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Bank of Lithuania’s Response to the Covid-19 Crisis: Responsible Action or Over-Regulation?
The Covid- 19 Pandemic has created many novel situations that are unlikely to disappear in the near future. Like in the majority of novel post- apocalyptic scenarios, the uncertainty of the a new world order, especially in the financial sector, is always looming upon not only the governmental sector, but also on the private sector, which leads to many legal lacunas.
Within the EU financial sector, it is still uncertain whether the crisis has entered into its second act, or if it is still at the overture level.
The Bank of Lithuania, for example, has demonstrated great resilience with the initial response to the Crisis, that was remarkable in comparison to the initial response of ESMA. The Bank has issued six points of reference to the financial institutions which are regulated under the Bank which are crucial for each Electronic Money Institution’s (hereinafter- EMI) reporting duties and financial duties.
For instance, part of these requirements are in direct correlation to the Market Abuse Regulation, 5 AMLD, PSD2, and MiFID II. When discussing the Market Abuse Regulation, the Bank has issued a notice that processes and business decisions issued within the quarantine time are considered inside information, and should be disclosed under the appropriate framework.
Bank of Lithuania is also aware that regulated entities, especially EMIs and Payment Institutions (hereinafter-PI) which have not been working from their usual headquarters, but on a remote basis, still have to continue their financial and regulatory report as usual. Documents should be sent on a password controlled basis, and physical documentation should not contain confidential or sensitive information.
In regards to trading activity and trading in a regulated environment, the Bank has announced its intentions for allocating means for legal enforcement for proper functioning of the market in Lithuania. By this, the Bank has decided to examine requests for suspended trading only after receiving well- reasoned submissions, which are objective, reasoned and legally justified.
This is not the first time that the objective, reasoned and legally justified criteria has been raised in a European context. The criteria is remarkably similar to the Subsidiarity and Proportionality principle of EU jurisprudence, which has been discussed countlessly in the Treaty of Maastricht, the Single European Act (SEA), and in T29/92, which established that the subsidiarity principle does not constitute sufficient grounds to tackle the legality of an EU legal act, especially in trade aspects between Member States and Association Agreement Countries.
In the financial services realm, this is one of the few times that this has occurred. Implementing the Subsidiarity and Proportionality Criteria in the Lithuanian context, has surpassed the EU Agency level (ESMA) and has been directly implemented by the Lithuanian Regulator.
It may seem to some that this leap is the first sign of over-regulation in Member States, which tend to over-regulate in times of crisis, yet this measure can also be deemed as responsible action. The fact that the Bank of Lithuania has managed to implement the measure in a short time frame, with minor and almost non-existent instructions from ESMA, proves once again that in cases of financial services, mutual and not exclusive competence is the golden route for financial institutions.
EMIs and crypto exchanges that have been licensed in Estonia in comparison, which have lately been scrutinized by regulatory enhanced enforcement, have not received any formal notification in regards to the Covid-19 crisis, and have not received an extension for financial and regulatory reporting, bearing in mind the July 1st deadline that is looming on the entire crypto industry in Estonia.
EMIs in Lithuania on the other hand, have received specific instructions on their financial and regulatory reporting, and the widely anticipated API open banking system will be presented during the Payment Council later this year.
Be that as it may, EMIs that are licensed in Lithuania need to bear in mind that additional enhanced procedures are anticipated from the Bank, and they need to prepare themselves for the regulatory whirlwind that will hit the compliance and operational desks within the foreseeable future.
About the author: Ella Rosenberg
EU Law Regulatory Consultant at Porat Group and CEO of the Israel-EU Chamber of Commerce and Industry. She primarily deals with high risk industries in Israel and Europe. Ella holds an LLB in EU Law from the European Law School, Maastricht University and an LLM in Commercial and Company Law from Erasmus School of Law, Erasmus University Rotterdam. Ella consults on AML in the crypto currency industry, Blockchain, AI, drone regulation, EU firearms regulatory framework, Art industry, financial arbitration and tokenization of maritime logistics. She also focuses on Foreign Trade Agreements of the EU and Israel, TRIPS and GATT agreements, WTO Law and EU Legal Policy. Ella serves as a member of Europe Forum in Israel, and actively consults the public and governmental sector in Israel on the EU Regulatory Framework.
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eWTP Arabia Capital’s Technology Fund I Recognized as Top Performing VC Fund in the Preqin League Tables
RIYADH, Saudi Arabia, May 19, 2024 /PRNewswire/ — eWTP Arabia Capital Technology Fund I (“Techology Fund I”), managed by eWTP Arabia Capital (“eWTPA”), one of the leading private equity firms in the Middle East, was listed in the Preqin League Tables as the the fifth top-performing VC funds in the US$250 Million to US$499 Million category by net Internal Rate of Return (IRR) for vintages between 2015-2020.
“We’re delighted by the recognition of our Technology Fund I as a top-performing VC fund in our sector,” expressed Jessica Wong, Founder and Managing Partner of eWTPA. “This milestone underscores the commitment of our team and the robustness of our investment strategy. It also underscores the significant growth potential of the Middle East and North Africa market, particularly in Saudi Arabia, warranting attention. As a pivotal driver of technological advancement in the region, we’re steadfast in our mission to empower entrepreneurs and deliver value to our investors.”
“Being recognized by Preqin validates our hard work and dedication to supporting and actively contributing towards building the Saudi digital ecosystem,” said Jerry Li, Founder and Managing Partner of eWTPA. “As eWTPA continues to grow and expand its investment portfolio, it remains committed to fostering innovation and driving positive change in Saudi, the GCC and the global emerging markets ecosystem.”
eWTPA has demonstrated exceptional performance, solidifying its position among industry leaders. This recognition underscores eWTPA’s commitment to identifying high-potential market opportunities and generating returns for its investors.
The Preqin League Tables are regarded as a comprehensive and authoritative ranking system for private equity and venture capital performance. Preqin, a leading data provider in the alternative assets industry, compiles these league tables based on various performance metrics, including net Internal Rate of Return (IRR) and other key indicators.
eWTPA’s success reflects its strategic approach to investing high-growth sectors in the MENA region. The firm’s portfolio includes a diverse range of companies poised to make a significant impact on their respective industries.
Acting as a bridge between Asia and the Middle East, eWTPA’s Technology Fund I has achieved significant success since its inception in 2019. The Fund has invested in over 18 companies, several of which have successfully established themselves in KSA, like J&T Express, Raha, Sahm and COFE.
About eWTPA:
Founded in 2019, eWTP Arabia Capital is an investment firm based in Saudi Arabia and China. Backed by marquee regional and international Sovereign Wealth Funds, Institutional investors, and family offices, eWTPA helps create robust local digital ecosystems in the MENA region by partnering with market-leading international businesses and providing a gateway for these companies to establish a strong and sustainable presence in the region. To date, eWTPA has invested in over 18 companies, 13 of which have already established themselves successfully in KSA.
Media contact:
Haile Liao
+966 0530868568
[email protected]
Photo – https://mma.prnewswire.com/media/2416426/eWTP_Preqin.jpg
View original content:https://www.prnewswire.co.uk/news-releases/ewtp-arabia-capitals-technology-fund-i-recognized-as-top-performing-vc-fund-in-the-preqin-league-tables-302149554.html
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