Protection of investors’ interests

Norvik Banka is a member of Investors Protection System. License Registration number is 06.01.04.007/210. The Financial and Capital Market Commission issues credit institution operating license.

1. Who is an investor?
An investor is bank’s client, who gives money or financial instruments to the bank for execution of deals with financial instruments or provision of other investment services.

2. How are interests of investors protected?
The Law on Protection of Investors envisages allowance of compensation to investors in cases, when the bank is not able to meet its obligations towards the investor in full amount and terms.

3. What is an amount of compensation?
The amount of compensation paid to one investor is 90% of:

• value of irrecoverably lost financial instruments. The Law on Protection of Investors states that irrecoverable loss of financial instruments is a fact established by the Financial and Capital Market Commission stating that data confirming investor’s ownership for financial instruments being located in bank’s computer system or kept recorded other way are destroyed or damaged irreversibly due some action or inaction or crime and the bank rejects to renew this data according to documents presented by the investor;
• losses caused by non-fulfillment of investment service. The Law on Protection of Investors states that unfulfilled investment service is an investment service undertaken by the bank for implementation that has not been fulfilled in full amount or partially, and it caused damages or irrecoverable loss of financial instruments to the investor.

The amount of compensation is stated by:

• in case of irrecoverable loss of financial instruments – according to market price of financial instruments belonging to the investor on the day, when application on irrecoverable loss of financial instruments was submitted to the Financial and Capital Market Commission. If it is not possible to establish market price on the day, when the application was submitted, then last available market price of financial instruments that was in force before the day of submitting of application is used;
• in case of unfulfilled investment service – according to losses caused to the investor by unfulfilled investment service.

However, the amount of compensation per depositor may not exceed 20 000 EUR.

4. What should be done to receive compensation?
The investor must submit an application for receipt of compensation the Financial and Capital Market Commission.
The Financial and Capital Market Commission establishes the procedure of admission of the application. The Financial and Capital Market Commission reviews the application for receipt of compensation submitted by the investor in 30 days and decides about validity of allowance of compensation or about refusal for allowance of compensation.
The application for receipt of compensation must be submitted in one year from the moment, when the investor got to know that the bank didn’t meet its obligations, but not later than in five years since the day of non-fulfillment of obligations.

5. How and when is the compensation paid?
The Financial and Capital Market Commission establishes procedure of allowance of compensation. The Financial and Capital Market Commission publishes information about procedure and terms of allowance of compensation in newspaper "Latvijas Vēstnesis" and at least in one daily newspaper.
The Law on Protection of Investors states that compensation must be paid in three months from the day, when the decision about admission of validity of the application for compensation is made. In exceptional cases and special circumstances, the Financial and Capital Market Commission may prolong this term for three months.

6. The compensation is not paid:

• to person for deals, in relation to which verdict of guilty in criminal case about money laundering was passed;
• to participants of the system (within the meaning of the Investor Protection Law), insurance companies, investment companies or other investors considered to be professional investors;
• to persons included in one holding with a participant of the system (within the meaning of the Investor Protection Law);
• to pension funds;
• to the state and local authorities;
• to the members of the board and council of a participant of the system (within the meaning of the Investor Protection Law), head of the Audit Commission and members of this Commission, head of the Internal Audit Service and its staff, other employees of a participant of the system, who are authorized and responsible for planning, management and control of the activities of the system’s participant as well as to the persons who have received directly or indirectly more than five percent of the system’s participant capital;
• to the persons who are responsible for the statutory audit of the system’s participant accounting documents, as well as the first-degree relatives and the spouses of those persons;
• to the persons with respect to whom, the Financial and Capital Market Commission has identified that they, on the basis of the specific provisions of the individually concluded agreement, received high interest rates or financial concessions, or aroused, or used in their favor, circumstances that have created the financial difficulties for a participant of the system, or who have contributed to the deterioration in the financial situation of a participant of the system;
• to the persons, who are the first-degree relatives or the spouses of the persons referred to in Article 7(6) of the Investor Protection Law, and who act on behalf of the persons referred to in Article 7 (7) of the Law.

More information on investor protection scheme you may find on the website http://likumi.lv/doc.php?id=55829.