Act on Supervision over Financial Market

This act (the ``Act'') regulates establishment, powers, activities and economy of the Office for Financial Market (the ``Office''), as well as the process of the Office in performance of supervision over the financial market, capital market and insurance. This Act also regulates co-operation and interactivity of the Office with other bodies, legal entities, as well as natural persons in the Slovak Republic and abroad at performance of supervision over financial market.

The Office is a legal entity established by law for purpose of performance of the above supervision. The seat of the Office is located in Bratislava. The Office is not registered with the Commercial Registry.

The Office supervises activities of securities dealers, branch offices of foreign securities dealers, investment services agents, securities stock exchanges, central depository of securities, asset management companies, mutual funds, insurance companies, branch offices of foreign insurance companies, insurance brokers, as well as other persons, entities and groups of persons and entities, to which certain duties are imposed by special regulations in the area of the capital market.

This Act reacts by its provisions on the newly adopted legislation in the area of securities and investment services (Act No. 566/2001 Coll. on Securities and Investment Services) and insurance (Act No. 95/2002 Coll. on Insurance).

At performance of its supervision, the Office co-operates with the Ministry of Finance of the Slovak Republic, National Bank of Slovakia, securities stock exchange, central depository, as well as with foreign supervision authorities acting in the area of capital market and insurance.

The Act determines exact rules for performance of supervision, whereas application of general rules on administrative proceedings is thereby excluded.

Within the rules for performance of supervision, the Act stipulates rights and duties of persons responsible for performance of supervision, as well as rights and duties of the entities being under supervision. The exact rules of the Office regulate proceeding rules, possibility of exclusion from the proceeding, participants of the proceeding and third persons, commencement of proceeding, petition, delivering, suspension of proceeding, integration of proceedings, termination of proceeding, proceeding expenses, evidencing, preliminary question and temporary injunction, decisions, effectiveness and enforceability of decisions, as well as possible means of remedy against the decisions of the Office related to the performed supervision.

Furthermore, the Office maintains the lists of:

(a)

persons to which a permission has been granted under the Act on Bonds, the Act on Collective Investment, the Act on Securities Stock Exchange, the Act on Securities and Investment Services, the Act on Insurance and the Act on Mandatory Contractual Insurance of Liability for Damage Caused by Operation of Motor Vehicles,

(b)

compulsory administrators, e.g. under the Act on Insurance and the Act on Collective Investment, or

(c)

other persons, if a special regulation stipulates so.

The Office issues its official Journal, in which it publishes various reports on activities and economy of the Office, on state of the capital market and insurance, lists mentioned in the preceding paragraph above, various methodical instructions and recommendations of the Office and other important announcements of the Office.

The Act further grants the authority to the Office to impose disciplinary penalties up to the amount of SKK 500,000.

In its enclosure, the Act enumerates amounts of annual contributions, which are mandatory paid by securities traders, branch offices of foreign traders in securities, investment services agents, asset management companies, mutual funds, insurance companies, branch offices of foreign insurance companies, re-insurance companies, branch offices of foreign insurance companies/re-insurance companies, insurance brokers, securities stock exchanges and a central depository.

The Act replaced the Act on Authority for Financial Market valid until 1 April 2002.

This Act came into force on 1 April 2002.

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