The Legislative Provisions On Information The Investment Service Provided To The Customer In The Course Of Investment Services, Financial Instruments, Costs And Service Transactions

Original Language Title: Normatīvie noteikumi par informāciju, ko ieguldījumu pakalpojuma sniegšanas gaitā sniedz klientam par ieguldījumu pakalpojumu, finanšu instrumentiem, pakalpojuma izmaksām un veiktajiem darījumiem

Read the untranslated law here: https://www.vestnesis.lv/ta/id/166131

Financial and capital market Commission Regulation No 153 in 2007 (9 November. Nr. 46, 2. p.)
The legislative provisions on information the investment service provided to the customer in the course of investment services, financial instruments, the cost of the service and transactions made in accordance with the financial instruments market law article 128 eighth and eleventh part i. General questions 1. provisions are binding on the Republic of Latvia registered investment brokerage firms and banks that provide investment services and investment, and additional services in the Republic of Latvia registered investment management companies investors make to the financial instrument for the management of the individual in accordance with the mandate of investors and provide advice on investments in financial instruments (hereinafter referred to as the authority).
2. the rules provide: 2.1 the requirements that must be followed to the written information provided to the client by the authority, would be considered fair, clear and not misleading;
2.2. what information the authority is obliged to provide to the customer: 2.2.1. agreement;
2.2.2. investment services;
2.2.3. financial instruments;
2.2.4. the customer's financial instruments and the safe keeping of funds;
2.2.5. the costs associated with the provision of investment services;
2.3. the customer provided an overview of the transactions carried out content.
3. the Provisions of II, III, IV, V, VI and VII claims authority to private customers. 23.4. Provisions, 23.5, 28 and 34 authority requirements also apply to professional customers. Chapter VIII requirements apply to private and professional customers.
4. the authority shall provide to the customer the information specified in these provisions of the financial instruments market law article 126.1 requirements for types of information exchange (in paper form or electronically) between the institution and the customer.
II. requirements that ensure that the customer information is considered to be true, clear and not misleading 5. the authority shall ensure that all the information that addressed or distributed in such a way that it can get customers or potential clients, including marketing communications, content, authority and meet the following conditions: 5.1. information is accurate and objectively and honestly reflect the investment service or financial instrument declines over the benefits and risks associated with it;
5.2. information is presented at a level and in a way that is understandable for the average individual to the customer (for example, customers without previous experience in relation to services provided, clients with specific experience in the URu.tml.) to which it is addressed or whom it can get;
5.3. relevant information, i.e. information that may affect the customer's decision to invest in financial instruments, notices or alerts are not hidden, rendered irrelevant or distorted;
5.4. If the information content of the investment service, additional services, financial instruments, or persons who provide the investment services and additional services, in comparison, the authority shall ensure that the comparison is justified, this is reflected in the fair and balanced and are listed for comparison used sources of information, the most important facts and assumptions;
5.5. If the information content of financial instruments, financial indices or investment services indicators of the previous period, the authority shall comply with the following conditions: 5.5.1. these figures reflect the last five-year period or for the entire period in which the financial instrument or investment service offered or provided on any financial index is defined, if the period is less than five years, or other periods which exceed five years, after the authorities check. Any of the above cases indicate the full 12-month period. Under this paragraph the requirement does not apply to the case where a financial instrument offers or financial index is defined for a period which is shorter than 12 months;
5.5.2. it is clearly indicated in the reference period and the source of information used;
5.5.3. the information must contain a prominent warning that the figures for the previous period does not guarantee adequate results in the future, if these indicators relate to the market yield associated with investment products;
5.5.4. If the previous period figures are expressed in a foreign currency, clearly indicate the currency and include a warning that, given the pointer expression foreign exchange income may increase or decrease due to fluctuations in currency exchange rates;
5.5.5. If the previous period figures are expressed in gross terms, indicate the applicable customer commissions, fees or other charges;
5.5.6. prior period figures do not reflect the information provided to the customer as the main theme;
5.6. If the information content model in the previous period figures or references to such indicators, the authority shall comply with the following conditions: 5.6.1. simulated prior period figures based on one or more financial instruments or financial indices which are comparable to the relevant financial instruments, financial indices or is the underlying asset, the actual figures for the previous period;
5.6.2. the actual figures for the previous period, which is based in the model parameters, these rules apply 5.5. proceedings of the type referred to in paragraph 1;
5.6.3. the information must contain a prominent warning that the figures refer to simulated past performance and that of the period prior period performance does not guarantee future results matching;
5.7. If the information contains forecasts for financial instruments, financial indices or investment services index in the future, the authority shall comply with the following conditions: 5.7.1. forecasts are based on assumptions, based on objective data;
5.7.2. forecasts are not based on the simulated figures for the previous period and does not contain references to such kind of indicators;
5.7.3. If projections of the future indicators are expressed in gross terms, indicate the applicable customer commissions, fees or other charges;
5.7.4. the forecasts contain a prominent warning that they are not a reliable indicator of future results;
5.8. If the information relates to the special tax arrangements applicable, clearly indicates that the tax treatment may depend on the individual circumstances of the client and in the future this may change;
5.9. no information content of the authority, the authority issued a license for the provision of investment services, the name, in a manner to be specified or it would be apparent that this institution has endorsed or welcomed the Authority's products or services.
III. Information on investment services and financial instruments in order to provide 6. Authority in good time before the contract for the provision of investment services or investment service before starting to provide clients or potential clients with information about the conditions of the Treaty, including with the provisions referred to in chapter IV of the Treaty apply.
7. The customer in good time before the provision of investment services the Office provides this rule IV, V, VI and VII of that information.
8. the authority, in order to ensure the provision of timely information delivery, take into account the urgency of the situation and the time that is required for the client to receive and respond to the specific information provided. It is considered that the customer takes less time to assess information about simple or standardised product or service or about the product or service that the customer has purchased or received in the past, while more time is needed to evaluate information about products or services, which are more complex, or where the customer has not previously purchased or received.
9. By way of derogation from the provisions of paragraphs 6 and 7, the body is entitled to give the customer the information referred to in paragraph 6 shall immediately after the contract for the provision of investment services and pre-contractual information referred to in paragraph 7, immediately following the commencement of the provision of the service in this case: If the body is not 9.1 have timely customer to provide the information referred to in those paragraphs, because the contract with the client is concluded at a distance in applying the legislation in respect of distance contracts for the provision of financial services;
9.2. If the authority executing the requirements of the laws that determine what information relating to distance contracts for the provision of financial services conditions provider is obliged to provide to the consumer.
10. the authority shall inform the customer in a timely manner of substantial changes in the way information in accordance with paragraphs 6 and 7 of the terms provided. Provides information about changes, using the same type of exchange of information, which the Authority used to disseminate basic information.
11. the authority shall ensure that the marketing communication is not in conflict with any other information which the institution provides to the client the investment services and investment in the course of the provision of additional services.

12. If the marketing communication contains a proposal for an agreement in respect of a financial instrument or investment service or investment additional to any person who relies on this statement or contains an invitation to any person who relies on this statement, to make a bid for the contract in respect of a financial instrument or investment services or additional services and marketing communication shows the way to acceptance of the offer or of the form You can accept the offer, the authority shall ensure that the provisions of the IV, V, VI and VII of this information is contained in the communication of marketing, in so far as it relates to such offer or invitation.
13. paragraph 12 of these rules do not apply to requirements only if to refer to marketing communication in the offer or invitation to a prospective client must use another document or another document that contains the information referred to in point 12.
14. the authority referred to in this chapter rules information is entitled to give the customer, if the institution provides the General requirements that the customer receives information in good time before conclusion of the contract or before the commencement of the provision of investment services.
IV. Customer information about the institution and its services provided 15. authority for a client or prospective client provides the following information about the institution and its investment services provided: 15.1. name and address of the authority;
15.2. information about the language in which the authority intends to contact the customer and the customer will send the documents and other information;
15.3. news about the types of information exchange that will be used for communication between the institution and the customer (including order receipt and dispatch);
15.4. a statement that the authority has received the license and authority that issued the licence to the investment services and investment for the provision of additional services, name and address;
15.5 If the institution disclose information to provide the services associated with the agent, and information on the Member State in which the tied agent is established;
15.6. information about the reports, which the authority intends to provide to the client, the nature, frequency and duration of supply;
9.8. If the institution offers the customer's financial instruments or funds held, a summary of the steps it has taken to ensure that the customer's financial instruments or funds (including information about investor protection and deposit guarantee scheme which applies to the authority in the light of its operation in the Member State concerned);
15.8. the prevention of conflicts of interest policy description. The prevention of conflicts of interest policy description can be provided in summary form, but if the client so requests, the authority shall provide the customer to fully familiarize yourself with the policy description.
16. the authority, which shall carry out the client's financial instrument for the management of the individual in accordance with the customer's mandate, has the responsibility to determine the method of evaluating the results of the client portfolio, for example, the standard portfolio yield (benchmark), which allows the customer to evaluate the service provided by the authority, taking into account the investment objectives of the client and portfolio of financial instruments.
17. If the institution offers to make the client's financial instrument for the management of the individual in accordance with the customer's authorization, the client or prospective client in addition to that referred to in paragraph 15 shall contain the following information: 17.1. information about the customer's financial instruments portfolio valuation of derivatives (valuation) method and frequency;
17.2. detailed information about the customer's portfolio of financial instruments or funds or parts of management delegation;
17.3. information about the method of evaluation of the results in the client portfolio;
17.4. for information on the types of financial instruments, which may include the customer's financial instruments portfolio and types of transaction that can be made with these financial instruments, including any limits in respect of the business;
17.5. information about portfolio management objectives, the degree of risk associated with the management of the implementation of the freedom of action, and the particular constraints for such discretion.
V. customer information on financial instruments 18. the authority, which offers to provide investment services and investment in additional services, taking into account the experience and knowledge of the customer, provide the client or prospective client information on the types of financial instruments and the nature of the financial instrument risks.
19. the Risk, if it is essential for the financial instrument in question and the nature of the client's experience and knowledge, shall include the following elements: 19.1. information about the risks associated with this type of financial instruments, if applicable, including explanation of financial structure (leverag) and its effects, and the risk of losing the entire investment;
19.2. for the price volatility of such instruments and any restrictions with regard to available market for such instruments;
19.3. to indicate that customer transactions with such instruments in addition to the purchase price of the instruments may be subject to other financial commitments and additional obligations, including contingent liabilities (to the contingen liabilit);
19.4. information concerning the guarantee contributions (margin requirements) or similar obligations, applicable to such instruments.
20. If the Authority gives the client or prospective client information on financial instruments for which the public offer is made and which is published in the prospectus law transposing the directive of the European Parliament and of the Council 2003/71/EC, in accordance with the procedure laid down, it shall indicate the place where financial and capital market Commission or another Member State, the prospectus approved by the competent authority is available to the public.
21. If the financial instrument risks depend on more financial instruments or services that constitute the financial instruments and financial instruments generally associated risks are greater than the risks associated with each separate component of the financial instrument, the authority shall provide the appropriate information for each separate component of the financial instrument and an explanation of how these components interact to increase the risk of financial instruments.
22. where a financial instrument contains a third-party guarantee, the authority shall provide to the client or prospective client all the information you need on this guarantee and the guarantor, to guarantee the customer can evaluate.
Vi. information to be provided to the customer on the customer's financial instruments and cash in the safe keeping of 23. If the institution provides the customer's financial instruments and funds held, it shall provide the customer with the following information: 23.1. inform the client or potential client, if the client financial instruments or funds the authority to third parties, as well as inform on legislation for the Authority's responsibility for the third party's Act or omission and the consequences to the client creates a third party insolvency;
23.2. If the client or potential client financial instruments the authority there by third party nominal account together are listed in more than one client financial instruments, the authority will inform the customer of this fact and give a clear warning about the risks arising from such a holding;
14.5. If it is not possible to ensure that the customer's financial instruments, which the authority there to a third party are identifiable separately from the third person or authority-owned financial instruments, it shall inform the client or potential client and provides a clear warning about the risks arising from this situation;
23.4. the authority shall inform the client or potential client, if the client or prospective client financial instruments belonging or holding of funds will be applied to the law of another country, and specifies that the client or potential client rights in respect of those financial instruments or funds may differ from the Latvian legislation law;
14.6. the authority will inform the customer of the existence of such circumstances and conditions: 23.5.1. If in respect of those financial instruments or funds is certainly a burden or authority has the right to impose such burdens;
23.5.2. If the authority is to transfer the rights for customer owned financial instruments and monetary funds;
14.7. the authority shall inform the customer in the event of a third party, to which authority carries out the customer's financial instruments or funds held, are or could be this rule 14.6 the rights referred to in paragraph;
23.7. the authority, before it enters into securities financing transactions with financial instruments, which it kept on the customer's behalf, or before it is otherwise use such financial instruments for its own account or on the account of another customer, in due time before the use of those instruments provide the customer a clear, complete and accurate information about the duties and responsibilities of the Authority relating to the use of financial instruments, including take-back provisions, and of the risks associated with that client's use of financial instruments.
24. the information referred to in this chapter, the authority shall provide those third parties with whom the authority has concluded the contract on the holding of financial instruments.

VII. information to be provided to the customer for the costs of investment services 25. the authority shall provide to the client or prospective client the following information on the costs associated with a proposed investment and the provision of additional services of investment: 25.1. total costs borne by the customer in connection with the financial instrument or investment service or investment in additional services, including related fees, commissions, taxes to be paid by the authority, or, if an exact price cannot be indicated total cost calculation method to calculate the cost amount of the customer could be verified. Authority of the commissions payable separately;
15.7. If part of the amount referred to in paragraph 25.1.-is payable in foreign currency, foreign currency, specify the amount of the conversion rate and the conversion costs;
25.3. indicate, if in connection with the provision of investment services may arise other additional costs;
25.4. information about account.
26. an open investment fund short prospectus, drawn up in accordance with the law, which takes over the European Parliament and Council Directive 85/611/EEC, the conditions may be the appropriate source of information in relation to that institution the Foundation ensure that the requirements referred to in paragraph 25.
VIII. Reports on the service provided 27. This provision, paragraph 28-33 requirements apply to customer orders, which are not related to the client's financial instrument for the management of the individual in accordance with the customer's authorization. Rule 34 – 41 requirements apply to individual customer's financial instruments management in accordance with the customer's authorization.
28. the authority executing the customer's order, providing essential information to the customer about the order. The customer is entitled to request and the authority is obliged to provide information on the implementation of the customer's order.
29. the authority shall forward the notification to the customer confirming the order, not later than the day after the execution of the order or, if the authority that approval is received from a third party, no later than the next working day after receiving confirmation from the third party. This paragraph shall not apply where the confirmation would contain the same information as a confirmation that is to be promptly dispatched to the customer by a third party.
30. This provision, paragraph 28 and 29 shall not apply if the customer's right to comply with the order is associated with the bonds that funded the mortgage loan agreement concluded with that client. In this case, the notice of the transaction is delivered at the same time, the customer is informed about the mortgage loan contract, but not later than one month from the date when the transaction is made.
31. the notice provided by the retail client, according to the executed transaction specifies the following information under the European Commission's 10 august 2006 Regulation No. 1287/2006 of the European Parliament and of the Council Directive 2004/39/EC as regards the obligation for investment firms to take accounting, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms in this directive, annex I, table 1 provides the explanation : 31.1. reporting of personally identifiable data;
19.4. customer identification data;
31.3. the trading day;
19.5. the trading time;
31.5. the type of the order (order, order limiting transaction at market price);
19.6. the designation of the place of execution;
19.7. the identification of financial instruments;
19.8., whether the order is a purchase or sales order;
19.8. the category of the order if the order is not to buy or sell a financial instrument;
31.10. financial instruments;
31.11. unit price (if the order is executed in tranches, the authority may provide the client with information about a particular part of the price or the average price; if the average price is stated, the authority shall, at the customer's request, with information on each individual part of the price);
31.12. total amount of the transaction;
31.13. with the transaction related fees and other charges imposed on the total amount and, if the customer requests it, a detailed list of fees charged;
31.14. customer responsibilities for the settlement of the transaction, including the time limit for payment or delivery, as well as the appropriate account information, if such information and a description of the tasks has not previously sent to the customer;
31.15. the approval, if the client's counterparty was the body itself or any other company within the group, the authority or other authorities. This requirement does not apply to the case where the order is executed through a trading system that provides anonymous trade.
32. the authority is entitled to give the customer the information referred to in paragraph 31, using standardized codes, if you ensure that code explanation.
33. If the customer orders apply to investment fund units or shares in collective investment undertakings and these orders executed periodically, either take the authority in paragraph 29, or at least once every six months to provide private customer information specified in paragraph 31 in respect of these transactions.
34. the authority, which shall carry out the investor's financial instrument for the management of the individual in accordance with the mandate of the investor, providing each client the periodic reports on the activities carried out by the customer for the good of the institution.
35. The periodic report: 21.8. name;
35.2. client account number;
35.3. statement on portfolio financial instruments and their evaluation, including detailed information about each of the listed financial instrument, its market value or fair value (fair value), if the market value is not available, and the cash balance at the beginning and end of the period, as well as portfolio yield (performance of the portfolio) in the reporting period;
35.4. the total fee for the period, showing at least the portfolio management fees and with the execution of transactions costs. The authority indicates that a detailed list will be provided at the customer's request;
22.1. If the authority has agreed with the customer about any portfolio yield standard (investment performance benchmark), provides that the standard and the profitability of the portfolio during the reporting period comparison;
35.6. other payments received during the reporting period (dividends, interest URu.tml.), the total amount;
22.2. information about financial instruments events which may affect the rights to a portfolio of financial instruments;
22.2. the information referred to in those provisions, respectively 31.3.-31.12. point. If the client has requested to receive information on each of the individual transactions, use of this provision in paragraph 40 and 41.
36. The client referred to in paragraph 34 of the periodic report provided every six months, except in the following cases: If the customer requests the 36.1., the periodic report provided every three months;
36.2. If customer requires a separate account for each transaction and apply this provision, paragraph 40 and 41, the periodic report provided at least once every 12 months;
36.3. If the authorities and the customer agreement for portfolio management is designed for transactions using borrowed funds (leveraged portfolio), the authority shall provide for periodic review at least once a month.
37. the authority will inform the customer of this in paragraph 36.1 of the rules right to require periodic reporting every three months.
38. If the transactions are carried out with the financial instruments market law, article 32, paragraph 1, "c" and in paragraph 3 of the second paragraph of article 4, paragraph financial instruments, the client this provision in paragraph 34 of the periodic report provided every six months.
39. the customer has the right to request the authority to provide an overview of each transaction, the management of the customer's financial instruments portfolio has performed.
40. the authority shall forward the notification to the customer confirming execution of the content of these provisions and the information referred to in paragraph 31, not later than the day following the transaction or, if the authority that approval is received from a third party, no later than the next working day after receiving confirmation from the third party. Requirements of this paragraph shall not apply where the confirmation would contain the same information as a confirmation that is to be promptly dispatched to the customer by a third party.
41. If the institution offers portfolio management services or handle client accounts that include an unsecured open position in respect of a transaction which provides for possible liabilities (liability contingen transaction), the authority shall inform the client about the loss, which exceeds the above between the authority and the client agreed threshold, no later than the end of the working day when the threshold is exceeded, or in cases where the threshold is exceeded, the next day a holiday.
Informative reference to EU directive regulations include rules stemming from the European Commission on 10 august 2006 the directive 2006/73/EC of the European Parliament and of the Council Directive 2004/39/EC as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that directive.
Financial and capital market Commission President When the U.