Rules On The Financial Conglomerate's Capital Adequacy Calculation Procedure And On The Provision Of Information On Significant Risk Concentration And Significant Intra-Group Transactions

Original Language Title: Noteikumi par finanšu konglomerāta kapitāla pietiekamības aprēķināšanas kārtību un par informācijas sniegšanu par nozīmīgiem riska koncentrācijas gadījumiem un nozīmīgiem grupas iekšējiem darījumiem

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Read the untranslated law here: https://www.vestnesis.lv/ta/id/133566

Financial and capital market Commission Regulation No. 84 in Riga in 2006 (April 21. 18. p. 3)
Rules on the financial conglomerate's capital adequacy calculation procedure and on the provision of information on significant risk concentration and significant intra-group transactions Issued pursuant to the financial conglomerate is article 13 of the law, the first paragraph of article 15 of the fourth and the third subparagraph of article 16(1) and the financial and capital market Commission of law article 6, paragraph 1 and article 7 paragraph 1 of the first paragraph of i. General questions 1. "rules on the financial conglomerate's capital adequacy calculation procedure and on the provision of information on significant risk concentration cases and significant intra-group transactions "(hereinafter-the rules) is binding on the financial conglomerate, the Coordinator is the financial and capital market Commission (hereinafter" Commission "), a leading company or another within the financial conglomerate to the regulated company, established by the Commission (hereafter referred to as the responsible company).
2. The financial conglomerate's capital adequacy calculation is carried out in accordance with the reduction and addition method (Marbles and aggregation method) in accordance with the requirements of paragraph 4 if: 2.1. leading public financial conglomerate is regulated in Latvia registered company;
2.2. managing public financial conglomerate is an unregulated company and the Commission is the only significant supervisory organ.
3. In cases not referred to in paragraph 2, the Commission, as the Coordinator, after consultation with other relevant supervisory authorities and the responsible company is determined by the financial conglomerate's capital adequacy calculation method applied by selecting either the reduction and addition method or one of the entries listed in annex 1.
 
II. The financial conglomerate's capital adequacy calculation procedure 4. Financial conglomerate's capital adequacy in accordance with the reduction and addition method is calculated as follows: 4.1 grouping included in calculation of the regulated and non-regulated banking sector, investment services and insurance sector the sector group company by corresponding financial sectors is calculated every commercial companies own capital (own funds) and capital (solvency margin) in accordance with the requirements of paragraph 9;
4.2. each company's own capital (own funds) is reduced by another financial conglomerate company investment company capital and reserves and subordinated capital, if this reduction is already taken into account in the calculation of the own funds of other companies (own funds) in accordance with the requirements of paragraph 9;
4.3. is calculated every commercial companies own capital (own funds) to be included in the own funds of the financial conglomerate calculated pursuant to the requirements of paragraph 10;
4.4. each company is calculated capital requirements (solvency margin) to be included in the financial conglomerate calculates the capital requirements under the requirements of paragraph 10;
4.5. the own funds of the financial conglomerate calculated by summing all the companies involved in the calculation of own funds (own funds), calculated pursuant to 4.1-4.3 the requirements;
4.6. financial conglomerate calculates the capital requirements, calculated by summing all of the company's capital requirements (solvency margin) calculated pursuant to paragraph 4.1 and 4.4;
4.7. the financial conglomerate's capital adequacy is calculated as the difference between the own funds of the financial conglomerate and the financial conglomerate's capital requirements.
5. all financial conglomerates in regulated and non-regulated banking sector and the investment services sector companies that are included in a separate group of consolidation, it is acceptable to include the financial conglomerate's capital adequacy calculation, with the banking sector and the investment services sector equity capital and capital requirements, calculated in accordance with the host country of the Commission or a Member State, the provisions governing the capital adequacy calculation procedures on the basis of consolidated financial statements.
6. all financial conglomerates in regulated and non-regulated sector of the insurance company, which is incorporated in a separate group of insurance companies, it is acceptable to include the financial conglomerate's capital adequacy calculation using the adjusted solvency margin and adjusted the calculation of own funds, in accordance with the host country of the Commission or that Member State has rules.
7. each within a financial conglomerate, the financial sector's capital requirements (solvency margin) to be covered by the financial sector equity capital (own funds), calculated in accordance with the provisions in the sector concerned. The level of the financial conglomerate the capital adequacy calculation shall take into account only the equity elements that are permitted under the financial conglomerate the provisions of the financial sector, following the sector, within the limits of the provisions on individual equity items.
8. If a financial sector capital requirements (solvency margin) is not met, the responsible company shall submit to the Commission a report explains: 8.1 or the financial sector, which has equity capital (own funds) surpluses have own funds (equity) elements that can be applied to the financial sector, which has a capital (own funds) deficiency;
8.2. is there no limitations in paragraph 8.1 of the equity (own funds) the availability of medicines and el free movement within a financial conglomerate.
9. The financial conglomerate's capital adequacy to be included in the calculation of the company's own capital (own funds) and capital (solvency margin) is determined as follows: 9.1 in the Republic of Latvia and the Member States registered regulated banking sector and the investment services sector the company calculate the equity capital and capital requirements in accordance with the Commission's "capital adequacy calculation rules" established procedure;
9.2. the Member States registered regulated banking sector and the investment services sector the company calculate the equity capital and capital requirements in accordance with the requirements of the home State;
9.3. This provision needs frequent embedded management company is on view on the effects of investment services companies and regulated the Torah to equity and capital requirement is calculated in accordance with paragraph 9.1 and 9.2;
9.4. the regulated banking sector and the investment services sector the company calculated the notional capital requirement in accordance with the banking sector and the investment services sector rules that would apply to this company, if it were a regulated company;
9.5. the regulated and unregulated sector of the insurance company's solvency margin calculation and own funds in accordance with the Commission's "rules on the supplementary supervision of insurance undertakings subject to the adjusted solvency margin and adjusted the calculation of own funds and for providing information on the supplementary supervision of insurance undertakings subject to transactions between the groups ' requirements relating to the organisation of the available solvency margin and the determination of means for the inclusion of adjusted solvency margin and adjusted the calculation of own funds;
9.6. the notional capital requirement for financial holding company of mixed the calculated in accordance with the largest financial conglomerate the provisions of the financial sector.
10. Capital requirements (solvency margin) and capital (own funds), to report to the financial conglomerate's capital adequacy calculation, calculation, taking into account the participation in society of the proportional share held in the company: 10.1. the rate of the related capital requirements (solvency margin) and equity (own funds) is determined based on the paid-up capital of the associated undertaking's part, directly or by way of control belongs to the public of participation;
10.2. the commercial companies which seeks compensation for the parent company, a subsidiary of electronics company or society in which the parent or the subsidiary has a membership, these companies manifested as common management in accordance with the signed agreement, the company memorandum or articles of association or rules so that those in the course of the financial year at least half of any governing body members are one and the same person, the proportional share for the inclusion of the financial conglomerate's capital adequacy calculation by the Commission in consultation with other relevant supervisory bodies, if any;
10.3. If a subsidiary capital (solvency margin) is greater than the capital (own funds), its own capital (own funds) and capital (solvency margin) included the financial conglomerate's capital adequacy calculation in full, without taking into account the public-owned of participation proportional share.  
 
III. The financial conglomerate's capital adequacy reporting procedures

11. the company shall provide "financial conglomerate the capital adequacy review" (hereafter referred to as report) under UPDK 0651275 form (annex 2). If necessary, the report shall be supplemented by reports in accordance with the requirements of paragraph 8.
12. at the request of the Commission, the responsible company ie shall provide the Commission with a financial conglomerate's capital adequacy calculation in what merc society capital requirements (solvency margin) and equity (own funds).
13. the report prepared for the State review the December 31 of the reporting year and the following year 30 April shall be submitted to the Commission in accordance with the "electronically submit statistical reports preparation and dispatch rules".
14. Where the Commission finds that the present report has been prepared incorrectly, it is notified by e-mail the report preparer. If the Commission has not stated otherwise, the report must be submitted not later than on the working day following notification of the existence of the error from the Commission.
15. The consultation on the review of the regulatory requirements of the Commission and the Department of statistics.
 
IV. Information on significant risk concentration and significant intra-group transactions of preparation and procedure for the submission of the report on 16 significant risk concentration and significant intra-group transactions within a financial conglomerate (a report) provides information on the measures taken in the reporting period significant intra-group transactions and significant risk concentration of cases for the year on December 31.
17. the company report on significant risk concentration, the Commission prepared using banking and brokerage company "exposure limit" the enforcement regulations of the given statements, and report on significant intra-group transactions made using the Commission's "rules on the supplementary supervision of insurance undertakings subject to the adjusted solvency margin and adjusted the calculation of own funds and for providing information on the supplementary supervision of insurance undertakings subject to transactions between group" the report form.
18. the company shall submit a report to the Commission by the following year the year 30 April.
19. If during the period of the regulated company within the financial conglomerate is not taken significant intra-group transactions and the end date of the reporting period are not significant risk concentrations, the company responsible for it in writing to the submission of the report to the Commission within the time limit.
V. concluding questions 20. report and report pursuant to the requirements of these regulations in the company responsible shall prepare and submit to, starting with the report and the report on the situation at 31 December 2006.
 
Vi. the Informative reference to European Union Directive 21. Provisions included in the law arising from the European Parliament and of the Council of 16 December 2002, Directive 2002/87/EC on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate.
Financial and capital market Commission Chairman U. When 1. Annex "regulations for financial conglomerate the capital adequacy calculation procedure and on the provision of information on significant risk concentration and significant intra-group transactions" the conglomerate's capital adequacy calculation methods i. consolidation method (Accounting consolidation method) 1. Capital adequacy calculation of regulated financial conglomerate companies is based on the parent company's consolidated financial statements. Equity capital (own funds) is calculated based on the consolidated balance sheet of the parent company, taking into account the provisions of the relevant sector. Own funds requirement is calculated by summing the individual financial sector capital requirements (solvency margin) calculated in accordance with the provisions in the sector concerned. Non-regulated companies, which are not included in the separate financial sector capital adequacy calculation, calculate the notional capital requirement. Commercial companies are included in the calculation under the ratio which takes into account, when drawing up the consolidated financial statements in the relevant sector.
 
II. Book value/requirement deduction method (Book value/requirement deduction in "method) 2. Capital adequacy calculation of regulated financial conglomerate companies is based on each company's individual financial statements. The financial conglomerate's equity is calculated by taking into account the parent company or leading financial conglomerate corporations own funds elements which are determined in accordance with the relevant provisions of the financial sector. The financial conglomerate's capital requirement is calculated by comparing the parent or leading financial conglomerate company in other companies of the Group and the book value of the proportional part of the company calculated capital requirements. The capital requirement is the largest of the following values. Investment in other companies in the group are evaluated under the equity method. Non-regulated companies is calculated on a notional capital requirement.
 
III. Combined method (Combination of methods) 3. Financial conglomerate the capital adequacy calculation is used in this annex, point 1 and 2 and of the methods referred to in the "rule of the financial conglomerate's capital adequacy calculation procedure and on the provision of information on significant risk concentration and significant intra-group transactions" referred to in paragraph 4, the reduction and addition methods (Marbles and aggregation method) or a combination of the two methods mentioned above.
 
2. Annex "regulations for financial conglomerate the capital adequacy calculation procedure and on the provision of information on significant risk concentration and significant intra-group transactions"