Council Regulation (EC) No 1060/2009 on credit rating agencies (hereinafter Regulation No 1060/2009), this law and the regulations issued by the Commission.
(2) the Commission shall by Regulation No 1060/2009 article 4 subject referred to in the first paragraph that uses the credit rating for regulatory purposes, the monitoring of their use in accordance with this regulation, and pursuant to the law on the financial instruments market.

(3) an external credit assessment institution (rating agency) considered financial and capital market participants in the financial and capital market Commission within the meaning of the Act, and subject to the financial and capital market participants the regulatory financial and capital market Commission's rules.  External credit assessment institution (rating agency) is binding in accordance with this law and Regulation No 1060/2009 of the Commission issued regulations.
Article 147.2. The Commission's administrative law and appeals (1) the Commission shall, in accordance with article 4 of this law, the first paragraph shall issue administrative law and Regulation No 1060/2009 of the cases.
(2) the administrative act issued in accordance with the first paragraph of this article may be appealed against this law, article 4, second paragraph.
Article 147.3. The Commission on the financing of external credit assessment institutions (rating agency) registration and supervision Commission is financed under Regulation No 1060/2009 set about and order. "
18. the supplement to the tenth article 148, the eleventh and the twelfth subparagraph by the following: "(10) On the law of the non-compliance section of the G1, as well as Regulation No 1060/2009 of the violations the Commission is empowered to make regulations contravened party warnings or impose fines of from 1000 to 100 000 lats.
(11) If a person has acquired or increased a substantial participation in the regulated market organizers, Latvian Central Depository or investment firm before this law, article 9 of the first or second part of the submission of the notification referred to in the Commission or during the review, the Commission is entitled to impose a fine for the person from 1000 to 10 000 lats.
(12) for actions that result in a breach of the requirements of the criminal law on money laundering and terrorist financing in the field of prevention, the Commission imposes on the investment brokerage firm interest from 5000 up to 100 000 lats. "
19. transitional provisions be supplemented with 46 as follows: "46. Until 31 December 2011 the investment brokerage firm, which has received permission from the Commission risk weighted value calculation to apply to the internal ratings based approach or the permission of operational risk capital requirements to apply to the calculation of the developed approach for measuring equity is at least 80 percent of the minimum equity capital, calculated using the applied to the simpler approach of credit risk and operational risk capital requirements in accordance with the Commission's minimum capital requirements."
20. To complement the informative reference to European Union directives, with 26 and 27 the following: "26) of the European Parliament and of the Council of 16 September 2009. directive 2009/111/EC amending Directive 2006/48/EC, Directive 2006/49/EC and 2007/64/EC as regards banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management;
27) of the European Parliament and of the Council of 24 November 2010, the EU directive 2010/76/amending Directive 2006/48/EC and 2006/49/EC as regards capital requirements for the trading book and for repeated vērtspapirizācij, and with regard to remuneration policy supervisory review. "
The Parliament adopted the law of 13 January 2011.
President Valdis Zatlers in Riga V 2011 January 28.