Resolutions of the Supervision Service of the Bank of Lithuania
For improper holding of customer funds – Majestic Financial, UAB fined
The Supervision Service of the Bank of Lithuania established that the payment institution Majestic Financial, UAB, held part of the customer funds improperly.
Majestic Financial, UAB violated the requirements of the Law on Payment institutions: although customer funds were held in credit institutions, part of them – in accounts for holding non-customer funds, unlike as is established in the Law. Therefore, the Bank of Lithuania imposed on the institution a €9,000 fine. The company is already complying with the legal requirement.
The Bank of Lithuania would once again like electronic money institutions and payment institutions to note that the requirement to provide for measures to ensure the protection of customer funds, as imposed by legal acts, shall be understood as the obligation to take steps to safeguard customer funds from debt recovery if they become insolvent. One such action is clear declaration of the status of customer funds and establishment of other special provisions in agreements, concluded with credit institutions, on safekeeping of customer funds.
EDRAUDA given warning for improper provision of services
The Supervision Service of the Bank of Lithuania performed an inspection of EDRAUDA, a private limited liability insurance brokerage company, and identified violations of the Law on Insurance, related to insurance distribution services provided to consumers.
The specialists of the Bank of Lithuania, of the selected 46 insurance agreements, established 7 cases where the company gave a higher price for the services than in the original offer, of which 4 cases were of demanding surcharge from customers. 2 cases were identified of the price indicated in the insurance agreement entered into by the insurer being lower than the price paid by the customer. By failing to provide correct information on the cost of insurance, the company infringed the requirements of the Law.
In addition, specialists identified gaps in the distribution procedure for the products of EDRAUDA UADBB. In accordance with the requirements of the European Union, it should contain a clear, comprehensive and up-to-date summary of the specific insurance products distributed by the company, their main characteristics, the target market, each specific distribution strategy and any circumstances, processes to ensure that the objectives, interests and characteristics of customers are duly taken into account.
Having taken into account all the circumstances, including the fact that in autumn 2019 the Bank of Lithuania fined EDRAUDA UADBB, after which the company immediately took measures to remedy the alleged systemic irregularities and provided documentary evidence, this time the Supervision Service issued a warning to the company.
Amendments to the rules of AB Nasdaq Vilnius have been recognised
Taking into account the request of AB Nasdaq Vilnius, the Supervision Service of the Bank of Lithuania approved the proposed amendments to the rules for the listing of AB Nasdaq Vilnius, which are relevant to the maximum capitalisation AB Nasdaq Vilnius regulated market companies and those that plan to change the trading code or the nominal value of the shares. The main change is that, according to the rules, the free float will have to be calculated once a year by the issuer and they will have to monitor whether the indicated amount is in compliance with the requirements, while AB Nasdaq Vilnius will have the right to require the issuer to provide it with the specified amount.
Information on enforcement measures applied by the Bank of Lithuania, complaints regarding the applied enforcement measures, and settlement results is available here.