OREANDA-NEWS. October 30, 2007. The Markets in Financial Instruments Directive (MiFID) is a directive of the European Union on the requirements for markets in financial instruments coming into effect on 1 November 2007, reported the press-centre of Ukio bankas.

The main aim of this Directive is to ensure the uniform regulation regime of trade in financial instrument within all EU member states. The Directive’s main principles are higher protection of investors, quality provision of investment services and ensuring of market transparency.

A higher protection of investors will be ensured by taking into account a category of investors. It is established that clients are classified in three categories:

Retail investors. They have the highest level of investor protection because they are deemed to have small experience in securities markets. The major part of AB Ukio bankas clients will be classified in this group – these are private clients and small enterprises.

Professional investors. Clients classified in this category include credit institutions, insurance companies, financial brokerage enterprises, collective investment undertaking and their management companies, national governments, big enterprises etc. They are deemed to have sufficient knowledge and experience and, therefore a lower level of investor protection could be applied for them.

Eligible counterparties – the operators having extensive knowledge and experience in the finance markets to whom investor protection rules are not applied.

In order to provide quality investment and additional services, when implementing the requirements laid down in this Directive, the Bank will collect information from its investors about their knowledge, experience and financial standing. Previously, clients had to provide such information too but now the Bank will, after having assessed the obtained information, offer an investor such investment products that not only meet its demands, knowledge and experience but also are the most suitable according to the tolerance of risk.

When implementing the Directive’s requirements concerning the increase of the market transparency, the Bank is ready to provide and will provide information about all transactions concluded to the supervisory institution – the Lithuanian Securities Commission. Apart from that, the Bank will provide full information about service costs to the clients.

Taking into consideration the Directive’s requirements, the Bank reviewed its investment service provision agreements and other documents related to the provision of investment services. From 1 November 2007, the present clients are invited to visit the Bank and sign new agreements, fill in financial instrument feasibility questionnaires and familiarize themselves with other documents ensuring such provision of investment services that meets high requirements of quality and transparency.

The present clients of Ukio bankas have to change their agreements with the Bank until 31 December 2007. For this purpose they have to contact the nearest Ukio bankas branch or unit. If a client fails to renew the agreement and fill in the financial instrument feasibility questionnaires until the set date Ukio bankas will not be able to provide investment services to such client. From 1 January 2008, AB Ukio bankas will terminate Investment Service Provision Agreements previously concluded with the clients if they fail to sign the new versions of these agreements.