Regulators

Latvian Financial and Capital Market Committee (FKTK)

On July 1, 2001, the Latvian Financial Capital Market Committee FKTK officially launched its activities and exercised its supervisory responsibilities.

Forex Regulatory Tips

The Latvian Financial Capital Market Commission (FKTK) regulates foreign exchange and other financial products and practices. Companies that provide currency trading (foreign exchange) services must apply for an "Investment Service Providers" license.
The specific information is as follows:
On January 6, 2010, the Latvian Financial Capital Markets Committee (FKTK, FCMC for short in English language) announced the regulation of currency trading (foreign exchange) services.
Persons who currently provide investment services related to Article 3(4) of the Regulations, including currency transactions, need to report to FCMC and submit relevant authorization or license certificates before July 1, 2010.

List of Regulated Companies

A total of 17 companies are regulated and licensed foreign exchange brokers. The full name is abbreviated regulatory number. Regulatory status Dukascopy Europe IBS AS Dukascopy is regulated AS IBS "Renesource Capital" Renesource Capital is regulated Amenda Markets AS IBS Amenda Markets is regulated AS BlueOrange Bank BlueOrange Bank under supervision Akciju sabiedrība "Baltic International Bank" Baltic International Bank under supervision "Swedbank" AS Swedbank under supervision Signet Bank AS Signet Bank under supervision Norvik Banka UK Limited Norvik Banka under supervision AS "SEB banka" SEB banka under supervision Nordea Bank Abp Nordea Bank Abp under supervision

Organization Profile

Nature of the organization:
FKTK is an autonomous public body that regulates Latvian banks, credit unions, insurance companies, insurance brokers, players in the financial instrument market, as well as private pension funds and e-money institutions.
FKTK is committed to enhancing the stability and competitiveness of financial and capital markets, thereby promoting their development, while at the same time protecting the interests of investors, depositors and insureds.
Institutional functions:
Regulate the business of financial and capital markets and their participants, strengthen the protection of the interests of investors, depositors and insurers, improve the stability of financial and capital markets, and promote their development.
Institutional History:
In 1997, the joint supervision concept was launched.
On October 26, 2000, the Parliament of the Republic of Latvia appointed UIdis Cerps as Chairman of the Latvian Capital Markets Committee and Janis Brazovskis as Vice-Chairman.
On November 14, 2000, Janis Brazovskis was appointed to the board of directors of FKTK.
On May 5, 2001, Ludmila Vojevoda and Gvido Romeiko were appointed to the Board of Directors.
On July 1, 2001, the Latvian Financial Capital Market Committee (FKTK) officially launched its activities to exercise its supervisory responsibilities.
On May 7, 2003, FKTK obtained ISO 9001:2000 certification.
On October 12, 2006, the Parliament of the Republic of Latvia appointed UIdis Cerps to continue as Chairman of the Latvian Capital Market Committee and Janis Brazovskis to continue as Vice-Chairman.

Licence application

I. Overview of license application requirements:
(1) The initial capital complies with the legal requirements and the regulatory rules of the Commission FKTK;
(2) The members of the board of directors and company committees meet the legal requirements;
(3) Shareholder members meet legal requirements;
(4) The chairman of the board of directors and at least one other board member have qualified and competitive investment experience.
1. Requirements for members of investment brokerage committees and shareholders' boards:
(1) Have sufficient competitiveness in relevant fields and be responsible for the investment brokerage company;
(2) Possess relevant education and no less than three years of similar work experience;
(3) No-fault reputation.
2. Requirements for the composition of the audit committee
(1) The audit committee is elected by the shareholders' meeting, with at least 3 members, at least one of whom is a member of the company committee, and the other members are elected by the company's shareholders' meeting.
(2) The audit committee should conduct activities and make decisions independently and objectively.
(3) Most members of the audit committee must be independent individuals. One of the following conditions is not independent:
(a) Participate in the operation of the company (more than 20% of the capital stock or voting rights)
(b) has a legal employment relationship with a capital company or has existed within the last 3 years
(c) Marriage, kinship, and kinship with members of the company's board of directors or shareholders (more than 20% of the capital stock or voting rights)
(d) is determined by the shareholders meeting to have other personal or financial factors that may impair the independence of the members of the Audit Committee.
3. Minimum capital requirement:
The minimum capital requirements for investment brokerage companies are 50,000 euros / 125,000 euros / 730,000 euros, and the contract is 380,000 yuan / 950,000 yuan / 5.5 million yuan.
The specific requirements are as follows:
(1) An investment service company offering any of Articles 3, 4, 1, 2, 3, 4 or 8 of this Regulation shall have an initial capital of more than EUR 50,000, excluding those offering only Article 3 , paragraph 4, investment companies for services 1, 8;
(2) An investment service company that provides at least one of the services in Article 3, paragraph 4, 1, 2, 3, 4 or 8 of this Regulation and can hold financial instruments and client funds, with an initial capital of 12.5 More than ten thousand euros;
(3) For investment service companies that provide at least one of Articles 3, 4, 5, 6 or 9 of this Regulation, the initial capital must be more than 730,000 euros;
Investment companies that provide only the services of Article 3, paragraph 4, 1, 8, cannot hold financial instruments and client funds, the initial capital is at least 50,000 euros, and its civil compensation capital requirement should not be less than 1.5 million euros a year , except for insurance business - not less than 1 million euros.
4. Physical office requirements:
FKTK requires that the license application company/legal person must have a local physical office.
2. Application Duration
Regarding the investment service provider license, the committee will review and make a decision on the investment company's application documents within 3 months.

Regulatory Rules

Regular Reports:
According to FKTK's "Markets in Financial Instruments Act" and the new regulations of the EU regulatory system MiFID2, regulated companies are required to submit transaction reports, annual financial audit reports, client funds reports and anti-money laundering reports, as well as business plans.
(1) All investment brokerage firms must inform the Commission (FKTK) of all circumstances of the firm that may have an impact on business operations.
(2) The investment brokerage company must submit the compliance audit report to the management within 10 days of receipt, and submit a copy to the committee before April 1 of each reporting year.
(3) The investment company needs to submit a copy of the annual account records and the copy of the compliance audit report to the State Tax Service Office within 10 days after receiving the compliance audit report and no later than 3 months after the end of the reporting year, and Attach an excerpt from the shareholder or board member meeting as proof of annual account records.
(4) Investment brokerage companies and trust institutions should ensure that annual compliance audit reports are submitted, and auditors are required to handwrite a report to the committee to certify the audit report. The audit report should include a report on client funds holdings and a report on financial instruments.
Negative Balance Protection:
At present, FKTK has not established a negative balance protection mechanism, but after email consultation, FKTK staff said that it will establish a negative balance protection mechanism in accordance with the requirements of the EU regulatory system MiFID2.
Segregated Accounts:
According to Article 16 of EU Directive 2006/73/EC, client funds are required to be deposited in segregated trust accounts. Latvia, an EU member state, is required to follow this directive to segregate client funds.
Leverage Limit:
At present, FKTK does not have leverage restrictions, but will set leverage multiples ranging from 2:1 to 30:1 according to the requirements of the EU regulatory system MiFID2.

Regulatory Inquiries

The first step: Open the official website of the Latvian Financial and Capital Market Commission FKTK: http://www.fktk.lv
Step 2: Click on the "Markets" section of the website and select "Investment Service Providers".

Step 3: Enter the "Investment Service Provider" page and enter the company name in the "Search" column to search. Please note that companies in the list of "BANKS" (banks) in "INVESTMENT FIRMS" (investment companies), "CREDIT INSTITUTIONS" (credit institutions) can provide foreign exchange trading services. "Investment Management Companies" can only provide asset management services.

List of investment service providers:
https://www.fktk.lv/en/market/investment-service-providers/
For service providers in the EU, please go to "SERVICE PROVIDERS FROM THE EEA"

You can see the list of EEA companies, and please check the company information carefully,

Service providers in the EU:
https://www.fktk.lv/en/market/investment-service-providers/service-providers-from-the-eea/

Regulatory complaints

1. Communicate with investors
2. Complaints to regulatory agencies
Tel: ( 371) 67774800
Fax: ( 371) 67225755
E-mail: [email protected] (Complaint E-mail)
Address: KunguStreet 1, Riga,LV 1050, LATVIA

Penalties

FKTK can impose penalties on licensed brokers, such as warnings, fines, suspension of licenses, revocation/cancellation of licenses, etc.

Contact information

Phone: ( 371) 67774800
Fax: ( 371) 67225755
E-mail: [email protected] (Complaint E-mail)
Address: KunguStreet 1, Riga,LV 1050, LATVIA

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