Introduction

1. The financial law of the Republic of Latvia (hereinafter ‘Latvia’) consists of a number of laws, regulations and instructions, most of which are adopted by the Financial and Capital Market Commission, the Latvian Central Depository and the market makers.

All laws applicable to the securities market in Latvia may be divided into the following categories:

1. (i) laws (adopted by the Parliament) and regulations (adopted by the Cabinet of Ministers);

2. (ii) regulations adopted by the Financial and Capital Market Commission (‘Commission’);

3. (iii) rules, instructions adopted by the Riga Stock Exchange (hereinafter ‘RSE’) and Latvian Central Depository (hereinafter ‘LCD’).

The main body of legislation governing the securities market is the Financial Instruments Market Law, adopted on 20 November 2003, effective as of 1 January 2004 (hereinafter ‘Financial Instruments Law’). It is a comparatively new law, which replaces and supplements the old Law on Securities; however, since its adoption it has been amended five times. The Financial Instruments Law complies to a large extent with the requirements of the European Union financial services legislation, of which the most important are requirements for the financial instruments to be listed in the Main List and information to be disclosed thereto; requirements for the prospectuses regarding the public offer of transferable securities; requirements for the use of inside information and prohibition of market manipulations.