The Saeima has adopted and the President promulgated the following laws: law on the protection of the investor, chapter I. General provisions article 1. The law is applied in the following terms: 1) financial instrument: transferable securities, investment certificates, money market instruments, financial termiņlīgum, forward rate agreements, interest rate, currency and equity swaps and options instruments;
2) investment services: (a) financial instruments) storage, (b) financial instruments) purchase or sales receipt and transfer of tasks on behalf of clients, financial instruments (c)) for the purchase or sale of task execution otherwise than on his own account, d) deals with financial instruments on its own account, e) separate individual client investment portfolio management under the client authority separately from investment services provider property, if such investment pools have money and financial instruments financial instruments, f) emissions and emissions of such guarantee placement;
3) Investor-a person who transfers money to the system or financial instruments for the provision of investment services;
4) contribution — cash or financial instruments that give investors an investment system for the provision of the service;
5) investor protection system (System): a set of measures for the protection of the interests of investors, this protection should the required financial resources and compensation in accordance with this Act;
6) system — a legal person established in the order received by the financial and capital market Commission's special permission (license) for the provision of investment services;
7 financial instruments) irreversible disappearance — financial and capital market Commission found the fact that the data supporting the investors ' property rights to financial instruments and the Member's computer system or other records shall be permanently destroyed or damaged any action, inaction or a violent crime and the system refuses to restore the data after the documents presented by the investor;
backorder 8) investment services, investment services, which has adopted a system for execution, but wholly or partly not done, and as a result suffered a loss to the investor or financial instruments are permanently lost;
9) compensation — this law and about the amount of money to be paid to investors, if the participant is unable fully to meet their deadlines and obligations to the investor;
10) financial instrument the system portfolio, financial instruments that belong to the system of investors who have a right to compensation in accordance with the procedure laid down in this Act and the amount and calculated in accordance with this Act;
11) total system financial instrument portfolio, financial instruments of the members of the total portfolio.
 
2. article. (1) the objective of this law is to establish a system for the protection of the interests of investors.
(2) this law determines the General principles for the system, it requires the provision of financial means and procedures for the payment of compensation.
(3) the investor has the right to receive compensation if the system could not fully and within the execute their obligations to investors.
(4) this Act does not apply to: 1) providers of investment services, which until this law into force is deemed insolvent or in liquidation, bankrupt;
2) where financial instruments are permanently gone before the entry into force of this law;
3) cases where investors suffered losses financial instrument due to changes in the prices of financial instruments or have become illiquid.
(5) If a member ceases its activities, it provides investment services are guaranteed in accordance with the procedure laid down in this Act and the amount until full completion.
(6) in Latvia registered the investment service provider affiliates abroad join the foreign investor protection system, as determined by the foreign law. If Affiliate joins the foreign investor protection system, it does not become a member.
 
3. article. (1) the compensation for a single investor is calculated on: 1) permanently lost financial instruments;
2) injury caused back investment services.
(2) irrespective of the date of the system passed the investment service, the execution of one investor compensation is as follows: 1) from 1 January 2002 to 31 December 2003, 90 percent of the permanently missing financial instruments or damage caused not executed investment services, but not more than 3000 lats;
2) from 1 January 2004 to 31 December 2005 — 90 percent of permanently missing financial instruments or damage caused not executed investment services, but not more than 6000 lats;
3) from 1 January 2006 to 31 December 2007, 90 percent of the permanently missing financial instruments or damage caused not executed investment services, but not more than 9000 lats;
4) from January 1, 2008 — 90 percent of permanently missing financial instruments or damage caused not executed investment services, but not more than 13 000 lats.
(3) compensation shall be paid in local currency.
 
4. article. Financial and capital market Commission provides compensation and performs the following functions: 1) organizes and supervises the execution of the system of compensation costs;
2) checks the validity of the application for compensation;
3) organise compensation;
4) decide on borrowing, to make compensation.
 
 
Chapter II. Payment of compensation in article 5. (1) compensation is payable only to those investors who Finance and capital market Commission applied for: 1) financial instruments the irreversible disappearance;
2) injury caused back investment services.
(2) an application for compensation must be submitted during the year, since investor became known, that the system has not met its obligations, but no later than five years from the date of default.
(3) financial and capital market Commission: 1) determines the order in which applications are accepted for payment of the refund, and the procedure for the determination of the amount of the refund;
2) 30 days evaluate applications for compensation received and decide whether compensation cost reasonableness or for refusal to pay compensation;
3) collects information about the investors that the applications for compensation were considered justified, and notify the system of payments to participants that they should take.
 
6. article. (1) compensation payable within three months from the date of the decision on the recognition of the application for compensation be justified.
(2) in exceptional circumstances and in special circumstances, the financial and capital market Commission may extend the first paragraph of this article, the period of three months.
 
7. article. Compensation shall not be paid: 1) for transactions in respect of which has given rise to a conviction in the criminal proceedings for criminal money laundering;
2) scheme members, insurance companies, investment firms and other investors who made it known that he is a professional investor;
3) persons who are in the same group with participants in a system;
4) pension funds;
5 State and local authorities);
6 Board members) and members of the Council, the Commission and the members of this Commission, the head of the internal audit service and the service members, other staff members who are authorized to plan, manage and control the operation of the system and who are responsible for it, as well as persons who directly or indirectly acquired more than five percent of the system's capital;
7) persons responsible for the statutory system of audits;
8) who are 6 and 7 of this article of the persons referred to in paragraph first-degree relatives or spouses;
9) persons who operate this article on behalf of the persons referred to;
10) persons for whom the financial and capital market Commission found that, on the basis of individual contracts with specific provisions they have received high interest rates or financial concessions or caused, or made use of their advantage in conditions that a member of the system has created financial difficulties or contributed to the deterioration of the financial situation.
 
8. article. (1) the amount of the refund shall be fixed: 1) financial instruments the irreversible disappearance case, according to the financial instruments belonging to investors of the market price on the day when the financial and capital market Commission was filed an application for a financial instrument to be permanently lost. If the market price on the day when the application was submitted, cannot be determined, use the last available financial instruments market price prior to the date of submission of the application;
2) executed in the case of investment services under the losses caused by Investor investment service unfulfilled.

(2) the permanently missing financial instruments or damage caused not executed investment services, foreign currency conversion in local currency at the Bank of Latvia the relevant foreign exchange rate on the day when a decision on the merits of the application for compensation.
 
9. article. Financial and capital market Commission publishes information on compensation procedures and deadlines, the newspaper "Latvian journal" and in at least one daily newspaper.
 
10. article. Compensation monitoring the financial and capital market Commission in financial Advisory and capital market Board.
 
 
Chapter III. The system for funding the provision of article 11. (1) in the system shall submit financial and capital market Commission a quarterly report of its financial instruments portfolio.
(2) the system for financial instruments portfolio calculated by adding the investments that are located at the system or the system of Government and the period concerned: 1) does not exceed this article 3 of the law referred to in the second subparagraph the maximum amount of compensation and are compensated for 90 percent of the investment;
2) exceeds this law article 3, referred to in the second subparagraph the maximum amount of compensation and are compensated for 90 percent of the investment, this maximum number only to the part of the investment, which is compensated.
(3) the statement and submission procedures and deadlines, as well as the system for financial instruments portfolio shall lay down the procedure for the calculation of the financial and capital market Commission.
 
12. article. (1) it is the duty of the system in the manner set out in this Act, deposit the money in a Bank account opened in compensation.
(2) members shall inform their existing or prospective investors about their activities in the system and the amount of compensation, as well as the rules to be followed in order to obtain a refund under this Act. The information must be easily readable and comprehensible.
(3) the system of information on the operation of the system should not be used in advertising.
 
13. article. (1) the financial and capital market Commission has the right to have members of the system including the Latvian Bank open account in cash compensation. Year of the financial and capital market Commission's first request, the date of the total may not exceed four percent of the total members of the financial instrument portfolio arithmetic average over the preceding 12 months.
(2) each Member of the system for the refund of duties shall be fixed in proportion to its share in the total of the financial instrument the system portfolio. Determining each Member's share of the payment of the total system of financial instruments portfolio participants report the system for financial instruments portfolio, investors are entitled to compensation under this Act, based on the previous quarter, the report data submitted on the system for financial instruments portfolio.
(3) within 30 days after the receipt of the financial and capital market Commission of the request for payment of the refund, in the system including the Latvian Bank account opened in the required funds.
(4) the Bank account opened in the system of funds funds may only be used for compensation.
(5) the amount of money that is not used for compensation within two months from the date on which they entered into the account are refunded according to scheme members in proportion to their payments in compensation.
(6) the financial and capital market Commission of this article may be extended by the time limits referred to in the fifth subparagraph, for three months.
(7) the financial and capital market Commission has the right to take loans for compensation if the payments system is not sufficient to cover the compensation under this Act.
 
14. article. (1) if the Member does not perform this statutory payments, financial and capital market Commission calculates a penalty of one percent of the amount of the unpaid amount for each day of delay.
(2) If a member missed the down payment is more than 30 days, the financial and capital market Commission has the right to decide on a special permit (license) for the provision of investment services stop.
(3) If, after the above measures cannot charge payments, financial and capital market Commission has the right to decide on a special permit (license) for the provision of investment services, for the 12 months before informing the participants in a system.
 
15. article. (1) the financial and capital market Commission has the right of recourse to the extent of compensation paid to the members of the system, which investors are compensated.
(2) the recourse procedure recover monies credited to the Bank account opened.
(3) the recourse procedures in recovering the money a month from the date of the recovery of money paid to the scheme members who have made payments of compensation. Each system participant the amount payable is determined in proportion to the part of the compensation paid.
(4) if the financial and capital market Commission, was not used in the first paragraph of this article right within one year from the date of payment of the compensation, it has the right to transfer its scheme members who have made payments of compensation.
(5) if the financial and capital market Commission failed to decline in order to recover the funds, it has the right to transfer the rights of recourse scheme members who have made contributions to the compensation.
 
 
Chapter IV. Registered foreign investment service providers article 16. Registered foreign investment service providers wishing to provide investment services in Latvia (foreign company) before the special permission (license) to receive the provision of investment services or activities for registration shall be submitted in Latvian financial and capital market Commission documentation demonstrating that the investors who will be using foreign companies branches of investment, they guaranteed foreign firms home country investor protection system.
 
Article 17. If a foreign company's home country investor protection system gives investors the right to Latvian: 1) less than the amount of the refund system, — foreign companies become participants in a system;
2) more than the amount of the refund system, — foreign companies does not become a member.
 
18. article. Foreign companies provide their existing and prospective investors with information on the activities of the branch system of investor protection as much volume as investors in their home ground, but no less determined in Latvia as required by applicable law.
 
19. article. If entitlement to the refund is acquired in the foreign companies, investors have the right to submit the application to the financial and capital market Commission, which helps the investor to get compensation from the foreign system of investor protection.
 
 
Transitional provisions 1. Article 17 of the Act referred to in paragraph 2 may not exceed this law article 3, second paragraph, the given level of no more than 1 January 2008.
2. The Latvian central depository is a member of the system as long as it kept the accounts of investors who are not members of the system.
The law shall enter into force on 1 January 2002.
The Parliament adopted the law of 8 November 2001.
 
State v. President Vaira Vīķe-Freiberga in Riga on 23 November 2001, in the Editorial Note: the law shall enter into force on January 1, 2002.