Security of pension plans

Financial and Capital Market Commission

The Commission’s task is to oversee that fund managers and custodian banks comply with the laws and other legal requirements, i.e., that funds are invested in accordance with the investment regulations. Commission and its approved certified auditors have the right to audit fund managers and custodian banks.

Financial and Capital Market Commission also performs licensing of fund managers and the state supervision and has the right to suspend or revoke the license issued to a custodian bankt, if there are any violations in their business activites found. All fund managers have to regularly submit to the Commission quarterly and annual reports on their activities. The annual report must be accompanied by a sworn auditor` cerificate.

Custodian bank

Supervision of your fund managers’ activities on a daily basis is performed by a custodian bank. Custodian bank is a bank with which the fund manager has a contract on holding of funds. In the custodian bank all investment plan accounts are open (billing accounts and securities accounts), where both the securities bought by the investment plan`s funds and the non-invested money are held. These funds are kept separate from its own funds, the custodian bank`s assets, as well as fund manager`s funds and other assets under management of the fund manager. This ensures safety of investment plan funds in case the fund manager or custodian bank would be found to be insolvent.The custodian bank also examines the fund manager`s prepared orders on funds` investment (securities purchasing or deposits in banks) compliance with the investment plan. Also the custodian bank is obliged to not execute any custodian order which is inconsistent with the investment plan. Otherwise, the custodian bank shall be responsible for any losses that may occur to you.