Compliance

Regulatory rules of bank's operation


Articles of Association

The Bank's Articles of Association specify the following core aspects of the company: 

1. Firm
2. Type of Business Operation
3. Share Capital and Type of Shares
4. Management Board
5. Supervisory Council
6. Internal Audit Department
7. Audit Committee

The Republic of Latvia Law on Protection of Depositors came into force on 1 January 2002 (available in Latvian). If entities that provide investment services (banks, investment management companies or brokerage companies) are unable to fulfil their obligations, their depositors are entitled to compensation. Compensation is provided when these obligations are not fulfilled.

Since 2008, each deposit has been guaranteed repayment equal to 90% of the value of financial instruments that have been irretrievably lost or of losses caused by an investment service that had not been provided, but no more than 20,000 euros.

As opposed to accumulations in the Deposit Guarantee Fund (Noguldījumu garantiju fonds, NGF) and Insured Persons’ Guarantee Fund (Apdrošināto aizsardzības fonds, AAF), the mechanism created to protect depositors intends that funds allocated for compensation are not accumulated in a fund; however, if any entity that provides investment services is unable to deliver of its obligations, the Financial and Capital Market Commission uses the quarterly financial instrument portfolio reports submitted by other parties that provide investment services to calculate a proportionate amount that each market player (entity providing investment services) should deposit to an account opened in the Bank of Latvia to ensure payment of compensation.

If necessary, the Financial and Capital Market Commission supervises market players’ compensation contributions, verifies the substantiation for compensation claims, and organises payment of compensation.

The Single Euro Payments Area allows all consumers, companies and government institutions from any European country to make and receive payments in euros across countries as well as within national borders, based on equal provisions, rights and obligations.

The SEPA is intended to equalise the use of payment instruments (SEPA credit transfers, SEPA card payments and SEPA direct debit payments), specifying that both national and cross-border euro payments must be executed with equal speed, security and simplicity.

SEPA payment standards:

  Payment currency – the euro; 

  The payment is sent to a bank in a European Union member country, Iceland, Liechtenstein, Monaco, Norway or Switzerland; 

  The recipient’s account must be in IBAN format; The recipient bank’s identification code (SWIFT/BIC) must be specified; 

  The payment applicant pays only the commission fee specified by their bank (covered partially);

  The details of the recipient and the recipient bank must be accurate.

Since 1 December 2012, the operation of Credit Register has been regulated by the Credit Register Law. 

The Credit Register is a state information system managed by the Bank of Latvia, gathering, maintaining and archiving data about clients and guarantors of clients of Credit Register participants, their obligations, and the progress of discharging the obligations.

It is worth noting that data included in the Credit Register are used for reference; they do not serve as evidence of the existence or nonexistence of obligations of a client or a client’s guarantor, or any violation of such obligations.

One of the primary goals of the Credit Register is to provide additional alternatives for evaluating the credit capacity of an existing or potential client and the client’s guarantor, contributing to a culture of fair and responsible consumer lending and borrowing practices.


Reports to the Credit Register

Information about a client, client’s guarantor, their obligations and violations of these obligations is included in the register by a member of the register.

Data about a client’s violations are recorded in the register if the client delays payment under an agreement on the basis of which they receive financial services bearing credit risk, for more than 60 calendar days – provided that the total of all overdue payments by the client, including late interest and contractual penalty, is equal to at least 150 euros or an equivalent in a foreign currency. 


Receiving data from the Credit Register

To receive data from the Credit Register, a client or guarantor submits a written application to the Bank of Latvia, either on paper or as a digital document. Such an application may also be signed by a different person on behalf of a client or guarantor. 

Data in the Credit Register may be received by a client or guarantor free of charge. Their guardian or proxy may also receive data on their behalf.


The Bank of Latvia issues data from the Credit Register to a client or guarantor: 
1. In electronic format; 
2. In person; 
3. By mail. 

Members of the Credit Register are entitled to receive data about: 
1. A current or potential client, their guarantor; 
2. A person with significant participation in a commercial company that is the relevant register member’s client, client’s guarantor, potential client, or potential guarantor of a client; 
3. A commercial company that is a subsidiary of the relevant register member’s (potential) client or guarantor, and any further subsidiary of such a subsidiary; 
4. A commercial company in which the relevant register member’s (potential) client or guarantor has significant participation;
5. Council and/or board member of the relevant register member’s (potential) client or guarantor, if any.


How long data are stored in the Credit Register:

1. Data about a client or its guarantor, including general information about their obligations and violation of obligations, are retained by the Bank of Latvia:
 For 15 years following termination of the obligations of the client or guarantor;
  For 15 years following the day that the rights or obligations under an agreement with the client or guarantor are transferred to a third party;
  For 5 year following remedy of obligations previously violated by the client or guarantor; 
2. Periodical data are stored by the Bank of Latvia for 3 years following expiration of the relevant period. 

You may read more about this law (in Latvian) here.

EMIR (European Market Infrastructure Regulation or Regulation No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories) is an EU regulation which sets common rules for OTC derivatives transactions, for risk mitigation techniques related to those transactions and for reporting of transactions. EMIR came into force on 16 August 2012. Various action-oriented regulations and requirements have come into force gradually in 2013 and 2014.


Objectives of EMIR

EMIR was adopted as a result of the 2009 decision by G20 to regulate the OTC derivatives market with greater accuracy, with the objective of increasing the transparency of the derivatives market and lowering the systemic risk of derivatives transactions within the global financial system.


Area of influence

Requirements of EMIR apply to OTC derivatives transactions, including some of the transactions that can be concluded under the Financial Instrument Account and Transaction Agreement – such as interest rate derivatives and FX derivatives (forwards, swaps, options). EMIR requirements apply to both financial and non-financial counterparties. Requirements of EMIR do not apply to private individuals and certain government institutions.


Main requirements of EMIR

Obligation to report derivatives transactions to a Trade Repository:

■ Obligation to centrally clear transactions with certain OTC derivatives through a Central Counterparty (CCP);

■ Mandatory risk mitigation techniques for non-cleared derivatives transactions.


Obligation to report derivatives transactions to a Trade Repository

Obligation to report transactions applies to all counterparties in derivatives transactions, except private individuals. This means that both counterparties to any derivatives transaction must report the transaction, modifications to the transaction, and termination of the transaction to a licensed trade repository of their choosing. The reporting obligation can also be delegated to one’s counterparty or to a third party. Transaction has to be reported no later than the working day following the conclusion, modification or termination of the transaction.

By signing the Financial Instrument Account and Transaction Agreement, the client authorises Baltikums Bank AS to report derivatives transactions concluded between the bank and the client to a trade repository.

In transaction reports, the counterparties to the transaction must be identified by a Legal Entity Identifier (LEI), which is a new identifier developed globally to identify counterparties to financial transactions. Until LEI format and issuing principles are finalised, an "interim" LEI code (or pre-LEI) must be used.

Obtaining a LEI (or equivalent identifier) is the responsibility of each counterparty to a derivatives transaction. If the client has not obtained a LEI (or equivalent identifier), it might not be possible for Baltikums Bank AS to report transactions on behalf of the client, and therefore the client might need to report the transactions themselves. Baltikums Bank AS can also refuse to conclude new derivatives transactions with clients who do not have a required identifier. A LEI code can be obtained over the internet. A full list of organisations issuing LEIs is listed on the website www.leiroc.org. Costs related to obtaining and maintaining the LEI (or an equivalent identifier) must be borne by the client.

The reporting obligation will come into force on 12 February 2014. In addition to new transactions concluded from that date forward, all derivatives transactions that were open on 16 August 2012 or have been concluded after that date have to be reported.


Obligation to centrally clear transactions with certain OTC derivatives through a Central Counterparty

The clearing obligation applies to transactions with standardised OTC derivatives. Instruments covered by that date have to be reported.


Obligation to centrally clear transactions with certain OTC derivatives through a Central Counterparty

The clearing obligation applies to transactions with standardised OTC derivatives. Instruments covered by that obligation will be published on the ESMA (European Securities and Markets Authority) website www.esma.europa.eu.

The clearing obligation applies to financial counterparties and to non-financial counterparties exceeding the so-called clearing threshold. Clearing thresholds have been set so that only companies holding very large speculative positions in derivatives would exceed them.


Mandatory risk mitigation techniques for non-cleared derivatives transactions

Main risk mitigation techniques affecting non-financial counterparties:

■ Timely confirmation of transactions. EMIR sets deadlines for confirming transactions depending on the counterparty and instrument type;

■ Portfolio reconciliation. Parties to a derivatives transaction have to agree on a process for regularly reconciling transactions to identify any discrepancies. EMIR sets deadlines on how often reconciliation has to be performed based on the counterparty type and number of open transactions between counterparties;

■ Dispute resolution. Counterparties to a derivatives transaction must agree on a process to resolve disputes. Baltikums Bank AS has specified the dispute resolution process in Financial Instrument Account and Transaction Agreement.


Counterparty classification

Application of different EMIR requirements depends on the classification of a counterparty – whether the counterparty is a financial or non-financial counterparty (in the latter case, it also depends on what types of transactions the counterparty concludes, for what purpose and in what amount). Financial counterparties under EMIR include banks, investment firms, insurance companies, fund management companies, providers of employer pension and central counterparties. All other undertakings are non-financial counterparties.

Baltikums Bank AS is a financial counterparty under EMIR.

Additional information on the ESMA (European Securities and Markets Authority) website www.esma.europa.eu

Customer complaints and suggestions


Submitting complaints to the Bank

How to submit claim or suggestion:

If you have any complaints or claims regarding client service or a service provided by the Bank, we are always ready to consider each case individually, provide explanations, and solve possible problems.

You may submit your complaint, suggestions or feedback:

- by email, sending them to: info@blueorangebank.com 

- by fax: :  +371 67 031 300 

- personally or mail them to the Bank’s address: Smilšu iela 6, Rīga, LV-1050, Latvija

- via Internet Bank


Information to be included in a complaint:

■ Data about the submitting person (for individuals – name, surname, and identity code or passport details if there is no identity code; for legal entities – the title and registration number, as well as the representative’s position, name, and surname);

■ The submitting person’s address;

■ The essence of the complaint or claim;

■ Documents on which the complaint or claim is based;

■ The submitting person’s phone number, fax number, and e-mail.

The Bank will consider your complaint or claim and will reply to you within thirty days after receipt. If more time is necessary for consideration of the complaint or claim and preparing a reply, you will be notified within thirty days following receipt of your complaint or claim.


Submitting a complaint to the Ombudsman

If you received an unsatisfactory reply from the Bank to a complaint concerning non-cash transfers or transactions with electronic account management tools, the complaint may be submitted to the Ombudsman of the Association of Latvian Commercial Banks (ACBL).

The Ombudsman only considers complaints that have all of the following features:

■ The complaint was submitted by a client who is not a credit institution or a financial institution;

■ The complaint concerns non-cash credit transfers or transactions with electronic payment tools;

■ The complaint concerns the actions of a credit institution registered in Latvia;

■ The amount of the transaction (the total amount of transactions which are obviously related) that is the subject of the complaint does not exceed EUR 50,000.00;

■ The complaint does not concern document forgery;

■ The complaint does not concern the reasonability of pricelists of credit institutions, the granting, cancellation or amendment of credit limits, the terms and conditions of credit limits, or other similar issues;

■ The client has turned to the credit institution with the same claim and failed to receive a satisfactory response to their claim within one month as of the day of submittal (sending) thereof;

■ No claim on the same subject has been submitted to a court or court of arbitration;

■ The client has not submitted the same complaint to the Consumer Rights Protection Centre;

■ No complaints on the same subject from the same client have been submitted to the ombudsman;

■ The complaint is filed in writing according to all requirements of the ACBL and is submitted to the ACBL Ombudsman at Pērses iela 9/11, Rīga, LV-1011, Latvija.

More information on the ACBL ombudsman, its regulations and procedures (in Latvian) are available on the website, http://lka.org.lv/lv/ombuds/reglaments.html and http://lka.org.lv/lv/ombuds/nolikums.html.


Submitting a complaint to the Consumer Rights Protection Centre

Clients who are considered consumers in the interpretation legal acts of the Republic of Latvia are entitled to submit complaints on violations of requirements of legal acts to the Consumer Rights Protection Centre.

More information on the Republic of Latvia Consumer Rights Protection Centre is available on the website, www.ptac.gov.lv.


Common Reporting Standard


Information disclosure

Information about Remuneration policy, Normative Regulations for Disclosure of Encumbered and Unencumbered Assets is available here.