Investment services

Cooperation
C
ti and
d exchange
h
off
information with domestic authorities
~ Memorandum of understanding ~
Sanja Petrinić Turković
April 2011
April,
Content
2
Structure of the RoC financial sector
3
RBA D.D.
RAIFFEISEN LEASING
RAIFFEISEN
CONSULTING
RAIFFEISEN
MIROVINSKO
DRUŠTVO ZA
UPRAVLJANJE:
•OBV.MIR.FONDOM
• DOBROVOLJ.
DOBROVOLJ MIR.
MIR
FONDOM
RAIFFEISEN MIROVIN.
OSIGURAVAJUĆE
DRUŠTVO
RAIFFEISEN INVEST
RAIFFEISEN
UPRAVLJANJE
NEKRETNINAMA
HPB D.D.
HPB
STAMBENA
ŠTEDIONICA
E&S D.D.
HAAB D.D.
SG- SPLITSKA D.D.
ERSTE
HYPO ALPE ADRIA SG CONSUMER
BANK,PODGORICA INVEST D.D.
FINANCE
MBU D.O.O.
ERSTE DELTA
D.O.O. ZA
POSLOVANJE
NEKRETNINAMA
ERSTE
FACTORING
ERSTE
D.O.O.DRUŠTVO
ZA UPRAVLJANJE
OBVEZNIM
MIROVINSKIM
FONDOM
ERSTE
NEKRETNINE
HYPO ALPE-ADRIA
NEKRETNINE
SG LEASING
ZABA D.D.
PBZ D.D.
UNICREDIT BANK MEÐIMURSKA
D.D. MOSTAR
BANKA ČAKOVEC
PRVA STAMBENA
ŠTEDIONICA
PBZ STAMBENA
ŠTEDIONICA
AZ D.O.O.
DOO
DRUŠTVO ZA
UPRAVLJANJE
ALPE ADRIA
CENTAR D.O.O.
•OBV.MIR.FONDOM
• DOBROVOLJ. MIR.
FONDOM
PBZ CARD
MAGUS D.O.O.
ZAGREB
NEKRETNINE
D.O.O.
CENTURION
FINANC. USLUGE
PROJEKT
NEKRETNINE
D.O.O.
POMINVEST D.D.
ZA FINANCIJSKO
POSREDOVANJE
PBZ LEASING
ZB INVEST D.O.O. PBZ NEKRETNINE
RAIFFEISEN
FACTORING D.O.O.
PBZ INVEST 4
Cooperation between the competent authorities of the RoC
~ Article 221~
‡
CNB and
d other
th supervisory
i
authorities
th iti iin th
the RoC
R C shall,
h ll att th
the
request of an individual supervisory authority, deliver to that
authority all information on a credit or financial institution
necessary for the:
„
„
‡
exercise of supervisory and
oversight tasks in authorisation or approval procedures, or when
deciding on other specific applications or requests within its
competence
The authorities shall notify each other of :
„
„
„
withdrawal of authorisations,
illegalities and irregularities identified in the course of supervision and
oversight
of imposed measures for their elimination if such findings and
imposed measures are relevant for the operation of the other authority
5
MoU with CFSSA
~ September 2006 ~
‡
Croatian National Bank (CNB) and the Croatian Financial Services
Supervisory Agency (CFSSA) express their readiness to cooperate in
the field of promotion and safeguarding of financial system
stabilityy and supervision
p
of the legitimacy
g
y of business operations
p
of supervised entities, as well as in other fields of their authorities
and agree to base such cooperation on mutual trust and
understanding
„
„
CNB is within its sphere of authority authorised, among others, for issuing
and revoking licenses of banks, savings banks and foreign bank branches,
their supervision on an individual basis and supervision of banking groups
on the basis of consolidated reports and for issuing implementing
regulations within its sphere of authority. The CNB is also responsible for
payment system supervision and the handling of procedures and issuing of
decisions which regulate market competition in the banking sector.
CFSSA is within
h its sphere
h
off authority
h
also
l responsible
bl for
f issuing and
d
withdrawing licenses of supervised entities, for exercising supervision over
the operations of supervised entities and for adopting subordinate
legislation which regulates business operations in connection with the
provision of financial services.
6
MoU with CFSSA
~ September 2006 ~
‡
Exchange of Information
„
„
„
„
‡
CNB & CFSSA agree that the exchange of information is an essential
precondition for cooperation
agree to provide each other with the requested information upon written
request as well as any other information within their respective authorities
that is judged to be of importance to the other party.
where it is find that it is necessary to impose specific measures
measures, such request
may also be submitted orally, provided it is followed by a confirmation in
writing
authorities may also exchange other information important for their
operations, based on a written request.
Licences and Approvals
„
CNB & CFSSA agree to exchange
h
i f
information
i necessary for
f the
h issuing
i i
and revoking of operating licenses and approvals and other authorisations
and for the carrying out of procedures related to market competition, in
case of supervised entities associated with the supervised entities
7
Core and additional financial services
~ Credit institutions act ~
‡
Core financial services that banks may be authorised for:
4) financial leasing;
6) trading for own account or for the accounts of clients in:
– money market instruments;
– transferable
t
f bl securities;
iti
– foreign exchange, including currency exchange transactions;
– financial futures and options;
– exchange and interest-rate instruments;
12) participation
ti i ti iin iissues off fi
financial
i l iinstruments
t
t as wellll as th
the provision
i i off services
i
relating
l ti tto iissues off
financial instruments in accordance with the law governing the capital market;
13) portfolio management and advice;
14) safekeeping of financial instruments and services related to the safekeeping of financial instruments
in accordance with the law governing the capital market;
17) investment and ancillary services and activities prescribed in the special law governing the capital
market and not included in services referred to in items (1) to (16) of this paragraph.
‡
Additional financial services that banks may be authorised for:
„
„
„
„
act v t es related
activities
e ated to the
t e sale
sa e of
o insurance
su a ce policies
po c es in accordance
acco da ce w
with
t tthee law
aw gove
governing
g insurance;
su a ce;
payment systems management services in accordance with the provisions of a special law;
other services which a credit institution may provide in accordance with the provisions of a special
law; and
other services similar to financial services referred to in paragraph (1) of this Article and listed in the
credit
di institution's
i i i ' authorisation.
h i i
8
Investment services & ancillary services
~ Capital Market Act ~
‡
Investment services and activities are as follows
follows:
1. reception and transmission of orders in relation to one or more financial
instruments;
2. execution of orders on behalf of clients;;
3. dealing on own account;
4. portfolio management;
5. investment advice;
6. underwriting of financial instruments and/or placing of financial instruments on
a firm commitment basis;
7. placing of financial instruments without a firm commitment basis;
8 operation of Multilateral Trading Facilities
8.
Facilities.
‡
Ancillary services are as follows:
1. safekeeping and administration of financial instruments for the account of
clients, including
g custodianship
p and related services such as cash/collateral
management;
3. advice 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
5.
recommendation relating to transactions in financial instruments;
9
Refusing/Withdrawal
g
o applications
pp
for
authorisation to provide financial services
‡
1.
2.
3.
1.
2.
Article 69
The CNB may refuse an application for authorisation to provide individual financial services:
where it is evident from the documentation and other available information that the credit
institution fails to meet the technical, personnel, organisational and other requirements for
the provision of individual types of core and additional financial services;
where the Croatian National Bank has imposed supervisory measures on the credit
institution and the introduction of a new service could adversely affect the implementation of
these supervisory measures; or
where the credit institution fails to meet special requirements for the provision of financial
services laid down in any other regulation governing the provision of financial services
envisaged in the credit institution's business plan.
Article 70
Where a credit institution ceases to meet the technical, personnel, organisational and other
requirements for the provision of individual types of financial services, the CNB may adopt a
decision on withdrawal of authorisation to provide those financial services for which the
credit institution no longer meets the requirements.
Th Croatian
The
C ti National
N ti
l Bank
B k shall
h ll adopt
d t a decision
d i i on withdrawal
ithd
l off authorisation
th i ti to
t provide
id
all or individual financial services if the credit institution no longer meets the requirements
laid down in other regulations governing the provision of financial services.
10
CREDIT INSTITUTION
~ PROVISION OF INVESTMENT SERVICES ~
Directive
Di
i 2004/39/EC
2004/ 9/EC - Credit
C di institutions
i i i
that
h are authorised
h i d under
d
Directive 2000/12/EC of the European Parliament and of the Council of
20 March 2000 relating to the taking up and pursuit of the business of
credit institutions should not need another authorisation under this
Directive in order to provide investment services or perform investment
activities.
‡ When a credit institution decides to provide investment services or
perform investment activities the competent authorities, before granting an
authorisation should verify that it complies with the relevant provisions of
authorisation,
this Directive.
‡
11
CREDIT INSTITUTION
~ PROVISION OF INVESTMENT SERVICES ~
‡
Current procedure
d
CNB – second
procedure
YES
• receive a request
YES
CFSSA - First procedure
• analises
documentation
• Decision
• receives a request
• analises documentation
• Decision
NO
CI does not have
necessary
documentation for
provision of
investment
services
NO
CI can
provide
investment
service
CI can not
provide
investment
service
CI can not
provide
investment
service
12
CREDIT INSTITUTION
~ PROVISION OF INVESTMENT SERVICES ~
‡
ALTERNATIVE
ONE PROCEDURE
YES CI can provide
CNB
q
•request,
• forward part of
documentation to
CFSSA
CFSSA
•request,
• analises of
documentation
• forward
decision to CNB
investment
service
CNB
•analises of
documentation
• Decision
NO
CI can nott
provide
investment
service
13
CREDIT INSTITUTION
~ PROVISION OF INVESTMENT SERVICES ~
Advantages off a single
Ad
i l legal
l l procedure
d
„ CI communicates exclusively with one
supervisor
i
which
hi h h
have ffullll overview
i on the
h
procedure
„ the
h decision
d i i iis one – the
h CI d
does not have
h
two
possibly different decisions
„ one supervisor
i
h
have the
h right
i h to withdraw
i hd
the
h
authorisation
„ “do
“d nott confuse
f
th court”
the
t”
‡ Disadvantages of a single legal procedure
„ complaint procedure in declines of requests
‡
14
MoU with CFSSA
~ Supervision ~
‡
CNB & CFSSA agree
g
to:
„ exchange information in connection with:
‡ planned on-site examinations (by the end of January),
‡ examination findings (one month from the report),
‡ imposed measures and their implementation by the supervised
entities
„ inform each other about any planned on-site examinations within their
authority which are associated with the supervised entities of the other
„ exchange information on those parts of examination findings which are
relevant for the work of the other
„ CNB & CFSSA agree to exchange information relating to any unlawful
activities and/or irregularities detected in the supervised entity, measures
imposed and the time limits set to the supervised entity for their
implementation as well as other important information within 30 days
from the date of the imposition of measures
15
MoU with CFSSA
~Working Committee for Financial System Supervision ~
‡
CNB & CFSSA established
t bli h d Working
W ki Committee
C
itt for
f Financial
Fi
i l
System Supervision (the Committee).
„
„
the purpose of this Committee is to achieve a coordination of the
procedures and the activities of CNB&CFSSA in the exercise of their
authority
the Committee is comprised of six members, three from each authority
President
mr. Mario
Varjačić, CNB
Secretary:Tatjana
Kovač Klemar,
CFSSA
Member
Member
Member
Member
Renata Samodol,
Samodol
CNB
Dr. sc.
Dr
sc Davor
Galinec, CNB
Denis Oštrić,
Oštrić
CFSSA
Željko Zubak,
Zubak
CFSSA
16
MoU with CFSSA
~Working Committee for Financial System Supervision ~
‡
‡
‡
the Committee con
convene
ene regularly
regularl (not less
le than once in eevery
er six
i
months) to discuss the current state of the financial system and
issues in connection with efficient conduct of supervision and
regulation of financial institutions and financial groups (10th
meeting was held in March 2011)
Committee may agree to meet more often, where this is
warranted by the circumstances
for each individual financial group in the system the Committee
shall, for the purpose of supervision of that financial group,
designate one of the authority as the supervision coordinator
which:
„
„
coordinate all the activities related to the conduct of supervision over a
financial group CNB˛CFSSA
CNB CFSSA agred to supply the coordinator with the
information on the supervised entity within its authority
inform the other authority about the findings of supervision of a
group
p in a written form
financial g
17
MoU with CFSSA
~ Rules of Procedure ~
‡
Rules of Procedure of the Working Committee for Financial
System Supervision (January 2008) defines:
„ manner and the frequency of the mutual exchange of
information on planned on-sight examinations
„ manner of the exchange of information regarding
examination findings, unlawful activities and/or
irregularities detected in a supervised entity, measures
imposed and the time limits set for their
„ the list of supervised entities
„ the list of regularly exchanged reports and dinamics of the
exchange
18
MoU with CFSSA
~ Coordination in Launching Initiatives and the Adoption of
Legislative and Implementing Regulations ~
‡
CNB & CFSSA agree to cooperate in
„
„
‡
‡
launching initiatives for the adoption of laws and implementing regulations
within the spheres of their activities and authorities, where these concern
the sphere
phere of their activity
acti it
the procedure of launching initiatives for the adoption of laws or
implementing regulations governing the supervision of financial groups
CNB & CFSSA agree to set up joint
j i working
ki groups (should
( h ld it
i b
be
necessary during implementing regulations adoption procedure).
CNB & CFSSA shall issue a decision, signed
g
byy both CNB &
CFSSA , determining the contents, the objectives, the tasks, the time
limits and the staff designated to the working groups
Coordination of regulatory proposals - March 2008.
2008 (CNB
(CNB, CFSSA,
CFSSA
MF, State Agency for Deposit Insurance and Bank Rehabilitation ) –
coordinated definitions and procudures for rehabilitation, liquidation
and bancrupcy.
bancrupcy
19
MoU with CFSSA
‡
‡
‡
‡
‡
7 Confidential Information
7.1 Signatories to the Agreement agree to take all the necessary
measures to safeguard the confidentiality of the exchanged
information and to use the exchanged confidential information
only for its intended purpose. Where a
Signatory to the Agreement plans to use the exchanged
information for purposes other than those for which the
information was intended, the Signatory to the Agreement shall
ask for a written approval therefor from the other Signatory to the
Agreement.
7 2 Signatories to the Agreement agree to obligate their staff to
7.2
keep the confidentiality of the information exchanged in the
context of cooperation with the other Signatory to the Agreement.
The obligation to keep the information exchanged under this
Agreement confidential shall continue even after this Agreement
has ceased to be valid.
7.3 Where a Signatory to the Agreement receives a request from a
third party to disclose the confidential information obtained from
the other Signatory to the Agreement, such a Signatory to the
Agreement shall ask for a written approval from the Signatory to
the Agreement which has provided the information, before
di l i the
disclosing
h information
i f
i to the
h third
hi d party. The
Th Signatory
Si
to
the Agreement which has been requested to give its approval may
make the disclosure of information to the third party subject to
fulfilment of certain conditions, such as the obligation to keep the
obtained information confidential and its exclusive use for the
purpose it has been given for
for.
Banking secrecy
Article 168
'Banking secrecy' means a credit institution's
obligation to protect the confidentiality of all
information, facts and circumstances of which it
becomes aware in the course of providing services
to clients or in the course of business with
individual clients. Credit institutions shall be bound
by the obligation of banking secrecy.
secrecy
Use and protection of confidential information
Article 170
The Croatian National Bank, courts, other
supervisory authorities and other persons, shall
use the confidential information they have received
exclusively for the purpose for which it has been
given and may not divulge it to third parties or
enable
bl third
hi d parties
i to acquire
i and
d make
k use off
such information, except in cases prescribed by
law.
20