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LEGAL ACTS OF THE REPUBLIC OF LATVIA
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The translation of this document is outdated.
Translation validity: 01.01.2018.–06.11.2018.
Amendments not included: 11.10.2018.

Text consolidated by Valsts valodas centrs (State Language Centre) with amending laws of:

31 October 2002 [shall come into force from 4 December 2002];
20 November 2003 [shall come into force from 1 January 2004];
18 March 2004 [shall come into force from 1 May 2004];
5 May 2005 [shall come into force from 1 June 2005];
28 September 2006 [shall come into force from 25 October 2006];
26 April 2007 [shall come into force from 30 May 2007];
25 September 2008 [shall come into force from 17 October 2008];
14 November 2008 [shall come into force from 1 January 2009];
23 April 2009 [shall come into force from 1 May 2009];
28 May 2009 [shall come into force from 1 July 2009];
20 December 2010 [shall come into force from 1 January 2011];
15 November 2012 [shall come into force from 1 January 2013];
9 July 2013 [shall come into force from 7 August 2013];
12 September 2013 [shall come into force from 1 January 2014];
3 April 2014 [shall come into force from 29 April 2014];
4 February 2016 [shall come into force from 29 February 2016];
22 November 2017 [shall come into force from 1 January 2018].

If a whole or part of a section has been amended, the date of the amending law appears in square brackets at the end of the section. If a whole section, paragraph or clause has been deleted, the date of the deletion appears in square brackets beside the deleted section, paragraph or clause.

The Saeima1 has adopted and
the President has proclaimed the following law:

Law on State Funded Pensions

Chapter I
General Provisions

Section 1. Purpose of the Law

This Law prescribes the general principles for the establishment and operation of State funded pension schemes (hereinafter - the funded pension schemes), the general provisions for the contribution, administration, management, investment and disbursement of funds, as well as State supervision of such activities.

Section 2. Funded Pension Scheme

(1) The State funded pension is part of the State old age pension consisting of accrued funded pension capital.

(2) The funded pension scheme is a State organised set of measures for making contributions, administration of funds contributed and disbursement of pensions which without increasing of total amount of contributions for old age pensions provides an opportunity to acquire additional pension capital by investing part of the contributions for old age pensions in financial instruments, and other assets in accordance with the procedures laid down in Section 12 of this Law.

[20 November 2003; 5 May 2005]

Chapter II
Participation in the Funded Pension Scheme

Section 3. Persons Participating in the Funded Pension Scheme

(1) All persons who are subject to the State pension insurance in accordance with the law On State Social Insurance and who have not reached 30 years of age on the day of coming into force of this Law shall be registered as participants of the funded pension scheme.

(2) Persons subject to the State pension insurance who are 30 to 49 years (including) of age on the day of coming into force of this Law may commence participation in the funded pension scheme voluntarily by submitting an appropriate application to the State Social Insurance Agency (hereinafter - the Agency).

(3) The registration of socially insured persons in the funded pension scheme shall be made in accordance with the procedures stipulated by the Cabinet.

(4) Participation in the funded pension scheme shall be suspended in the cases referred to in Sections 7 and 8 of this Law.

(5) Persons to which Regulation (EEC, Euratom, ECSC) No. 259/68 of 29 February 1968 laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities (Staff Regulations) is applicable shall be registered as participants of the funded pension scheme, if:

1) they are returning to Latvia and the funded pension capital accrued in the funded pension scheme thereof has been received from a European Union pension scheme, to which it was transferred in related to the participation in the scheme;

2) they, prior to becoming participants of a European Union pension scheme, were not participants of the funded pension scheme, but have become such upon choosing to transfer the funded pension capital accrued in the European Union pension scheme to the State pension system of Latvia, in conformity with the procedures laid down in this Law.

(6) The procedures by which the funded pension capital accrued in a European Union pension scheme which has been transferred to the State pension system of Latvia shall be transferred to the funded pension scheme shall be stipulated by the Cabinet.

[31 October 2002; 26 April 2007; 25 September 2008 / Paragraphs five and six shall come into force on 1 January 2009. See Transitional Provisions]

Section 4. Contributions in the Funded Pension Scheme

(1) Contributions in the funded pension scheme form a part of the contributions actually made for State pension insurance.

(2) The contribution rate in the funded pension scheme shall be six per cent of the contribution object laid down in the law On State Social Insurance and Solidarity Tax Law.

[23 April 2009; 20 December 2010; 22 November 2017]

Section 5. Account of a Participant of the Funded Pension Scheme

(1) The Agency shall ensure that the accrued funded pension capital to each participant of the funded pension scheme - funds accrued during a specific time period in accordance with this Law in favour of a participant of the funded pension scheme - are calculated and registered in an account of the participant of the funded pension scheme.

(2) The Cabinet shall determine the procedures for accounting of accounts of the funded pension scheme participants and for the calculation of the funded pension capital, as well as the maximum amount of administration (administrative) expenses of the funded pension scheme.

Section 6. Participation in the Funded Pension Scheme in Case of Disability

[26 April 2007]

Section 7. Disbursement of Funded Pension Capital

(1) A participant of the funded pension scheme, upon reaching the age that gives rights to receive the old age pension or later, has the right to select whether:

1) to add the accrued funded pension capital to the non-funded pension capital and to calculate (recalculate) the old age pension in accordance with the law On State Pensions,

2) to acquire a life assurance (lifetime pension) policy using the accrued funded pension capital. The Cabinet shall issue such standard regulations regarding lifetime assurance.

(2) If a participant of the funded pension scheme becomes a participant of a European Union pension scheme, the accrued funded pension capital thereof shall be transferred to the European Union pension scheme. The procedures by which the accrued funded pension capital shall be transferred to the European Union pension scheme shall be determined by the Cabinet.

[31 October 2002; 25 September 2008 / Paragraph two shall come into force on 1 January 2009. See Transitional Provisions]

Section 8. Disbursement of Funded Pension Capital in Case of Death of a Participant

If a participant of the funded pension scheme has died prior to requesting an old age pension, the whole funded pension capital registered by the day of the death of the participant of the funded pension scheme shall be included in the special budget of State pensions and taken into account when calculating the survivor's pension to family members who were supported by the dead participant of the funded pension scheme in accordance with the law On State Pensions.

Chapter III
Supervision, Monitoring, Administration of Operation and Management of Funds of the Funded Pension Scheme

Section 9. Supervision of Operation of the Funded Pension Scheme

(1) The Ministry of Welfare shall supervise the funded pension scheme.

(2) In accordance with this Law the Ministry of Welfare has the right:

1) to request and receive an annual statement from the Agency on the operation of the funded pension scheme and reports submitted by the fund manager on the operation of the funded pension scheme;

2) to request and receive quarterly from insurers reports on life assurance (lifetime pension) services (provided in accordance with this Law), dynamics in the number of participants and the amounts of lifetime pensions.

(3) In order to ensure accounting of the old age pension, the Ministry of Welfare has the right to receive an include in the Welfare Information System (WelIS) the data of natural persons in relation to life insurance (lifetime pension) agreements entered into by and between insurance companies and participants to the funded pension scheme, and the insurance companies have an obligation to provide such data to the Ministry of Welfare.

(4) The Cabinet shall determine the data to be included in the Welfare Information System (WelIS), their amount, time periods for the submission of data and procedures for processing thereof.

[26 April 2007; 22 November 2017 / Paragraph three shall come into force on 1 July 2018. See Paragraph 24 of Transitional Provisions]

Section 10. Competence of the Agency

(1) In accordance with this Law the Agency shall:

1) ensure the establishment and updating of accounts of participants to the funded pension scheme by registering contributions made and the funded pension capital accrued;

11) ensure the transfer of the contributions of the participants of the funded pension scheme to managers of funds, requesting the funded pension capital accrued from managers of funds, when the participants of the funded pension scheme change investment plan or terminate participation in the funded pension scheme, and transfer of the funded pension capital to managers of funds in the case of change of investment plans;

2) inform the person of the registration in the funded pension scheme and other significant changes in the operation of the funded pension scheme;

21) issue or send a statement of account of the participant of the funded pension scheme and information regarding the change of the fund manager or investment plan, upon attendance in person of the participant of the funded pension scheme, or upon submission of a written request;

3) conclude contracts with fund managers on the management of funds of the funded pension scheme and its conditions;

4) ensure fulfilment of the applications of the funded pension scheme participants on the selection and change of managers of the funded pension scheme funds and investment plans. The Agency is not entitled on its own initiative to decide on the change of a manager of the funded pension scheme funds and the investment plan, except in the cases provided for in Section 13, Paragraphs six and seven of this Law;

5) ensure compliance with Section 7 of this Law in accordance with the procedures laid down by the Cabinet;

6) each year in accordance with procedures stipulated by the Cabinet, prepare a report on the operation of the funded pension scheme which provides a true and clear representation of the management of the funded pension scheme, contributions made and fund transfers, as well as of the compliance of the accounting of accounts of the funded pension scheme participants with the requirements of laws and regulations. The report on the operation of the funded pension scheme in accordance with international auditing standards shall be verified by a sworn auditor and approved by the Minister for Welfare;

7) ensure publication of the information regarding the funded pension scheme and the results of its operation.

(2) The expenses of the Agency for the administration of the funded pension scheme shall be covered in accordance with the procedures stipulated by the Cabinet.

(3) [22 November 2017]

(4) The tasks laid down in Paragraph one, Clauses 1 and 1.1 of this Section may be delegated to a private person in accordance with the State Administration Structure Law. In fulfilling these tasks, a private person shall be under functional subordination of the Agency.

[31 October 2002; 26 April 2007; 14 November 2008; 4 February 2016; 22 November 2017]

Section 11. Manager of the Funded Pension Scheme Funds and Custodian

(1) The manager of funds of the funded pension scheme shall perform the management of the contributions made in the funded pension scheme, further fruits (interest) and other assets (hereinafter - the funds). The funds of the funded pension scheme may be managed by an investment management company registered in Latvia or the branch in Latvia of an investment management company registered in a Member State of the European Union or a State of the European Economic Area (hereinafter - the Member State), which is entitled to provide investment management services (hereinafter - the Member State branch). The manager of funds of the funded pension scheme may only commence the management of funds of the funded pension scheme after registration in the Register of Managers of Funds of Funded Pension Schemes maintained and updated by the Finance and Capital Market Commission (hereinafter - the Commission).

(11) The manager of funds of the funded pension scheme shall ensure that its minimum share capital is at least:

1) EUR 500 000, if it is planning to manage or is managing the funds of the funded pension scheme with a value no more than EUR 50 000 000;

2) EUR 1 000 000, if it is planning to manage or is managing the funds of the funded pension scheme with a value from EUR 50 000 001 to EUR 100 000 000;

3) EUR 2 000 000, if it is planning to manage or is managing the funds of the funded pension scheme with a value from EUR 100 000 001 to EUR 200 000 000;

4) EUR 3 000 000, if it is planning to manage or is managing the funds of the funded pension scheme with a value greater than EUR 200 000 000.

(2) The manager of funds of the funded pension scheme shall make transactions with funds of the funded pension scheme through intermediation of the custodian, entering into a custodian bank agreement therewith. The funds of the funded pension scheme may be held in a bank registered in Latvia, which in accordance with the procedures laid down in laws and regulations has commenced the provision of investment services and non-core services, including the keeping of financial instruments, or the branch in Latvia of a bank registered in a Member State, if the respective bank is entitled to provide investment services and non-core services, including the keeping of financial instruments. The selection of a custodian, the duties and liabilities thereof, as well as the procedures for the entering into and fulfilment of a custodian bank agreement shall be laid down in this Law and the Law on Investment Management Companies.

(3) The provisions for the management of funds of the funded pension scheme, consequences and liability for non-compliance therewith shall be provided in a contract entered into by the Agency with a manager of funds of the funded pension scheme. A decision to enter into the contract with a manager of funds of the funded pension scheme, on any further amendments in such contract, as well as on early termination of such contract shall be made by the director of the Agency. The Cabinet shall determine the contents, type and procedures for the entering into of a contract.

(4) The manager of the funds of the funded pension scheme shall develop one or several plans for the investment of funds of the funded pension scheme - a systematic set of such provisions in accordance with which the management of funds of the funded pension scheme shall be carried out and which are presented in a prospectus of the relevant investment plan and basic information intended for the participants of a funded pension scheme. The prospectus of an investment plan and basic information intended for the participants of a funded pension scheme shall be an integral part of the contract entered into between the Agency and the manager of funds of the funded pension scheme. The manager of funds of the funded pension scheme is entitled to perform the management of funds of the funded pension scheme in conformity with an investment plan only following the registration of the prospectus of the relevant investment plan and basic information intended for the participants of the funded pension scheme with the Commission. If the prospectus of an investment plan or basic information intended for the participants of the funded pension scheme fail to comply with the requirements of laws and regulations governing the operation of the funded pension scheme, the Commission shall refuse the registration thereof.

(41) If amendments to the prospectus of the investment plan provide for changing the investment provisions of the investment plan or to increase the maximum amount of remuneration payments from the investment plan to the manager of funds, custodian or another person, the amendments to the prospectus of the investment plan shall enter into effect not earlier than six months after the agreement has been entered into on amendments to the contract between the Agency and the manager of funds of the funded pension scheme.

(42) The format and content of the basic information intended for the participants of the funded pension scheme, and also the procedures for preparing thereof shall be determined by the Commission.

(5) A manager of funds of the funded pension scheme shall ensure compliance with provisions in relation to the investments of funds of the funded pension scheme, provide orders to make payments with funds contributed in the funded pension scheme, as well as receive and transfer financial instruments and perform other transactions with the funds of the funded pension scheme in conformity with the requirements prescribed by the law and the terms and conditions of the contract concluded with the Agency.

(51) A fee of a manager of funds of the funded pension scheme for the management of the investment plan shall be comprised by:

1) the permanent part of the fee which includes payments to the manager of funds, custodian, and also payments to third parties which are made from the funds of the investment plan, except for the expenses which have been incurred, when making transactions with the sale of investment plan assets with repurchase, and which is determined depending on the total assets of the investment plans under the management of the manager:

a) up to 0.6 per cent per year - for the total part of assets which does not exceed EUR 300 million by calculating it as of 30 November of the previous year,

b) up to 0.4 per cent per year - for the total part of assets which exceeds EUR 300 million by calculating it as of 30 November of the previous year;

2) the variable part of the fee which is remuneration to the manager of the funds of the funded pension scheme for the investment plan activity result, and the amount thereof is dependent on the profitability of the pension plan above the reference index which is determined as the combination of indices of debt securities and capital securities. The Cabinet shall determine the applicable reference indices.

(52) The procedures for the calculation of the permanent and variable part of the fee for the management of the investment plan for the manager of funds, and also the procedures for accounting and deduction of the fee for the management of the investment plan shall be determined by the Cabinet.

(53) The manager of funds of the funded pension scheme shall ensure that the maximum amount of the fee for the management of the investment plan by including the permanent and variable part of the fee calculating it for the period of the last 12 months does not exceed:

1) 0.85 per cent of the average value of the investment plan assets in the investment plan prospectus of which the investments in the stocks of commercial companies, other capital securities and securities equal to them are not provided;

2) 1.1 per cent of the average value of the investment plan assets for the investment plans not referred to in Clause 1 of this Paragraph.

(54) The manager of funds of the funded pension scheme shall register the funds of the funded pension scheme under its management and manage them separately from any other property owned or managed by the manager of funds of the funded pension scheme. The manager of funds of the funded pension scheme shall manage part of the funds of the funded pension scheme, which are managed in accordance with a specific investment plan (funds of investment plan) separately from other assets thereof and the funds of other investment plans.

(55) Management of funds of the funded pension scheme includes the following services:

1) management of investments of the investment plan funds;

2) administration of the investment plan funds, which includes:

a) handling legal and accounting matters,

b) provision of information regarding the performance of the investment plan,

c) calculation of the value of the investment plan and of an investment plan unit,

d) monitoring the regulatory compliance of the investment plan,

e) distribution of the income of the investment plan,

f) execution of the orders and notifications by the Agency in respect of dealing with the investment plan funds,

g) settlement under the contractual obligations,

h) keeping accounts on the transactions related to investment plan funds;

3) provision of information to existing and potential participants to the scheme on the investment plan, manager of funds and custodian bank.

(56) In conformity with that laid down in Paragraph 5.1 of this Section, the permanent part of the fee calculated on 30 November of the previous year shall be applied to the assets value of the investment plan for the current calendar year from 1 January until 31 December.

(6) Each participant of the funded pension scheme has the right, in accordance with the procedures stipulated by the Cabinet, to select and change the manager of funds of his or her funded pension capital accrued or an investment plan if one manager of funds has two or more investment plans. It is permitted to change the manager of funds of the funded pension scheme not more frequently than once a year, but an investment plan of one and the same manager of funds of the funded pension scheme - not more frequently than twice a year, as well as additionally when:

1) the Commission has cancelled the entry in the register of managers of funds of funded pension schemes;

2) [28 May 2009];

3) reorganisation of the manager of funds of the funded pension scheme selected by the participant of the funded pension scheme has occurred;

4) the manager of funds of the funded pension scheme unifies an investment plan selected by the participant of the funded pension scheme with another investment plan (plans) and has registered with the Commission a prospectus of a new investment plan (new version of the investment plan prospectus) or append the selected investment plan to another investment plan managed by the same manager of the funds of the funded pension scheme;

5) the manager of funds of the funded pension scheme exercises the rights referred to in Paragraph nine of this Section.

(7) [28 May 2009]

(8) [18 March 2004]

(9) The manager of funds of a funded pension scheme is entitled to transfer the investment plan managed by him or her to another manager of funds of a funded pension scheme. The manager of funds shall enter into a contract regarding the transfer of the investment fund assets and shall make the relevant amendments in the contracts entered into with the Agency regarding the management of the funds of the State funded pension scheme. If the manager of funds within one year after taking over of the transferred investment plan makes amendments to the investment policies of the investment plan or increases the expenses of transactions which are associated with investment plan funds and investment management, or increases remuneration, such amendments shall enter into effect not earlier than six months after entering into of the relevant amended contract.

[31 October 2002; 20 November 2003; 18 March 2004; 28 September 2006; 26 April 2007; 28 May 2009; 3 April 2014; 22 November 2017 / New wording of Paragraph 5.1, Clause 1 and amendments to Paragraph 5.3, Clauses 1 and 2 shall come into force on 1 January 2019. See Paragraphs 20 and 21 of Transitional Provisions]

Section 11.1 Advertising the Services of the Management of Funded Pension Scheme Funds and Offering the Investment Plans

(1) Any public advertising (advertisement) of the management of funded pension scheme funds and the services associated thereof in any way may occur only in conformity the prospectus of the investment plan registered with the Commission.

(2) In placing an advertisement or publicly notifying the regulations of the investment plan, the investment plan advertisement shall indicate:

1) the name of the investment plan;

2) the name of the management company, legal address and the location of the executive institutions;

3) the name of the custodian;

4) the place of issuing of the prospectus of the investment plan;

5) a notice that the current yield does not guarantee a similar yield in the future(if in the advertisement is mentioned the yield of the investment plan).

(3) In placing an advertisement or publicly notifying the regulations of the investment plan, the investment plan advertisement shall in no way guarantee a profit or a specific level of yield.

(4) Persons which offer the investment plans have the obligation to individually inform the participants to the funded pension scheme of the fee for the management of the investment plan (the permanent and variable part of the fee) by familiarising them with the basic information document (current version) intended for the participants to the relevant investment plan.

(5) The persons who offer investment plans are prohibited:

1) to influence the decision of the participant to the funded pension scheme by additionally offering to acquire goods, receive services or other advantages;

2) to request the information from the participant to the funded pension scheme on the amount of the funded pension capital accrued;

3) to make difference in attitude among the participants to the funded pension scheme, including due to the selected investment plan or funded pension capital accrued;

4) to link or combine the participation in the investment plan with any other services, goods or advantages.

[5 May 2005; 28 May 2009; 22 November 2017]

Section 112. Delegation of Funded Pension Scheme Managed Fund Services

(1) If in the prospectus of the investment plan is provided information regarding separate services associated with the management of the funds of a State funded pension scheme, which the manager of funds of the funded pension scheme plans to transfer (delegate) to another person, the manager of funds of the funded pension scheme shall observe the procedures for the transfer (delegation) of investment management services laid down in the Investment Management Companies Law.

(2) For the purpose of applying Paragraph one of this Section, an investment plan shall be comparable to an investment fund, management of the funds of an investment plan shall be comparable to management of the funds of an investment fund, administration of the funds of an investment plan shall be comparable to administration of the funds of an investment fund, and marketing of an investment plan shall be comparable to marketing of an investment fund within the meaning of the Investment Management Companies Law.

[26 April 2007; 3 April 2014]

Section 113. Registration of Managers of Funds of Funded Pension Schemes

(1) In order to register in the Register of Managers of Funds of Funded Pension Schemes, an investment management company or the Member State branch shall submit an application to the Commission. The following documents shall be annexed thereto, which determine the operation of the investment management company in the management of funds of the funded pension scheme:

1) an activity plan for the next three years, in which it is described how it is planned to ensure the management of the funds of the funded pension scheme, and in which at least the following information is included:

a) the investment plans to be introduced,

b) an expenditure forecast and the sources for covering them,

c) the amount of those funds of the funded pension scheme which are planned to be managed;

2) a description of the internal control system, which includes:

a) the organisational structure with clearly specified tasks and duties of officials;

b) the accounting policy and the main principles of the organisation of registration;

c) the financial risk management policy;

d) a description of the management information system;

e) the provisions for the protection of the information system.

(2) After receipt of an application form by the Member State branch, the Commission shall send a request to the supervisory body of the respective Member State, requesting therein the notification of the following information:

1) the equity capital of the investment management company registered in a Member State complies with the requirements of Section 11, Paragraph 1.1 of this Law and during the year before lodging the registration submission no violations of the capital requirements have been found;

2) that the investment management company licensed in the Member State follows the rules of internal control and within one year prior to submitting the application for registration no sanctions have been applied thereto for violations of the abovementioned rules;

3) that the supervisory body of the Member State does not object to the Member State branch commencing the management of funds of the funded pension scheme;

4) that the supervisory body of the Member State will, without delay, inform the Commission of any facts which endanger or may endanger the activities of the branch of the Member State in Latvia;

5) the supervisory body of the member State will immediately inform the Commission if the amount of the equity capital of the investment management company licensed in the Member State no longer complies with the requirements of Section 11, Paragraph 1.1 of this Law.

(3) The Commission shall examine the application and take the decision to make an entry in the Register of Managers of Funds of Funded Pension Schemes or to refuse to make an entry within 60 days after receipt of the documents specified in Paragraphs one and two of this Section which have been drawn up in accordance with the requirements of the laws and regulations governing the procedures for drawing up of documents.

(4) The Commission shall take a decision to refuse to make an entry in the register of managers of funds of funded pension schemes if:

1) the submitter of the application does not meet the requirements of Section 11, Clause 1.1 of this Law;

2) the submitter of the application has not submitted all the documents referred to in Paragraph one of this Section or has presented false or inaccurate information in the submitted documents;

3) the submitted documents have not been processed in accordance with the requirements of this Law and the laws and regulations governing the activities of the funded pension scheme, personal data protection and the procedures for drawing up documents;

4) within one year prior to submitting the application the investment management company has violated the capital requirements;

5) within one year prior to submitting the application the investment management company has violated the rules of internal control and sanctions have been applied thereto for the abovementioned violations;

6) the supervisory body of the Member State objects to the Member State branch commencing the management of funds of the funded pension scheme;

7) the supervisory body of the Member State has not agreed to inform the Commission of the facts which endanger or may endanger the activity of the Member State branch in Latvia, or of non-conformity of the amount of the equity capital of the investment management company licensed in the Member State with the requirements of Section 11, Paragraph 1.1 of this Law;

8) the Commission has not received the notification of the supervisory body referred to in Paragraph two of this Section.

(5) The Commission has the right to cancel an entry in the register of managers of funds of the funded pension scheme if:

1) any of the cases referred to in Paragraph four of this Section has been established;

2) the manager of funds of the funded pension scheme violates the requirements of the laws and regulations governing the activities of the funded pension scheme, as a result of which further operation of the manager of funds or the interests of the participants of the funded pension scheme may be adversely affected;

3) the manager of funds of the funded pension scheme violates the rules of the investment plan, in accordance with which he or she has undertaken to invest and manage the funds of the funded pension scheme;

4) the licence of the manager of funds of the funded pension scheme for the provision of investment management services is cancelled;

5) the manager of funds of the funded pension scheme, within one year from the day of registration thereof by the Commission in the register of managers of funds of the funded pension scheme, has not entered into a contract with the Agency regarding the management of funds of the State funded pension scheme;

6) the manager of funds of the funded pension scheme is reorganised or liquidated;

7) the manager of funds of the funded pension scheme withdraws from the management of funds of the funded pension scheme;

8) it is requested by the supervisory body of the branch of a Member State;

9) the supervisory body of the Member State branch informs the Commission of facts which endanger or may endanger the activity of the Member State branch in Latvia, or of non-conformity of the amount of the equity capital of the investment management company licensed in the Member State with the requirements of Section 11, Paragraph 1.1 of this Law;

10) the equity capital of the manager of the funded pension scheme funds fails to comply with the requirements of Section 11, Paragraph 1.1 of this Law.

(6) If the Commission has established the circumstances specified in Paragraph five of this Section, which allows to make a decision to cancel an entry in the register of managers of funds of the funded pension scheme, it has the right not to cancel the entry but initially to take a decision to give a warning or to apply the fine referred to in Section 13, Paragraph 5.1 of this Law, as well as to specify the time period for the elimination of the violations established. If, after expiry of the time period, the manager of funds of the funded pension scheme has not eliminated the violations established, the Commission shall cancel the entry in the register of managers of funds of the funded pension scheme.

(7) If an administrative act issued by the Commission regarding the cancellation of an entry in the register of managers of funds of the funded pension scheme is appealed, it shall not suspend the operation of the act.

[28 May 2009; 3 April 2014 / Amendments to this Section in respect of the requirements for the equity capital laid down for a manager of the funded pension scheme funds shall come into force on 1 January 2015. See Paragraph 18 of Transitional Provisions]

Section 12. Provisions for Investment of Funded Pension Scheme Funds

(1) A manager of funds of the funded pension scheme, when investing the funds of the funded pension scheme, shall act as a conscientious and careful proprietor and solely in the interests of the participants of the investment plan, as well as observe precautionary principles which ensure the reduction of risk, security of investments, quality and liquidity in accordance with the rules of the investment plan, and shall implement such investment policy which is aimed towards the growth of the funds of the funded pension scheme of the participants of the investment plan. Funds of the funded pension scheme may be invested in the following financial instruments:

1) securities or money market instruments issued and guaranteed by the State and international financial authorities if such securities or money market instruments have been issued and guaranteed by:

a) [18 March 2004];

b) Latvia or another Member State;

c) a Member State of the Organisation for Economic Co-operation and Development the long-term credit rating of which in foreign currency according to the evaluation of international rating agencies conforms to the investment category (hereinafter - 'the Member State of the Organisation for Economic Co-operation and Development);

d) an international financial authority the member of which is one or several Member States;

11) securities or money market instruments issued or guaranteed by a State and international financial institutions which fails to comply with the requirements referred to in Clause 1 of this Paragraph but are included in the regulated market registered in Latvia or other Member State or which are not included in the regulated market registered in Latvia or other Member State, but the long-term credit rating of which in a foreign currency according to the assessment data of international rating agencies complies with the investment category and in the issuance prospectus of which it is laid down that they will be included therein within a year from the day when the subscription for the receipt of the relevant instruments has commenced;

2) securities or money market instruments issued and guaranteed by local governments, if:

a) such securities or money market instruments have been issued or guaranteed by Latvia or another Member State, or a local government of a Member State of the Organisation for Economic Co-operation and Development,

b) such securities or money market instruments conform to the requirements specified in Paragraph one, Clause 3 of this Section;

3) the shares of commercial companies and other capital securities (hereinafter - the capital securities) or debt securities of commercial companies if such securities:

a) are included in the registered regulated markets of Latvia or in another Member State;

b) are included in the official or comparable thereto listing of a stock exchange (regulated market) registered in a Member State of the Organisation for Economic Co-operation and Development and the abovementioned stock exchange is a full member of the International Stock Exchange Federation;

c) are not included in the regulated markets referred to in Sub-clauses "a" and "b", but in the issuance of securities regulations it is provided that the securities therein shall be included within a year from the day when the subscription for the receipt of such securities has commenced. If the referred to securities are not included in the regulated markets referred to in Sub-clauses "a" and "b" within a year from the day when the subscription for the receipt of such securities has commenced, it shall be the duty of the manager of funds of the funded pension scheme to repurchase these securities for a price which conforms to the purchase value thereof;

4) investments in a credit institution which has obtained a licence for the activity of a credit institution in the Member State or country which is a member country to the Organisation for Economic Co-operation and Development and which in accordance with Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance) has been recognised as the country in which the supervision and activity regulating requirements which are equal to those applied in the European Union shall be applied to credit institutions;

5) investment funds registered in Latvia or in another Member State within the meaning of the Investment Management Companies Law (hereinafter - the investment fund);

51) alternative investment funds registered in Latvia or in another Member State within the meaning of the Law On Alternative Investment Funds And Fund Managers (hereinafter - the alternative investment fund);

6) derivative financial instruments, if:

a) such derived financial instruments are included in the registered regulated markets of Latvia or in another Member State, or also included in the official or comparable thereto listing of a stock exchange (regulated market) registered in a Member State of the Organisation for Economic Co-operation and Development and the abovementioned stock exchange is a full member of the International Stock Exchange Federation;

b) a credit institution which has received a licence to operate the credit institution and to which it is permitted to provide financial services in Latvia or in another Member State has assumed obligations included in such a derivative financial instrument;

7) in a risk capital market - in a market, which offers the financing of capital commercial companies registered in Latvia or in another Member State at the development stage thereof.

(2) Funds of the funded pension scheme shall be invested in compliance with the following investment restrictions:

1) the total amount of investments in securities or money market instruments issued or guaranteed by one state or an international financial institution may not exceed 35 per cent of the funds of the scheme that are managed and invested in accordance with a systematised set of provisions developed by the manager of funds of the funded pension scheme which is set out in a prospectus of the investment plan (hereinafter - assets of investment plan). The abovementioned restriction may be exceeded when performing investments in the transferable securities issued by the state, as well as if the assets of an investment plan have securities or money market instruments from six or more issues of one issuer and the value of securities or money market instruments of each individual issue does not exceed 20 per cent of the assets of the investment plan, as well as six months following the first contribution made in the relevant investment plan, if the value of the assets of the investment plan is less than EUR 150 000;

2) the total amount of investments in securities or money market instruments issued or guaranteed by one local government may not exceed 5 per cent of the assets of the investment plan. This restriction shall not apply to investments in the transferable securities issued by local governments of Latvia;

3) the investments in securities of one issuer may not exceed 5 per cent of the assets of the investment plan and concurrently 5 per cent of the equity capital and number of voting stocks of the relevant issuer;

4) investment in securities of one issuer may not exceed 10 per cent of the assets of the investment plan and concurrently 10 per cent of the debt securities of one issuer. This restriction shall not apply to securities referred to in Paragraph two, Clause 1 of this Section;

5) total amount of investments in securities referred to in Paragraph one, Clause 3, Sub-clause "c" of this Section may not exceed 20 per cent of the assets of the investment plan;

51) total amount of investments in securities referred to in Paragraph one, Clause 11 of this Section may not exceed 10 per cent of the assets of the investment plan;

6) deposits in one credit institution may not exceed 10 per cent of the assets of the investment plan. This restriction shall not apply to claims on the basis of claims against a Custodian bank;

7) the investments in one investment fund may not exceed 10 per cent of the assets of the investment plan and 30 per cent of net assets of such investment fund;

71) the investments in one alternative investment fund may not exceed 10 per cent of the assets of the investment plan and 30 per cent of net assets of such alternative investment fund. The total amount of all investments in the alternative investment funds may not exceed 10 per cent of the assets of the investment plan. The total amount of all investments in the alternative investment funds may be increased up to 15 per cent from the assets of the investment plan by taking into account all the requirements as follows:

a) the managers of funds of the funded pension scheme shall comply with the diversification principle by ensuring that investments are made in different types of alternative investment funds which are indicated as predominant alternative investment fund types in Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision (Text with EEA relevance) (hereinafter - Regulation No 231/2013);

b) the manager of funds of the funded pension scheme shall indicate in the prospectus of the investment plan the maximum amount of the investment in each of the types of alternative investment funds which are indicated as predominant alternative investment fund types in Regulation No 231/2013;

8) the investments in financial instruments issued by commercial companies that are a part of one group by managers of funds of the funded pension scheme may be made only through intermediation of a stock exchange (regulated market), and investments in such securities may not exceed 5 per cent of the assets of the investment plan;

81) the investments in investment funds and alternative investment funds managed by commercial companies included in one group with the manager of funds of the funded pension scheme may not exceed 15 per cent of the assets of the investment plan;

82) total investment in investment funds and alternative investment funds under the management of the manager of funds of the funded pension scheme may not exceed 10 per cent of the assets of the investment plan;

9) the total amount of investments in securities or money market instruments issued by one commercial company or one group of commercial companies may not exceed 10 per cent of the assets of the investment plan;

10) deposits in one credit institution or in credit institutions contained in one group and investments in transferable financial instruments issued by the same credit institution or credit institutions contained in one group in total may not exceed 15 per cent of the assets of the investment plan. This restriction shall not apply to claims on the basis of claims against a custodian bank;

11) investments in capital securities, alternative investment funds and investment funds that may make investments in capital securities or other financial instruments of equivalent risk may not exceed 75 per cent of the total assets of the investment plan;

12) investments in derived financial instruments may be performed only because in order to ensure against the risk of fluctuations in the value of the specified investment plan assets, which may be caused by changes in the price of assets or exchange rate, and only then if the manager of funds has submitted to the Commission regulations in which is described in detail the management policy and the derived financial instrument valuation methods;

13) the value of a single investment in risk capital market may not exceed 5 per cent of the investment plan assets, whereas the total investment value in risk capital market may not exceed 10 per cent of the investment plan assets. Investments in the capital of such capital company, which is in the stage of development, may not exceed 5 per cent of the fixed capital of the respective capital company and the number of voting stocks or shares, but the amount of an investment (capital) share of a capital company, which was founded with the purpose of financing capital companies in the stage of development, or investments in the capital of such capital companies, which were founded with the purpose of financing capital companies in the stage of development, may not exceed 30 per cent of the sum total of the investment (capital) or the capital of the respective capital company;

14) the total investment value in alternative investment funds and risk capital market may not exceed 20 per cent of the investment plan assets, following the restrictions laid down in Paragraph two, Clause 7.1 of this Section in respect of investing in alternative investment funds, and the restrictions laid down in Paragraph two, Clause 13 of this Section in respect of investing in risk capital market;

15) when using the assets of an investment plan in transactions with the sale of assets with repurchase, liabilities arising from such transactions may not exceed 50 per cent of the assets of the investment plan. Such transactions may only be performed for ensuring the short-term liquidation of the investment plan for a period of time up to three months.

(21) Commercial companies included in one group within the meaning of this Section are commercial companies the annual accounts of which are consolidated in accordance with international accounting standards.

(3) Open position of foreign currencies of the investment plan may not exceed:

1) in a separate foreign currency - 10 per cent of the assets of the investment plan;

2) in total in all foreign currencies - 20 per cent of the assets of the investment plan.

(31) The Financial and Capital Market Commission shall determine the procedures for the calculation of the open position of foreign currency.

(4) The managers of funds of the funded pension scheme are prohibited from:

1) investing the funds of the funded pension scheme in immovable property, except investments in alternative investment funds which may invest in immovable property;

2) lending the investment plan funds;

3) investing the funds of the funded pension scheme in financial instruments issued by the manager of funds of the funded pension scheme itself, except in the investment funds and alternative investment funds under its management, for buying or selling of certificates of which the manager of funds does not receive a commission payment from the funds of the investment plan;

4) borrowing money on the account of the investment plan, except for loans to provide short-term liquidity for a period of up to three months, and not exceeding 50 per cent of the investment plan asset value;

5) assuming any commitments on the account of the investment plan that arise from a guarantee agreement;

6) exceeding 50 per cent of the investment plan assets when entering into the transactions referred to in Paragraph two, Clause 15 of this Section and Clause 4 of this Paragraph;

7) investing the funds of the investment plan in such alternative investment funds the activity regulations of which intend to use leverage financing the amount of which in accordance with the calculation laid down in Regulation No 231/2013:

a) exceeds the value of the net assets of the alternative investment fund more than twice if it intends to issue loans or involve in crediting transactions;

b) exceeds the value of the net assets of alternative investment fund for more than three times if it does not intend to issue loans or involve in crediting transactions;

8) to invest the funds of the investment plan in virtual currencies and such alternative investment funds the activity regulations of which intend to invest more than 10 per cent of the net asset of the fund in virtual currencies.

(5) [3 April 2014]

(6) [3 April 2014]

(7) [3 April 2014]

[31 October 2002; 20 November 2003; 18 March 2004; 5 May 2005; 26 April 2007; 28 May 2009; 9 July 2013; 12 September 2013; 3 April 2014; 4 February 2016; 22 November 2017 / See Paragraphs 22 and 23 of Transitional Provisions]

Section 12.1 Consequences of a Violation of the Investment Provisions for the Funded Pension Scheme Funds

(1) A violation of the investment provisions prescribed in the investment plan prospectus shall not invalidate the respective transaction, whereas the manager of funds of the funded pension scheme has the obligation compensate for all damages incurred by participants of the investment plan as a result of such actions. The manager of funds has the obligation to design a procedure for laying down the procedures for evaluating the damages and compensating them.

(2) The manager of funds of the funded pension scheme shall, without delay, however no later than on the following working day notify the Commission in writing of a violation of the investment provisions, as well as of measures for the elimination of such violations, indicating the time period for the elimination of the violations.

(3) If, in order to eliminate violations of investment provisions, it becomes necessary for a manager of funds of the funded pension scheme to dispose of an investment in the investment plan, however, disposal of such investment (asset) is impossible in financial markets, the manager of funds has an obligation to redeem the investment concerned at its fair value. The fair value of an investment shall be determined in accordance with the Commission regulations prescribing the preparation of annual reports of investment plans of the funded pension schemes.

(4) After having eliminated investment violations, the manager of funds of the funded pension scheme has an obligation to evaluate without delay whether such actions have caused damages to the participants of the investment plan.

(5) If the manager of funds of the funded pension scheme establishes that the violation of investment provisions has resulted in damages to the participants of the investment plan, the manager of funds of the funded pension scheme has an obligation, no later than on the next day after elimination of the damages, to compensate for them in the specified amount by making a cash contribution to the account of the investment plan concerned.

(6) A custodian has an obligation to monitor the compliance with the investment provisions prescribed in the investment plan prospectus, and, when detecting a violation thereof, shall, without delay, notify in writing the manager of funds of the funded pension scheme and the Commission thereof.

(7) A custodian has an obligation to monitor the process of evaluation and compensation for damages, as well as to supply the Commission with a statement that the evaluation of damages performed by the manager of funds of the funded pension scheme corresponds to the actual amount of damages, and with information that funds have been contributed to the account of the investment plan concerned towards indemnification for damages.

(8) It is permissible to exceed the investment restrictions prescribed by the investment plan if they have been caused by extraordinary and adverse developments in financial markets. The manager of funds of the funded pension scheme shall notify the Commission on having exceeded investment restrictions in accordance with the procedures laid down in Paragraph two of this Section.

[3 April 2014]

Section 122. Ensuring of Cash Flow

(1) The manager of funds of the funded pension scheme has the obligation to ensure cash flow in accordance with the signed contracts.

(2) If, in order to ensure cash flow, it becomes necessary for a manager of funds of the funded pension scheme to dispose of an investment in the investment plan, however, disposal of such investment (asset) is impossible in financial markets, the manager of funds has the obligation to redeem the investment concerned at its fair value. If such redemption of investment has caused damages to the participants of the investment plan, the manager of funds of the funded pension scheme and the custodian shall act in accordance with the provisions of Section 12.1 of this Law, which specify the actions to be taken in the case of a violation of the investment provisions for the funded pension scheme.

[3 April 2014]

Section 13. Monitoring of Operation of Managers and Custodians of Funds of the Funded Pension Scheme

(1) The Commission shall monitor the operation of managers and custodians of the funds of the funded pension scheme.

(2) The Commission has an obligation:

1) to monitor that the managers of funds of the funded pension scheme, when managing the funds of the funded pension scheme, comply with the requirements of laws and regulations;

2) to monitor that the custodians of funds of the funded pension scheme, when keeping the funds of the funded pension scheme, comply with the requirements of laws and regulations;

3) to register a prospectus of an investment plan conforming to the requirements laid down in law.

(3) The Commission shall notify the Agency of the making of or annulment of an entry in the Register of Managers of Funds of the Funded Pension Scheme.

(4) The Commission and sworn auditors approved thereof have the right to perform inspections of the operation of managers of funds of the funded pension scheme and the holders of funds, and to request documents and information regarding the operation thereof and the management of funds of the funded pension scheme. Managers of funds and holders of funds have an obligation to provide all necessary information and to present all the documents during such inspections.

(5) The Commission on the basis of the reports submitted and inspections performed shall evaluate the stability of the financial standing and solvency of the manager of funds and the custodian and, if necessary, provide instructions regarding the improvement of the standing of the assets of the funded pension scheme, as well as determine a time period for the implementation of the instructions.

(51) If the manager of funds or custodian violates the requirements of this Law, laws and regulations issued in accordance with this Law or provisions of the prospectus of the investment plan of funds of the funded pension scheme, the Commission has the right to impose a fine on the manager of funds or the custodian up to 400 minimum monthly salaries.

(52) If in supervising the manager of funds and custodian, the Commission finds that the custodian violates the requirements of this Law, laws and regulations issued in accordance with this Law or provisions of the prospectus of the investment plan of funds of the funded pension scheme or the financial stability or solvency of the custodian causes risks to the provision of continuous operation of the funded pension scheme, the Commission is entitled to request that the manager of funds changes the custodian. In the case referred to in this Paragraph the Commission, in taking the decision, is entitled to determine conditions for the manager of funds for the attraction of a new custodian.

(6) If the Commission cancels an entry in the Register of Managers of Funds of the Funded Pension Scheme, it shall immediately, but not later than on the following working day, notify the Agency thereof. The Agency shall transfer the funded pension scheme funds managed by the relevant manager in accordance with the procedures stipulated by the Cabinet to other managers of the funded pension scheme funds for management, as well as perform other activities of substantiated necessity to prevent the reduction of value of the funded pension scheme funds managed by the relevant manager of the funded pension scheme funds.

(7) If the manager of the funded pension scheme funds has refused to manage the funded pension scheme funds and participants of the funded pension scheme whose pension capitals are managed by the relevant manager of the funded pension scheme funds, within two months of the day when the Agency has notified them on the refusal of such manager of the funded pensions scheme funds, have not submitted to the Agency a written submission regarding the selection of a new manager of the funded pension scheme funds, in accordance with the procedures stipulated by the Cabinet the Agency shall transfer such funded pension capitals of the participants to the scheme for management to other managers of the funded pension scheme funds.

[31 October 2002; 18 March 2004; 26 April 2007; 28 May 2009; 22 November 2017]

Section 14. Reports on the Management of the Funded Pension Scheme Funds and Audit Thereof

(1) The manager of funds of the funded pension scheme shall, in accordance with procedures stipulated by the Commission, prepare an annual statement which provides a true and clear representation of the management of funds of the funded pension scheme, accounting of contributions made and investments. A sworn auditor approved by the board of an investment management company shall examine the report in accordance with international auditing standards.

(2) A sworn auditor has the obligation to notify in writing the manager of funds of the deficiencies found in the inspection and to send the copies of his or her notice to the Commission and the Agency. If the financial situation of the manager demands rapid action, the sworn auditor has an obligation to notify the Commission and Agency immediately thereof.

(3) In order to ensure monitoring, the Commission is entitled to request the manager of funds of the funded pension scheme to prepare other reports in accordance with the regulations issued by the Commission regarding the procedures for the preparation and submission of such reports.

[31 October 2002; 18 March 2004; 28 September 2006; 28 May 2009]

Chapter IV
Final Provisions

Section 15. Procedures for the Settlement of Disputes

(1) Administrative acts issued and actual acts by officials of the Agency may be disputed within one month from the day of the coming into effect of the administrative act by submitting a relevant complaint to the director of the Agency. The decisions of the director of the Agency may be appealed to a court within one month from the day of the entering into effect thereof.

(2) Administrative acts of the Commission, which have been issued in accordance with this Law, may be appealed to the Administrative Regional Court. The case shall be examined by a court of first instance. The case shall be examined in the composition of three judges. The judgment of the Administrative Regional Court may be appealed, by submitting a cassation complaint.

[26 April 2007; 28 May 2009]

Section 16. Termination of the Operations of the Treasury in the Management of Funded Pension Scheme Funds

(1) From 1 August 2007, participants of funded pension schemes who select or change managers of funded pension capital funds shall not be given the possibility to select the Treasury as a manager.

(2) In order to terminate the operations of the Treasury in the management of funded pension scheme funds and to transfer the funded pension capital registered in the funded pension scheme funds participants accounts under Treasury management to other fund managers, a tendering procedure shall be announced. The regulations of the tendering procedure, procedures for the transfer of funds and time periods, as well as the procedures by which the managers of funded pension scheme funds shall compensate the Agency the expenditure associated with the transfer of the capital shall be determined by the Cabinet. The tendering procedure shall be announced not earlier than 1 August 2007.

[28 September 2006]

Transitional Provisions

1. [28 September 2006]

2. The rate determined in Section 4, Paragraph two of this Law shall come into force on 1 January 2016.

[25 September 2008; 23 April 2009; 20 December 2010; 15 November 2012]

3. By coming into force of the rate determined in Section 4, Paragraph two of this Law the rate is:

1) as of 1 July 2001 not less than 2 per cent of the contribution object determined in law;

2) as of 1 January 2007 not less than 4 per cent of the contribution object determined in law;

3) as of 1 January 2008 not less than 8 per cent of the contribution object determined in law;

4) as of 1 May 2009 - 2 per cent of the contribution object determined in law. The rate shall be applied to contributions which are registered from 1 May 2009 in the account of a participant of a funded pension scheme, except adjusted contributions for the time period until 31 December 2008;

5) as of 1 January 2011 not less than 2 per cent of the contribution object determined in law;

6) as of 1 January 2013 - 4 per cent of the contribution object determined in law;

7) as of 1 January 2015 - 5 per cent of the contribution object determined in law.

[25 September 2008; 23 April 2009; 20 December 2010; 15 November 2012]

4. Until the establishment of the Finance and Capital Market Commission:

a) the Cabinet shall issue the regulations referred to in Section 12 of this Law regarding the investment of funds of the funded pension scheme;

b) the Securities Market Commission shall fulfil the functions of the Commission referred to in Sections 11, 13 and 14 of this Law.

[20 November 2003]

5. [28 September 2006]

6. [28 September 2006]

7. Investment companies, which have commenced the management of the funds of State funded pension schemes until 30 April 2004, shall, by 31 December 2004, implement the necessary measures so that they would conform to the requirements laid down in this Law.

[18 March 2004]

8. [26 April 2007]

9. The Cabinet shall by 1 February 2007:

1) make the necessary amendments to Cabinet Regulation No. 272 of 27 May 2003, Regulations Regarding the Operation of State Funded Pension Schemes;

2) issue the regulations referred to in Section 16, Paragraph two of this Law.

[28 September 2006]

10. Amendments to Sections 11 and 14 and the deletion of Paragraphs 1, 5 and 6 of these Transitional Provisions of this Law shall come into force on 1 November 2007.

[28 September 2006]

11. Amendments to Section 3 of this Law regarding the supplementation thereof with Paragraphs five and six, and amendments to Section 7 of this Law regarding the supplementation thereof with Paragraph two shall come into force on 1 January 2009.

[25 September 2008]

12. If investment management companies have received a licence for the management of funds of the State funded pension scheme, the Commission shall register the investment management company in the Register of Managers of Funds of the Funded Pension Scheme within one month after the day of the coming into force of the relevant amendments to the Law by which the registration of the managers of funds of the funded pension scheme are prescribed, without requesting additional documents.

[28 May 2009]

13. Amendments to the second sentence of Section 12, Paragraph one, Clause 3, Sub-clause "c" of this Law, in relation to the obligation to repurchase securities and the amendments to Section 13, Paragraph two in relation to the determination of additional restrictions shall not apply to investments which were made prior to the coming into force of the aforementioned amendments, and such transactions may be continued in accordance with those legal provisions which were prescribed by law until the day of the coming into force of these amendments, except in the cases where the amount of these investments is increased or other transaction rules are amended.

[28 May 2009]

14. Amendments to Section 12, Paragraph two of this Law in relation to the supplementation thereof with Clause 15 and amendments to Section 12, Paragraph four of this Law in relation to the new wording thereof shall come into force on 1 December 2009.

[28 May 2009]

15. The Cabinet shall, within six months after the date when after the end of the financial year when the annual revenues of the social insurance special budget have exceeded the expenditures, assess the reduction of the social insurance contribution rate to the State funded pension scheme in the years 2011-2015 and its impact on the retirement pension capital of a participant of the State funded pension scheme, and shall submit a respective report to the Saeima. The report shall also include an assessment of the possibility to compensate the State funded pension scheme for the reduction of the social insurance contribution rate.

[15 November 2012]

16. Any investments made before the Law on Alternative Investment Funds and Managers of Alternative Investment Funds effective date, however which, within the meaning of the abovementioned Law, are considered to be alternative investment funds, shall be subject to the restrictions laid down in this Law in respect of alternative investment funds.

[3 April 2014]

17. The minimum share capital referred to in Section 11, Paragraph 1.1 of this Law shall be ensured by the manager of funds of the funded pension scheme:

1) as of 1 January 2015 - in the amount of 50 per cent;

2) as of 1 January 2016 - in the amount of 100 per cent.

[3 April 2014]

18. The requirement laid down in Section 11, Paragraphs four and 4.2 of this Law concerning the obligation of the manager of funds of the funded pension scheme to draw up the document with key information designated for the participants of the funded pension scheme, Section 11, Paragraphs 5.1, 5.2 and 5.3 of this Law concerning the fees of the manager of funds of the funded pension scheme for the management of the investment plan, as well as the amendments concerning the capital requirements set forth for the manager of funds of the funded pension scheme shall come into force on 1 January 2015.

[3 April 2014]

19. Managers of funds of the funded pension schemes shall ensure that, starting from 1 January 2015, the investment plan rules are in compliance with the requirements laid down in Section 11, Paragraph 5.3 of this Law, which establish the maximum amount of the fee for the management of an investment plan.

[3 April 2014]

20. Amendments to Section 11, Paragraph 5.1, Clause 1 of this Law in respect of the calculation of the permanent part of the fee of the manager of funds of the funded pension scheme up to 0.6 and up to 0.4 per cent shall come into force on 1 January 2019. During the time period from 1 January 2018 up to 31 December 2018 the permanent part of the fee laid down in Section 11, Paragraph 5.1, Clause 1 of this Law which includes payments to the manager of funds, custodian, and also payments to third parties which are made from the funds of the investment plan, except for the expenses which have been incurred, when performing transactions with the sale of investment plan assets with repurchase, and which is determined depending on the total assets of the investment plans under the management of the manager shall be as follows:

1) up to 0.8 per cent per year - for the total part of assets which does not exceed EUR 300 million by calculating it as of 30 November 2017;

2) up to 0.6 per cent per year - for the total part of assets which does not exceed EUR 300 million by calculating it as of 30 November 2017.

[22 November 2017]

21. Amendments to Section 11, Paragraph 5.3, Clauses 1 and 2 of this Law in respect of determining the maximum amount of the fee for the management of the investment plan in the amount of 0.85 and 1.1 per cent shall come into force on 1 January 2019. During the time period from 1 January 2018 until 31 December 2018 a manager of funds of the funded pension scheme shall ensure that the maximum amount of the fee for the management of the investment plan, including the permanent and variable part of the payment by making calculation for the last 12 months does not exceed:

1) 1.05 per cent of the average value of the investment plan assets for the investment plans in the prospectus of the investment plans of which the investments in stocks of commercial companies, other capital securities and securities equal thereto are not intended;

2) 1.3 per cent of the average value of the investment plan assets for the investment plans not referred to in Sub-paragraph 1 of this Paragraph.

[22 November 2017]

22. Amendments to Section 12, Paragraph two, Clause 11 shall not be applied to the investment plan the prospectus of which have been registered with the Commission until 31 December 2017, and the investment restrictions providing that investments in capital securities, alternative investment funds or in such investment funds which may make investments in capital securities or other financial instruments equal to them in terms of risk may not exceed 50 per cent in total of the investment plan assets shall be followed in respect of them.

[22 November 2017]

23. The provisions of Section 12, Paragraph four, Clause 7 of this Law shall not be applicable to the investments in alternative investment funds which have been made until 31 December 2017 and the agreement entered into to make investments in the future if the agreement has been entered into until 31 December 2017.

[22 November 2017]

24. Section 9, Paragraph three of this Law shall come into force on 1 July 2018.

[22 November 2017]

This Law shall come into force on 1 July 2001.

This Law has been adopted by the Saeima on 17 February 2000.

President V. Vīķe-Freiberga

Riga, 8 March 2000


1 The Parliament of the Republic of Latvia

Translation © 2018 Valsts valodas centrs (State Language Centre)

 
Document information
Status:
In force
in force
Issuer: Saeima Type: law Adoption: 17.02.2000.Entry into force: 01.07.2001.Theme:  Social protectionPublication: Latvijas Vēstnesis, 78/87 (1989/1998), 08.03.2000.; Latvijas Republikas Saeimas un Ministru Kabineta Ziņotājs, 7, 06.04.2000.
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