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Liechtenstein Consults On Banking Law Amendments

by Lorys Charalambous, Lowtax.net, Cyprus
17 February, 2014

The Liechtenstein Government has adopted a consultation report pertaining to the planned amendment of the Principality's banking law and changes to other laws. The consultation report contains provisions implementing the Capital Requirements Directive (CRD-IV) package, as well as provisions extending Liechtenstein's investor compensation system.

In the wake of the 2008 financial market crisis, the European Union (EU) enacted Directive 2013/36/EU, the so-called Capital Requirements Directive (CRD-IV), together with the Capital Requirements Regulation (CRR), which together form the CRD-IV package. The package provides for regulations designed to improve capital adequacy and liquidity, and to govern internal capital policies, corporate governance, sanctions, and regulatory cooperation.

The CRD-IV package will be transposed into the Liechtenstein law on banks and investment firms (BankG).

Furthermore, the bill aims to "complete" investor protection regulations contained in Liechtenstein's BankG law. For the provision of investment services, the EU requires all member states to have an investor compensation system in place, in accordance with the Markets in Financial Instruments Directive (MiFID).

Although Liechtenstein established the Deposit Guarantee and Investor Protection Foundation of the Liechtenstein Bankers Association (EAS) for banks, the Principality now intends to include in the investor protection system investment firms, wealth managers, individual portfolio management companies, and Alternative Investment Fund Managers with individual portfolio management.

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