Liechtenstein Adopts Financial Service Sector Bill

11.02.2011


During its sitting on February 1, Liechtenstein’s government adopted the report and application pertaining to the amendment of the principality’s Banking Act, Payment Services Act, E-Money Act, and Market Abuse Act.

According to Liechtenstein’s Prime Minister Klaus Tschüscher, the bill serves to implement four European directives, designed to eradicate weaknesses in the own capital requirements and risk management of banks and investment firms, observed in the wake of the last financial crisis.

Following reform decisions taken by the G20, the European Commission united, in addition to financial market supervision reform, on five reform packages – Capital Requirements Directives I to V (CRD), designed to amend the banking directive and capital adequacy directive.

Liechtenstein’s administration has confirmed that the principality’s bill contains CRD packages I to III, introducing changes not only to legislation but also to the own capital and banking ordinances.

In its statement, the administration points out that the various legislative changes aim to ensure a more efficient and coherent cooperation between national supervisory authorities in dealing with cross-border banks and investment firms, via the introduction of supervisory colleges, whereby information exchange as well as joint planning of supervisory activities in normal and crisis situations are regulated.

Expanded and more precise rules for the joint decision of a supervisory college on the adequacy of own capital resources of the group on a consolidated basis are designed to guarantee a better control of a group’s financial situation in future.

Every bank and investment company will be legally required to pursue a remunerations policy aligned to the long-term success of the overall business, verifiable by the supervisory authorities, in order to prevent high risks being taken for large bonuses linked to short-term success.

Entry into force of both the bill and corresponding ordinance amendments is set for July 1.

 

Quelle: Tax-News.com