Investor protection scheme

JSC „Rietumu Banka” (hereinafter – Bank) is a participant of the investor protection scheme in accordance with the Investor Protection Law of the Republic of Latvia.

What is an investor protection scheme?

Investor protection scheme (hereinafter – Scheme) is a set of measures for the protection of interests of the Bank’s clients and the possibility for the Bank’s clients to receive compensation if the Bank is unable to fulfil its obligations to its clients fully and on time.

In which cases the Bank’s client may apply for compensation?

The Bank’s client is entitled to apply for compensation, if the client’s financial instruments placed with the Bank have been irreversibly lost, or the Bank has fully or partly failed to perform its investment service, as a result of which the Bank’s client has suffered losses.

How much compensation the Bank’s client is entitled to receive?

Each client of the Bank is guaranteed a compensation in the amount of 90% of the value of irreversibly lost financial instruments or losses caused by non-fulfilled investment services, but no more than EUR 20 000. Compensation is paid in euros.

In which cases the client is not entitled to compensation?

The compensation is not paid to:

  1. a client for transactions in respect of which a judgment of conviction in a criminal matter for money laundering has been made;
  2. Scheme participants, insurance companies, investment companies or other investors which have informed of the fact that they are professional investors;
  3. clients which are in the same group of companies as the Scheme participant;
  4. pension funds;
  5. the State and local governments;
  6. executive board and council members of the Scheme participant, 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 Scheme participant who are authorised to plan, manage and control activities of the Scheme participant and who are responsible thereof, as well as the persons who are directly or indirectly acquired more than 5% of the capital of the Scheme participant;
  7. persons who are responsible for the audit of the accounting documents of the Scheme participants specified in the Investor Protection Law;
  8. persons who are relatives of the first degree of kinship, or spouses referred to in Clauses 6 and 7 above;
  9. persons who act on behalf of the persons referred to in Clause 7 above;
  10. persons in respect of whom the Financial and Capital Market Commission (hereinafter – FCMC) has established that, under special provisions of a contract entered 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 Scheme participant.

The Bank draws attention of its clients that the investor protection scheme is not applied, if the client suffers losses due to changes in the prices of financial instruments or if the financial instruments owned by the client have become illiquid.

Procedure for applying for compensation

In order to apply for compensation, the Bank’s client must submit an application for compensation to the FCMC. The application for compensation must be submitted to the FCMC within one year since the Bank’s client has become aware of that the Bank has not fulfilled its obligations, but no later than 5 years from the date of non-fulfilment of obligations.

Investor Protection Law of the Republic of Latvia is available at: https://likumi.lv/doc.php?id=55829&mode=KDOC