Bank of Lithuania expert visits: what do they mean to market participants?
In supervising the domestic financial market, the Bank of Lithuania is increasingly using on-site visits as one of its supervisory measures. Such visits differ from usual inspections, as they are shorter, their subjects are specific and narrow and their objective is to gather information about market participants and assess their operation to help improve it.
“On-site visits are aimed at maintaining constructive cooperation with market participants. They are comparable to internal audits and are dedicated to consultations and the exchange of best practices. This also helps the supervisory authority to better understand the domestic financial market and assess the prevailing trends and challenges,” said Jekaterina Govina, Director of the Financial Market Supervision Service of the Bank of Lithuania.
Since 2018, when the Bank of Lithuania started applying this measure as a form of supervision, 11 visits have already been arranged. The largest number of visits (five) by the Financial Market Supervision Service experts has been paid to pension accumulation companies (SEB investicijų valdymas, UAB, Swedbank investicijų valdymas, UAB, UAB INVL Asset Management, Luminor investicijų valdymas, UAB and Aviva Lietuva, UAGDPB). They focused on the analysis and assessment of information on investment of pension fund assets. During the visits, the Bank of Lithuania has evaluated the measures used by pension accumulation companies to ensure quality of their investment processes, analysed risks and their control procedures, assessed compliance of the processes with the legal requirements and internal regulations and organised discussions on the improvement of their day-to-day activities.
Based on the results of these visits, a conclusion has been made that pension accumulation companies have appropriate documents describing the procedures for making investment decisions and their implementation as well as control and risk management processes and adhere to them. The Bank of Lithuania has positively evaluated the operation of all five pension accumulation companies and provided recommendations to each of them to ensure the application of the best practices in the market.
At least two visits are planned for this year.