Slovak Financial Law News 2005

Decree on Determination of the Value of Property in the Pension Fund and on the Manner of Determination of the Value of Securitiesin this Fund

Decree of the Ministry of Finance of the Slovak Republic No. 48/2005 Coll. on Methods and Manner of Determination of the value of Property in the Pension Fund and on the Manner of Determination of the value of Securities in the Pension Fund

This Decree implements certain provisions of Act No. 43/2004 Coll. on Old-Age Pension Savings and on Amendment and Supplements to Certain Acts, and it regulates the manner of determination of the value of property in the pension fund and the manner of determination of the value of securities in the property in the pension fund.

Pursuant to this Decree, the value of contributions, penalties and revenues from assets acquired from contributions and penalties, which are not included in the calculation of the value of securities, of the financial market instrument or of the derivative, are determined by their value as of the date of their acceptance.

This Decree defines terms for purposes of this Decree such as the market value of a security, theoretical value of a security and asset security.

With the exceptions stipulated by this Decree, the market price, for which the last transaction on the regulated market was made and which was made public by the organiser of the regulated market on that day is used to determine the value of a security and of a financial market instrument accepted for trading on the regulated market. If it is not possible to determine the value of a security or of a financial market instrument in this manner, the market price which was made public by a generally accepted information system publishing official market prices of securities and of financial market instruments on that day will be used. This system is used by a pension trustee company after an agreement with the depositor to determine the value of securities and of financial market instruments.

This Decree stipulates cases in which the theoretical value is used to determine the value of securities and it also stipulates the manner of its calculation while it distinguishes among individual financial market instruments and types of securities.

The theoretical value of an asset security is for instance determined in the manner that the last known market price or the price determined by the creator of the market with asset securities as of the date of the determination of the real value is daily decreased by 1% for the period of 100 calendar days. The manner of calculation of the theoretical value of a bond and of a financial market instrument, as well as a theoretical value of a forward is calculated according to the formulas stipulated in the Annex to the Decree.

This Decree further stipulates the determination of the value of a derivative accepted for trading on the regulated market. The market value for which the last transaction on the regulated market was made and which was made public by the organiser of the regulated market on that day is used to determine the value of such derivative unless specified otherwise by this Decree.

This Decree further regulates the manner of determination of the value of a unit of an open unit trust and of a share of a foreign entity of collective investment for determination of which the last published current price of the unit and of the share of a foreign entity of collective investment valid on the due date on which the value of the unit and of the share of a foreign entity of collective investment was determined is used.

This Decree also stipulates the manner of determination of the value of contributions and claims.

To determine the value of securities, of a financial market instrument or a derivative which are not being used for trading or with which the trading on the regulated market or on the international regulated market stopped, the theoretical value is used in accordance with this Decree.

With the exceptions stipulated by this Decree, the value of a security, of a financial market instrument or of a claim resulting from a derivative issued by an issuer on the property of which bankruptcy was declared, or a petition in bankruptcy was rejected for reasons of insufficient property, or with regard to which a composition procedure was started, will be equal to zero.

This Decree came into effect on 1 March 2005.

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