Translated by the Ministry of Finance
Consolidated version as of 04 December 2015
Law published in Valstybės Žinios (Official Gazette), 2007, No 17-627, identification code 1071010ISTA00X-1024
The new version of the Law as of 01 January 2012:
No XI-1672, 17/01/2011, Valstybės Žinios (Official Gazette), 2011, No 145-6818 (01/12/2011)
LAW ON MARKETS IN FINANCIAL INSTRUMENTS
OF THE REPUBLIC OF LITHUANIA
18 January 2007 No X-1024
Vilnius
Article 1. Purpose of the Law
1. The purpose of the present Law is to govern public relations with a view to ensuring a fair, open and efficient functioning of markets in financial instruments, protection of investor interests and the prudential management of systemic risk.
Article 2. Scope of the Law
1. The present law shall establish the requirements to be adhered by financial brokerage firms and regulated markets.
2. Certain requirements in cases specified in this Law shall be mutatis mutandis applied to licensed credit institutions providing investment services and (or) engaged in investment activities (hereinafter - credit institutions).
4. Requirements laid down in Chapters II and III of this Law shall not be applicable to:
2) persons who provide investment services exclusively for their parent undertakings, their subsidiaries or other subsidiaries of their parent undertakings;
3) persons providing an investment service where that service is provided in an incidental manner in the course of a professional activity and that activity is regulated by legal or regulatory provisions or a code of ethics governing the profession which do not exclude the provision of that service;
4) persons who do not provide any investment services or activities other than dealing on own account unless they are market makers or deal on own account outside a regulated market or an MTF on an organised, frequent and systematic basis by providing a system accessible to third parties in order to engage in dealings with them;
5) persons providing investment services consisting exclusively in the administration of employee-participation schemes;
6) persons who provide investment services which only involve both administration of employee-participation schemes and the provision of investment services exclusively for their parent undertakings, for their subsidiaries or for other subsidiaries of their parent undertakings;
7) the members of the European System of Central Banks, other national bodies performing similar functions and other public entities conducting or participating in the public debt management;
8) collective investment undertakings and pension funds regardless of whether their activities are regulated at EU level or not, and to depositaries and managers of such undertakings;
9) persons dealing on own account in financial instruments, or providing investment services in commodity derivatives or derivative contracts included in Article 3(4)(10) of this Law, provided this is an ancillary activity to their main business, when considered on a group basis, and that main business is not the provision of investment services and banking services;
10) persons providing investment advice when they are engaged in other types of professional activities falling outside the scope of this Law provided that the provision of such recommendations is not specifically remunerated;
11) persons whose main business consists of dealing on own account in commodities and/or commodity derivatives. This exception shall not apply where the persons that deal on own account in commodities and/or commodity derivatives are part of a group the main business of which is the provision of other investment services or banking services;
12) firms which provide investment services and/or perform investment activities consisting exclusively in dealing on own account on markets in financial futures or options or other derivatives and on cash markets for the sole purpose of hedging positions on derivatives markets, also firms which deal for the accounts of other members of those markets referred to in this paragraph or make prices for them and which are guaranteed by clearing members of the same markets, where responsibility for ensuring the performance of contracts entered into by such firms with the exception of the requirements set out in Article 121(8) of this Law;
Amendments to the Article:
No XII-1547, 1903/2015, published in TAR, 31/03/ 2015, identification code 2015-04840
13) associations set up by Danish and Finnish pension funds with the sole aim of managing the assets of pension funds that are members of those associations;
5. The rights granted by this Law shall not extend to the provision of investment services as counterparty in transactions carried out by legal entities performing the functions of public debt management, as well as the members of the European System of Central Banks performing the functions set out in the Treaty on the Functioning of the European Union and the Statute of the European System of Central Banks and of the European Central Bank, or equivalent functions in accordance with the national law of the Member States.
6. The provisions in paragraph 5 of this Article shall be applied to licensed credit institutions mutatis mutandis.
Article 3. Main Definitions
1. Home Member State:
1) in the case of a financial brokerage firm - shall be the Member State in which its head office is registered. Where a financial brokerage firm incorporated in another Member State, under its national law, has no registered office or a natural person operates under the rights of the financial brokerage firm - the Member State in which the registered office of the firm or a registered residence of a natural person is situated;
2) in the case of a regulated market – shall be the Member State in which the registered office of the regulated market is situated. Where the regulated market established in another Member State under the law of that Member State has no registered office - the Member State in which the registered office of the regulated market is situated;
3) in the case of a multilateral trading system – shall be the Member State in which the registered office of an operator of the multilateral trading system is situated. Where the operator of the multilateral trading system established in another Member State under the law of that Member State has no registered office - the Member State in which the registered office of the operator of the multilateral trading system is situated.
2. Multilateral trading facility (MTF) means a multilateral system operated by an investment firm or a market operator, which in accordance with non-discretionary rules brings together third-party buying and selling interests in financial instruments in a way that results in transactions in financial instruments.
3. Subsidiary undertaking means an undertaking as defined by the Law on Consolidated Financial Statements of Groups of Undertakings of the Republic of Lithuania (hereinafter - the Law on Consolidated Financial Statements of Groups of Undertakings).
4. The financial instrument means any of the following instruments:
4) options, futures, swaps, forward rate agreements and any other derivative contracts related to securities, currencies, interest rates or yields, as well as other derivatives, financial indices and measures for which it may be settled in cash or commodities;
5) options, futures, swaps, forward rate agreements and other derivative contracts related to commodities that must be settled in cash or may be settled in cash at the option of one of the parties (except for insolvency and dissolutions);
6) options, futures, swaps and other derivative contracts related to commodities and admitted to trading on a regulated market and (or) in the multilateral trading system that can be settled in goods;
7) options, futures, swaps, forwards and other derivative contracts related to commodities that can be settled in goods and which are not specified in paragraph 6 above provided not being for commercial purposes, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are cleared and settled through recognised clearing houses or are subject to regular margin calls. The definition of financial instruments provided for in this paragraph is established in Commission Regulation (EC) No 1287/2006 of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council concerning on record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading and defined terms for the purposes of that Directive (Regulation (EC) No 1287/2006);
10) options, futures, swaps, forward rate agreements and other derivative contracts related to climatic changes, freight rates, emission allowances, inflation rates or other official economic statistic indicators that must be settled in cash or may be settled in cash at the option of one of the parties to the transaction (excluding for insolvency and dissolutions), as well as other derivative contracts associated with the assets, rights, obligations, indices and other measures not specified in this paragraph, which have the characteristics of other derivative financial instruments, having regards to whether, inter alia, they are admitted to trading on a regulated market or an MTF and are cleared and settled through recognized clearing houses or are subject to regular margin calls. The definition of financial instruments provided for in this paragraph is established in Regulation (EC) No 1287/2006.
5. Management of the portfolio of financial instruments means the discretionary management of client portfolios, which contain one or more financial instruments according to an individual order of each client.
6. Financial instruments portfolio means the portfolio of financial instruments held by the investor.
7. Financial brokerage firm means a legal person whose regular business is the provision of one or more investment services to third parties and (or) the performance of one or more investment activities on a professional basis. Financial brokerage companies established in other Member States may not have the status of a legal person.
8. Qualifying holding of a financial brokerage firm means any direct or indirect holding or share of the capital or of the voting rights in a financial brokerage firm which represents not less than 1/10 of the capital or voting rights, or which makes it possible to exercise a significant influence over the management of a financial brokerage firm. In calculating whether a share of the company's capital or of the voting rights represents not less than 1/10 of the capital, the obligation to report the acquisition or loss of a qualifying holding and the procedure for calculation of the votes held by the person as laid down in the Law on Securities of the Republic of Lithuania should be regarded.
Amendments to the paragraph of the Article:
No XII-2076, 26/11/2015, published in TAR 03/12/2015, identification code 2015-19284
9. The branch of a financial brokerage firm means a department of the financial brokerage firm whose place of business is different from the registered office and which has no legal personality and which provides only the investment services and (or) activities, and which may also perform ancillary services for the financial brokerage firm has been authorised. All departments set up by the financial brokerage firm in the same host Member State shall be regarded a single branch.
10. Heads of a financial brokerage firm:
11. Close links means a situation in which two or more natural or legal persons are linked by:
1) participation which means the ownership, direct or by way of control, of at least 1/5 of the voting rights or capital of an undertaking;
2) control which means the relationship between a parent undertaking and a subsidiary arising on control basis, as well as other similar relationship between any natural or legal person and the firm, given the fact that any subsidiary undertaking of a subsidiary undertaking shall be regarded as a subsidiary of the first undertaking;
12. Investment recommendation means personal recommendation provided to the client at the initiative of the financial brokerage firm or a client on one or more transactions relating to financial instruments.
13. Investment services and investment activities (hereinafter – investment services) means any of the services or activities relating to one or more financial instruments, such as:
6) underwriting of financial instruments and (or) placing of financial instruments on a firm commitment basis;
14. Investor means a person who holds securities by the right of ownership or intends to acquire them.
15. United (consolidated) supervision means the supervision as defined by the Law on Financial Institutions of the Republic of Lithuania (hereinafter - the Law on Financial Institutions).
16. Client means a natural or legal person to whom a financial brokerage firm provides investment and (or) additional services.
17. Management company of a collective investment undertaking (hereinafter - the management company) - as defined in the Law on Collective Investment Undertakings of the Republic of Lithuania (hereinafter - the Law on Collective Investment Undertakings).
18. Control means a direct and (or) indirect decisive impact on the company, as defined in the Law on Consolidated Accounts of Entities.
20. Credit rating agency - as defined by Regulation (EC) No 1060/2009 of the European Parliament and of the Council (hereinafter - Regulation (EC) No 1060/2009) of 16 September 2009.
21. Persons of good repute mean both natural and legal persons:
1) having no criminal records for a major offence, or an offence or violation of the finance system, economic order, or business order, property, property rights or property interests;
2) having no criminal records for an offence or infringement not specified in item 1, or whose conviction has already expired or has been repealed;
4) whose members of the management bodies and natural and legal persons controlling the legal person are of good repute;
22. Retail client means a client that cannot be attributed neither to professional clients nor to eligible counterparties.
23. Central counterparty (CCP) - as defined in the Law on Settlement Finality in Payment and Securities Settlement Systems of the Republic of Lithuania.
24. Ancillary services means:
1) safekeeping, accounting and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management;
2) granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;
3) advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;
5) investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments;
7) investment services, investment activities as well as ancillary services relating to financial instruments, assets or other instruments to which the derivative financial instruments referred to in items 5, 6, 7 and 10 of par. 4 of this Article relate on condition that these are connected to the provision of investment services or ancillary services or the investment activity.
26. Execution of orders on the account of the client means acting to conclude agreements to buy or sell one or more financial instruments on the account of the client.
27. Transferable securities means the securities which are normally dealt in on the capital market (excluding instruments of payment), including but not limited to the following securities:
1) shares in companies and other securities equivalent to shares in companies, partnerships, and other entities, as well as depository receipts representing shares;
2) bonds and other forms of non-equity securities, including depositary receipts in respect of non-equity securities;
3) other securities conferring the right to acquire or transfer the transferable securities or underlying the cash-settlements determined having regard to the transferable securities, currencies or exchange rates, interest rates, yield of securities, stock exchange commodities, or other indices or instruments.
28. Money market instruments means those classes of instruments which are normally dealt in on the money market, such as treasury bills, certificates of deposit and short-term corporate promissory notes and excluding instruments of payment.
29. Supervisory authority means the Bank of Lithuania performing the functions of supervision of markets in financial instruments in the procedure laid down by this and other laws.
30. Host Member State means the Member State other than the home Member State in which a firm has established a branch or provides investment services and (or) activities without establishing a branch, or the Member State in which a regulated market provides appropriate arrangements so as to facilitate access to trading on its system by remote members or participants established in that same Member State.
31. Professional client means a client who possesses sufficient knowledge, skills and experience to make its own investment decisions and properly assess the risks that it incurs and meets the criteria set out for the professional clients referred to in Section III of Chapter II of this law.
32. Regulated market means a multilateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments - in the system and in accordance with its nondiscretionary rules - in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems.
33. Operator of a regulated market (hereinafter - the market operator) means a person or persons who manage and (or) operate a regulated market. The market operator may be the regulated market itself.
34. Limit order means an order to buy or sell a financial instrument at the price specified in the order or the better price, and for a specified quantity.
35. Market maker means a person who holds himself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against his proprietary capital at prices defined by him.
36. Dealing on own account means the conclusion of transactions in one or more financial instruments on its own account.
37. Systemic internaliser means a financial brokerage firm which, on an organised, frequent and systematic basis, deals on own account by executing client orders outside a regulated market or an MTF.
38. Systemic risk means a possibility that insolvency of one brokerage firm, a credit institution or investor may negatively affect the interests of a great number of brokerage firms, credit institutions or investors.
39. Harmonized collective investment undertaking - as defined in the Law on Collective Investment Undertakings.
40. Third party means a non-Member State of the European Union or non-member States of the European Economic Area.
41. Third-country supervisory authority means the authority that performs the functions of the supervisory authority referred to in this Law similar to the supervisory functions of the markets in financial instruments in the Non-Member State.
42. Member State means a Member State of the European Union, as well as the state of the European Economic Area.
43. Supervisory authority of the Member State means the authority performing the functions of supervision of the markets in financial instruments in the Member State similar to the functions of the supervisory authority referred to in this Law.
44. Inside information means information of a precise nature relating, directly or indirectly, to one or several issuers of financial instruments on the material events that have already or are planned to take place, which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or related derivative instruments where such information has not yet been made public. In relation to derivatives on commodities “inside information” means information of a precise nature relating, directly or indirectly, to one or more of such instruments and which the users of markets on which such instruments are traded would expect to receive in accordance with accepted market practices on those markets. For persons charged with the execution of orders concerning financial instruments, “inside information” also means information of a precise nature conveyed by the client, related to the client‘s orders, which relates directly or indirectly to one or more issuers or financial instruments, and which, if it were made public, would be likely to have a significant effect upon the price of the financial instruments concerned or the related derivative instruments.
45. Public disclosure means publication and provision of information on the website of the supervisory authority, unless otherwise provided in this Law.
46. European Banking Authority means the authority established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority) amending Decision No 716/200/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 2010, p. 12).
47. European Systemic Risk Board means the authority established by Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (OJ L 331, 2010, p. 1).
48. European Securities and Markets Authority means the authority established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 2010, p. 84).
49. For the purpose of this Law, the definitions provided in the Law on Financial Institutions and the Law on Financial Sustainability of the Republic of Lithuania, and Regulation (EU) No 575/2013 of the European Parliament and of the Council of 2013 July 26 on prudential requirements for credit institutions and investment firms, and amending Regulation (EU) No 648/2012 (OJ L 176, 2013, p. 1) (hereinafter - Regulation (EU) No 575/2013) shall apply.
Supplemented with a paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR 31/03/2015, identification code 2015-04840
Amendments to the paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios. (Official gazette), 2011, No 163-7770 (31/12/2011)
Article 4. Provision of Investment Services - Licensed Activities
1. Investment services on a regular and professional basis in the Republic of Lithuania may be provided only by financial brokerage firms holding a license of a financial brokerage firm issued by the Supervisory Authority or a supervisory authorities of another Member States, also credit institutions licensed in the Republic of Lithuania or another Member State provided the licence of a credit institution authorises the provision of investment services, and the financial advisor company holding a financial advisory company license issued by the Supervisory Authority.
2. An undertaking holding a license of a financial brokerage firm shall be called a financial brokerage firm. The words “financial brokerage firm” or similar combinations of these words may appear only in the names and advertisements of those undertakings, which have a right to provide investment services. Undertakings specializing in the management of securities portfolios of other persons may use in their titles the words “investment management firm” or similar combinations of these words.
3. Provisions of paragraph 1 of this Article shall not be applied to a market operator operating the MTF and not intending to provide other investment services. In such cases no license shall be issued to a market operator, however, the market operator shall be entitled to operate the multilateral trading facility only after the Securities Commission is satisfied that the market operator complies with the requirements established in this Section (except for those in Article 11 of the Law) and notifies the market operator thereof.
4. A financial brokerage firm and financial advisor company established in the Republic of Lithuania must have its registered office in the Republic of Lithuania.
5. The supervisory authority shall compile data and information on the entities referred to in paragraph 1 of this Article, and investment and ancillary services they are entitled to provide in the Republic of Lithuania. This information shall be constantly updated and made available on the Internet site of the Supervisory Authority.
6. A company holding a financial advisor license shall be called the financial advisor company. The words ‘financial advisor company’ or the combinations or derivatives thereof in its name and advertising may be used only by those companies authorised to engage in a financial advisory activities.
7. A financial advisory firm shall be authorised to provide investment services in the Republic of Lithuania specified in Article 3(13)(1)(5) of this Law on transferable securities and securities of collective investment undertakings without holding money or financial instruments of the clients and which for that reason may not at any time place themselves in debit with their clients and in the course of providing that service, are allowed to transmit orders only to:
3) branches of financial brokerage firms and credit institutions established in third countries, which are subject to less stringent requirements than those established by the European Union legislation;
4) collective investment undertakings authorised under the law of their home Member State to market securities of collective investment undertakings to public and their managers;
8. A financial advisor company shall be mutatis mutandis subject to the requirements established in Chapter II of this Law applicable to financial brokerage firms with the exceptions stipulated in this Law and the regulations passed by the Supervisory Authority.
9. The requirements laid down in Articles 12 and 15 of this Law shall not be applicable to a financial advisory company; however, it shall be required to acquire professional indemnity insurance. The amount of insurance shall be not less than EUR 29 000 per one insurable event and EUR 145 000 per year for all insurable events. A financial advisor company shall hold the insurance coverage for its entire operating time.
TAR note. The provisions of paragraph 9 shall apply to insurance contracts awarded as of 1 January 2015 (Law No XII-1103).
Amendments to the Article:
No XII-1103, 23/09/2014, published in TAR 02/10/2014, identification code 2014-13435
Article 5. Scope of the License of a Financial Brokerage Firm
1. The licence of a financial brokerage firm shall specify the investment services that the financial brokerage firm is authorised to provide. The licence may also specify one or several ancillary services. The licence of a financial brokerage firm may not be issued for the provision of the ancillary services only.
2. The Supervisory Authority shall issue a license of a financial brokerage firm to:
1) companies established in the Republic of Lithuania intending to engage in the activities of a financial brokerage firm;
3. Credit institutions established in the Republic of Lithuania shall be authorised to provide investment services under a credit institution license where this license does not set a restriction to engage in such activity. Credit institution established in the Republic of Lithuania may provide investment services by establishing a special internal unit. The Supervisory Authority shall assess the preparedness of a credit institution in question to provide investment services by establishing a special internal unit with that aim.
4. A financial brokerage firm or a credit institution intending to provide investment services and (or) ancillary services not provided for in the license issued thereto must apply to the supervisory authority issuing the license with a request to supplement the existing license by the investment and (or) ancillary services the brokerage firm or the credit institution intends to provide.
Article 6. The Procedure for Issuing the Licence
1. A firm willing to obtain a licence a financial brokerage firm shall file an application with the Supervisory Authority. The application shall contain the program of the intended activities (business plan), including a description of, inter alia, the areas of the intended activities and the organisational structure of the firm, also the information about the legal person, its participants, managers, operations, compliance with the capital requirements, and other information established by the Supervisory Authority upon the examination of which the Supervisory Authority could conclude that the firm complies with the requirements stipulated in this Section to obtain a financial brokerage firm license. Upon a request of the Supervisory Authority, public and local authorities shall submit all information at their disposal about the shareholders of the applicant, their financial standing, operations, the established infringements of laws and other legal acts, findings of inspections performed and other information necessary for passing the decision concerning the issue of the licence.
2. The Supervisory Authority shall issue the license for a financial brokerage firm only upon having fully satisfied itself that the firm meets the requirements for obtaining the license specified in this Section.
3. The Supervisory Authority shall inform the applicant firm about its decision to issue the license at least within six (6) months from the submission of all necessary documents and information.
4. The Supervisory Authority shall have the right to request the applicant to present additional data or clarification. In this case, the time limit for the examination of the application shall be calculated from the date of submission of the last documents or data.
5. The Supervisory Authority shall communicate granting or revocation of licenses to a relevant registrar of the Register of Enterprises and the European Securities and Markets Authority and make an appropriate announcement on the Internet website of the Supervisory Authority.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 7. The Basis for the Refusal to Issue the Licence
1. The Supervisory Authority shall have the right to refuse to issue a license of the financial brokerage firm provided that:
3) the intended changes of the managers of the firm pose a threat to the reliable and transparent management of the firm;
4) the firm fails to provide information about the firm's shareholders, holding of shares under their direct or indirect management, and the amount of such holdings;
5) there is a reason to believe that the holders of the block of shares of the firm will fail to ensure the reliable and transparent management of the firm;
6) a close link existing between the firm and other natural or legal persons might prevent effective supervision by the Supervisory Authority,
7) at least one of the employees of the firm is a member of the regulated market operating in the Republic of Lithuania or the Central Securities Depository of Lithuania (hereinafter - the Central Depository);
8) premises or equipment owned or rented are not suitable for carrying out investment activities and provision of investment services;
9) the head office of the firm established in the Republic of Lithuania is situated outside the territory of the Republic of Lithuania;
10) the requirements of the laws and legal acts governing the status of third party natural or legal persons with whom the firm is related by close links, or the implementation of those requirements may hamper effective supervision by the Supervisory Authority;
11) the firm fails to meet capital and (or) prudential requirements set out in this Law, Regulation (EU) No 575/2013 and other legislation;
Amendments to the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
13) the firm has not put in place the measures and procedures to ensure the compliance with organizational requirements for the financial brokerage firm;
2. The Supervisory Authority may refuse to issue a license to a financial brokerage firm authorised in a non-Member State if the Supervisory Authority has not entered into an agreement with the third party supervisory authority to ensure the proper supervision of activities and the provision of information.
Article 8. The Basis for the Revocation of the Validity of the License
The Supervisory Authority shall have the right to revoke the validity of the license issued to the financial brokerage firm where the financial brokerage firm:
2) within 12 months from the issuance of the license has not started to provide services defined in the license;
3) has not been providing investment services and engaged in investment activities in the course of the previous 6 months;
4) has obtained the license upon submission of false data or information, or having referred to other illegal measures;
6) has been severally and regularly infringing the requirements for the activities of the financial brokerage firm established by this Law;
7) fails to meet its obligations under its liabilities or there is evidence that it will not be able to do that in the future;
Article 9. Managers of a Financial Brokerage Firms
1. Managers of a financial brokerage firms must be persons of good repute and hold sufficient experience in order to ensure the sound and transparent management of the financial brokerage firm.
2. Where the market operator seeking to obtain a permission to operate a multilateral trading facility, and the multilateral trading facility he intends to operate are managed by the same persons managing the regulated market, such persons shall be deemed to comply with the requirements set out in paragraph 1 of this Article.
3. The financial brokerage firm licensed in the Republic of Lithuania must file with the Supervisory Authority an advance notification of all changes of the managers of the firm and to submit information defined by the Supervisory Authority needed to assess the compliance of the newly elected or planned to be elected managers with the requirements of good repute and sufficient experience. The newly elected managers of the financial brokerage firm shall commence performing their duties only after the Supervisory Authority approves their candidatures.
4. The Supervisory Authority shall have the right to refuse to approve the candidatures of the newly elected managers if such managers are not of good repute, do not hold sufficient experience or there are any other objective reasons to believe that the planned changes in the firm’s management pose a threat to the sound and transparent management of the comp. The Supervisory Authority shall pass a decision concerning the eligibility of the newly elected managers no later than within one month from the date of receipt of all required documents.
Article 91. Notice of Convening of an Extraordinary General Meeting of
Shareholders of the Financial Brokerage Firm
1. The general meeting of shareholders of the financial brokerage firm, which is subject to the condition specified in paragraph 2 of Article 121 of this Law, may decide by the majority of least 2/3 of all votes conferred by the shares of shareholders present at the meeting, that if the temporary administrator is appointed in accordance with Article 851 this law or the Supervisory Authority determines that the conditions referred to in paragraph 10 of Article 81 of this Law are fulfilled, and it is necessary to increase the authorized capital in order to avoid the conditions of restructuring defined in Article 42 of the Law on Financial Stability, the notice of convening of an extraordinary general meeting on increasing the share capital would be issued within a shorter period than that laid down in paragraphs 4, 5 and 6 of Article 26 or paragraphs 3, 4 and 5 of Article 261 of the Law on Companies, or take a decision on changing the statutes with the possibility of a shorter period of such notification. However, in any case, the notice on convening of an extraordinary general meeting must be issued at least 10 days before the meeting.
2. When the general meeting of the shareholders is convened at shorter terms, the provisions of Article 21 of the Law on Companies on the record date of the general meeting; the time limit to submit a proposal to supplement the agenda of the general meeting as set out in paragraph 3 of Article 25 and the obligation, not later than within 10 days prior to the general meeting of shareholders, to inform the shareholders about the additions to the agenda of the general meeting of shareholders established in paragraph 5 of the Law on Companies; and the requirement established in paragraph 7 of Article 26 of the Law on Companies to obtain the written consent of all shareholders to convene a general meeting of shareholders beyond the time limits as set out in paragraphs 4, 5 and 6 of Article 26 of the Law on Companies, shall not apply in the case referred to in paragraph 1 of this Article.
Supplemented by the Article:
No XII-2057, 24/11/2015, published in TAR, 02/12/2015, identification code 2015-19168
Article 10. Acquisition and Disposal of Shares in the Financial Brokerage Firm
1. Any natural or legal person or such persons acting in concert (hereinafter referred to as the proposed acquirer), willing directly or indirectly acquire a qualifying holding in an brokerage firm or increase the qualifying holding in a financial brokerage firm so as to reach or increase the proportion of the votes or the authorised capital he holds to the threshold of 20, 30 or 50 percent in an ascending order so as to make the financial brokerage firm its subsidiary (hereinafter referred to as the proposed acquisition) must obtain an approval of the Supervisory Authority not to oppose the proposed acquisition. Failure to comply with such a requirement shall not make the transaction invalid; however, it will cause the consequences set forth in paragraph 23 of this Article. Two or more persons shall be considered acting in concert in this Article who, based on concluded or implied oral or written agreement, exercise or seek to exercise their rights attached to any existing holding of the brokerage firm.
2. In determining whether the criteria for a qualifying holding in a brokerage company under this Article are fulfilled, the voting rights or shares of the financial brokerage firm hold after the provision of investment services (underwriting of financial instruments) on a firm commitment basis shall not be taken into account provided these rights are not exercised or otherwise used to intervene in the management of the issuer and provided they are disposed of within one year of the acquisition.
3. The acquirer must notify in writing the Supervisory Authority of the intended acquisition and indicate the size of the intended holding of a financial brokerage firm, and provide the supporting documents and other information and data specified by the Supervisory Authority.
4. A person willing directly or indirectly acquire a qualifying holding in a financial brokerage firm or reduce his qualifying holding in a financial brokerage firm so as to reach or reduce the proportion of the votes or the authorised capital he holds below the threshold of 20, 30 or 50 percent 20, 30 or 50 percent in a descending order so as the financial brokerage firm would cease to be its subsidiary must notify in writing the Supervisory Authority and indicate the size of the holding in the brokerage firm intended to be disposed of or reduced.
5. The Supervisory Authority shall establish a list of documents and data necessary to carry out the assessment of the acquirer and the proposed acquisition to be submitted along with the notification of the proposed acquisition. Documents and data specified in this list shall be proportionate and adapted to the acquirer and the proposed acquisition. The list shall not contain the documents and data that are not necessary to carry out the assessment of the acquirer and the proposed acquisition in accordance with the criteria set out in paragraph 10 of this Article.
6. Upon receipt of the notification on the proposed acquisition and subsequent documents and data referred to in paragraph 8 of this Article, the Supervisory Authority shall immediately but not later than within 2 working days acknowledge in writing their receipt and notify the acquirer of the date of expiry of the assessment period.
7. The Supervisory Authority shall have a maximum of 60 working days as from the date of the written acknowledgement of receipt of the notification and all documents and data required on the basis of the list referred to in paragraph 5 of this Article to carry out the assessment (hereinafter - the assessment period).
8. The Supervisory Authority may, during the assessment period, if necessary, and no later than on the fiftieth working day of the assessment period, request any further data and documents that is necessary to complete the assessment. Such request shall be made in writing and shall specify the additional information needed. For the period between the date of request for additional documents and data by the Supervisory Authority, and the receipt of a response thereto by the proposed acquirer, the assessment period shall be interrupted. The interruption shall not exceed twenty working days. In addition, the Supervisory Authority shall have the right, at its sole discretion, to request to re-submit additional documents and data, or to clarify them, but this may not result in an interruption of the assessment period.
9. The Supervisory Authority may extend the interruption of the assessment period referred to in paragraph 8 of this Article to a maximum of thirty working days provide the proposed acquirer is situated or regulated in a third country or not subject to supervision in accordance with national legislation regulating the activities of financial brokerage firms, management companies of harmonized collective investment undertakings, credit institutions, insurance companies and reinsurance companies.
10. When examining the notification referred to in paragraph 3 of this Article on the intended acquisition, and documentation and data necessary to carry out the assessment of the acquirer and the intended acquisition, the Supervisory Authority in order to ensure the sound and transparent management of the financial brokerage firm in which the acquisition or increase of a qualifying holding is proposed, and taking into account the potential impact of an acquirer on the financial brokerage firm, shall appraise its suitability and financial soundness of the acquisition against all of the following criteria:
2) the reputation and experience of any person who will manage the financial brokerage firm after the intended acquisition. The Supervisory Authority by appraising the good reputation and experience of the person who will manage the financial brokerage firm after the proposed acquisition will take into account the provisions of Article 9 of this Law;
3) the financial soundness of the proposed acquirer in particular in relation to the type of business pursued and envisaged in the financial brokerage firm in which the acquisition or increase of a qualifying holding is proposed;
4) whether the financial brokerage firm is able to comply with the prudential requirements, whether a structure of the group of which it will become part after the proposed acquisition makes it possible to perform effective supervision, to effectively exchange information among the Supervision Authority and supervision authorities of other Member States, and to determine the allocation of responsibilities among the Supervision Authority and supervision authorities of other Member States;
5) whether there are reasonable grounds to suspect that seeking to implement the proposed acquisition, money laundering or terrorist financing within the meaning of the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania (hereinafter - the Law on the Prevention of Money Laundering and Terrorist Financing) is being or has been committed or attempted, or that the proposed acquisition could increase the risk thereof.
11. The Supervisory Authority shall not be entitled to impose any prior terms and conditions in respect of the level of holding that must be acquired in the brokerage firm or to examine the proposed acquisition in terms of the economic needs of the market.
12. The Supervisory Authority shall be entitled to refuse to approve the proposed acquisition only if there are reasonable grounds for doing so on the basis of the criteria set out in paragraph 10 of this Article or if the acquirer has not submitted all the documents and data set out in paragraph 5 or 8 of this Article.
13. Before taking a decision on the proposed acquisition, the Supervisory Authority shall consult the supervisory authorities of other Member States provided the acquirer is a financial brokerage firm, a management company of the harmonized collective investment undertaking, a credit institution, insurance company, re-insurance company or the parent company or controlling person authorised in the Member State.
14. The Supervisory Authority according to paragraph 13 of this Article shall request the other supervisory authorities to provide all relevant information needed to assess the suitability of the acquirer and the financial soundness of the proposed acquisition, and shall immediately provide the other supervisory authorities with the requested information relevant to the assessment, and, on its own initiative, provide all information essential to the assessment.
15. Where the Supervisory Authority fails to oppose the proposed acquisition within the assessment period specified in paragraph 7 of this Article, it shall be deemed that the Supervisory Authority does not object to the proposed acquisition. Where the Supervisory Authority decides not to oppose the proposed acquisition before the end of the assessment period, it shall notify the acquirer within two working days of the decision taken in writing.
16. Where the Supervisory Authority decides not to oppose the proposed acquisition, it may determine the deadline for the implementation of the intended acquisition or increase of a holding in the brokerage firm and, if necessary, to extend it.
17. Where the Supervisory Authority decides to oppose the proposed acquisition after completing the assessment, it shall notify the acquirer about it in writing within two working days of adoption of the decision not exceeding the assessment period, and state the reasons of decision.
18. Any views and reservations received from other supervisory authorities in accordance with paragraphs 13 and 14 of this Article shall be provided in the decision of the Supervisory Authority on the proposed acquisition. The Supervisory Authority's decision to oppose the proposed acquisition may be appealed in court. The Supervisory Authority shall make public the decision and its reasons regardless of whether the acquirer’s consent is obtained. The Supervisory Authority shall be entitled not to publish its decision and reasons in cases where such disclosure would damage the market or cause disproportionate damage to the persons concerned.
19. Where the Supervisory Authority receives more than one notification on a proposed acquisition in the same financial brokerage firm, all the notifications shall be examined on the same basis without discrimination against the acquirers.
20. Where a financial brokerage firm becomes aware of any acquisitions or disposals of its holdings that cause holdings to exceed or fall below any of the thresholds referred to in the paragraph 1 of this Article, that brokerage firm must inform about it the Supervisory Authority without any delay.
21. A financial brokerage firm shall not less frequently than once a year furnish with the Securities Commission a notification specifying the shareholders of the firm holding its block of shares, and the amounts of the blocks of shares held thereby. The information shall be provided based on the data available at the date of the regular meeting of shareholders, and where the shares of the firm are admitted to trading on a regulated market – in compliance with the requirements of the legal acts applicable to companies whose securities are traded on a regulated market.
22. Where the impact produced by the persons specified in paragraph 1 of this Article poses a threat to the reliable and transparent management of the financial brokerage firm, the Supervisory Authority shall take measures to rectify the situation. In this case the Supervisory Authority shall issue the binding instructions and impose sanctions defined in this Law upon the managers and other persons responsible for the management of the firm.
23. All shares of the person who has acquired or increased a qualified holding in the financial brokerage firm exceeding the thresholds referred to in this Article without the decision of the Supervisory Authority not to oppose the proposed acquisition or the expiry of the deadline set forth in paragraph 7 of this Article (except for the case where the decision of the supervisory authority not to oppose the proposed acquisition is taken earlier) shall have no voting right at the general meeting of shareholders. The right to vote shall be again acquired on the date on which the decision of the Supervisory Authority not to oppose the proposed acquisition is received, or where the Supervisory Authority fails to oppose the proposed acquisition within the assessment period.
Article 11. Membership in the Recognised Investor Insurance System
1. An undertaking seeking to obtain a license of a financial brokerage firm shall insure the liabilities of the firm in respect of the investors in the procedure defined in the Law on Insurance of Deposits and Liabilities to Investors.
Article 12. Capital and Other Prudential Requirements
An undertaking seeking to obtain a license of a financial brokerage firm shall comply with the capital and other prudential requirements for financial brokerage firms established by the Law and Regulation (EU) No 575/2013.
Amendments to the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
Article 121. Initial Capital Requirements
1. The initial capital of the financial brokerage firm shall comprise the total amount of own funds as defined in one or more points of Article 26(1)(a-e) of Regulation (EU) No 575/2013.
2. The initial capital of the brokerage firms, with the exception of paragraphs 3, 4 and 6 of this Article, shall not be less than EUR 730 000.
3.The initial capital of financial brokerage firms that do not have the right to provide investment services referred to in Article 3(13)(3) or (6), but safe-keep client funds or financial instruments and provide one or more investment services referred to in Article 3(13)(1)(2)(4) shall be not less than EUR 125 000.
4. The initial capital of the brokerage firms that do not have the right to provide the investment services referred to in Article 3(13)(3) or (6), as well as to safe-keep client funds or financial instruments shall be not less than EUR 50 000.
5. In determining the size of the initial capital in accordance with paragraphs 3 and 4 of this Article, the positions in financial instruments in order to invest own funds shall not be considered as an investment service as referred to in Article 3(13)(3) of this Law.
6. Financial brokerage firms referred to in Article 4(1)(2)(c) of Regulation (EU) No 575/2013 must meet one of the following requirements:
2) have professional indemnity insurance covering the entire period of their activities throughout the territory of the European Union, or some other comparable guarantee against liability for damage amounting to at least one million euros per insured event and in aggregate EUR 1 500 000 per year for all insurable events;
7. Where the firm referred to in Article 4(1)(2)(c) of Regulation (EU) No 575/2013 also carries insurance and reinsurance mediation in accordance with the procedure laid down in the Law on Insurance of the Republic of Lithuania, it shall, in addition to the requirements set out for this activity in the Law on Insurance of the Republic of Lithuania, meet one of the following requirements:
2) have professional indemnity insurance covering the entire period of their activities throughout the territory of the European Union, or some other comparable guarantee against liability for damage amounting to at least EUR 500 000 per insured event and in aggregate EUR 750 000 per year for all insurable events;
8. Firms referred to in Article 2(4)(12) of this Law must have EUR 50 000 of initial capital if they provide investment services in other European Union member states by establishing or non-establishing a branch.
Supplemented by the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
Article 122. Capital Reserves
1. Financial brokerage firms which are authorized to provide investment services referred to in Article 3(13)(3)(6) of this Law shall calculate and create the following capital reserves:
2. The amount of capital reserves and the methodology for their calculation shall be determined in accordance with Regulation (EU) No 575/2013 and legislation of the Supervisory Authority.
Article 13. Organisational Requirements
1. A financial brokerage firm shall put in place an appropriate activity organisation policy and procedures able to ensure the compliance with the requirements stipulated in this Law of the financial brokerage firm, its managers, employees and agents, and the rules governing the conclusion of the deals at own account by the managers, employees and agents of the financial brokerage firm.
Amendments to the Article:
No XII-1547, 19/03/2015, published in TAR 31/03/2015, identification code 2015-04840
2. A financial brokerage firm shall maintain and operate the efficient organisational and administrative measures aimed at preventing the conflicts of interests adversely affecting the interests of its clients.
3. A financial brokerage firm shall enforce measures necessary to ensure a regular and continuous provision of investment services. For that purpose, the financial brokerage firm shall employ the appropriate and proportionate systems, resources and procedures.
4. When entrusting a third person to perform the functions of the financial brokerage firm which are critical for the provision of continuous and satisfactory service to clients, shall refer to all measures necessary to avoid any undue additional operational risk. Outsourcing of important operational functions may not be undertaken in such a way as to impair materially the quality of its internal control of the financial brokerage firm and the efficient supervision to be exercised by the Supervisory Authority.
5. A financial brokerage firm shall have sound administrative and accounting procedures, internal control mechanisms, effective procedures for risk assessment, effective control and safeguard arrangements for information processing systems.
6. The financial brokerage firm shall ensure the safekeeping of the documents related to the provided investment services or the transactions concluded to enable the Supervisory Authority to ensure an efficient supervisions, and in particular to ascertain that the financial brokerage firm has complied with all obligations set out in this Law with respect to clients or potential clients.
7. A financial brokerage firm shall, when holding financial instruments belonging to clients, make adequate arrangements to safeguard clients' ownership rights, especially in the event of the brokerage firm's insolvency. The accounts of the financial brokerage firm and its clients shall be kept separate. The financial brokerage firm shall not be entitled to use the financial instruments belonging to the client except with the client's express consent.
8. A financial brokerage firm shall, when holding funds belonging to clients, make adequate arrangements to safeguard the clients’ rights and, except in the case of licensed credit institutions, prevent the use of client funds for its own account. A financial brokerage firm must hold clients’ funds in credit institution on a trust basis segregated from its own funds. Clients’ funds transferred to the financial brokerage firm for the purpose of acquisition of financial instruments and clients’ funds generated from the sale of financial instruments owned by the client shall be the client's property upon which no enforcement may be levied in respect of the indebtedness of the financial brokerage firm.
9. When the investment services are provided by a branch of a financial brokerage firm established in another Member State, the Supervisory Authority shall supervise how the branch complies with the obligations set out in paragraph 6 of this Article without prejudice to the supervisory authority of the home Member State of the firm to obtain the documents referred to in paragraph 6 of this Article.
10. Requirements set out in paragraph 6 of this Article shall be implemented in accordance with the rules laid down in Regulation (EC) No 1287/2006.
Article 14. Brokers
1. A natural person who holds a broker’s license issued by the Supervisory Authority or other qualification recognized by the Supervisory Authority entitling him may engage in one or more brokerage activities (hereinafter - the broker).
2. A person applying for a broker’s license must pass an examinations organized by Supervisory Authority. The Supervisory Authority shall have the right to establish educational and professional requirements for applicants. A broker’s license may not be issued to a person whose reputation is not impeccable.
3. The Supervisory Authority shall have the right to revoke a broker’s license:
3) where a broker within 12 months has not engaged in professional activities related to the market in financial instruments or its supervision indicated in the rules for issuing licenses of financial brokers, and approved by the Supervisory Authority, or if it does not been engaged in it for more than 12 months;
4) where after the issuance of the license the facts which are subject to refuse to issue a license are revealed;
4. The revocation of a broker’s license shall result in the suspension of the existing license of the brokerage firm at which the broker is employed provided the firm no longer qualifies for the licence it has been issued.
5. The Supervisory Authority shall have the right to conduct, from time to time but no more frequently than once a year, re-evaluation of brokers‘ qualifications on the basis of grounded complaints of clients or data of inspections evidencing inadequate qualifications of a broker. On the basis of the results of the qualifications‘ re-evaluation, the number of functions which the broker is authorised to perform may be reduced and where it turns out that the brokers‘ qualifications are completely inadequate or where he does not participate in the re-evaluation, his license shall be revoked.
Article 15. Accounting, Auditing and Profit Allocation of Financial Brokerage Firms
1. A financial brokerage firm must keep records and prepare financial statements in accordance with the laws of the Republic of Lithuania, other legislation and international accounting standards.
2. The procedure for the auditing of financial brokerage firms, the requirements for auditors and audit firms, obligations and responsibilities of auditors and audit firms shall be governed by the Law on Audit and the Law on Financial Institutions of the Republic of Lithuania and Article 79 of this Law.
3. Paragraph 1 of this Article shall apply mutatis mutandis to the market operator and the Central Depository.
Article 16. Additional Requirements for Brokerage Firms and Market Operators of
The Multilateral Trading Facility
1. Financial brokerage firms and market operators operating a multilateral trading system, in addition to the requirements laid down in Article 13 of this Law shall have transparent and non-discretionary rules and procedures that provide for fair and orderly trading, and establish objective criteria for the efficient execution of orders.
2. Financial brokerage firms and market operators operating a multilateral trading system shall put in place transparent rules for the establishment of criteria under which the financial instruments may be admitted to trading in the system.
3. Financial brokerage firms and market operators operating a multilateral trading system shall ensure the public disclosure of information enabling the members of the multilateral trading system to pass informed investment decisions having regard to the position in the market of the participants of the multilateral trading system and the types of financial instruments traded in the system.
4. The requirements defined in Articles 22, 24 and 25 of this Law shall not apply to transactions concluded under the rules governing the operations of the multilateral trading facility where the transaction involves only the members or participants of the system, or only the system itself and its members or participants. Nevertheless, the members and the participants of the multilateral trading facility shall comply with the requirements in respect of the clients laid down in Articles 22, 24 and 25 of this Law when executing the orders in the multilateral trading system on the account of the client.
5. Financial brokerage firms and market operators operating a multilateral trading system shall approve and enforce the transparent rules based on objective criteria establishing the requirements to market participants seeking the membership in the system. The rules shall comply with the requirements laid down in paragraph 3 of Article 56 of this Law.
6. Financial brokerage firms and market operators operating a multilateral trading system shall furnish the members of the system with all the necessary information about their duties related to the settlement of the transactions concluded thereby in the system. Financial brokerage firms and market operators operating a multilateral trading system shall enforce efficient measures or enter into appropriate arrangements facilitating the settlement for the transactions concluded in the system including the arrangements with the central counterparty and the clearing and settlement system.
7. Where the transferable securities admitted to trading on a regulated market are traded in the multilateral trading facility without the consent of the issuer, the issuer shall not be subject to any obligation of the initial, periodic or the on-going information disclosure applicable in the system.
8. Financial brokerage firms and market operators operating a multilateral trading system shall immediately comply with the instructions of the Supervisory Authority concerning the suspension or termination of trading in financial instruments.
Article 17. Consultations of Supervisory Authorities Prior to Issuing the Licence of a Financial Brokerage Firm
1. Prior to issuing a license of a financial brokerage firm the Supervisory Authority shall seek the opinion of the supervisory authority of another Member State where the firm seeking the licence of a financial brokerage firm is:
1) a subsidiary of a financial brokerage firm or credit institution licensed in another Member State;
2) a subsidiary of the parent undertaking of a financial brokerage firm or credit institution licensed in another Member State;
2. Prior to issuing the licence of a financial brokerage firm the Supervisory Authority shall request the opinion of the authority supervising the credit institutions or insurance companies where the financial brokerage firm applying for the licence is:
2) a subsidiary of the parent undertaking of a credit institution or insurance undertaking licensed in the European Union;
3. The Supervisory Authority shall in particular seek the opinion of the supervisory authority referred to in paragraphs 1 and 2 of this Article when assessing the suitability of the holders of the block of shares of the firm seeking the licence and the reputation and experience of the managers of the entities of the same group. The Supervisory Authority shall exchange all information necessary for the assessing the suitability of the holders of the block of shares of the firm seeking the licence and the reputation and experience of the managers of the entities of the same group both for the granting of a license as well as for the ongoing assessment of compliance with operating conditions of the brokerage firm.
Article 18. Powers of the Supervisory Authority in Specifying the Procedures for
Licensing of Financial Brokerage Firms and the Financial Advisor Company and the Requirements for Obtaining the Licence
In specifying the provisions of this Section, the Supervisory Authority shall establish:
3) the procedure for the submission of notifications on the acquisition and the disposal of a block of shares of financial brokerage firms and the notifications on the crossing of the thresholds of voting rights granted by shares established by this Law;
5) rules relating to the organisation and operation of financial brokerage firms specifying the organizational requirements set out in Article 13 of this Law;
Article 19. The Duty of a Financial Brokerage Firm to Ensure the Compliance with
the Requirements for Obtaining the Licence
1. A financial brokerage firm licensed in the Republic of Lithuania shall ensure the continuous compliance with the requirements for obtaining a financial brokerage firm licence established by this Law.
2. The fulfilment of the duty established in paragraph 1 of this Article shall be supervised by the Supervisory Authority. A financial brokerage firm shall notify the Supervisory Authority of all changes in the circumstances effective at the moment of the issue of the licence.
Article 20. The Duty to Ensure Continuous Compliance with the Requirements to the
Activity of a Financial Brokerage Firm and Provide Periodic Information
1. A financial brokerage firm licensed in the Republic of Lithuania providing the investment services in the Republic of Lithuania, also branches of the financial brokerage firms licensed in another Member State providing investment services in the Republic of Lithuania shall at all times meet the requirements established for the activity of a financial brokerage firm laid down in this Section.
2. The compliance with the duty established in paragraph 1 of this Article shall be monitored by the Supervisory Authority. For the performance of the supervisory functions the Supervisory Authority shall exercise the rights granted thereto in accordance with Article 71 of this Law.
3. A financial brokerage firm shall, in the manner and in cases established by the Supervisory Authority submit the capital adequacy calculation statement, interim financial statements, annual report and other documents prescribed by the Supervisory Authority.
4. A financial brokerage firm shall in the cases and following the procedure established by the Supervisory Authority disclose publicly the information about its activities.
5. The Supervisory Authority shall specify the duties set out in paragraphs 3 and 4 of this Article.
Article 21. The Duty to Avoid Conflicts of Interest
1. A financial brokerage firm shall take all reasonable steps to identify conflicts of interest between the firm and other financial brokerage firms, including their managers, employees and tied agents, or any person directly or indirectly linked to them by control and their clients, or between one client and another that arise in the course of providing any investment and ancillary services, or combinations thereof.
2. Where the arrangements made by a financial brokerage firm in accordance with Article 13(2) of this Law to manage the conflicts of interest are not sufficient to ensure that risks of damage to client interests will be prevented, the financial brokerage firm shall clearly disclose the general nature and/or sources of conflicts of interest to the client before the provision of investment and (or) auxiliary services.
Article 22. Duties of a Financial Brokerage Firm when Providing Investment Services
to Clients
1. When providing investment services and/or ancillary services to clients, a financial brokerage firm shall act honestly, fairly and professionally in accordance with the best interests of its clients and comply, in particular, with the requirements set out in this Article.
2. All information, including marketing communications about the nature of the activity of the firm and the services offered addressed by the firm to clients or potential clients shall be fair, clear and not misleading. Marketing communications shall be clearly identifiable as such.
3. A financial brokerage firm shall, in a comprehensive and understandable form, provide to the clients and the potential clients all information so that the clients are reasonably able to understand the nature of financial service and the financial instruments and the risks related thereto, and, consequently, to take investment decisions on an informed basis. This information may be provided in a standardised format.
4. When fulfilling the requirements defined in paragraph 3 of this Article the financial brokerage firm shall provide the information about:
2) financial instruments and proposed investment strategies, including advice and warnings of the risks associated with investments in certain financial instruments and in respect of particular investment strategies or;
5. Prior to the provision of the investment services to the client including investment advice and/or the management of financial instruments portfolio the financial brokerage firm shall collect about the client or a potential client:
1) knowledge and experience in the investment field relevant to the specific investment services or financial instruments;
6. Having collected and property assessed the information specified in paragraph 5 of this Article, the financial brokerage firm shall recommend to the client or a potential client the investment services and financial instruments that suit their interests the best.
7. Prior to providing the investment services other than those referred to in paragraphs 5 and 10 of this Article, the financial brokerage firm shall ask the client or a potential client to provide information regarding his knowledge and experience in the investment field relevant to the specific type of product or service offered by the financial brokerage firm or demanded by the potential client. Having regard to the information received the financial brokerage firm shall assess whether the specific investment services or financial instruments are appropriate for the client.
8. In case the financial brokerage firm considers, on the basis of the information indicated in paragraph 7 of this Article, that the investment service or financial instrument is not appropriate to the client or a potential client, the financial brokerage firm shall warn the client or a potential client. This warning may be provided in a standardised format.
9. In cases where the client or a potential client elects not to provide the information referred to in paragraph 7 of this Article, or where he provides insufficient information regarding his knowledge and experience, the financial brokerage firm shall warn the client or a potential client that the client's refusal to provide the required information or the lack of all the required information will not allow the firm to determine whether the investment services and financial instruments are appropriate for him. This warning may be provided in a standardised format.
10. A financial brokerage firm when providing investment services that only consist of execution and/or the reception and transmission of client orders with or without ancillary services, may provide those investment services to their clients without the need to obtain the information about the client’s knowledge and expertise in the area of investment or make the determination concerning the suitability of the investment services or the financial instruments to the client provided all the following conditions are met:
1) the above services relate to shares admitted to trading on a regulated market or in an equivalent third country market, money market instruments, bonds or other forms of securitised debt, excluding those bonds or securitised debt that embed a derivative, UCITS and other noncomplex financial instruments;
3) a client or a potential client has been informed that a brokerage firm in provision of investment services is not required to assess the suitability of financial instruments and services provided or offered, and that therefore the client does not benefit from the protection of client's interests established by this Law which is provided for the provision of other investment services. This warning may be provided in a standardized form;
11. A financial brokerage firm shall retain the documents that set the contractual relations between the firm and the client, their mutual duties and obligations, other terms on which the firm will provide services to the client. The rights and duties of the parties to the contract may be incorporated by reference to other documents or legal texts.
12. The client must receive from the financial brokerage firm adequate reports on the service provided to its clients. These reports shall include, where applicable, the costs associated with the transactions and services undertaken on behalf of the client.
13. In cases where an investment service is offered as part of a financial product which is already subject to other provisions of Community legislation or common European standards related to credit institutions and consumer credits with respect to risk assessment of clients and/or information requirements, this service shall not be additionally subject to the obligations set out in this Article.
Article 23. Provision of Investment Services through the Medium of another
Financial Brokerage Firm
1. A financial brokerage firm, having received an instruction of another financial brokerage firm (a mediating firm) to perform investment or ancillary services on behalf of a client of the mediating firm, shall have a right to relay on the information about the client transmitted by the latter company (including the information about the client’s knowledge, and experience in the file of investment, financial situation, objectives sought thereby through the use of the investment services). The mediating firm will remain responsible for the completeness and accuracy of the information transmitted.
2. A financial brokerage firm, having received an instruction of another financial brokerage firm (a mediating firm) to perform investment services on behalf of a client of the mediating firm, shall also be able to rely on any recommendations in respect of the service or transaction that have been provided to the client by the mediating firm. The mediating firm will remain responsible for the appropriateness for the client of the recommendations or advice provided.
3. A financial brokerage firm which receives client instructions from a mediating firm shall remain responsible for concluding the service or transaction, based on any such information or recommendations, in accordance with the relevant provisions of paragraphs 1 and 2 of this Article.
Article 24. Obligation to Execute Orders on Terms Most Favourable to the Client
1. When executing the order of the client the financial brokerage firm shall take all reasonable steps to obtain the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. Nevertheless, whenever there is a specific instruction from the client the investment firm shall execute the order following the specific instruction.
2. When performing the duty established in paragraph 1 of this Article, the financial brokerage firm shall establish and implement an order execution policy, to allow them to obtain, for their client orders, the best possible result, also put in place and implement the effective arrangements for the implementation of the order execution policy.
3. The order execution policy shall include, in respect of each class of instruments, information on the different venues where the financial brokerage firm executes its client orders and the factors affecting the choice of execution venue. It shall at least include those venues that enable the financial brokerage firm to obtain on a consistent basis the best possible result for the execution of client orders.
4. The financial brokerage firm shall provide appropriate information to their clients on their order execution policy. Prior to starting to execute the orders of the client, the financial brokerage firm shall obtain the client's consent to the execution policy.
5. Where the order execution policy provides for the possibility that client orders may be executed outside a regulated market or an MTF, the financial brokerage firm shall, in particular, inform its clients about this possibility. The financial brokerage firm shall obtain the prior express consent of their clients before proceeding to execute their orders outside a regulated market or an MTF. Such consent may be either in the form of a general agreement or in respect of individual transactions.
6. The financial brokerage firm shall monitor the effectiveness of their order execution arrangements and execution policy in order to identify and, where appropriate, correct any deficiencies. In particular, the firm shall assess, on a regular basis, whether the execution venues included in the order execution policy provide for the best possible result for the client or whether they need to make changes to their execution arrangements. The financial brokerage firm shall notify clients of any material changes to their order execution arrangements or execution policy.
7. The financial brokerage firm shall be able to demonstrate to their clients, at their request, that they have executed their orders in accordance with the firm's execution policy.
Article 25. Other Requirements Related to the Execution of the Client Orders
1. Prior to executing the orders of the clients on their behalf, the financial brokerage firms shall put in place and implement the procedures and arrangements which provide for the prompt, fair and expeditious execution of client orders, relative to other client orders or the trading interests of the investment firm. These procedures or arrangements shall allow for the execution of otherwise comparable client orders in accordance with the time of their reception by the financial brokerage firm.
2. In the case of a client limit order in respect of shares admitted to trading on a regulated market which are not immediately executed under prevailing market conditions, financial brokerage firms are, unless the client expressly instructs otherwise, to take measures to facilitate the earliest possible execution of that order by making public immediately that client limit order in a manner which is easily accessible to other market participants. This obligation is considered complied with where the limit order is transmitted for the execution to the regulated market and/or MTF.
3. The obligation provided in paragraph 2 of this Article shall be waived where the limit order of the client is large in scale compared with normal market size as determined under Article 58(3) of this Law.
4. The authorisation of a spouse to conclude the deals in respect of financial instruments that are the object of the joint common property of the spouses and that are publicly offered and /or traded on a regulated market and /or the MTF, may be issued in a regular written form.
5. The requirements set out in this Article shall be implemented in accordance with the rules laid down in Regulation (EC) No 1287/2006.
Article 251. Notification on Infringements of the Financial Brokerage Firm
A financial brokerage firm must have in place appropriate procedures for its employees to report the managers of the financial brokerage firm or other authorized persons on committed or possible infringement of this law, its implementing legislation and Regulation (EU) No 575/2013 through a specific, independent and autonomous channel. The financial brokerage firm may involve third parties for the implementation of this requirement. These measures shall be subject to requirements set out in paragraphs 2, 3 and 4 of Article 731 of this Law.
Supplemented by the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
Article 26. Powers of the Supervisory Authority Securities in Specifying the
Requirements for the Operations of a Financial Brokerage Firm
For the purpose of the specifying the provisions of this Section, the Supervisory
Authority in the elaboration of the provisions of this section shall approve:
1) the rules on the avoidance and management of conflicts of interest;
2) the rules for the acceptance and execution of investment services and client’s orders.
Article 27. Professional clients without a Separate Acknowledgement
1. Professional clients without a separate acknowledgement shall be deemed to include:
1) licensed and /or otherwise regulated entities operating in the financial markets: credit institutions, financial brokerage firms, other licensed and /or regulated financial institutions, insurance companies, collective investment undertakings and the management companies thereof, pension fund and the management companies thereof, commodity and commodity derivative dealers, own-account future dealers and other institutional investors. The professional clients specified in this item include the entities licensed and/or regulated in the Member States of the European Union or third countries;
2) large undertakings meeting at least two of the following criteria: the balance sheet total – not less than 20 m EUR; net sales revenues not less than 40 m EUR, own funds – not less than 2 m EUR;
3) national and regional governments, public bodies that manage public debt, Central Banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB and other similar international organisations;
2. Where the client of a financial brokerage firm is an undertaking referred to in paragraph 1 of this Article, the financial brokerage firm must inform it prior to the provision of investment services and (or) auxiliary services that, on the basis of the information available to the firm, the client is deemed to be a professional client, and it will be deprived of certain investor protection measures, unless the financial brokerage firm and the client agree differently otherwise.
3. Upon a choice of the professional clients referred to in paragraph 1 of this Article, they may be deprived of all or certain investor protection measures, indicated in Articles 22 and 24 and Article 25 (2) and (3) of this Law.
4. The financial brokerage firm must also inform the customer that he can request a variation of the terms of the investment service agreement in order to secure a higher degree of protection.
5. The entities referred to in paragraph 1 of this Article shall have a right to apply to the financial brokerage firm and abdicate their status as a professional client. In this case, the financial brokerage firm shall be under obligation to apply all the investor protection measures available to non-professional clients.
6. It is the responsibility of the client of the financial brokerage firm, considered to be a professional client, to choose a level of protection applicable to it if it deems it is unable to properly assess or manage the risks involved.
7. This higher level of protection will be provided when a professional client enters into a written agreement with the investment firm to the effect that it shall not be treated as a professional for the purposes of the applicable investor protection measures. Such agreement should specify whether this applies to one or more particular services or transactions, or to one or more types of product or transaction.
Article 28. Persons Who May be Treated as Professional Clients on Request
1. Clients of the financial brokerage firm not indicated in Article 27 of this Law also other public legal and private persons and private investors in the manners stipulated in this Article shall be allowed to waive some of the protections stipulated in Articles 22 and 24 and Article 25 (2) and (3) if they are recognised to be professional clients provided the clients comply with the criteria indicated in paragraph 3 of this Article and the procedures stipulated in this Article are complied with.
2. Any such waiver of the protection afforded to a client recognised as a professional client shall be permitted only where the financial brokerage firm upon an assessment of the expertise, experience and knowledge of the client and having regard to the nature of the envisaged services and transactions is reasonably assured that the client is capable of independently and reasonably making own investment decisions and understanding the risks involved. These clients should not, however, be presumed to possess market knowledge and experience comparable to that of the categories of professional clients listed in Article 27 of this Law. The expertise and the knowledge may be assessed by means of a fitness test applied to managers and directors of financial institutions. In the case of small firms, the person subject to the above assessment should be the person authorised to carry out transactions on behalf of the firm.
3. In order to be recognised to be a professional the client shall comply with at lest two of the following criteria:
1) over the previous four quarters the client in the relevant market has carried out, on average, 10 transactions of significant size;
2) the size of the client's financial instrument portfolio including cash funds exceeds EUR 500 000;
4. The clients complying with the criteria defined in paragraph 3 of this Article may be deprived of certain investor protection measures on the condition that:
1) the client must state in writing to the financial brokerage firm that he wishes to be treated as a professional client, either generally or in respect of a particular investment service or transaction, or type of transaction or financial instrument;
2) the financial brokerage firm must give them a clear written warning of the protections (including the investment insurance) rights he may lose;
5. Prior to recognising the person to be a professional client and deciding to accept a request for waiver, the financial brokerage firm shall ensure that the client meets the requirements stipulated in this Law.
6. A financial brokerage firm shall implement appropriate written internal policies and procedures to categorise clients. Professional clients are responsible for keeping the firm informed about any change, which could affect their current categorisation. Should the financial brokerage firm become aware, however, that the client no longer fulfils the initial conditions, which made him eligible for a professional treatment; the financial brokerage firm must take appropriate action and apply to the client all investor protection safeguards.
Article 29. Transactions Executed with Eligible Counterparties
1. A financial brokerage firms authorised to execute orders on behalf of clients and/or to deal on own account and/or to receive and transmit orders, shall have a right to enter into transactions with eligible counterparties without being obliged to comply with the obligations under Articles 22 and 24 and Article 25(2) and (3) of this Law in respect of those transactions or in respect of any ancillary service directly related to those transactions.
2. For the purpose of this Article the eligible counterparties shall include financial brokerage firms, credit institutions, insurance companies, UCITS and their management companies, pension funds and their management companies, other financial institutions authorised or regulated under Community legislation or the national law of a Member State, undertakings referred to in items 11 and 12 of paragraph 4 of Article 2 of this Law exempted from the application of Chapters II and III of this Law, national governments and their corresponding offices including public bodies that deal with public debt, central banks and supranational organizations.
3. Classification of a person as an eligible counterparty shall be without prejudice to the right of such person to be applied all measures of investor protection including those stipulated in Articles 22, 24 and 25 of this Law. Such a request may be in a general form or on a trade-by-trade basis.
4. As eligible counterparties may be recognised other undertakings complying with the criteria established by the Securities Commission. In the event of a transaction where the prospective counterparties are located in different jurisdictions, the financial brokerage firm shall defer to the status of the other undertaking as determined by the law or measures of the Member State in which that undertaking is established.
5. Prior to the conclusion of a transaction with the eligible counterparty or mediating for the execution of such transaction the financial brokerage firm shall obtain an express confirmation from the prospective counterparty that it agrees to be treated as an eligible counterparty. This confirmation may be submitted either in the form of a general agreement or in respect of each individual transaction.
6. As eligible counterparties may be recognised entities from third countries where they perform similar functions and / or is engaged in an activity referred to in paragraph 2 of this Article. As eligible counterparties may be recognised the entities of third countries provided they meet the requirements under paragraph 4 of this Article.
Article 30. Powers of the Supervisory Authority in Specifying the Procedure for the
Provision of Investment Services to Individual Client Categories
For the purpose of specifying the provisions of this Section the Supervisory Authority shall establish the rules governing the specific features of the provision of investment services to professional clients and eligible counterparties.
Article 31. The Duty of a Financial Brokerage Firm to Uphold Integrity of Markets,
Report Transactions and Maintain Records
1. A financial brokerage firm shall act honestly, fairly and professionally and in a manner which promotes the integrity of the market in financial instruments.
2. A financial brokerage firm shall keep for a period of at least 10 years the relevant data and documents relating to all transactions in financial instruments which they have carried out, whether on own account or on behalf of a client, if necessary, can be immediately submitted to the Supervisory Authority. In the case of transactions carried out on behalf of clients, the records shall contain all the information and details of the identity of the client, supporting documents, as well as the data and the information required by the Law on the Prevention of Money Laundering and Terrorist Financing should be kept separately.
3. Having executed a transaction in any financial instruments admitted to trading on a regulated market a financial brokerage firm shall without delay, but in any case not later than the end of the next working day report on the transaction to the Supervisory Authority in the manner prescribed by the Supervisory Authority. This obligation shall apply whether or not such transactions were carried out on a regulated market. The Supervisory Authority shall make the necessary arrangements in order to ensure that the information on the executed transactions is communicated to the supervisory authority of the most relevant market in terms of liquidity for those financial instruments.
4. The report indicated in paragraph 3 of this Law shall contain the information about the financial instruments being the object of the transaction, the quantity, date and time of the transaction, transaction price and the data on the financial brokerage firm submitting the notification.
5. The report about the transaction executed may be made by the competent authority itself, a third party acting on its behalf, the trade-matching or reporting system approved by the Supervisory Authority or by a regulated market or MTF though whose systems the transaction was completed. In cases where transactions are reported directly to the competent authority by a regulated marker, an MTF or a trade-matching or reporting system approved by the Supervisory Authority, the obligation stipulated in paragraph 3 of this Article shall be waived.
6. In cases a branch of a financial brokerage firm licensed in other Member State established in the Republic of Lithuania submits a report on the transaction concluded to the Supervisory Authority, the Supervisory Authority shall transmit this information to the competent authorities of the home Member State of the financial brokerage firm unless such authorities decide that they do not want to receive such communications.
7. The requirements set out in this Article shall be implemented in accordance with the rules laid down in Regulation (EC) No 1287/2006.
Article 32. Monitoring of Compliance with the Rules of the MTF and with Other Legal Obligations
1. Financial brokerage firms and market operators operating an MTF shall establish and maintain effective arrangements and procedures, relevant to the MTF, for the regular monitoring of the compliance by its users with its rules. Financial brokerage firms and market operators operating an MTF shall monitor the transactions undertaken by their users under their systems in order to identify the breaches of those rules, disorderly trading or conduct that may involve market abuse.
2. Financial brokerage firms and market operators operating an MTF shall report to the Supervisory Authority all the significant breaches of its rules, disorderly trading conditions or conduct that may involve market abuse. Financial brokerage firms and market operators operating an MTF shall supply to the supervisory authority all the information relevant for the investigation and prosecution of market abuse and provide full assistance to the latter in investigating and prosecuting market abuse occurring on or through its system.
3. Financial brokerage firms and market operators operating an MTF in accordance with the procedure established by the Supervisory Authority and the approved form shall submit the information on daily trading and other changes in transactions, the orders submitted, trade statistics, information on financial instruments that are admitted to trading on a multilateral trading facility, calculated indices of financial instruments and members of the multilateral trading facility.
Article 33. Obligation of Systematic Internalisers to Make Public the Quotes
1. Financial brokerage firms acting as systematic internalisers in respect of share admitted to trading on a regulated market and for which there is a liquid market shall make public a firm quote in those shares. In the case of shares for which there is not a liquid market systematic internalisers shall disclose quotes to their clients on request.
2. The provisions of this Article shall be applicable to systematic internalisers when dealing for sizes up to standard market size. Systematic internalisers that only deal in sizes above standard market size shall not be subject to the provisions of this Article.
3. Systematic internalisers may decide the size or sizes at which they will quote. The quote shall include a firm bid and/or an offer price or prices for a size or sizes which could be up to standard market size for the class of shares to which the share belongs. The price or prices shall also reflect the prevailing market conditions for that share.
4. Shares shall be grouped in classes on the basis of the arithmetic average value of the orders executed in the market for that share. The standard market size for each class of shares shall be a size representative of the arithmetic average value of the orders executed in the market for the shares included in each class of shares.
5. The market for each share shall be comprised of all orders executed in the European Union in respect of that share excluding those large in scale compared to normal market size for that share.
6. The Supervisory Authority being the supervisory authority of the most relevant market in terms of liquidity (as set forth in Article 31 of the Law) and having regard to the arithmetic average value of the orders executed in the market in respect of that share shall not less frequently than once a year shall determine the class of shares to which it belongs. This information shall be made public to all market participants on the website of the Supervisory Authority and transmitted to the European Securities and Markets Authority.
7. Systematic internalisers shall make public their quotes on a regular and continuous basis during normal trading hours. Such quotes may be at any times modified or updated. Under exceptional market conditions such quotes may be withdrawn.
8. The quote shall be made public in a manner which is easily accessible to other market participants on a reasonable commercial basis.
9. Systematic internalisers shall, while complying with the provisions set down in Article 24 of this Law execute the orders they receive from their retail clients in relation to the shares for which they are systematic internalisers at the quoted prices at the time of reception of the order.
10. Systematic internalisers shall, while complying with the provisions set down in Article 24 of this Law execute the orders they receive from their retail clients in relation to the shares for which they are systematic internalisers at the quoted prices at the time of reception of the order. However, they may execute those orders at a better price in justified cases provided that this price falls within a public range close to market conditions, and the order size exceeds the size of the orders, which generally are provided by retail investors.
11. Furthermore, systematic internalisers may execute orders they receive from their professional clients at prices different than their quoted ones without having to comply with the conditions established in par. 10 of this Article, in respect of transactions where execution in several securities is part of one transaction or in respect of orders that are subject to conditions other than the current market price
12. Where a systematic internaliser who quotes only one quote or whose highest quote is lower than the standard market size receives an order from a client of a size bigger than its quotation size, but lower than the standard market size, the firm may decide to execute part of the order which exceeds its quotation only at the quoted price, except in cases provided for in paragraphs10 and 11 of this Article, where a deviation from the quoted price may be allowed. Where a systematic internaliser is quoting in different sizes and receives an order between those sizes, which it chooses to execute, it shall execute the order at one of the two quoted prices in compliance with the requirements of Article 25 of this Law, except in cases provided for in paragraphs 10 and 11 of this Law.
13. The Supervisory Authority shall check that the financial brokerage firms acting as systematic internaliser regularly update bid and/or offer prices published in the manner defined in par. 1 of this Article, maintain prices that reflect the prevailing market conditions and that the firm complies with the requirements under par. 10 of the Law on the terms of price improvement. When exercising its supervisory duties the Securities Commission shall have a right to issue binding instructions and other rights specified in this Law and in other regulations.
14. A systematic internaliser on the basis of its commercial policy and having regard to the objective criteria shall have a right to decide which investors shall be given access to their quotes. To that end the firm shall approve the rules for governing access to their quotes.
15. A systematic internaliser on the basis of commercial considerations such as the investor credit status, the counterparty risk and the final settlement of the transaction may refuse to enter into or discontinue the business relationships with investors.
16. In order to limit the risk of being exposed to multiple transactions from the same client systematic internalisers shall be allowed to limit in a non-discriminatory way the number of transactions from the same client which they undertake to enter at the published conditions. Furthermore, the firm shall have a right, in a non-discriminatory way and in accordance with the provisions of Article 25 to limit the total number of transactions from different clients at the same 29 time provided that this is allowable only where the number and/or volume of orders sought by clients considerably exceeds the norm.
17. Requirements set out in this Article shall be implemented in accordance with the rules laid down in Regulation (EC) No 1287/2006.
18. Requirements set out in this Article shall apply mutatis mutandis to licensed credit institutions.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 34. Post-Trade Disclosure by Financial Brokerage Firms
1. A financial brokerage firm having on own account or on behalf of the clients concluded transactions in shares admitted to trading on a regulated market outside the regulated market or MTF shall make public the volume and price of those transactions and the time at which they were concluded. This information shall be made public as close to real-time as possible, on a reasonable commercial basis, and in a manner which is easily accessible to other market participants.
2. The information which is made public in accordance with paragraph 1 and the time-limits within which it is published comply with the requirements adopted pursuant to Article 59. Provisions of Article 59 for deferred reporting for certain categories of transaction in shares shall apply mutatis mutandis to those transactions when undertaken outside regulated markets or MTFs.
3. Requirements set out in this Article shall be implemented in accordance with the rules laid down in Regulation (EC) No 1287/2006.
Article 35. Pre-trade Disclosure Requirements for Multilateral Trading Facilities
1. A financial brokerage firm and market operator operating an MTF shall make public current bid and offer prices in respect of shares admitted to trading on a regulated market. A financial brokerage firm and market operator operating an MTF shall provide for this information to be made available to the public on reasonable commercial terms and on a continuous basis during normal trading hours specifying the total number of orders and the number of related shares under each price level and the five best bid and ask offers.
2. Based on the market model and the type and size of orders the Supervisory Authority shall have a right to waive the obligation established in paragraph 1 of this Article. Such waiving of the obligation shall be in particular waived to orders that are large in scale compared with normal size for the share or type of share in question.
3. Requirements set out in this Article shall be implemented in accordance with the rules laid down in Regulation (EC) No 1287/2006.
Article 36. Post-Trade Disclosure Requirements for Multilateral Trading Facilities
1. A financial brokerage firm and market operator operating an MTF shall make public the information about the transactions executed under its system specifying the price and the quantity of the shares transferred under each transaction and the time of execution of such transaction. This information shall be without delay made public on a reasonable commercial basis, as close to real-time as possible.
2. The requirement established in paragraph 1 of the Article shall not apply to transactions concluded on an MTF that are made public under the systems of a regulated market.
3. Based on the type and size of the concluded transactions the Supervisory Authority may authorise the deferred publication of the information referred to in par. 1 of this Article. In particular, the Securities Commission may authorise the deferred publication in respect of transactions that are large in scale compared with the normal market size for that share or that class of shares. A market operator operating an MTF shall obtain the Supervisory Authority’s prior approval to proposed arrangements for deferred trade-publication and the information about such transactions shall be clearly disclosed to market participants and investors.
4. Requirements set out in this Article shall be implemented in accordance with the rules laid down in Regulation (EC) No 1287/2006.
Article 37. Provision of Investment Services by Financial Brokerage Companies
Established in the Republic of Lithuania in Another Member State Without Establishing a Branch
1. A financial brokerage firm wishing to start providing the investment services in another Member State for the first time or which wishes to change the range of services or activities so provided, shall communicate to the Securities Commission the Member State in which it intends to operate or change the range of the investment services already provided, submit the programme of operations stating in particular the investment services as well as ancillary services which it intends to perform.
2. Upon the receipt of the information specified in paragraph 1 of this Article the Supervisory Authority shall communicate such information to the supervisory authority of the host Member State. The financial brokerage firm shall be authorised to start providing the investment services and the ancillary services in another Member State without establishing a branch within one month from the submission of all necessary documents and the information to the Supervisory Authority.
3. In the event of a change in any of the data or information referred to in paragraph 1, a financial brokerage firm shall give written notice of that change to the Supervisory Authority not later than one month before implementing the change. The Supervisory Authority shall communicate this information to the supervisory authority of the host Member State.
4. A financial brokerage firm licensed in the Republic of Lithuania and a market operator operating a MTF intending to make appropriate arrangements in another Member State designed to facilitate the becoming by persons established in those Member State members of the multilateral trading facility or the remote use or participants thereof shall inform the competent authority in which Member State it intends to make such arrangements. The Supervisory Authority shall communicate this information, within one month, to the supervisory authority of the host Member State. Upon a request of the supervisory authority of the host Member State, the Supervisory Authority within a reasonable delay shall communicate the identity of the members of this MTF.
Article 38. The Right of Financial Brokerage Firms Established in another Member
State to Provide Investment Services in the Republic of Lithuania without Establishing a Branch
1. A financial brokerage firm established in another Member State shall have a right to provide investment and the ancillary services in the Republic of Lithuania without establishing a branch provided the specific investment services and the ancillary services are covered by the licence of the firm issued by the supervisory authority. Ancillary services may be provided only where at least one investment service is provided.
2. A financial brokerage firm established in another Member State shall have a right to provide investment services or modify the range of the services already provided thereby in the Republic of Lithuania without establishing a branch after the Supervisory Authority receives a notification letter of the supervisory authority of the financial brokerage firm notifying that the firm intends to start providing the investment services or change the range thereof in the Republic of Lithuania and containing the programme of operations stating in particular the investment services as well as ancillary services which it intends to perform. The Supervisory Authority shall make this information public not later than within 3 working days.
3. In the event of a change in any of the data or information referred to in paragraph 2 of this Article a financial brokerage firm shall give written notice of that change to the supervisory authority of the home Member State. The Supervisory Authority shall have a right to receive the documents certifying the change in the information concerned.
4. A financial brokerage firm licensed in another Member State and a market operator operating a MTF shall have a right to take measures facilitating the becoming by the legal persons established in the Republic of Lithuania members of the multilateral trading facility or the remote use thereof.
Article 39. The Right of Financial Brokerage Firms Established in the Republic of
Lithuania to Provide Investment Services in another Member State by Establishing a Branch
1. A financial brokerage firm intending to establish a branch in another member State shall submit to the Supervisory Authority a notification specifying:
2) a programme of operations setting out inter alia the investment services and/or activities as well as the ancillary services to be offered and the organisational structure of the branch and indicating whether the branch intends to use tied agents;
2. In cases where a financial brokerage firm established in the Republic of Lithuania uses a tied agent established in another Member State, such tied agent shall be assimilated to the branch and shall be subject to the provisions of this Law regulating the operations of the branch of the financial brokerage firm.
3. The Supervisory Authority shall not later than within 3 months from the receipt of the information specified in paragraph 1 of this Article shall communicate such information to the supervisory authority of the host Member State and shall notify the financial brokerage firm that had filed the notification except the cases where the Supervisory Authority has reasons to doubt the adequacy of the administrative structure or the financial situation of the financial brokerage firm taking into account the activities envisaged. Furthermore, the Supervisory Authority shall communicate the information about the officially established investor insurance system to which the financial brokerage firm establishing a branch is a member.
4. In the event of any changes in the particulars as per paragraph 1 of this Article the financial brokerage firm shall inform in writing the Supervisory Authority not later than within one month from the implementation of the planned changes. The Supervisory Authority shall communicate this information to the supervisory authority of the host Member State.
5. Where the Supervisory Authority establishes that the management structure of the financial brokerage firm or its financial situation taking into account the activities envisaged are inadequate, the Supervisory Authority shall refuse to communicate the information specified in paragraph 1 of this Article to the supervisory authority of the home Member State and notifies accordingly the financial brokerage firm that had submitted the notification within the time limits indicated in paragraph 3 of this Article.
6. A branch of a financial brokerage firm shall be established and shall start its operations after the firm receives a notification from the supervisory authority of the host Member State certifying the receipt of the communicated information of within two months after the communication of the information by the Securities Commission without a receipt of any notification.
Article 40. The Right of Financial Brokerage Firms Established in Other Member
States to Provide Investment Services in the Republic of Lithuania by Establishing a Branch
1. A financial brokerage firm established in another Member State shall have a right to provide investment and the ancillary services in the Republic of Lithuania by establishing a branch provided that the right to provide the services in question is are covered by the licence of the financial brokerage firm. Ancillary services may be provided only where at least one investment service is provided.
2. A branch of a financial brokerage firm shall be established and shall commence its operations in the Republic of Lithuania after the supervisory authority of the financial brokerage firm communicates to the Supervisory Authority the notification containing the information specified in Article 39(1) of this Law. Upon the receipt of this notification the Supervisory Authority shall take all the preparatory arrangements for the supervision of the financial brokerage firm and the operational requirements established in public interest that the financial brokerage firm shall have to comply with and shall notify the financial brokerage firm accordingly not later than within 2 months. The branch may be established after the financial brokerage firm receives such notification of the Supervisory Authority and in case it does not receive such notification – within two months after the Supervisory Authority has communicated to the Supervisory Authority the information specified in this paragraph.
Article 41. Access of a Financial Brokerage Firm to the Regulated Market Operating
in another Member State
1. A financial brokerage firm established in another Member State and authorised to execute client orders or to deal on own account shall have a right to become a member of the regulated market operating in the Republic of Lithuania – both directly, by setting up a branch in the Republic of Lithuania, and indirectly, by becoming a remote member of or having a remote access to the regulated market unless trading procedures and the systems of the regulated market are such that the conclusion of the transactions on the market require the physical presence therein.
2. The provisions of paragraph 1 of this Article shall be mutatis mutandis applicable to any financial brokerage firm established in the Republic of Lithuania intending to become a member of a regulate market operating in another Member State.
Article 42. The Right of a Financial Brokerage firm To Become a Member of
the Central Counterparty, Clearing and Settlement System and Select a Settlement System
1. A financial brokerage firm established in another Member State, with a view to providing for or arranging the clearing and/or settlement in respect of transactions in financial instruments shall have a right to become a member of the central counterparty and the clearing and settlement system operating in the Republic of Lithuania. These rights shall be enforced on the basis of non-discriminatory, transparent and objective criteria applicable to financial brokerage companies established in the Republic of Lithuania. The Membership in these systems may not be limited to transactions in financial instruments concluded on the regulated market or an MTF operating in the Republic of Lithuania.
2. A regulated market operating in the Republic of Lithuania shall ensure its members the right to select a settlement system for conducting settlement for the transactions in financial instruments concluded on the regulated market subject to:
1) such links and arrangements between the designated settlement system and any other system or facility ensure the efficient and economic settlement for the transactions in question, and
3. The approval by the Supervisory Authority as referred to in par. 2 of this Article is without prejudice to the competencies of the central banks of other Member States and overseers of settlement systems and other supervisory authorities of such systems. In order to avoid undue duplication of control prior to expressing its approval in question the Supervisory Authority shall take into account the results of the oversight of the central banks and other important aspects related to the supervision of the settlement system exercised thereby.
4. The rights of financial brokerage companies stipulated under this Article shall be without prejudice to the right of operators of central counterparty, clearing or securities settlement systems to refuse a request of a financial brokerage firm to use the services provided thereby provided such refusal is based on legitimate commercial grounds.
Article 43. The Right of Financial Brokerage Companies and Market Operators
Operating the Multilateral Trading Facility to Select the Central Counterparty and the Clearing or Settlement System
1. A financial brokerage firm established in the Republic of Lithuania or a market operator operating a multilateral trading facility shall have a right to enter into appropriate arrangements with a central counterparty or clearing house and a settlement system of another Member State with a view to providing for the clearing and (or) settlement of some or all trades concluded by market participants under their systems.
2. The Supervisory Authority may not oppose the use of the central counterparty, the clearing house and (or) the settlement systems of the other Member States by a financial brokerage firm or a market operator established in the Republic of Lithuania except where this is demonstrably necessary in order to maintain the orderly functioning of that multilateral trading facility taking into account the provisions of Article 42(2) of this Law.
3. In order to avoid undue duplication of control the Supervisory Authority shall take into account the supervision of the clearing and settlement system by the national central banks of the Member States or by other supervisory authorities.
Article 44. Licensing and Applicable Law
1. The right to engage in the activities of an operator of a regulated market in the Republic of Lithuania shall be granted only to public companies whose managed trading systems operate under the licence of a regulated market issued by the supervisory authorities.
2. The licence of a regulated market shall be issued provided the Supervisory Authority is fully satisfied that both the market operator and the trading systems of regulated market and other systems comply with the requirements laid down in this Section of this Law.
3. A public company under incorporation or an operating public company intending to engage in the regulated market operator activity shall furnish with the Supervisory Authority:
1) an application specifying the purpose of the establishment of the regulated market operator, the name, registered office, data about the incorporators (shareholders) and managers;
3) the operational programme, specifying, inter alia, the types of the activities intended and the organisational structure of the market operator;
4. Upon receipt of all required documents the Supervisory Authority shall within three months issue the licence or present in writing a reasoned refusal to issue the licence. The Supervisory Authority may require the company to issue additional information or present an explanation of the data already submitted. In this case the time limit for the consideration of the application shall be calculated from the date when the last data or documents were filed.
5. The licence of a regulated market shall be issued only provided the Supervisory Authority `having considered all the documents required concludes that at the time of the issue of the licence all the initial requirements set out in this Section for the operations of a regulated market are being complied with.
6. The operator of a regulated market shall comply with the organisational and performance requirements (including the initial requirements for obtaining the licence of the regulated market) and ensure that the regulated market operated thereby meets other requirements laid down in this Chapter.
Article 45. Grounds for the Refusal of Issuing of a Licence of the Regulated Market
The Supervisory Authority shall have a right to refuse to issue the licence of a regulated market where:
1) Articles of Association of the operator of the regulated market, the Memorandum of Association, rules of the regulated market or other documents submitted contradict the laws of the Republic of Lithuania or other legislation;
3) the program of operations of the regulated market is not sufficient to ensure that the regulated market properly performs its functions;
4) the holders of the shareholding of the applicant fail to meet the requirements under Article 50 of this Law;
Article 46. Basis for the Withdrawal of the Licence of the Regulated Market
1. The Supervisory Authority shall have a right to withdraw the licence of the regulated market issued thereby where the operator of the regulated market:
1) within twelve months from issuance of the licence expressly renounces the licence or within six months does not exercise the rights conferred by the licence;
2. The Supervisory Authority shall inform the European Securities and Markets Authority of any withdrawals of validity of the license of a regulated market.
Amendments to the Article:
No XI-1881, 22/11/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 47. Duties of the Operator of the Regulated Market
1. The operator of the regulated market shall:
1) organise trading in financial instruments, their admission and quoting in the regulated market, safe and efficient conclusion of the transactions and settlements;
2) promote fair trade in financial instruments and seek to prevent market manipulation and other unfair actions;
3) make public the information ensuring the compliance with the pre-trade or post-trade transparency requirements applied to the regulated market;
2. The operator of the regulated market shall have a right to engage only in such activities that are directly related to the activities specified in the licence of the regulated market and the duties related as stipulated in this Law.
3. The Code of Governance of a company admitted to trading on a regulated market shall be drafted and approved by the operator of the regulated market. Prior to the approval of such Code of Governance the operator of the regulated market shall obtain the endorsement of the Supervisory Authority.
4. The operator of the regulated market shall notify the Supervisory Authority in the manner established thereby of:
5. The operator of the regulated market shall submit to the Supervisory Authority in the procedure laid down and approved by it the information on daily trading and other changes about transactions concluded during the trading session, orders submitted to the trading session, trading session statistics, financial instruments included in the regulated market, the issuer whose financial instruments are included in the regulated market, indices of financial instruments and the members of the regulated market.
6. In respect of the operator of the regulated market the Supervisory Authority shall establish the capital requirements and investment restrictions. The operator of a regulated market must submit to the Supervisory authority in the prescribed manner the report for calculating capital adequacy, financial statements and other documents specified by the Supervisory Authority.
Article 48. Management of the Operator of the Regulated Market
Article 49. Managers of the Operator of the Regulated Market
1. Managers of the operator of the regulated market shall be persons of impeccable repute and sufficiently experienced to ensure the sound and prudent management of the regulated market. The operator of the regulated market shall provide to the Supervisory Authority the information about the managers of the operator of the regulated market and any subsequent changes in the information provided.
2. The Supervisory Authority shall have a right to refuse the approval of the proposed managers of the operator of the regulated market where there are grounds for believing that they pose a material threat to the sound and prudent management and operation of the regulated market.
Article 50. Requirements to Persons Having Significant Influence on the
Management of the Regulated Market
1. The persons who, directly or indirectly, have a significant influence on the management of the regulated market shall be suitable for the position and to out the functions allocated having regard to their reputation, education, knowledge, experience and other significant characteristics, as well as the potential influence upon the management of the regulated markets.
2. The operator of the regulated markets shall:
1) submit to the Supervisory Authority and make public the information about the shareholders of the regulated market and the operator of the regulated market, also the information about other persons having a significant influence upon the management of the regulated market, including the identities of the persons and the disclosure of the interest to exercise the influence;
3. The Supervisory Authority shall have a right to object to the replacement of the proposed managers having a significant influence upon the management of the regulated market and (or) the operator of the regulated market where there are grounds for believing that they pose a material threat to the transparent and reliable management of the regulated market.
Article 51. Acquisition of a Qualifying Holding of an Operator of the Regulated
Market
1. A qualifying holding of the operator of the regulated market shall be acquired and transferred following the same procedure as established for the acquisition or transfer of a qualifying holding of a financial brokerage firm.
Article 52. Organisational Requirements Applicable to the Operator of the Regulated
Market
The operator of the regulated market shall put in place:
1) to have proper arrangements and procedures to identify and manage the potential adverse consequences for the operation of the regulated market or for its participants, of any conflict of interest between the interest of the regulated market, its owners or its operator and the sound functioning of the regulated market, and in particular where such conflicts of interest might prove prejudicial to the accomplishment of any functions of the regulated market;
2) to be adequately equipped to manage the risks which are characteristic to the operation of the regulated market, to use appropriate arrangements and systems to identify and measures to mitigate all significant risks to its operations;
3) to have arrangements for the sound management of the technical operations of the system, including the effective arrangements to eliminate unforeseen systems disruptions;
4) to have transparent and non-discretionary rules and procedures that provide for fair and orderly trading and establish objective criteria for the efficient execution of orders;
5) to have effective arrangements to facilitate the efficient and timely finalisation of the transactions executed under the systems of regulated markets;
Article 53. Rules of the Regulated Market and the Fulfilment of the Obligations
Provided Therein and Other Legal Acts
1. The regulated market shall establish and maintain transparent and non-discriminatory rules, based on objective criteria, and drafted and approved by the operator of the regulated market. Prior to the approval of such rules the operator of the regulated market shall obtain the endorsement thereof by the Supervisory Authority. The Rules of the regulated market may consist of a single document or several individual documents.
2. The regulated market shall establish and implement effective arrangements and procedures for the regular monitoring of the compliance by their members with the rules of the regulated market. Regulated markets shall monitor the transactions undertaken by their members under the trading system of the regulated market in order to identify breaches of those rules, disorderly trading conditions or conduct that may involve market abuse.
3. The operators of the regulated markets must report significant breaches of the rules of the regulated market, disorderly trading conditions or conduct that may involve market abuse to the Supervisory Authority. Furthermore, the operator of the regulated market must deliver the relevant information without delay to the Supervisory Authority related to possible infringements of the rules of the regulated market, also to provide full assistance to the latter in investigating and prosecuting market abuse.
Article 54. Admission of Financial Instruments to Trading on the Regulated Markets
1. Financial instruments may be admitted to trading on the regulated market according to the rules governing the admission of financial instruments to trading on a regulated market.
2. The Rules shall ensure that the transferable securities admitted to trading on a regulated market are admitted without any restriction on transfer and establish:
1) the terms, procedures and the time limits for the admission and the removal of financial instruments into trading on the regulated market;
3. The issuer whose financial instruments are admitted to trading on a regulated market shall in the manner and within the time limits prescribed by the operator of the regulated market furnish the information set forth in this and other laws.
4. The regulated market shall establish and apply effective arrangements allowing the verification of the compliance of the issuers of the transferable securities with the requirements of initial, periodic and the on-going disclosure established in the Law on Securities.
5. The regulated market shall operate the measures facilitating the members of the regulated market to access the information made public in accordance with the requirements of the regulations of the European Union.
6. The regulated market shall operate measures enabling a regular monitoring of the compliance of the financial instruments admitted to trading on a regulated market to the admission requirements set forth to the specific type of financial instrument.
7. Transferable securities admitted to trading on a regulated market may be additionally admitted to trading on other regulated markets irrespective of the presence of the consent of the issuer of such transferable securities to the admission provided the requirements concerning the admission of transferable securities to trading on a regulated market stipulated in other legal acts are complied with. The regulated market shall notify the issuer of such securities that the securities issued thereby are traded on the regulated market concerned. The issuer is not obligated to submit directly to the regulated market the information stipulated in paragraphs 3 and 4 of this Article in case its securities have been admitted to trading in this regulated market without its consent.
Article 55. Suspension and Removal of Financial Instruments from Trading
1. Without prejudice to the right of the Supervisory Authority under Article 71(1)(11) to demand suspension or removal of an instrument from trading, the operator of the regulated market shall have a right to suspend or remove from trading a financial instrument in its operating regulated market and (or) multilateral trading facility provided the financial instrument no longer complies with the rules of the regulated market (or) multilateral trading facility unless such a step would be likely to cause significant damage to the investors' interests or the orderly functioning of the market.
2. An operator of a regulated market that suspends or removes from trading a financial instrument in the regulated market and (or) multilateral trading facility shall make public this decision and communicate the relevant information to the Supervisory Authority. The Supervisory Authority shall notify the supervisory authorities of the other Member States about the suspension or removal of financial instruments allowed for trading in the regulated market.
3. Paragraph 2 of this Article shall not preclude the operator of the regulated market from directly notifying operators of other regulated market of the suspension or removal of financial instruments from trading.
4. Where the Supervisory Authority demands the suspension or removal of a financial instrument from trading on one or more regulated markets and multilateral trading facilities such decision of the Supervisory Authority shall immediately be made public. The Supervisory Authority shall notify the European Securities and Markets Authority and the supervisory authorities of the other Member States on the decision to suspend or remove of a financial instrument from trading on a regulated market.
5. Upon receipt of the notification from a supervisory authority of another Member State on the suspension or removal of a financial instrument from trade on the regulated market of that Member State, the Supervisory Authority shall pass a decision to suspend or remove the financial instrument concerned from trade on the regulated market operating in the Republic of Lithuania and multilateral trading facility regulated by the Supervisory Authority unless where it could cause significant damage to the investors’ interests or the orderly functioning of the market.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 56. Membership in the Regulated Market
1. The membership in the regulated market and the access thereto shall be regulated by the appropriate rules.
2. The rules in question shall establish:
2) the procedure and the terms for the granting or suspension of the authorisation to trade on the regulated market, and the removal from the members of the regulated market;
3) the duties of the members of the regulated market arising from the establishment and management of the regulated market and the transactions concluded on such market; professional standards applicable to the personnel of the financial brokerage firms and credit institutions operating in that market; requirements imposed upon other market participants indicated in par. 3 of this Article; clearing and settlement for the transactions concluded on the regulated market concerned;
3. Regulated markets may admit financial brokerage firms, credit institutions and other persons who:
4) have sufficient resources for the role they are to perform taking into account the different financial arrangements and procedures that the regulated market has established in order to guarantee the adequate settlement of transactions;
4. Members of the regulated market are not obliged to apply to each other the obligations laid down in Articles 22, 24 and 25 of this Law in respect of the transactions concluded therein. However, the members of the regulated market shall apply the obligations provided for in Articles 22, 24 and 25 with respect to their clients when they, acting on behalf of their clients, execute their orders on a regulated market.
5. The rules on access to or membership in the regulated market provide for the direct or remote participation of financial brokerage firms and credit institutions.
6. Regulated markets from other Member States shall have a right in the Republic of Lithuania take measures to facilitate access to and trading on those markets by remote members established in their territory.
7. The right established in paragraph 6 of this Article may be implemented after the supervisory authority of another Member State communicates to the Supervisory Authority the information on the intention of a regulated market operating in that Member State to take appropriate measures in the Republic of Lithuania.
8. The regulated market operating in the Republic of Lithuania, without infringing the requirements of another Member State, shall have a right to take measures facilitating the becoming of the entities established in those Member States the members of the regulated market and (or) trading on such regulated market.
9. In order to be able to exercise the right referred to in par. 8 of this Article the regulated market shall submit to the Supervisory Authority a notification and indicate the Member State in which it intends to take the appropriate measures. The Supervisory Authority shall communicate, within one month, this information to the Supervisory Authority of Member State in which it is intended to take such arrangements. On the request of the supervisory authority of another Member State, the Supervisory Authority shall communicate to it the information about the members of the regulated market.
10. The operator of the regulated market shall have a right to receive the information on the financial and economic activities of the members of the regulated market, and verify the compliance of the members of the regulated market with the requirements established by the operator of the regulated market and impose sanctions set forth in the rules of the regulated market for the failure to comply with the established requirements.
Article 57. Trade in Financial Instruments in the Regulated Market
2. These rules shall ensure that trading in financial instruments on the regulated market is conducted in a fair, orderly and efficient manner and also establish:
3) the procedure for the establishment of the price of financial instruments and (or) derivative financial instruments;
7) the ways for resolving of disputes arising in relation to the transactions concluded on the regulated market;
Article 58. Pre-Trade Transparency Requirements for Regulated Markets
1. The regulated market shall make public the offers for transactions in shares admitted to trading on that regulated market. The regulated market shall on a continuous basis during normal trading hours and on reasonable commercial terms specify the total number of orders and the related shares under each price level specifying the five best bid and offer prices.
2. Regulated markets shall have a right to give access, on reasonable commercial terms and on a non-discriminatory basis, to the arrangements they employ for making public the information under the paragraph 1 of this Article to financial brokerage firms which are obliged to publish their quotes in shares pursuant to Article 33.
3. The Supervisory Authority shall have a right to waive the obligation for regulated markets to make public the information referred to in paragraph 1, based on the regulated market model and (or) the type and size of orders. The Supervisory Authority shall have a right to waive the obligation referred to in paragraph 1 of this Article in respect of transactions that are large in scale compared with normal market size for the share or type of share in question.
Article 59. Post-Trade Transparency Requirements for Regulated Markets
1. The regulated market shall make public the price, volume and time of the transactions executed in respect of shares admitted to trading on that regulated market. Details of all such transactions must be made public on a reasonable commercial basis and as close to real-time as possible.
2. The regulated market shall have a right to give access, on reasonable commercial terms and on a non-discriminatory basis, to the arrangements it employs for making public the information under par. 1 of this Article to financial brokerage firms which are obliged to publish the details of quotes causing the obligation to conclude a transaction in shares pursuant to Article 33 of this Law.
3. The Supervisory Authority shall have a right to authorise regulated markets to provide for deferred publication of the details of transactions indicated in par. 1 of this Article based on their type or size. In particular, the Supervisory Authority shall have a right to authorise the deferred publication in respect of at least such transactions that are large in scale compared with the normal market size for that share or that class of shares. The regulated markets shall obtain the Supervisory Authority’s prior approval of proposed arrangements for deferred trade-publication, and the arrangements shall be clearly disclosed in advance to market participants and other investing public.
Article 60. Agreements of the Regulated Market with the Central Counterparty and
The Clearing and Settlement Systems
1. The regulated market shall have a right to enter into appropriate arrangements with a central counterparty or clearing house and a settlement system of another Member State with a view to providing for the clearing and/or settlement of some or all trades concluded by market participants under the system of the regulated market.
2. The Supervisory Authority cannot oppose the use by the regulated market operating in the Republic of Lithuania of central counterparty, clearing houses and/or settlement systems in another Member State except where this is demonstrably necessary in order to maintain the orderly functioning of that regulated market and taking into account the provisions of Article 42(2) of this Law.
Article 61. List of Regulated Markets
The Supervisory Authority shall draw up a list of the regulated markets operating in the Republic of Lithuania and shall forward that list to the other Member States and the European Securities and Markets Authority. The Supervisory Authority shall communicate any changes to this list to the other Member States and the European Securities and Markets Authority, which shall compose, update and publish a list of all the European regulated markets on its website.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 62. Prohibition of Insider Dealing in Trading in Financial Instruments
1. Persons who are in possession of the inside information by virtue of being the issuer’s employees, members of supervisory or management bodies, or they have access to such information by virtue of their occupation, profession, duties or by virtue of being shareholders of the issuer, or because they have obtained such information by virtue of their criminal activities, shall be prohibited from attempting, directly or indirectly, to conclude or conclude deals in financial instruments to which the information relates on their own account or the account of a third party until the information is publicly disclosed. Where the person referred to is a legal person, such prohibition shall also apply to the natural person who takes part in taking the decision to transact for the account of the legal person concerned.
2. Persons referred to in paragraph 1 of this Article shall be prohibited from:
1) disclosing directly or indirectly inside information to other persons, except when information is disclosed by virtue of their occupation, position or in the course of executing their professional duties;
3. Prohibitions specified in this Article shall also be imposed on any person possessing the inside information, who is aware or should be aware that such information is not publicly disclosed. Prohibitions specified in paragraph 1 of this Article shall not apply to the transactions executed before the person came into possession of the information concerned.
4. Managers of the issuer and persons closely related to such managers the list whereof shall be established by the Supervisory Authority in accordance with the procedure and within the time limits established thereby, shall notify of the transactions concluded on their own account thereby in respect of the securities of the issuer managed thereby, as well as derivative financial instruments and other financial instruments related to such securities. Such notifications shall specify the types of transactions, the number and the dates of the transactions, type and number of transferred or acquired financial instruments, amount of transactions, form of settlement and other data required by the Supervisory Authority. The information specified in this paragraph shall be made public in the manner specified by the Supervisory Authority.
5. Managers of the issuer and persons closely related to such managers shall be prohibited from entering into transactions, except for gift and inheritance transactions in respect of their securities and derivatives or other financial instruments linked to such securities of the issuer managed thereby from the end of the reporting period until the publication of the results of the reporting period, including the date of publication of the results, except when forward commitments which were agreed before the end of the reporting period are carried out or where there are other exceptional circumstances. The definition ‘reference period’ as used in this paragraph shall be understood as a period for which the company's annual or interim financial statements have been drawn up.
6. The issuer or the person acting on the account and in the name of the issuer while disclosing the inside information to any third person in normal exercise of his employment, profession or duties, shall at the same time (or in case of non-intentional disclosure – promptly after such disclosure), make complete and effective public disclosure of such information. This requirement shall not apply where the person who has come into possession of such information owes a duty of confidentiality, arising from legal acts, Articles of Association or a contract. Issuers and persons acting in the name of or on the account of the issuers shall in the manner prescribed by the Supervisory Authority furnish to the Supervisory Authority the data (including personal codes) on persons entitled to have access to inside information by virtue of the employment contract or on other basis.
7. A financial brokerage firm or credit institution while performing its mediation duties in transaction and reasonably suspecting that the transaction would be effected in violation of prohibitions provided for in paragraphs 1, 2 or 3 of this Article or Article 63 shall forthwith notify the Supervisory Authority thereof.
8. The prohibitions stipulated in this Article and Article 63 shall not apply to transactions carried out in pursuit of monetary policy, exchange-rate policy, public debt and reserves management policy by the Republic of Lithuania, other Member State, the Bank of Lithuania, the European system of Central banks or other body performing similar functions or a person acting under the mandate of the above authorities.
9. The prohibitions established in this Article and Article 63 shall not apply to the buyback of own shares or to the price stabilization provided such operations are executed in the manner prescribed by legal acts.
10. The prohibitions laid down in this Article and Article 63 and the requirements in respect of financial instruments traded on the regulated markets or multilateral trading facilities established or operating in the Republic of Lithuania (or for which a request for admission to trading on such a market has been made) shall apply irrespective of whether the action has been performed inside or outside the territory of the Republic of Lithuania. The prohibitions laid down in this Article and Article 63 and the requirements in respect of securities traded on the regulated markets or multilateral trading facilities of the European Union (or for which a request for admission to trading on such a market has been made) shall apply to actions performed in the territory of the Republic of Lithuania, even though the transaction has been executed outside such a market or facility.
Article 63. Prohibition to Manipulate the Market
1. All persons shall be prohibited from:
1) concluding purchase/sale transactions or placing purchase/sell orders where these transactions or orders form a misleading impression about the demand, supply or price of financial instruments and the person or person acting in concert thus maintain unusual or artificial price of one or several financial instruments. The prohibition provided for in this item shall not apply where the person who entered into the transaction or issued the orders to trade proves that his reasons for so doing are legitimate and that these transactions or orders to trade conform to accepted market practices on the regulated marker concerned approved by a supervisory authority;
2) concluding transactions or placing orders to trade by employing fictitious devices or any other form of deception or contrivance;
3) dissemination of information through the media (including the Internet), or by any other means (including the dissemination of gossip or misleading news), which gives or is likely to give, false or misleading impression as to the financial instruments, where the person who made the dissemination knew or ought to have known that the information was false or misleading. In respect of journalists where they act in their professional capacity, such dissemination of information is to be assessed taking into account the rules governing their profession, unless those persons derive, directly or indirectly, an advantage or profits from the dissemination of the information in question.
2. The actions prohibited under par. 1 of this Article may be effected in the following forms:
1) conduct by a person, or persons acting in collaboration to secure a dominant position over the supply or demand of financial instruments which has the effect of fixing, directly or indirectly, purchase or sale price or creating other unfair trading conditions;
2) the buying or selling of financial instruments at the close of the market with the effect of misleading investors acting on the basis of closing prices of the financial instruments;
3) taking advantage of occasional or regular access to the mass media by voicing an opinion about financial instruments (or directly about their issuer) while that person having previously taken positions on those financial instruments and profiting subsequently from the impact of the opinions voiced on the price of the financial instruments, without having simultaneously disclosed that conflict of interest to the public in a proper and effective way;
3. Persons who produce or disseminate research concerning financial instruments or issuers of such financial instruments and other information, designed to develop or propose an investment strategy shall ensure that such information is fairly presented and disclose their interests or indicate conflicts of interest concerning the financial instruments to which the information is related.
4. With a view to ensuring the compliance with the requirements indicated in this Article and Article 62 of this Law, the Supervisory Authority may take all necessary measures to ensure that the public is correctly informed (including the disclosure of any known information).
Article 64. Basis of Accounting of Financial Instruments
1. Financial instruments shall be registered by making entries in personal financial instruments accounts managed in accordance with the rules on accounting of financial instruments and their circulation. These rules shall be drawn up by the Central Depository and shall be approved by the Supervisory Authority. Personal financial instruments accounts shall be opened in the name of the owner of financial instruments.
2. Accounts of collateralised financial instruments may be opened in the name of the holder of the collateral, indicating the owner of the financial instruments. Entering of collateralised financial instruments into an account opened in the name of the collateral holder shall be considered a transfer of these financial instruments to the disposal of the collateral holder.
3. Accounts of clients of account managers registered in the Member States or third countries may be opened in the name of the account managers indicating that they act as account managers and the account has been opened on behalf of the client. Account managers registered in the Republic of Lithuania handling the accounts of account managers registered in the Member States or third countries, which are opened in favour of the clients of account managers, at a request of the Supervisory Authority or the Central Securities Depository shall have to disclose the clients on whose behalf the financial instruments have been acquired.
4. General accounts of clients of account managers registered in the Republic of Lithuania may be opened in the name of the account managers with another account manager registered in the Republic of Lithuania stating that they act as account managers and that the account has been opened on behalf of the clients. Account managers registered in the Republic of Lithuania on whose behalf such accounts have been opened, at a request of the Supervisory Authority or the Central Depository shall have to disclose the clients on whose behalf the financial instruments have been acquired.
5. Financial instruments pledged with the European Central Bank or the central bank of another Member State may be recorded by entries in the accounts opened in the name of the Bank of Lithuania in the Central Depository by indicating the pledge holder and the owner of the financial instruments. Entries in these accounts shall be made in accordance with the instructions of the Bank of Lithuania.
6. Financial instruments transferred to the ownership of the European Central Bank or the central bank of another Member State by way of a repurchase or other transaction may be recorded in the accounts opened in the name of the Bank of Lithuania in the Central Depository indicating the Central European Bank or the central bank of the Member State of the European Union as the holder of financial instruments. Entries in such accounts shall be made in accordance with the instructions of the Bank Lithuania.
Article 65. Management of Accounts of Financial Instruments
1. The right to open and manage personal financial instruments accounts shall be conferred to licensed credit institutions and the Central Depository.
2. An issuer must submit documents for opening of the account of financial instruments issued by it or for making changes in entries in the accounts pursuant to the procedure and within the terms stipulated in the Rules on accounting of financial instruments and their circulation.
3. Before launching the primary trading in financial instrument, an issuer must conclude with an account manager an agreement on handling personal accounts of financial instruments. The Central Depository shall inform the Supervisory Authority, following the procedure specified by the latter, about the authorised account managers. An account manager authorised by the issuer must open personal accounts of financial instruments issued by the issuer to each owner who has not delegated by a written statement the management of the account to another account manager.
4. The issuer shall have the right to request at any time that the account managers present a list of owners of its registered financial instruments and the names of the persons on behalf of which the accounts have been opened. This right shall be exercised by submitting an inquiry to the Central Depository which on the discretion of the issuer shall furnish the list of account managers or the list of owners of financial instruments. At the issuer's request, a list of account managers prior to each ordinary general meeting of shareholders shall be provided on a free of charge basis. The account managers shall present to the Central Depository the lists of owners of financial instruments and the persons on behalf of whom the financial instrument accounts have been opened in the procedure defined by the Central Securities Depository.
5. Financial instrument accounts may be managed on behalf of the account manager as well as the contents of the account may be changed only by employees holding a written authorisation issued by the account manager. Each manager of accounts must present a list of such employees to the Central Depository. The account manager must, on a continuous basis, guarantee to the owner the right of disposal of his financial instruments.
Article 66. Notification on Account Status
An account manager must in the manner and the periodicity established in the agreement with the owner of the financial instruments notify the owner of financial instruments in writing of any change in the latter‘s account. Upon the end of the calendar year, the account managers must present statements of financial instruments accounts as of the close of the last day of the past year pursuant to the procedure and within the terms stipulated in the agreement.
Article 67. The Central Depository
1. The Central Depository is public company acting in accordance with this Law and its own Statutes.
2. Members of the Board, Supervisory Board and the Manager of the Central Depository shall be the persons of good repute, have qualifications set out by the Supervisory Authority or work experience in financial or other analogous institutions.
3. Only the Republic of Lithuania, the Bank of Lithuania, or credit institutions licensed in the Republic of Lithuania or other Member State, financial brokerage firms, insurance firms, management companies, market operators, central depositories and central counterparties to the agreement may be the shareholders of the Central Depository. The Central Depository may issue only registered ordinary shares.
4. A qualifying holding of the Central Depository shall be considered part of its share capital or voting rights representing at least 1/10 of the share capital or voting rights, or which makes a dominant influence on the management of the Central Depository.
5. Legal person or persons acting in concert and seeking to acquire or to increase a qualifying holding in the Central Depository (hereinafter in this article - the proposed acquirer) so as to cause holdings to exceed the thresholds referred to in paragraph 1 of Article 10 of this Law (hereinafter in this article - the proposed acquisition), shall have to obtain a decision of the supervisory authorities not to oppose the proposed acquisition. Two or more legal persons who, based on the express or implied oral or written agreement, exercise or seek to exercise their rights under their existing qualifying holding in the Central Depository shall be considered in this Article as persons acting in concert.
6. The acquirer must submit to the Supervisory Authority a written notice on the proposed acquisition and provide the amount of the intended holding therein. Documents and data necessary to carry out the assessment of the acquirer and the proposed acquisition must be submitted along with the notification of the proposed acquisition.
7. The Supervisory Authority shall establish a list of documents and data submitted along with the notice on the proposed acquisition necessary to carry out the assessment of the acquirer and the proposed acquisition. Documents and data specified in this list must be proportionate and adapted to the acquirer and the proposed acquisition, and necessary to carry out the assessment of the acquirer and the proposed acquisition in accordance with the criteria set out in paragraph 10 of Article 10 of this Law.
8. The Supervisory Authority upon receipt of the client's notification on a proposed acquisition and all documents and data contained in a list set out in paragraph 7 of this Article shall:
1) within 20 working days carry out the assessment of the acquirer (hereinafter in this article - the assessment period);
2) may, if necessary, request in writing during the assessment period additional information to complete the assessment. In this case, the assessment period shall be calculated from the date of receipt of the additional information;
9. After an assessment of the acquirer, the Supervisory Authority shall take one of the following decisions:
1) not to oppose the proposed acquisition. The Supervisory Authority shall inform in writing the acquirer on this decision within 2 working days from the date of taking the decision;
2) oppose the proposed acquisition in accordance with the criteria set out in paragraph 10 of Article 10 of this Law, or in cases where the acquirer has submitted all the documents and the data contained in a list set out in paragraph 7 of this article or did not provide the additional information referred to in paragraph 2 of paragraph 8 of this Article, or when there is reason to believe that the proposed acquisition will have a negative impact on the safe and efficient operation of the markets in financial instruments. The Supervisory Authority shall notify in writing the acquirer within two working days from the date of taking the decision stating the reasons of the decision.
10. Where the Supervisory Authority during the evaluation period takes no decision to oppose the proposed acquisition, it shall be assumed that the Supervisory Authority does not oppose the proposed acquisition.
11. In the absence of a decision of the Supervisory Authority not to oppose the proposed acquisition or the expiry of the assessment of the proposed acquisition, all the shares owned by the person who has acquired a qualifying holding in the Central Depository, or raised the qualifying holding more than the thresholds specified in paragraph 1 of Article 10 of this Law, shall lose the right to vote at the general meeting of shareholders. The right to vote shall be acquired again on the date of receipt of the decision of the Supervisory Authority not to oppose the proposed acquisition, or if the Supervisory Authority does not oppose the acquisition during the assessment period.
Article 68. Rights and Duties of the Central Depository
1. The Central Depository shall:
1) prepare and present the Rules on accounting of financial instruments and their circulation for the approval to the Supervisory Authority;
2) prepare and approve documents of financial instrument accounting, also other documents governing the accounting of financial instruments ant their circulation;
3) open and manage financial instrument accounts of account managers and personal financial instrument accounts;
4) ensure that during execution of transactions with regard to financial instruments the said financial instruments are timely transferred from the financial instrument account of one account manager to the financial instrument account of another account manager;
5) control that the number of financial instruments of each issue put into circulation is in line with the number of financial instruments actually in circulation;
6) develop and implement measures ensuring the integrity and security of the financial instrument accounting system;
7) monitor the compliance of the account managers with the rules on the accounting of financial instruments and other documents governing the accounting of financial instruments and their circulation;
8) accumulate, process, and disseminate information concerning accounting of financial instruments, train and consult specialists in financial instrument accounting;
11) submit to the Supervisory Authority proposals concerning financial instrument accounting issues and provide reports on the development of the accounting system and the main problems related thereof;
12) provide free of charge to the Supervisory Authority information necessary for the performance of their functions;
13) have appropriate tools to manage the risks inherent in the activity of the Central Depository, to use tools and systems to identify operational risks and to have effective measures to reduce the potential risks;
15) have appropriate tools and procedures established to identify and manage situations which could lead to negative consequences for the functioning and participants of markets in financial instruments, settlement systems, as well as to identify and manage conflicts of interest between the Central Depository, its shareholders and other market participants, especially in cases where such conflicts of interest could have a negative impact on the efficient functioning of the markets in financial instruments or settlement systems;
2. The Central Depository shall have the right to:
2) take over the management of financial instrument accounting from account managers against which bankruptcy has been instituted;
3) provide to issuers and intermediaries other services related to accounting of financial instruments and their circulation and settlement in relation thereto;
3. A representative of the Supervisory Authority, having a deliberative vote, shall be entitled to attend meetings of the managing bodies of the Central Depository and shall have a right to receive material provided to other participants of meetings.
4. The documents issued by the Central Depository on the issues of financial instrument accounting and their circulation, its safety requirements shall be binding to all account managers.
5. The amounts of entrance and annual fees, quarterly account management fees and the operation fees set by the Central Depository and applicable generally and in a standard manner to account managers shall be approved by the Supervisory Authority.
6. The Supervisory Authority shall set the requirements for the capital of the Central Depository and restrictions on investment funds. The Central Depository must submit in the procedure laid down by the Supervisory Authority a report on the calculation of capital adequacy, financial statements and other documents required by the Supervisory Authority.
Article 69. Supervision of Markets in Financial Instruments
The purpose of supervision of markets in financial instruments shall be:
Article 70. Objectives and Functions of the Supervisory Authority
1. The objectives of the Supervisory Authority shall be as follows:
2) to take measures assuring effective functioning of the market in financial instruments and protection of interests of the investors;
3) submit proposals with regard to shaping of the State economic policy which would promote the development of the market in financial instruments;
2. When implementing the objectives provided for in paragraph 1 hereof, the Supervisory Authority shall perform the following functions:
1) draft, approve, amend or repeal the rules regulating the licensing and activities of regulated markets and financial brokerage companies, financial advisor companies and brokers, and the trading in financial instruments;
3) issue or revoke licenses for regulated markets, financial brokerage firms, financial advisor companies and brokers;
4) monitor, analyse, inspect and in other way supervise the activities of financial brokerage firms, regulated markets and their members, the Central Depository, and account managers;
5) perform functions assigned to the competent authority provided for in Regulation (EC) No 1060/2009, Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 (hereinafter - Regulation (EU) No 648/2012) and Regulation (EU) No 575/2013;
Amendments to the paragraph of the Article:
No XII-1470, 18/12/2014, published in TAR, 31/12/2014, identification code 2014-21127
No XII-1547, 19/03/2015, published in TAR, 31/12/2015, identification code 2015-04840
6) impose sanctions provided for in this Law and other laws of the Republic of Lithuania on persons who violate this Law, Regulation (EU) No 648/2012, Regulation (EU) No 575/2013 and legal acts of the Supervisory Authority;
Amendments to the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR, 31/12/2015, identification code 2015-04840
7) prepare or take part in preparing of publications concerning the functioning and regulation of the markets in financial instruments;
8) organise examinations and qualifications tests with the purpose of evaluating the knowledge and competence of financial brokers;
10) conclude agreements with counterpart foreign authorities on cooperation and exchange of information;
12) cooperate with the European Securities and Markets Authority in accordance with Regulation (EU) No 1095/2010 and with the European Banking Authority in accordance with Regulation (EU) No 1093/2010 and immediately provide them with all the information necessary to carry out their objectives;
3. Without prejudice to the provisions of this Law and other laws, the Supervisory Authority in implementing the objectives and functions assigned, shall take into account supervisory measures and practice convergence in applying laws and regulations adopted to implement European Union legislation. For this purpose, the Supervisory Authority shall participate in the activities of the colleges of the European Banking Authority and the supervisory authorities, follow the guidelines and recommendations adopted by the European Banking Authority or provide reasons for the individuals concerned for which they do not follow, as well as cooperate with supervisory authorities of other European Union Member States and the European Systemic Risk Board and follow the recommendations and warnings published by this Board.
Amendments to the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
4. The Supervisory Authority in carrying out supervisory functions and on the basis of information available at the appropriate time, shall properly take into account, especially in emergency situations, the potential impact of their decisions on the stability of the financial system in other European Union Member States.
Supplemented by the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR 31/03/2015, identification code 2015-04840
5. The Supervisory Authority‘s acts or failure to act may be appealed in accordance with the procedure laid down in the Law on Administrative Procedure.
Amendments to the numbering of the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR 31/03/2015, identification code 2015-04840
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/ 2011)
No XII-339, 28/05/2013, Valstybės Žinios (Official Gazette), 2013, No 62-3054 (12/06/2013)
Article 71. The Rights of the Supervisory Authority in Executing the Functions
Assigned to it
1. When implementing the functions assigned to it the Supervisory Authority shall have a right to:
1) obtain, free of charge, documents, copies thereof, other data and information from persons being inspected, as well as public authorities, registers and other institutions performing similar functions;
2) require the persons to submit any information at their disposal and, where necessary, obtain additional information - call up such persons and require them to present explanations;
4) employ specialists and experts of appropriate areas (auditors, accountants, lawyers, specialists of information technologies, etc.) requesting them to provide their opinions, conclusions, assessment or perform other actions requiring specific qualification, knowledge or expertise;
5) obtain information about subscribers of electronic communications services or registered users of electronic communications services, the related traffic data and content of information transmitted via electronic communications networks from electronic communications network and (or) service providers;
6) require the cessation of any practice infringing the provisions of this Law, of specifying legislation or Regulation (EU) No 648/2012;
7) Repealed on Obsolete since 01 May 2015.
Annulment of the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
9) require the auditors of financial brokerage firms and operators of regulated markets submit the information related to the audit of such entities;
10) take other measures ensuring the continuous compliance of the financial brokerage firms, financial advisor companies, the Central Depository and regulated markets with the requirements defined in this Law and other regulations;
11) require suspending or terminating trading in a specific financial instrument on a regulated market or other trading venues;
12) communicate the materials and other information obtained during the inspection to the law enforcement authorities;
13) appeal to court concerning the protection of public interest while representing the interests of investors;
14) publish the information necessary for the protection of the market or the interests of the market participants;
16) give binding instructions set out in paragraphs 6 and 10 of Article 81 of this Law.
Supplemented by the following paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
Amendments to the paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR, 02/12/2015, identification code 2015-19168
2. The rights provided in paragraph 4 of Article 81 of this Law may be implemented only with court authorization. Court authorization shall be obtained in the procedure set out in paragraph 4 of Article 81 of this Law.
3. The Supervisory Authority shall exercise the rights vested to in under par. 1 of this Article:
4. The provisions of this Article shall be applied to licensed credit institutions mutatis mutandis.
Amendments to the Article:
No XII-339, 28/03/2013, Valstybės Žinios (Official Gazette), 2013, No 62-3054 (12/06/2013)
Article 72. Restrictions Applicable to the Members of the Board and the Employees
Of the Supervisory Authority Concerning Trading in Financial Instruments
1. Seeking to avoid conflicts of interests, the Members of the Board and employees of the Supervisory Authority as well as their spouses and life partners shall be banned from transferring financial instruments, which are traded on regulated markets of the Republic of Lithuania, prior to six months from the date of their acquisition.
2. The ban referred to in paragraph 1 of this Article shall not be applied to:
Article 73. The Duty of the Members of the Board and the Employees of the
Supervisory Authority and Other Persons not to Disclose Confidential Information
1. Current and former Members of the Board and employees of the Supervisory Authority shall have no right to use or to disclose to other persons confidential information of which they have become aware in the course of executing their professional duties at the Supervisory Authority. This prohibition shall also be imposed on auditors, experts and other persons who have carried out instructions of the Supervisory Authority, and persons who in cases provided for by the law have the right to receive confidential information from the Supervisory Authority.
2. The following shall not be considered divulging of confidential information prohibited under paragraph 1 of this Article:
1) provision of information on financial brokerage firms and the licensed credit institutions in such a generalized form that it is not possible to determine the identity of any specific person;
2) forwarding of information for the investigation or hearing of a criminal case in the manner prescribed by criminal laws;
3) disclosure of information in civil cases concerning bankruptcy or forced winding up of a financial brokerage firm or a credit institution;
Article 731. Notification of Violations
The Supervisory Authority shall determine the measures to encourage informing it on the infringement of provisions of this Law, its implementing legislation and Regulation (EU) No 575/2013. These measures shall comply with the following requirements:
1) provision of specific procedures for obtaining and evaluation of the notification on the above infringements;
2) confidentiality of the person who reports the violations committed, unless the disclosure of such information is required in cases and in accordance with the procedure laid down in the laws and other legislation;
3) personal data is processed in accordance with the procedure set out in the legislation governing the protection of personal data;
SECTION TWO
COOPERATION OF THE SUPERVISORY AUTHORITY WITH SUPERVISORY AUTHORITIES OF OTHER MEMBER STATES AND EUROPEAN INSTITUTIONS
The title of the Section was amended:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
The title of the Section was amended:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
Article 74. Cooperation of the Supervisory Authority with Supervisory Authorities of
Other Member States and the European Securities and Markets Authority
1. For the purpose of the performance of the functions assigned to it under the present Law and other laws, the Supervisory Authority shall cooperate with the supervisory authorities of other Member States. Such cooperation shall include the exchange of information, participation in conducting investigations or inspections, performance of other supervisory functions at the initiative of any of the supervisory authorities.
2. Where a regulated market operating in another Member State provides appropriate arrangements in the Republic of Lithuania so as to facilitate access to and use of the system of remote members established in the Republic of Lithuania whereby the operation of the regulated market becomes important in ensuring the orderly functioning of Lithuanian markets in financial instruments and the investor protection, the Supervisory Authority shall enter into an agreement with the supervisory authority of that regulated market concerning cooperation and the exchange of information.
3. Where a regulated market operating in the Republic of Lithuania provides appropriate arrangements in another Member State so as to facilitate becoming remote members of that market for entities established in that Member State and (or) trade on that regulated market, the provisions of par. 2 of this Article shall apply mutatis mutandis.
4. The Supervisory Authority shall cooperate and provide any further assistance to supervisory authorities of other Member States even in cases where the conduct being investigated does not constitute an infringement of any regulation in force in the Republic of Lithuania.
5. Where there is a good reason to suspect that acts or omissions in other Member States of entities not subject to supervision of the Supervisory Authority contradict the requirements of the regulations of another Member State, the Supervisory Authority shall notify this to the supervisory authority of the relevant Member State and the European Securities and Markets Authority.
6. Where a supervisory authority of another Member State notifies the Supervisory Authority of possible infringements of entities subject to its supervision committed in another Member State, the Supervisory Authority shall immediately take appropriate actions and shall accordingly notify the supervisory authority that had communicated such information and the European Securities and Markets Authority.
7. The Supervisory Authority shall inform the European Commission and the European Securities and Markets Authority of any general difficulties encountered by the brokerage companies established in the Republic of Lithuania, in third countries or providing there investment services.
8. The requirements provided for in this Article shall apply to licensed credit institutions mutatis mutandis.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 75. Cooperation in Supervisory Activities, Investigations and On-the-Spot
Verifications
1. In conducting its supervisory activity and investigations and the on-the-spot verifications the Supervisory Authority shall cooperate with the supervisory authorities of other Member States. For that purpose the Supervisory Authority may request the supervisory authorities of another Member State to provide information or assistance.
2. Where a financial brokerage firm established in another Member State is a remote member of a regulated market operating in the Republic of Lithuania, the Supervisory Authority shall have a right to exercise the functions of the supervisory authority of a regulated market by addressing the financial brokerage firm directly. In this case the Supervisory Authority shall be informed of the actions taken in respect of the remote member of the regulated market.
3. A supervisory authority of another Member State shall be entitled to appeal to the Supervisory Authority concerning cooperation and, upon its authorisation, conduct an investigation or an on-the-spot verification independently, and also request such inspection or on-the-spot verification to be conducted by the supervisory authority or be delegated to auditors or experts. The on-the-spot verifications and inspections shall be conducted in the procedure established by this Law.
Article 76. Exchange of Information
1. When performing the functions assigned to it under this Law, the Supervisory Authority shall exchange the information with the supervisory authorities of other Member States.
2. When communicating the information to the supervisory authority of another Member State, the Supervisory Authority shall have a right to require that such information shall not be disclosed to third persons without an express prior consent of the Supervisory Authority. Such limitation shall be provided for at the time of communication of such information. When giving consent to the disclosure of the information to third persons the Supervisory Authority shall specify the purposes for which the information concerned may be used.
3. The Supervisory Authority shall have a right to forward the information received from other Member States or the third party supervisory authorities to other natural or legal persons only upon an advance consent of another Member State or the supervisory authority of another Member State to communicate the provided information only for the purposes expressly indicated in the consent, unless the communication without such consent or for purposes other than indicated in the consent would be justifiable in view of the circumstances prevailing – in the latter case the Supervisory Authority shall immediately notify the Supervisory Authority of another Member State or a third country which has submitted a notice.
4. The Supervisory Authority and other entities indicated in paragraph 3 of this Article shall have a right to use the confidential information obtained in accordance with the procedure set out in this Article solely for the execution of their supervisory functions, i.e.:
1) to verify whether the entities subject to its supervision comply with the terms for issuing the license and monitor the compliance thereof with the organisational and operating requirements placing a special focus upon the oversight of the capital adequacy requirements, management and accounting procedures and the exercise of internal controls;
4) examine complaints in the manner defined in the Law on Public Administration concerning the decisions passed by supervisory authorities;
5) participation in litigation proceedings in respect of complaints regarding the resolutions passed by supervisory authorities;
5. The provisions of Article 73 and 78 of this Law do not preclude the Supervisory Authority from communicating the confidential information to the European Securities and Markets Authority, European Banking Authority, European Systemic Risk Board, central banks of the European system of the central banks and other institutions performing similar duties when this information is necessary to carry out their functions established by law (including the conduct of monetary policy and ensuring liquidity, supervision of payment, clearing and settlement systems and safeguarding the stability of the financial system), as well as to the Ministry of Finance of the Republic of Lithuania and the central authorities of other Member States participating in drafting of legislation relating to the supervision of credit institutions, financial institutions, companies providing investment services and insurance services provided that confidential information is necessary to carry out their functions.
Amendments to the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
6. The authorities referred to in paragraph 5 of this Article shall have a right to communicate the confidential information to the Supervisory Authority where such information is necessary for the performance of functions defined in this Law.
7. Where the Supervisory Authority becomes in a possession of the data that the actions prohibited as defined in Articles 62 or 63 are being performed or have been performed in the territory of another Member State, or they are related to financial instruments traded on a regulated market of such Member State, it shall notify the supervisory authority of the Member State.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 77. Refusal to Cooperate
1. The Supervisory Authority shall have a right to refuse to cooperate or provide assistance in carrying out an investigation, on-the-spot verification or performing other supervisory functions as provided for in Article 75 of this Law or to exchange information as provided for in Article 76 of this Law only where:
1) such an investigation, on-the-spot verification, performance of other supervisory functions or exchange of information might adversely affect the sovereignty, security or public policy of the Republic of Lithuania;
2) judicial proceedings have already been initiated in respect of the same actions and the same persons before the authorities of the Republic of Lithuania;
2. Where the Supervisory Authority exercises the right provided for in paragraph 1 of this Article, it shall immediately notify the supervisory authority of another Member State requesting the provision of information or any other assistance and the European Securities and Markets Authority providing the reasons for the refusal to cooperate.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 78. Exchange of Information with the Third Country Supervisory Authorities
1. While exercising the supervisory functions assigned to it, the Supervisory Authority shall have a right to enter into cooperation agreements on the exchange of information with the supervisory authorities of third countries provided the information being communicated to third countries is subjected therein to the requirements concerning the security of confidential information not less stringent than those defined in Article 73 of this Law. Any personal data may be communicated to the supervisory authority of a third country only in compliance with the requirements of the Law on the Legal Protection of Personal Data of the Republic of Lithuania.
2. The Supervisory Authority shall also be entitled for the purposes of the exercise of the supervisory functions to enter into cooperation agreements on the exchange of information with the entities from third countries provided the information being communicated is subjected therein to the requirements concerning the security of confidential information not less stringent than those defined in Article 73 of this Law. Such agreements may be entered into with the supervisory authorities, also natural and legal persons responsible for:
1) supervision of credit institutions, other financial institutions, insurance undertakings and financial markets;
2) execution of winding-up and bankruptcy as well as similar proceedings in respect of financial brokerage firms;
3) performance of statutory audit of financial statements of financial brokerage firms, credit institutions, other financial institutions and insurance undertakings in the course of the exercise of the supervision functions or the administration of the investment insurance systems in the course of the exercise of the supervisory functions;
4) supervision of persons participating in the execution of winding-up and bankruptcy as well as similar proceedings in respect of financial brokerage firms;
3. Where the information requested by a supervisory authority of a third country has been received from another Member State, such information may be forwarded only upon obtaining of a prior consent of the supervisory authority that had provided the information and only for the purposes expressly indicated in the consent.
Article 79. Relations with Auditors
1. When performing the audit of a financial brokerage firm, the auditor shall without delay notify in writing the Supervisory Authority of the facts and circumstances that are liable to:
1) constitute a material breach of the laws, or other regulations which lay down the conditions governing licensing or which specifically govern pursuit of the activities of financial brokerage firms, or
2. The auditor shall also be under obligation to notify the Supervisory Authority of the facts and circumstances specified in items 1-3 of paragraph 1 of this Article of which he becomes aware of in the course of carrying out the audit of an undertaking having close links with the financial brokerage firm.
3. The notification of the Supervisory Authority as indicated in paragraphs 1 and 2 of this Article shall not be deemed to constitute an infringement of the prohibition to disclose confidential information as stipulated in legal acts or a contract and shall not cause any adverse effects to the auditor.
Article 80. Alternative (Extra-Judicial) Mechanism for Investor Disputes
1. The Supervisory Authority shall encourage the setting-up and operations of efficient procedures for the alternative (out-of-court) settlement of disputes of investors and undertakings providing investment services.
2. The bodies indicated in paragraph 1 of this Article shall not be prevented from the exchange of information and the data including cases where the resolution of a dispute is attributable to the jurisdictions of more than one Member State.
3. The Supervisory Authority shall inform the European Securities and Markets Authority on the complaint procedures and their settlement falling within its competence in resolving investor disputes in an alternative (non-judicial) way.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 81. The Rights of the Supervisory Authority in Investigating Violations of
Legal Acts Regulating Functioning of Markets in Financial Instruments
1. The Supervisory Authority shall have the right to organize and carry out investigations in order to monitor observance of this Law and the legislation enacted on the basis thereof and the requirements of Regulation (ES) No 648/2012.
2. When carrying out investigations, officers of the Supervisory Authority shall have the right to:
1) obtain explanations in a written or oral form from persons connected to violations under investigation, and require these persons to arrive to the office of the officer carrying out the inspection in order to give evidence;
2) upon producing official certificates and a reasoned decision of the Supervisory Authority or its authorized employee to conduct an inspection (check up), have an unimpeded access to the premises of financial brokerage firms, credit institutions, market operators, the Central Depository, issuers, management companies, financial advisor companies and investment undertakings to check the documents, employee records, accounting books and other sources of information necessary for the inspection, and to obtain their copies and extracts, copy them and the information contained in computers and in any medium, and receive conclusions about the inspection material from the expertise institutions;
3) to have an access to the premises of other legal entities connected to possible infringements, as well as legal entities whose employees are related to possible violations and to carry out an inspection, review employee records of a legal entity, the necessary studies, get their copies and extracts, access to the notes of the employees of the legal person, copy them and the information contained in computers and in any medium;
4) insist on being provided with copies of accounting documents, contracts, orders, memoranda and other documents considered by the Supervisory Authority to be of relevance for the investigation;
5) take away temporarily documents of the inspected financial brokerage firms, regulated markets, credit undertakings, management companies, the Central Depository, and issuers, which may be used as proof of violations, evidence by providing a reasoned decision on the seizure of documents and a description of the taken away documents;
6) upon producing a reasoned decision of the Supervisory Authority, to obtain from the banking institutions data, certificates and copies of documents concerning financial transactions related to the entity under inspection;
3. Inspection operations referred to in item 3 of paragraph 2 of this Article may be carried out only with judicial authorization.
4. When the Supervisory Authority takes a decision on the actions provided for in item 5 of paragraph 1 of Article 71 of the Law, item 3 of paragraph 2 and in point 1 of paragraph 6 of this Article, the authorized officer of the Supervisory Authority shall submit to the Vilnius Regional Administrative Court a request for the court's permission to perform these actions. The request must contain the name of the legal person, the nature of the suspected irregularities and the intended investigation actions. The application must be accompanied by evidence of the suspected violations. A judge of the Vilnius Regional Administrative Court shall examine an application for a court authorization in a written procedure and make a reasoned decision either to grant or reject the application. The application must be examined and the order must be made at the latest within 72 hours from the moment of submission of the application. Where the Supervisory Authority disagrees with the decision of the judge of the Vilnius Regional Administrative Court to reject the application, it may, within seven days, to appeal the judge's decision to the Supreme Administrative Court of Lithuania. The Lithuanian Supreme Administrative Court shall examine the appeal against the order of the Vilnius Regional Administrative Court no later than within seven days. Representatives of the Supervisory Authority shall have the right to take part in the examination of the appeal. When considering applications and complaints on the issue of the court's permission, the courts must ensure the confidentiality of the information and the actions planned.
5. For the implementation of the rights provided for in paragraph 2 of this Article, the Supervisory Authority may request an assistance of police officers.
6. The Supervisory Authority based on reasonable grounds for suspecting a violation of the provisions of this Law, of its implementing legislation or of Regulation (EU) No 575/2013, or data that they can be violated, shall have the right, within the next 12 months or in order to prevent substantial or irreparable damage to the interests of investors, to give the following binding instructions to the financial brokerage firm, financial advisor firm, a regulated market operator or the Central Depository:
1) to discontinue certain activities until the Supervisory Authority performs the inspection and takes a decision on the suspected violation;
2) to temporally withhold or terminate the trading on a regulated market or another trading venue or admission to trading on a regulated market or another trading venue;
3) to eliminate violations of the law or operational weaknesses within the time limit set by the Supervisory Authority;
5) to suspend or terminate the provision of professional activities related to the investment and (or) auxiliary services;
7) to hold capital exceeding the capital requirements set out in this Law and Regulation (EU) No 575/2013 and (or) to constitute the appropriate capital reserves;
9) to develop and to implement a plan of measures for elimination of defects identified and (or) violations within the time limit set by the Supervisory Authority and acceptable to it;
10) to form additional special provisions or to properly assess the assets in respect of capital requirements;
11) not to carry out certain activities, certain transactions, to reduce the scope of such activities or transactions, or to reduce investment in activities that pose excessive risks to the credibility of the financial brokerage firm;
12) to reduce the risks associated with the activities of financial brokerage companies, products and systems;
13) to reduce the variable part of the remuneration paid to executives and employees of the brokerage firm if it is not compatible with the maintenance of a sound capital base;
15) to limit or terminate the distribution of profits to the shareholders of the financial brokerage firm or interest payment to holders of non-equity securities issued by financial brokerage companies, which are included in the capital of the brokerage firm where such a ban does not means the non-fulfilment of the obligations of the financial brokerage firm;
16) to provide additional information to the Supervisory Authority or information needed to perform supervisory functions;
7. The right referred to in item 1 of paragraph 6 of this Article may be implemented only with the authorization of the court. Court authorization shall be obtained according to the procedure set out in paragraph 4 of this Article.
8. Quantitative and qualitative results of the supervisory review and evaluation, the evaluation of systemic risk, the management structure of the brokerage firm, risk identification, management, and internal control processes should be taken into account in determining the appropriate amount of the individual capital or the appropriate amount of capital reserves under paragraph 6 of this Article, as well as special liquidity requirements.
9. The Supervisory Authority having reasonable grounds for suspecting that the provisions of resolutions of the Supervisory Authority issued pursuant to this Law have been violated, and in order to prevent substantial or irreparable damage to the interests of investors, shall have the right to request the court to place property of the financial brokerage firm, financial advisor firm, regulated market operator or the Central Depository under temporary attachment by the ruling of the court. The request of the Supervisory Authority concerning placing the property under attachment shall be examined by the Vilnius Regional Administrative Court.
10. The Supervisory Authority having determined that the financial brokerage firm, which is subject to the condition specified in paragraph 2 of Article 121 of this Law, has violated the requirements of Articles 3, 4, 5, 6, 7, 14, 15, 16, 17, 24, 25 and 26 of this Law, Regulation (EU) No 575/2013, the European Parliament and Council Regulation (EU) No 600/2014 on markets in financial instruments of 15 May 2014 amending Regulation (EU) No 648/2012 (OJ 2014 L 173, p. 84), or with knowledge that the financial brokerage firm will violate them due to the rapidly deteriorating financial condition, shall have the right to issue the following binding instructions to the financial brokerage firm:
1) to implement one or more of the procedures and measures set out in the recovery plan drawn up in accordance with the provisions of Articles 4-11 of the Law on Financial Stability, or update a recovery plan, where the circumstances which prompted the application of the instructions set out in this paragraph differ from the assumptions set out in the current recovery plan, and to implement one or more of the procedures and measures set out in the updated recovery plan within the time limit set by the supervisory authorities ensuring that the circumstances which prompted the application of the measures set out in this paragraph are removed;
2) to develop and implement a plan of measures for modification in the financial brokerage firm’s activities within the time limit set by the Supervisory Authority;
3) to convene a general meeting of shareholders of the financial brokerage firm and discuss there the issues proposed by supervisors. If the bodies of the financial brokerage firm fails to comply with the requirement to convene a general meeting of shareholders, the Supervisory Authority shall have a right to convene a general meeting of shareholders, to prepare its agenda and to require that issues proposed by the Supervisory Authority are considered;
4) to remove or replace one or more directors or persons of the financial brokerage firm belonging to the senior management of the financial brokerage firm if the Supervisory Authority finds that the person (s) does not meet the requirements set out in Article 9 of the Law;
5) to draw up a plan of negotiations on debt restructuring with some or all of its creditors in accordance with the recovery plan;
11. When mandatory instructions set out in paragraph 10 of this Article are issued to the financial brokerage firm, which is subject to the condition specified in paragraph 2 of Article 121 of this Law, belonging to the financial group, the provisions of Article 752 of the Banking Law shall apply mutatis mutandis.
12. A financial brokerage firm, financial advisor firm, a regulated market operator or the Central Depository must follow the instructions set out in paragraph 6 of this Article under the terms set out by the Supervisory Authority and immediately notify in writing the Supervisory Authority about the performance. The financial brokerage firm, which is subject to the condition specified in paragraph 2 of Article 121 of this Law, must also follow the instructions set out in paragraph 10 of this Article under the terms set out by the Supervisory Authority and immediately notify in writing the Supervisory Authority about the performance.
13. Decisions of the Supervisory Authority referred to in paragraphs 6 and 10 of this Article may be appealed to the Vilnius Regional Administrative Court within one month from the date of adoption of the decision. Filing a complaint on the decision of the Supervisory Authority does not suspend the execution of the decision.
14. Binding instructions set out in paragraph 6 of this Article may be issued in conjunction with sanctions. The instructions set out in paragraph 10 of this Article may be issued to a financial brokerage firm which is subject to the condition specified in paragraph 2 of Article 121 of this Law in conjunction with the instructions set out in paragraph 6 of this Article and (or) sanctions.
15. The Supervisory Authority having determined that the financial brokerage firm, which is subject to the condition specified in paragraph 2 of Article 121 of this Law, meets the conditions referred to in paragraph 10 of this Article, shall immediately notify the resolution authority for financial sector entities (hereinafter - the Resolution Authority). In this case (including cases where the Supervisory Authority shall carry out inspections in accordance with this Article) the Supervisory Authority shall have the right to obtain all information necessary to update the restructuring plan drawn up in accordance with the Law on Financial Stability to prepare for the possible restructuring of the financial brokerage firm and to evaluate its assets and liabilities. The Supervisory Authority must provide the following information to the Resolution Authority.
16. Where the measures restricting the activities of the financial brokerage firm applicable in accordance with this Law or where winding-up proceedings of the financial brokerage firm are brought as they are understood in accordance with Article 121 of the Law on Financial Stability, the Supervisory Authority shall have, mutatis mutandis, the rights and obligations set out in Chapter VII of the Law on Financial Stability for the Resolution Authority.
17. The Supervisory Authority may request supervisory authorities of the Member States to carry out the necessary inspections in the territory of those States and to allow its personnel to accompany the personnel of the supervisory authority during such inspections.
18. The Supervisory Authority may apply to the European Securities and Markets Authority in cases where a supervisory authority of another Member State:
1) fails to act on time concerning the request for the submission of the information or refuses to provide such information;
2) fails to act on time concerning the request for cooperation in carrying out supervision, investigation or on-site inspection as provided for in Article 75 of this Law, or reject this request;
19. The Supervisory Authority deciding on giving mandatory orders pursuant to paragraph 10 of this Article shall also follow the applicable European Union legislation.
Amendments to the Article:
No XII-1547, 19/03/2015, published in TAR, 31/03/2015, identification code 2015-04840
No XII-2057, 24/11/2015, published in TAR, 02/12/2015, identification code 2015-19168
Article 82. Secrecy of Investigation and Examination Materials of the Supervisory
Authority
A financial brokerage firm or credit institution and their employees are prohibited from disclosing to clients or other persons any information relating to the investigation or inspection, carried out by Supervisory Authority, except as set forth in this Law.
Article 83. Sanctions Imposed by the Supervisory Authority
1. The Supervisory Authority shall have a right to impose the following sanctions:
1) to warn for the shortcomings and violations of their activities and set the term for the elimination of such shortcomings and violations;
3) to appoint an interim representative of the Supervisory Authority for the supervision of the activity;
5) to suspend the license to provide one, several or all of the investment services as long as there are grounds to suspend a license; should the grounds for the suspension of the license no longer be applicable, the Supervisory Authority shall immediately, but not later than within five working days from when it became satisfied that the grounds no longer prevail, renew the license to provide one, several or all of the investment services;
2. The Supervisory Authority shall have the right to impose on licensed credit institutions, market operators and the Central Depository the sanctions referred to in items 1 and 2 of paragraph 1 o this Article, and to the financial advisory companies - sanctions set out in items 1, 2, 4, 5 and 6 of paragraph 1 of this Article.
3. The Supervisory Authority shall have the right to impose penalties for natural persons laid down in the Code of Administrative Offences of the Republic of Lithuania.
4. Sanctions or penalties adapted by the Supervisory Authority shall be made public no later than within three working days, unless such publication would damage the market or cause disproportionate damage to the parties involved. If the Supervisory Authority makes public sanctions or penalties imposed, at the same time it shall inform the European Securities and Markets Authority hereof.
5. The Supervisory Authority shall submit annually to the European Securities and Markets Authority the aggregated information about all sanctions imposed in accordance with paragraphs 1, 2 and 3 of this Article.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 84. Grounds of Imposition of Sanctions
1. The sanctions set forth in this Law shall be imposed on at least one of the following grounds:
2) the Supervisory Authority has not been provided with requested information or documents necessary for the supervision;
5) the requirements laid down in Regulation (EC) No 1060/2009 are infringed;
Supplemented by the paragraph of the Article:
No XII-1470, 18/12/2014, published in TAR, 31/12/2014, identification code 2014-21127
6) the financial brokerage firm fails to meet its obligations under its liabilities or there is evidence that it will not be able to do that in the future;
Amendments to the numbering of the paragraph of the Article:
No XII-1470, 18/12/2014, published in TAR 31/12/2014, identification code 2014-21127
7) binding instructions provided by the Supervisory Authority in accordance with Article 81 of this Law are not carried out, or are carried out incorrectly.
Supplemented by the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR 31/12/2015, identification code 2015-04840
Amendments to the paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
2. A decision to apply a sanction may be taken provided not more than two years have passed since the day the violation was made, while in cases of continuous or prolonged violations - since the date of the last acts were committed or the date of the disclosure of prolonged violation.
Article 85. Temporary Representative for the Supervision of Activities
1. In urgent cases, upon receiving information on violations of legislation and seeking to protect financial instruments and funds transferred to financial brokerage firms by clients, the Supervisory Authority shall have the right to delegate a temporary representative for the supervision of the activities of the financial brokerage firm.
2. The managers of the financial brokerage firm shall be obliged to obtain the approval for the supervision of activities of the temporary representative regarding each decision related to the activities of the firm.
Article 851. Appointment of a Temporary Administrator of the Financial Brokerage Firm
1. Provisions of Article 751 of the Law of Banks of the Republic of Lithuania shall apply mutatis mutandis to the appointment of a temporary administrator and activities of financial brokerage companies, which are subject to the requirement referred to in paragraph 2 of Article 121 of this Law.
2. The provisions of Article 752 of the Law on Banks of the Republic of Lithuania shall apply mutatis mutandis to the financial brokerage firm, which is subject to the condition specified in paragraph 2 of Article 121 of this Law and belong to a financial group, in appointing a temporary administrator of the financial brokerage firm.
Supplemented by the Article:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
Article 86. Reorganization of the Financial Brokerage Firm
Financial brokerage firms may be reorganized only upon obtaining a prior consent of the Supervisory Authority. The Supervisory Authority shall have a right to refuse to give its consent only if the reorganization would impede the safety of the cash funds and financial instruments entrusted by the clients to the financial brokerage firm.
Article 87. Bankruptcy of a Financial Brokerage Firm
1. Bankruptcy procedures of the brokerage firms shall be regulated by the Law on Enterprise Bankruptcy of the Republic of Lithuania, unless otherwise provided by this law, the Law on Financial Stability and the Law on Financial Institutions.
Supplemented by a paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
2. A financial brokerage firm‘s bankruptcy case shall be considered in the court proceedings only.
Amendments to the numbering of the paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
3. The Supervisory Authority shall have the right to file with the court a petition for initiating a bankruptcy against a financial brokerage firm.
Amendments to the numbering of the paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR 02/11/2015, identification code 2015-19168
4. Upon receipt of an application to initiate bankruptcy proceedings, the court shall on the same day ban the financial brokerage firm from disposing of bank accounts and securities.
Amendments to the numbering of the paragraph of the Article:
No XII-2057, 24/11/ 2015, published in TAR 02/12/2015, identification code 2015-19168
5. Not later than within 15 days after the petition was filed, the court shall pass a decision either to initiate or to refuse to initiate a bankruptcy proceedings against the financial brokerage firm.
Amendments to the numbering of the paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
6. The administrator of the financial brokerage firm shall return to the firm‘s clients their cash funds either held at the firm or deposited in client accounts with a credit institution managed by the financial brokerage firm and shall transfer the management of the personal accounts of financial instruments to another account manager designated by the client.
Amendments to the numbering of the paragraph of the Article:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
Article 88. Joint (Consolidated) Supervision
1. The Supervisory Authority shall carry out a joint (consolidated) supervision of the financial group where
1) the parent company of the financial group is a financial brokerage firm or a management company with a license issued by the Supervisory Authority;
2. The provisions of the eighth and tenth sections of the Law on Banks of the Republic of Lithuania shall apply mutatis mutandis to the joint (consolidated) supervision of financial groups. Detailed procedures for conducting joint (consolidated) supervision may determine the Supervisory Authority.
Amendments to the Article:
No XII-1547, 19/03/2015, published in TAR 31/03/2015, identification code 2015-04840
Article 89. Authorizations of the Supervisory Authority in Respect of the Branches of
Financial Brokerage Firms Licensed in another Member State and Established in the Republic of Lithuania
1. The Supervisory Authority of the home Member State shall carry out the prudential supervision of a financial brokerage firm licensed in another Member State and which had established a branch in the Republic of Lithuania. However, this shall not limit the right of the Lithuanian Supervisory Authority to require that a financial brokerage firm that had established a branch in the Republic of Lithuania provide regular information about the activities of the branch in the Republic of Lithuania, as well as to carry out the supervision considering the provisions of this Law.
Amendments to the paragraph of the Article:
No XII-1547, 19/03/2015, published in TAR 31/03/2015, identification code 2015-04840
2. When performing the supervisory functions established in this Law the Supervisory Authority shall have a right to obligate the branch of the financial brokerage firm to furnish the complete information necessary to assess whether the branch complies with the requirements for the operations of braches laid down on the basis of Article 40 of this Law.
3. The instructions of the Supervisory Authority stipulated in paragraph 2 of this Article shall not be more stringent than those applicable for the purpose of supervision of the financial brokerage firms established in the Republic of Lithuania.
4. The Supervisory Authority shall monitor the compliance of the branches of financial brokerage firms established in the Republic of Lithuania with the requirements of Articles 22, 24, 25, 31, 33 and 34 of this Article and other regulations passed on the basis thereof. To that end the Supervisory Authority shall have a right to conduct the inspections of the branch with a view to establishing the compliance with the requirements and require the elimination of the determined violations.
5. The supervisory authority of the financial brokerage firm licensed in another Member State and operating a branch in the Republic of Lithuania, having (in writing) notified the Securities Commission, shall have a right to carry out the inspections of the branch established in the Republic of Lithuania.
Article 90. Precautionary Measures Available to the Supervisor Authority in Respect
of Financial Brokerage firms licensed in Other Member States
1. The Supervisory Authority having clear grounds for suspecting that a financial brokerage firm licensed in another Member State and providing investment services in the Republic of Lithuania fails to comply with the requirements provided for in this Law, shall notify the supervisory authority of the financial brokerage firm thereof.
2. The notifications provided for in paragraph 1 of this Article shall be provided where:
2) investment services are provided in the Republic of Lithuania having established a branch and the financial brokerage firm having established a branch is suspected to be in breach of the requirements established in this Law the enforcement whereof is not attributed to the competence of the Supervisory Authority.
3. Where disregarding the sanctions imposed by the supervisory authority of the financial brokerage firm or because the measures imposed are inadequate, the financial brokerage firm persists in acting in non-compliance with the requirements established in this Law, and in prejudice to the interests of the investors of the Republic of Lithuania or poses threat to an orderly functioning of the markets in financial instruments, the Supervisory Authority after informing the supervisory authority of the financial brokerage firm shall be entitled to take all the appropriate measures needed in order to protect investors and the proper functioning of the markets. The Supervisory Authority shall be entitled to take measures preventing the offending financial brokerage firm from initiating any transactions in financial instruments in the Republic of Lithuania. The Supervisory Authority shall without delay notify the European Commission and the European Securities and Markets Authority on the measures taken in this respect. The Supervisory Authority may also communicate the matter to the European Securities and Markets Authority, which may act in accordance with the powers conferred on it by Regulation (EU) No 1095/2010.
4. Where the Supervisory Authority determines that a financial brokerage firm licensed in another Member State, while acting through its branch in the Republic of Lithuania is in breach of the requirements of this Law, the enforcement whereof is executed by the Supervisory Authority, it shall require the financial brokerage firm to put an end to the infringing actions. Where the financial brokerage firm continues to infringe the requirements of the relevant regulations the Supervisory Authority shall have a right to take all appropriate measures to cease the irregularities. The Supervisory Authority shall notify the financial brokerage firm on the actions that has been undertaken.
5. Where despite the sanctions imposed by the Supervisory Authority the financial brokerage firm persists in breaching the regulatory requirements of the legal acts of the Republic of Lithuania, the Supervisory Authority shall have a right after notifying the supervisory authority of the financial brokerage firm to take all required measures to protect the interests of investors and to ensure orderly functioning of markets. The Supervisory Authority shall without delay notify the European Commission and the European Securities and Markets Authority on the measures taken in this respect. The Supervisory Authority may also communicate the matter to the European Securities and Markets Authority, which may act in accordance with the powers conferred on it by Regulation (EU) No 1095/2010.
6. Where the Supervisory Authority has grounds for suspecting that the requirements established in this Law are being infringed by a market operator of a regulated market operating in another Member State or of a multilateral trading facility, or a financial brokerage firm that had taken actions in the Republic of Lithuania specified in this Law with a view to facilitating the entities established in the Republic of Lithuania of becoming members of the regulated market managed thereby or members of the multilateral trading facility, or facilitating trading therein, the Supervisory Authority shall without delay notify the supervisory authority of the operator of the regulated market or the operator of the multilateral trading facility thereof. Where disregarding the sanctions imposed by the home supervisory authority or because the measures imposed are inadequate, the operator of the regulated market or the multilateral trading facility persists in acting in noncompliance with the requirements established in this Law, and in prejudice to the interests of the investors of the Republic of Lithuania or poses threat to an orderly functioning of the markets in financial instruments, the Supervisory Authority, after informing the home supervisory authority shall be entitled to take all the appropriate measures needed in order to protect investors and the proper functioning of the markets. The Supervisory Authority shall be entitled to prevent the operator of the regulated market or the multilateral trading facility from making arrangements with a view to facilitating the entities established in the Republic of Lithuania becoming members of the regulated market managed thereby or members of the multilateral trading facility or facilitating trading therein. The Supervisory Authority shall without delay notify the European Commission and the European Securities and Markets Authority on the measures taken in this respect. The Supervisory Authority may also communicate the matter to the European Securities and Markets Authority, which may act in accordance with the powers conferred on it by Regulation (EU) No 1095/2010.
7. Any sanctions which the Supervisory Authority may impose in cases specified in this Article shall be properly justified and reasoned, and the sanctions imposed shall be immediately communicated to the financial brokerage firm or the operator of the regulated market.
8. The provisions of this Article shall apply mutatis mutandis to licensed credit institutions mutatis mutandis.
Amendments to the Article:
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7770 (31/12/2011)
Article 91. Supervision of the Operations of Financial Brokerage Firms of the
Republic of Lithuania in Third Countries
1. The Supervisory Authority shall supervise the compliance with the prudential requirements by the financial brokerage firms of the Republic of Lithuania providing investment services in third countries. Where the supervisory authority of a third country notifies of any infringements committed by a financial brokerage firm, the Supervisory Authority shall impose sanctions and notify the supervisory authority of a third country thereof.
2. The Supervisory Authority shall have a right to request the supervisory authority of a third country to conduct an inspection of the activities of the branch of the financial brokerage firm or initiate an inspection itself after having in advance notified the supervisory authority of the third country thereof.
Article 92. Effects of Violation of the Law
Persons who violate this Law must:
1) act in line with the instructions of the Supervisory Authority to terminate their actions, restore the situation to its original condition and fulfil other orders;
Article 93. Pecuniary Penalties
1. The Supervisory Authority shall have a right to impose pecuniary penalties on:
1) legal persons providing investment services without having a licence provided for in this Law where such licence is required – up to EUR 57 924;
2) legal persons failing to comply with the requirements for their activities established in Chapter II of this Law – up to EUR 57 924;
3) legal persons failing to comply with the organisational requirements established in Articles 13 and 16 of this Law – up to EUR 28 962;
4) legal persons failing to comply with the market transparency requirements established in Section Four of Chapter II and Section Two of Chapter III of this Law – up to EUR 28 962;
5) legal persons engaged in the activities of an operator of a regulated market without having a licence provided for in this Law – up to EUR 57 924;
6) operators of regulated markets failing to comply with the requirements laid down in Chapter III of this – up to EUR 28 962;
7) legal persons failing to comply with the requirements laid down in Chapter IV of this Law – up to EUR 57 924;
8) legal persons failing to comply with the ban established in Article 82 of this Law – up to EUR 28 962;
9) legal persons failing to comply with other laid down in this Law and its implementing legislation – up to EUR 28 962;
10) legal persons not fulfilling the instructions of the Supervisory Authority, not providing to the Supervisory Authority the information provided for in this and other Laws and obstructing the Supervisory Authority or the persons authorised thereby to carry out investigations or inspections – up to EUR 28 962;
11) legal persons failing to comply with the requirements laid down in paragraph 1 of Article 4 of Regulation (EC) No 1060/2009 – up to EUR 57 924;
12) legal persons failing to comply with the requirements laid down in Articles 4, 5, 7–11 of Regulation (EC) No 648/2012 – up to EUR 57 924;
13) legal persons failing to comply with the requirements laid down in Regulation (EB) No 1060/2009 – up to EUR 57 924.
Supplemented by the paragraph of the Article:
No XII-1470, 18/12/2014, published in TAR 31/12/2014, identification code 2014-21127
Amendments to the paragraph of the Article:
No XII-1103, 23/09/2014, published in TAR 2/10/2014, identification code 2014-13435
2. Where income and other financial benefit have been illegally obtained, loss avoided or damage caused due to violations listed in paragraphs 1-8 and 12 of paragraph 1 of this Article and the amount of such income, other financial benefit, loss avoided or damage caused exceeded the amount of fines referred to therein, the Supervisory Authority shall have the right to impose a fine of the double amount of income obtained illegally, other financial benefits, loss avoided or damage caused.
3. The imposition of sanctions referred to in paragraph 1 of this Article upon legal persons does not exempt the managers or employees thereof from the civil, administrative and criminal liability provided for by laws, also does not preclude the Supervisory Authority from considering the issue of suspension or revocation of licences issued thereby.
Amendments to the Article:
No XII-339, 28/05/2013, Valstybės Žinios (Official Gazette), 2013, No 62-3054 (12/06/2013)
Article 94. Procedure of Imposing Pecuniary Penalties
1. Prior to passing a decision to impose a pecuniary penalty specified in this Law, the Supervisory Authority shall allow at least a 5-day term for the submission of explanations and shall inform thereof the legal person subject to the investigation. If explanations are not submitted within the set term, it shall be deemed that the person has refused to provide them.
2. The Supervisory Authority shall inform the person whose actions are subject to investigation about the date and the venue of the meeting at which the issue of penalty imposition will be discussed by sending a notification by registered mail. The person‘s representatives and lawyers shall have the right to attend the meeting. The issue of imposing a penalty shall be considered at the meeting even if the representative of the person whose actions are being investigated fails to attend the meeting, provided the person has been informed of the pending meeting.
3. The representatives of the person shall have the right to familiarize with the material proving the violation, provide explanations, present evidence, and hire a lawyer.
4. Having analysed the material concerning the suspected violation, the Supervisory Authority shall have the right to:
2) discontinue the investigation due to the absence of a violation or a statutory basis to impose a penalty;
5. The Supervisory Authority by imposing the sanction shall take into consideration the following:
3) the amount of illegal proceeds, other financial benefit or another benefit the person gained from the violation;
6. Actions of the suspect taken of his own free will in order to prevent the detrimental effects of the violation, to assist the Supervisory Authority in carrying out the investigation, to compensate for the losses or to undo the damage shall be considered attenuating circumstances. The Supervisory Authority may decide to deem other circumstances not specified therein as attenuating as well.
7. Actions of the suspect taken wilfully provided he fails to cooperate with the Supervisory Authority, impedes the investigation, conceals the violation, continues illegal acts in spite of an order to discontinue them and repeats a violation for which a penalty prescribed in this Law has been imposed shall be considered aggravating circumstances. The aggravating circumstances referred to in this paragraph shall not be considered when they are qualifying circumstances of the violation.
Article 95. The Right of the Supervisory Authority not to Impose Sanctions
The Supervisory Authority when considering the imposition of sanctions laid down in this Law, may not impose the sanctions taking into account the circumstances referred to in paragraphs 5, 6 of Article 94 of this Law and in the absence of circumstances referred to in paragraph 7 of Article 94 and in accordance with principles of justice and reasonableness, where all of the following requirements are met:
Article 96. Collection of Pecuniary Penalties
Pecuniary penalties shall be paid into the State Budget not later than within one month from the day when the person received the decision of the Supervisory Authority concerning the imposition of a penalty. Having appealed against such a decision, the penalty must be paid no later than within forty days from the date of coming into effect of the court decision based on which the appeal is dismissed. If a person fails to pay the penalty of his own free will the decision of the Supervisory Authority to impose a penalty shall be enforced in the manner prescribed by the Code of Civil Procedure.
Article 97. Final Provisions
1. A financial brokerage firm in possession of a licence of a financial brokerage firm issued by the Supervisory Authority before 2 February 2007 and complying with the requirements established in Articles 9–13 and Article 16 of this Law shall have a right to provide investment services and enjoy other rights prescribed by this Law.
2. A financial brokerage firm in possession of a licence of a financial brokerage firm issued by the Supervisory Authority before 2 February 2007 but not complying with the requirements established in Articles 9–13 and Article 16 of this Law shall have its licence of the financial brokerage firm revoked in the manner stipulated by this Law.
3. An operator of the regulated market the system operated whereby is in possession of a license of an operator of the regulated market issued by the Supervisory Authority before 2 February 2007 and complying with the requirements established in Chapter III of this Law, shall have a right to engage in the activities of the operator of the regulated market and enjoy other rights prescribed by this Law.
4. An operator of the regulated market the system operated whereby is in possession of a license of an operator of the regulated market issued by the Supervisory Authority before 2 February 2007 but not complying with the requirements established in Chapter III of this Law shall have its licence of the regulated market revoked in the manner provided for in this Law.
5. Where a financial brokerage firm on the basis of the procedures and criteria similar to those specified in Article 28 of this Law has recognised a person to be a professional client before 2 February 2007, it shall not need to repeatedly perform the procedure for the recognition of the person a professional client.
Article 98. Application of the Provisions of the Law
The provisions of this Law setting forth new requirements upon persons providing investment services and/or regulated markets and their operators that had not been provided for in the previously effective Law on Securities Market of the Republic of Lithuania shall be effective starting from 1 November 2007. From 8 February 2007, the references to the Law on Securities Market of the Republic of Lithuania, depending on the area of regulation of this Law shall be considered as references to this Law, and the references to the definitions presented in the Law on Securities Market of the Republic of Lithuania shall be considered as references to the definitions presented in this Law, except the references to the Law on Securities Market of the Republic of Lithuania that, depending on the area governed by the Law on Securities shall be considered as references to the Law on Securities of the Republic of Lithuania, also the references to the definitions presented in the Law on Securities Market of the Republic of Lithuania that having regard to the area governed by the Law on Securities of the Republic of Lithuania should be considered as references to the Law on Securities of the Republic of Lithuania.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
PRESIDENT OF THE REPUBLIC VALDAS ADAMKUS
Annex to the Law on Markets in
Financial Instruments of the
Republic of Lithuania
REGULATIONS OF THE EUROPEAN UNION IMPLEMENTED BY THE PRESENT LAW
1. Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganization and winding up of credit institutions (OJ 2004, Special Edition, Chapter 6, Volume 4, p. 15), as last amended by European Parliament and Council Directive 2014/59/EU of 15 May 2014 (OJ 2014 L 173, p. 190).
2. Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities (OJ 2004, Special edition, Chapter 6, Volume 4, p. 24).
3. Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) (OJ 2004, Special edition, Chapter 6, Volume 4, p. 367) as last amended by European Parliament and Council Directive 2010/78/EU of 24 November 2010 (OJ 2010 L 331, p. 120).
4. Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ 2004, Special edition, Chapter 6, Volume 7, p. 263) as last amended by European Parliament and Council Directive 2010/78/EU of 24 November 2010 (OJ 2010 L 331, p. 120).
5. Directive 2007/44/EC of the European Parliament and of the Council of 5 September 2007 amending Council Directive 92/49/EEC and Directives 2002/83/EC, 2004/39/EC, 2005/68/EC and 2006/48/EC as regards procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of shareholdings in the financial sector (OJ 2007 L 247, p. 1).
6. Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ 2009 L 302, p. 1), as amended by Regulation (EU) No 462/2013 of the European Parliament and of the Council of 2013 May 21 (OJ 2013 L 146, p. 1).
7. Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (OJ 2012 L 201, p. 1).
8. Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L 176, p. 338).
9. Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (OJ 2014 L 173, p. 190).
Amendments to the Annex:
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
Amendments:
1.
Seimas of the Republic of Lithuania, Law
No X-1776, 06/11/2008, Valstybės Žinios (Official Gazette), 2008, No 131-5026 (15/11/2008)
LAW AMENDING ARTICLE 70 OF THE LAW ON MARKETS IN FINANCIAL INSTRUMENTS
2.
Seimas of the Republic of Lithuania, Law
No XI-199, 19/03/2009, Valstybės Žinios (Official Gazette), 2009, No 38-1438 (04/04/2009)
LAW SUPPLEMENTING THE LAW WITH ARTICLE 85(1) AND SUPPLEMENTING AND AMENDING ARTICLES 3, 7, 10, 14, 20, 41, 42, 43, 47, 51, 62, 64, 80, 82, 83, 85, 86, 95 97, AND THE ANNEX TO THE LAW ON MARKETS IN FINANCIAL INSTRUMENTS
Until the entry into force of this law, the applications submitted to the Securities Commission for permission to acquire or increase a qualifying holding in the financial brokerage firm or operator of a regulated market shall be examined and decisions taken in accordance with the procedure established by the legislation in force at the time of filing the application.
3.
Seimas of the Republic of Lithuania, Law
No XI-875, 03/06/2010, Valstybės Žinios (Official Gazette), 2010, No 71-3551 (19/06/2010)
LAW SUPPLEMENTING THE LAW WITH ARTICLE 96(1) AND AMENDING AND SUPPLEMENTING ARTICLES 3, 10, 22, 32, 47, 55, 62, 64, 68, 71, 72, 73, 85, 86, 87, 95, 96, OF THE LAW ON MARKETS IN FINANCIAL INSTRUMENTS
4.
Seimas of the Republic of Lithuania, Law
No XI-1402, 24/05/2011, Valstybės Žinios (Official Gazette), 2011, No 71-3364 (11/06/2011)
LAW SUPPLEMENTING THE LAW WITH ARTICLE 93(1) AND 90(1), AND AMENDING AND SUPPLEMENTING ARTICLES 3, 4, 7, 15, 18, 20, 21, 64, 67, 68, 69, 71, 80, 85, 95 AND THE ANNEX TO THE LAW ON MARKETS IN FINANCIAL INSTRUMENTS
Brokerage firms, market operators and the Central Depository shall prepare the financial statements for the reporting period starting on 1 January 2012 and later in accordance with Article 4 of this Law and according to international accounting.
5.
Seimas of the Republic of Lithuania, Law
No XI-1672, 17/11/2011, Valstybės Žinios (Official Gazette), 2011, No 145-6818 (01/12/2011)
LAW AMENDING THE LAW ON THE MARKETS IN FINANCIAL INSTRUMENTS
This Law was amended:
5.1.
Seimas of the Republic of Lithuania, Law
No XI-1881, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, Nr. 163-7770 (31/12/2011)
LAW AMENDING ARTICLE 1 OF THE LAW AMENDING THE LAW ON MARKETS IN FINANCIAL
INSTRUMENTS
The Law is in force since 1 January 2012
6.
Seimas of the Republic of Lithuania, Law
No XII-339, 28/05/2013, Valstybės Žinios (Official Gazette), 2013, No 62-3054 (12/06/2013)
LAW SUPPLEMENTING AND AMENDING ARTICLES 70, 71, 81, 93 AND THE ANNEX TO THE LAW ON MARKETS IN FINANCIAL INSTRUMENTS
Amendments:
1.
Seimas of the Republic of Lithuania, Law
Nr. XII-1103, 23/09/2014, published in TAR 02/10/2014, identification code 2014-13435
Republic of Lithuania Law amending Articles 4 and 93 of the Law on Markets in Financial Instruments No X-1024
2.
Seimas of the Republic of Lithuania, Law
No XII-1470, 18/12/2014, published in TAR 31/12/2014, identification code 2014-21127
Republic of Lithuania Law amending Articles 70, 84 and 93 and Annex to the Law on Markets in Financial Instruments No X-1024
3.
Seimas of the Republic of Lithuania, Law
No XII-1547, 19/03/2015, published in TAR 31/03/2015, identification code 2015-04840
Republic of Lithuania Law supplementing the Law with Articles 12-1, 12-2, 25-1, 73-1 and amending the Annex to the Law and title of the Section 2 of Chapter VI and Articles 2, 3, 7, 12, 13, 70, 71, 76, 81, 84, 88, 89 of the Law on Markets in Financial Instruments No X-1024
4.
Seimas of the Republic of Lithuania, Law
No XII-2057, 24/11/2015, published in TAR 02/12/2015, identification code 2015-19168
Republic of Lithuania Law supplementing the Law with Articles 9-1, 85-1 and amending the Annex and Articles 2, 3, 71, 81, 83, 84, 87 of the Law on Markets in Financial Instruments No X-1024