Published: 19.11.2022 Updated: 03.06.2024

Latvijas Banka, taking into account the findings in the course of considering an application submitted by a person for obtaining an operating licence or notification of an acquisition or increase in a qualifying holding in a financial and capital market participant, hereby points out that:

  • A person shall independently prepare (compile) all the documentation and information, which is relevant to provide evidence for legal origin of financial assets and adequacy of free capital. Please note that ''all the documentation and information'' means that the submitted information shall be complete and prepared correctly so that prevent a situation that initially only part of documents is submitted to Latvijas Banka for the assessment and during the assessment process of applications (notifications) extra time is required to submit additional evidence (notifications) for verifying compliance with regulatory requirements.
  • Latvijas Banka draws attention that when considering an application for issuing an operating licence to a financial and capital market participant or notification of acquisition or increase in a qualifying holding in a financial and capital market participant Latvijas Banka shall not be obliged to prove legal origin of financial assets held by a certain person or free capital adequacy in order to issue an administrative act to the benefit of the person. Latvijas Banka points out that evidence of legal origin of financial assets and free capital adequacy shall be known to the person when submitting all underlying documents as well as dates of certain transactions and their presentation in the financial statements have been known only to the person; in case they might be material in a certain administrative case the person itself shall submit them to Latvijas Banka to facilitate issuing favourable administrative act.

Also, a founder (shareholder) of the financial and capital market participant shall verify the origin of the funds that are invested in the share capital of financial and capital market participant, that allows Latvijas Banka to resolve any doubts as to legality of such funds as regards money laundering and terrorism financing.

  • Latvijas Banka shall be initially aware that a person cannot exercise its influence over a the market participant, performing via it transactions of unclear and doubtful legal purposes, which are therefore incompatible with the rights of the acquisition or increase of qualifying holding in a licensed market participant.
  • Considering impeccable reputation of founders (shareholders), Latvijas Banka shall take into account the person's integrity and strict adherence to obligations set in the regulatory enactments, namely, voluntary, comprehensible and timely action and provision of information that is not misleading.

Joint Guidelines

Above criteria are binding on Latvijas Banka and are based on the Joint Guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (JC/GL/2016/01) developed by the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority, prescribing that the impeccable reputation of person shall be verified by open, transparent and cooperative communication with supervisory authority (i.e. Latvijas Banka).