Start : Brokerage Services : Protection of investors' interests
Protection of investors' interests
The Investor Protection System of the Republic of Latvia ensures the receipt of compensation for irreversibly lost financial instruments and losses caused by a non-executed investment service if the Bank is unable to meet its obligations towards the client in full and within the prescribed term, but not in cases when investor has suffered losses due to financial instrument price changes or financial instruments becoming illiquid.
Compensation is calculated for:
- irreversibly lost financial instruments;
- losses resulting from a non-executed investment service.
Compensation to one client is determined in the amount of 90 percent of irreversibly lost financial instrument's value or losses caused by a non-executed investment service, however, not exceeding EUR 20,000 on the day when the decision on the legitimacy of application for compensation is made.
Compensation is not paid to:
- a person for transactions in respect of which a conviction in a criminal case for money laundering has been adopted;
- banks, insurance companies, investment companies or other investors which have stated that they are professional investors;
- persons affiliated with the Bank;
- pension funds
- the State and local governments;
- management board and board of directors members of the Bank, the head of an audit commission and members of such commission, the head of an internal audit service and members of such service, other employees of the Bank who are authorised to plan, manage and control activities of the Bank and who are responsible therefore, as well as to persons who have directly or indirectly acquired more than 5% of the capital of the Bank;
- persons who are responsible for the audit of the accounting documents of the Bank stipulated by law;
- persons who are relatives of the first degree of kinship, or spouses of the persons referred to in items 6 and 7 above;
- persons who act on behalf of the persons referred to in item 7 above;
- persons regarding whom the Financial and Capital Market Commission has established that, under special provisions of a contract concluded individually, they have received high interest rates or financial concessions, or have caused or have taken advantage of circumstances which have resulted in financial difficulties or have led to deterioration in the financial situation of the Bank.
The Financial and Capital Market Commission ensures the payment of compensations on the basis of an investor's application. An application for compensation shall be submitted within a one-year period from the date the client becomes aware that Bank has defaulted on its obligations, but not later than five years from the date of default on obligations.
More information on the protection of investors’ interests can be found on the Financial and Capital Market Commission website - www.fktk.lv. Adress of FCMC: Kungu street 1, Riga, LV-1050, Latvia, phone +371 7666 4804.
Client Funds (Deposit) Protection
The transactions of clients with financial instruments are simultaneously related to cash settlements. All the cash of the client is placed either in his or her current account or in the Investment account with the Bank. An Investment account is an account from which transactions involving financial instruments are carried out. The protection of the Deposit Guarantee System of the Republic of Latvia applies to client’s cash, which is located in both his or her current account and his or her Investment account. More on Deposit Guarantee System of the Republic of Latvia please read here.
More information on the protection of client founds (deposit) can be found on the Financial and Capital Market Commission website - www.fktk.lv. Adress of FCMC: Kungu street 1, Riga, LV-1050, Latvia, phone +371 7666 4804.