Licence types in Lithuania
In Lithuania all the legal persons which are planning to engage in provision of financial investment services shall obtain a licence which is issued by the Central Bank of the Republic of Lithuania.
There are three types of financial investment licenses:
A, B and C. Each licence is different in the scope of services that the licence
owner can provide.
Type A license covers the widest range of
services: reception and transmission of orders; execution of orders on behalf
of clients; dealing on account of the company; management of a financial
instrument portfolio; provision of investment advice; underwriting and/or
placing of financial instruments on a firm commitment basis; placing of
financial instruments without a firm commitment basis; operation of a
multilateral trading facility.
Type B licence covers the following services:
reception and transmission of orders; execution of orders on behalf of clients;
management of a financial instrument portfolio; provision of investment advice;
placing of financial instruments without a firm commitment basis;
Type C licence covers the services including:
reception and transmission of orders; provision of investment advice; placing
of financial instruments without a firm commitment basis. Type C licence
holders can manage of a financial instrument portfolio by passing on execution
of orders, safekeeping, accounting and management of financial instruments to
another brokerage firm.
A financial investment firm can apply for all the activities which cover a certain licence or a part of the activities.
Share capital requirements
In order to obtain a financial investment licence, the applicant shall comply with share capital requirements. Minimum share capital in order to acquire a type A licence is 730 000 EUR, type B licence – 125 000 EUR, type C licence – 50 000 EUR.
There are additional requirements to maintain certain share capital throughout the activities of brokerage firm in order to reduce risks. In addition, each brokerage firm shall prepare a capital adequacy assessment report.
A legal person which applies for a licence shall submit the following documents to the Central Bank of the Republic of Lithuania:
- Business plan;
- Information about the legal person (including Commercial Register extracts);
- Information about shareholders;
- Information about the manager of the legal person;
- Documents confirming that share capital has been paid as well as capital adequacy assessment report;
- Information about close relations with other natural and legal persons in the Republic of Lithuania;
- Information about close relations with other natural and legal persons in third countries;
- Description of the office and equipment;
- Documents confirming commitment to become a member of recognized investors’ insurance system;
- Information regarding financial brokers to be employed;
- Documents confirming payment of state fees;
- Documents and information confirming compliance with requirements for brokerage firms;
- Information regarding implementation of money laundering and terrorist financing prevention measures;
- Information regarding ability to provide data about transactions using Transaction Reporting System;
- Information about IT systems.
The Central Bank of the Republic of Lithuania adopts the decision to issue a licence or reject the application within 6 months from the provision of all the above mentioned documents.