Press Release of May 22, 2001
On July 1, 2001, a unitary financial supervisory authority, the Financial and Capital Market Commission (FCMC), will begin functioning in Latvia. It has been established to protect the interests of investors, depositors and the insured and to promote the development and stability of the financial and capital market.
The Commission has been established in accordance with the Law "On the Financial and Capital Market Commission" adopted by the Latvian parliament in June 2000. The experience of the Scandinavian countries has shown that as a financial market develops and its range of services provided expands, merging several financial supervisory authorities into one provides for more efficient supervision of the transactions in the financial sector, including an opportunity to assess market conditions more objectively and duly identify risk factors that could affect the interests of market participants and clients.
Until now, supervision of the financial market in Latvia has been performed by the Credit Institutions Supervision Department of the Bank of Latvia, Securities Market Commission and the Insurance Supervision Inspectorate.
A unitary system for supervision of capital market has been successful in the Scandinavian countries, Australia, Canada, Japan, Korea, Singapore and Great Britain. Of the Central and East European countries, it has already been introduced in Hungary, and the possibility of its introduction is currently being debated in Estonia.
The Law "On the Financial and Capital Market Commission" stipulates that once a year, the FCMC must file a full report on the situation in the financial and capital market with the Parliament and, once every quarter, submit a summary of the relevant information to the Governor of the Bank of Latvia and the Minister of Finance. The Commission will also see to publishing the information available for public disclosure, including posting it at the Commission's website, www.fk.lv. For full text of the Law "On the Financial and Capital Market Commission," please see the Bank of Latvia's website: www.bank.lv.
In its work, the Commission is guided by the principle of independent supervision that is provided for by the FCMC top management election procedure. The Commission is governed by a council of five. The chairperson and his/her deputy are appointed, for a term of six years, by the Parliament upon a joint recommendation of the Governor of the Bank of Latvia and the Minister of Finance. The other three members of the council, who are also directors of the Commission's departments, are appointed and dismissed by the chairperson of the FCMC who co-ordinates his/her decision with the Governor of the Bank of Latvia and the Minister of Finance. To promote the efficiency of capital market supervision, an additional body, Consultative Council, will be set up and charged with advisory functions. The Consultative Council will be comprised of the managers of the public organizations (professional associations) of the financial and capital market participants on the principle of parity.
In October 2000, the Parliament approved Finance Minister Gundars Berzins and Bank of Latvia Governor Einars Repse's choice for the top management of the FCMC: Uldis Cerps became chairman of the FCMC and Janis Brazovskis was appointed his deputy. Previously, Cerps was President of the Riga Stock Exchange simultaneously serving as deputy chairman of the Central Depository of Latvia and member of the board of the Latvian Development Agency. In addition to his duties as Deputy Chairman of the Commission, Janis Brazovskis continues to serve as deputy chairman of the Bank of Latvia Credit Institutions Supervision Department. Uldis Cerps has appointed Janis Placis, Ludmila Vojevoda and Gvido Romeiko members of the FCMC Council.
The Law "On the Financial and Capital Market Stipulates" that members of the FCMC Council simultaneously hold the posts of FCMC department directors: the posts of directors of Supervision, Legal and Licencing and Methods and Statistics departments will be Janis Placis, Gvido Romeiko and Ludmila Vojevoda, respectively. Their academic and work experience is as follows:
Janis Placis (b. 05.31.1951): higher education in economics. Currently, Head of the Credit Institutions Supervision Department of the Bank of Latvia.
Gvido Romeiko (b. 05.13.1959): higher education in law. Currenly, Head of the Insurance Supervision Inspectorate.
Ludmila Vojevoda (b. 05.14.1962): higher education in economics. Currently, Head of the Regulatory Requirements and Analysis Division of the Credit Institutions Supervision Department, Bank of Latvia.
The Commission will be financed as provided for in the Law "On the Financial and Capital Market Commission. Initially it will be financed from payments by the Bank of Latvia and insurance societies, as well as from the state budget, but as of January 1, 2007, all of its financing is to be drawn from payments of the financial and capital market participants. According to recent estimates, the annual cost of supervision of the financial and capital market is about 1.9 million lats.
FCMC's permanent address will be at Kungu iela 1, Riga. Until the Commission commences its work on July 1, 2001, it is housed at the Bank of Latvia, K. Valdemara iela 2a, Riga. It is expected that the Commission will relocate to Kungu 1, on September 1, 2001.
The Commission can be contacted at : +371 67022 326.