Following up on the amended financial instrument act, on 23 June 2018 a new regulation was published by the Minister of Finance concerning the procedure and conditions of activity of investment firms, banks (referred to in Article 70.2 of the financial instrument act) and trust banks.
The new regulation sets forth many new obligations and limitations for the investment firms. The domestic regulator followed in the footsteps of the EU agencies and emphasised the need to improve protection of investors in the new regulations. To that end, new rules were set up on how to identify target groups and design distribution strategies for every financial instrument. Following the change the brokerage houses will need to meet several new requirements when arranging an instrument issue. With a view to enhanced investor protection, new obligations were also introduced concerning submission of current and period activity reports to customers.
The regulation also includes new and more restrictive rules of incentives that are acceptable for brokerage houses.
Investment firms are required to adjust their operations to the new regulations by 21 October 2018.
