Competence of the National Bank of the Republic of Belarus with regard to the issues of implementing Edict of the President of the Republic of Belarus No. 231 "On Carrying out Activities in the Over-the-counter Forex Market"
In line with Edict of the President of the Republic of Belarus No. 231 “On Carrying out Activities in the Over-the-counter Forex Market” dated June 4, 2015 (hereinafter- the “Edict”).
The National Bank shall:
- draw up and keep a register in the procedure set out thereby;
- define the forms of legal entity’s application on the inclusion in the register and of certificate of the inclusion in the Edict;
- set out a minimum size of security capital, procedure of its generation, replenishment and use;
- specify requirements to the subject matter of the rules on effecting operations;
- set out a forex company risk limit;
- set out the National forex center risk limit when conducting operations involving non-deliverable OTC financial instruments with forex companies, banks, non-bank financial institutions in respect to an aggregate open position of customers (a sum of customers’ open positions);
- establish the procedure of examination by the National forex center of relevant software programs with a view to verify their compliance with the requirements specified by the National Bank;
- define the forms and scope of financial statements to be submitted by forex companies, banks, non-bank financial institutions, terms and procedure of drawing up and submission thereof to the National Bank and the National forex center;
- define the forms and scope of financial statements to be submitted by the National forex center to the National Bank, as well as a procedure and dates of their drawing up and submission;
- establish the criteria while complying with which a forex company is entitled to funnel an aggregate open position of customers (a sum of open positions of customers) to a foreign counteragent with due account of the limitations set out in the Edict;
- establish the criteria in respect to foreign counteragents to which forex companies are entitled to funnel an aggregate open position of customers (a sum of open positions of customers);
- establish requirements to:
- software programs required for effecting operations in the OTC forex market via the Internet and/or using other technical means and for submitting financial statements to the National Bank and the National forex center;
- arranging the internal control and risk management procedures at forex companies and the National forex center;
- a special-status current (settlement) bank account for generating and using security capital.
- exercise control over the compliance with the legislation governing the procedure and terms of conducting operations involving non-deliverable OTC financial instruments initiated by individuals and legal entities, including by way of carrying out audits at the National Bank place of business based on examination of documents, statements and other data obtained thereby in accordance with the effective legislation, with no vindication from a forex company, the National forex center, bank, non-bank financial institution of other documents (desk audits).
The National Bank shall be entitled to:
- act as a customer of an audit service when carrying out audit of forex company’s accounting (financial) statements;
- establish a limit size of the leverage;
- establish minimum sizes of forex companies’ reserves, a procedure of their generation;
- establish financial ratios for forex companies, including a liquidity ratio and a limit ratio of the monetary funds raised from customers to a forex company net worth, as well as the size of such ratios.
- set the following compulsory requirements:
- requirement (an order) on elimination of the detected violations;
- requirement on taking by a forex company actions to improve its financial standing in the event that such forex company faces the situation threatening its financial standing, to timely and completely discharge its obligations and liabilities;
- requirement to deposit funds in a security fund (including the case where the National forex center obtains information certifying the fact that a forex company, bank, non-bank financial institution fails to discharge their duty on generating security fund);
- order stating prohibition to raise by a forex company, bank, non-bank financial institution monetary funds from customers under agreements;
- order stating prohibition to effect operations involving non-deliverable OTC financial instruments in the cases set out in the Edict;
- requirement to dismiss from office a forex company manager, an officer of a structural division exercising internal control (including manager of such structural division) in the cases set out in the Edict.
National Bank together with the Council of Ministers of the Republic of Belarus:
- specifies other underlying assets, not specified in the Edict, in operations with non-deliverable OTC financial instruments;
- defines (creates) the National forex center;
- approves Provision on the activities of the National forex center;