BANK OF LATVIA

Riga, 16 May 2013 Regulation No. 101


Regulation for Compiling Reports on Foreign Currency Purchases and Sales

(Unofficial translation)

Issued pursuant to
Paragraph 2 of Article 39 of the Law
"On the Bank of Latvia"

I. General Provisions

1. The Regulation stipulates the procedure for compiling and submitting reports on foreign currency purchases and sales (hereinafter, reports) to the Bank of Latvia by a credit institution registered in the Republic of Latvia and by a branch registered in the Republic of Latvia of a credit institution registered in a foreign country (hereinafter, a credit institution) as well as the report submission timeframe.

2. Terms used in the Regulation
2.1 Non-cash transaction – foreign currency purchase or sale executed without using cash.
2.2 Cash transaction – purchase or sale of cash foreign currency for cash; purchase or sale of cash foreign currency, transferring the purchased or sold currency to an account of a credit institution; purchase or sale of cash foreign currency using a payment card.
2.3 Weighted average exchange rate – foreign currency buying or selling rate calculated in accordance with Appendix 1 hereto.
2.4 Forward transaction – a forward transaction with a condition to purchase or sell currency on a definite future date at the exchange rate set at the moment the transaction is concluded as well as a non-deliverable forward, i.e. a transaction where physical delivery of the currency is not required and settlement is executed for the difference between the contracted exchange rate and the prevailing exchange rate on the settlement date.
2.5 Spot transaction – foreign currency purchase or sale executed within two working days of the moment of signing the contract. Spot legs of foreign exchange swaps, overnight swaps, and spot next swaps shall not be reported as spot transactions.
2.6 Foreign exchange swap – a transaction whereby the counterparties agree on an exchange of two currencies for a definite period of time (FX swap).

3. Other terms are used in the same meaning as in the Bank of Latvia's regulations stipulating the procedure for compiling and submitting monthly financial position reports of monetary financial institutions".

4. The Regulation has been developed for the purpose of compiling statistical information with regard to the foreign exchange market to be used in the analysis of foreign exchange market evolution and the developments in economy as well as to provide such information to other institutions and general public.

5. The Bank of Latvia may disclose the information provided in the report to the institutions referred to under Paragraph 2 of Article 40 of the Law "On the Bank of Latvia" subject to the requirements stipulated in the above law.

 

II. The procedure for compiling and submitting reports and the report submission timeframe

6. A credit institution shall compile the following reports:
6.1 "Report on Foreign Currency Purchases and Sales for Euro" (Appendix 2);
6.2 "Report on Foreign Currency Purchases and Sales for Foreign Currencies" (Appendix 3);
6.3 "Report on Cash and Non-Cash Foreign Exchange Transactions" (Appendix 4).

7. Credit institutions shall prepare reports for the calendar month and shall submit them to the Bank of Latvia within five business days after the end of reporting month.

8. Reports shall be submitted as electronic files in accordance with the Bank of Latvia's regulation stipulating the procedure for electronic exchange of information with the Bank of Latvia.

9. In the reports, foreign currency codes are used in accordance with the international standard ISO-4217 "Codes for the representation of currencies and funds".

10. The reports shall reflect the relevant transactions, such as spot transactions, foreign exchange swaps, forward transactions and transactions in other financial derivatives where a foreign currency or currency index is the underlying primary financial instrument, that are concluded in all currencies in the respective reporting month, irrespective of whether they are or are not executed or settled during the reporting month.

11. The amounts of foreign exchange swaps, forward transactions and transactions with other financial derivatives where a foreign currency or currency index is the underlying primary financial instrument shall be reported at their nominal or notional value on the transaction date.

12. The amounts of foreign currencies purchased and sold shall be reported in whole numbers, and the monthly weighted average exchange rate shall be presented as a decimal fraction with four digits after the decimal point.

III. The procedure for compiling the "Report on Foreign Currency Purchases and Sales for Euro"

 

13. In the "Report on Foreign Currency Purchases and Sales for Euro", a credit institution shall report transactions where foreign currency has been purchased or sold for the euro.

14. The amount of each foreign currency purchased and sold shall be reported in the respective currency, and the weighted average exchange rate shall be stated for cash and non-cash transactions separately in the report.

 

IV. The procedure for compiling the "Report on Foreign Currency Purchases and Sales for Foreign Currencies"

 

15. In the "Report on Foreign Currency Purchases and Sales for Foreign Currencies", a credit institution shall report transactions where foreign currency has been purchased or sold for another foreign currency.

16. In the report, the total amount of each foreign currency purchased and sold in the respective currency shall be reported, inter alia stating separately the respective amount of foreign currency purchased and sold for the US dollars.

17. Where two currencies are involved in the transaction, only the amount of currency sold or the amount of currency purchased shall be indicated in the report. A transaction where a vehicle/hub currencyis used (i.e. where three currencies are involved, one of them being the vehicle/hub currency) shall be reported as two separate transactions for the vehicle/hub currency.

 

 

V. The procedure for compiling the "Report on Cash and Non-Cash Foreign Exchange Transactions"

 

18. In the "Report on Cash and Non-Cash Foreign Exchange Transactions", a credit institution shall report cash and non-cash foreign currency purchases and sales in the breakdown by financial instrument used and by customer.

19. Spot, forward and foreign exchange swap transactions shall be reported separately. For spot transactions, cash and non-cash transactions shall be reported together. Transactions in other financial derivatives where a foreign currency or currency index is the underlying primary financial instrument shall not be reported separately but shall be included in the total transaction amount.

20. The total transaction amount, irrespective of the currency, shall be reported in the column "Total in all currencies".

21. Foreign currency purchases and sales for the euro shall be reported separately.

22. Foreign currency purchases and sales for euro shall be reported by currency pair as follows: US dollars for euro, the UK pounds sterling for euro and other currencies for euro. The total amount of these transactions shall be included in the total currency amount and shall be reported in the column "Total in all currencies".

23. Transactions shall be reported in the breakdown by counterparty according to the principle of residence, separately reporting transactions with MFIs (excluding the Bank of Latvia), transactions with other financial intermediaries, financial auxiliaries, insurance corporations and pension funds, transactions with the government, non-financial corporations, institutions serving households and foundations, and transactions with households.

24. Foreign exchange transactions shall be reported in the euro according to the accounting exchange rate of the respective currency on the last day of the reporting month.

25. The total value of foreign exchange transactions reported shall coincide with the sum of total amounts of the "Report on Foreign Currency Purchases and Sales for the Euro" and the "Report on Foreign Currency Purchases and Sales for Foreign Currencies", recalculated pursuant to the provisions of Paragraph 24 hereof.

26. The total amount of euro transactions shall coincide with the total amount of the "Report on Foreign Currency Purchases and Sales for Euro", recalculated pursuant to the provisions of Paragraph 24 hereof.

VI. Final provisions

27. For the December 2013 reports, the Bank of Latvia Council Regulation No. 41 the "Regulation for Compiling Reports on Foreign Currency Purchases and Sales"of 16 July 2009 shall be applicable. The reports herein shall have been submitted to the Bank of Latvia by 8 January 2014.

28. The Bank of Latvia Council Regulation No. 41 the "Regulation for Compiling Reports on Foreign Currency Purchases and Sales" of 16 July 2009 (Latvijas Vēstnesis, 2009, No. 116) shall be deemed invalid.

29. The Regulation shall take effect on the date as of which the Council of the European Union takes a decision to abrogate the derogation for the Republic of Latvia under Article 140(2) of the Treaty on the Functioning of the European Union.

 

Governor of the Bank of Latvia I. Rimsevics