The call for tighter financial regulation can be heard everywhere - Estonia is no exception. The Financial Supervision Authority recently issued an advisory guideline to investment funds specifying the requirements for internal rules regarding risk management. The guideline, entitled "Requirements for the Management of Risks Related to the Investment of the Assets of a Fund", will enter into force on February 15 2010.
The harmonization of the EU Markets in Financial Instruments Directive with Baltic (Estonian, Latvian and Lithuanian) financial market regulation has given the Baltic Exchanges the opportunity to establish the Baltic alternative market - First North Baltic - as a component of the First North alternative market of the OMX Nordic Exchanges.
According to the Act on the Issue of 2002 Bonds of the Republic of Estonia, the government may issue bonds worth up to €100 million for a five-year term. The issuing is aimed at international financial markets, with bonds being offered to investors outside the Republic of Estonia.
The Estonian Parliament recently adopted amendments to the Act on Foreign Borrowings and Issuing of State Guarantees to Foreign Loans by the Republic of Estonia. The amendments pave the way for the first international bond issue by the Republic of Estonia and expedite the country's foreign borrowing procedure.
The new Guarantee Fund Act aims to protect investors by ensuring the functioning of guarantee schemes for compulsory pension funds in Estonia and introducing an effective mechanism for the administration of such schemes.
The new Securities Market Act replaces the Securities Market Act of 1993 for the purpose of regulating the domestic securities market in compliance with relevant EU and international standards, in order to ensure the efficient operation and transparency of the market and its integration with equivalent markets.
The new Securities Market Act and amending legislation brings the Criminal Code into line with the new act, and provisions are introduced regarding liability for manipulation in a regulated securities market.
Including: Securities Market Regulation; Supervision
Parliament passed the Financial Supervisory Authority Act on May 9 2001. The act is based on the principle that the new Financial Supervisory Authority must enjoy political and financial independence in adopting decisions, and must have sufficient competence and resources for the performance of its functions.
The draft Financial Supervisory Authority Act recommends the formation of a single financial supervisory authority as an independent government agency operating within the Ministry of Finance. After months of deliberation and a second reading, agreement has not yet been reached about the authority's subordination.
Regulation 116 governs the administration of the Central Register of Securities. The provisions detail the requirements for the exchange of information, and the procedures for maintaining the register and making entries therein.
New regulations detail the procedure for the sale of securities owned by the state. Securities must first be entered in the state assets register and, if the sale is public, in the Central Register of Securities. The new statutes of the Securities Insepctorate stipulate the inspectorate's scope and powers as a government agency.
The new Central Register of Securities Act introduces provisions for the registration of shares and amends the Commercial Code regarding the regulation of shares. The act is effective from January 1 2001.
A regulation introduces new procedures for the public issuing of securities. Issuers must now register securities with a new body, the Securities Inspectorate.
Including: Securities Market Regulation; Supervision of Securities Markets
Although the Ministry of Finance is drafting a new Securities Market Act, immediate amendments have been introduced in the interim to rectify deficiencies in the existing legislation. The changes are set out in a new act which concerns public issues of securities and issues subject to prior registration with the Securities Inspectorate.