2024-05-06
Capital Market Council: New opportunity – Baltic States capital fund would accelerate the activities of small and medium-sized enterprises
The Capital Market Council discussed proposals to strengthen the protection of pension fund participants, plans for operating the Baltic States capital market acceleration fund, and the implementation of the capital market development plan.
“We have assessed the progress of the development of the capital market and seen many positive steps taken towards fortifying consumer protection and reducing the administrative burden. The contours of new capital market tools aimed at helping small and medium-sized enterprises to attract funds are emerging. It is also important that the necessary draft laws for the emergence of registered investment accounts are in place, which were discussed in the Capital Market Council,” said Simonas Krėpšta, a member of the Board of the Bank of Lithuania.
At the Capital Market Council meeting, the Bank of Lithuania presented proposals on safeguarding pension accumulation participants when investing in alternative asset classes. Despite the inherent risks associated with the activities of alternative investment funds, these investments serve as catalysts for the local economy, offer more investment distribution opportunities, and yield higher investment returns. The Bank of Lithuania believes that pension funds can invest in alternative investment funds, provided they effectively manage risks and implement effective risk mitigation measures. The Bank of Lithuania is poised to draft regulatory proposals to bolster the protection of pension accumulation participants by June of this year.
The requirements for reports prepared by pension funds and collective investment entities were previously evaluated, and excess requirements were identified and reduced. Per this year’s updated procedure (for 2023), pension funds and collective investment undertakings will begin submitting shortened annual and semi-annual reports.
The Ministry of Economy and Innovation presented an analysis of the process of including state-owned enterprises in the lists of securities exchanges and the possibilities of trading their shares (listing). A listing opportunities matrix will be created by cooperating with Nasdaq and the Bank of Lithuania and evaluating the proposals submitted by ministries. This will be used by all state-owned companies to assess their opportunities and needs regardless of the existing legal regulations. A Lithuanian capital market fact sheet was also presented, providing concentrated information about the advantages of the market. The fact sheet can be found here.
UAB Investicijų ir verslo garantijos (INVEGA) presented the Baltic States capital market acceleration fund, which will be invested in together with ALTUM, a Latvian state-owned development finance institution. This fund is expected to be around €50 million in size and will invest in very small, small, and medium-sized innovative enterprises with medium capitalisation that seek to be listed on the stock exchange.
The Capital Market Council meeting also discussed European Union legal proposals in the Capital Markets Union field and considered their implementation. Additionally, the perspectives of the collective investment undertaking’s market for informed investors (risks, opportunities) for 2024–2026 were addressed, along with other issues.
The Capital Market Council was established last year. It aims to ensure cooperation between capital market participants (service providers and consumers) and state institutions by shaping and implementing capital market policy, thus promoting market development and progress. The Council consists of representatives of state institutions and private sector associations. This year, the Bank of Lithuania is the chair of the Capital Market Council.