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Investor protection scheme

Investor protection scheme is a set of measures put in place for the protection of the interests of the investors, for ensuring financial resources necessary for such protection and for the payment of compensation under the Investor Protection Law.

Who is entitled to compensation?

The right to receive a compensation is granted to the investor - a person who transfers money or financial instruments to the scheme participant for the delivery of investment services. A scheme participant is a legal person that has received a licence from the Financial and Capital Market Commission to provide investment services.

Which cases are eligible for compensation?

Compensation is payable on irreversible loss of financial instruments or damage caused by non-executed investment services.

  • An irreversible loss of financial instruments is a fact to be established by the Financial and Capital Market Commission having decided that the data certifying the investor's title to the financial instruments and stored by the computer system of a scheme participant or included in any other type of accounting, have been irreversibly destroyed or damaged due to an act or omission or criminal offence and the scheme participant refuses to restore such data on the basis of the documents presented by the investor;
  • A non-executed investment service is an investment service accepted for delivery by a scheme participant but fully or partially not carried out by that participant, whereby the investor has suffered loss, or financial instruments have irreversibly been lost as a result thereof.

What is the amount of the compensation?

Irrespective of the day when a scheme participant had accepted an investment service for execution, the compensation due to one investor is calculated as follows:

  • From 1 January 2002 until 31 December 2003 - 90 per cent of the value of irreversibly lost financial instruments or damage caused by a non-executed investment service, however, no more than LVL 3 000;
  • from 1 January 2004 until 31 December 2005 - 90 per cent of the value of irreversibly lost financial instruments or damage caused by a non-executed investment service, however, no more than LVL 6 000;
  • from 1 January 2006 until 31 December 2007 - 90 per cent of the value of irreversibly lost financial instruments or damage caused by a non-executed investment service, however, no more than EUR 15 000 which have been calculated in Latvian lats in accordance with the exchange rate set by the Bank of Latvia on the day when a decision has been made about the validity of the compensation application;
  • from 1 January 2008 - 90 per cent of the value of irreversibly lost financial instruments or damage caused by a non-executed investment service, however, no more than EUR 20 000 which have been calculated in Latvian lats in accordance with the exchange rate set by the Bank of Latvia on the day when a decision has been made about the validity of the compensation application.

Compensation is not disbursed to:

  • A person for transactions havign resulted in a judgement of conviction in a criminal matter for money laundering;
  • Scheme participants, insurance companies, holding companies or other investors who informed the respective authorities of the fact that they are professional investors;
  • Persons party to the same group of companies as the scheme participant;
  • Pension funds;
  • State and local governments;
  • Board and Council members of a scheme participant, heads of audit commissions and members of such commissions, heads of internal audit services and members of such services, other employees of the scheme participant who have been authorised to carry out or been responsible for planning, management and control of the activities of the scheme participant, as well as to persons who have directly or indirectly acquired more than five per cent of the capital of a scheme participant;
  • Persons responsible for the audit of the accounting documents of scheme participants specified by law;
  • Persons who are relatives of the first degree of kinship, or spouses of the persons referred to in Clause 6 and 7;
  • Persons who act on behalf of the persons referred to in Clause 7;
  • Persons regarding whom the Financial and Capital Market Commission has established that, on the basis of special provisions of a contract concluded individually, they have received high interest rates or financial concessions, or have caused or have taken advantage of circumstances which have resulted in financial difficulties or have contributed to the deterioration in the financial situation of a scheme participant.

How to apply for compensation?

Compensation is paid only to the investors who have submitted an application to the Financial and Capital Market Commission stating an irreversible loss of financial instruments or damage caused by a non-executed investment service.

An application for the receipt of compensation must be submitted within a one-year as of the moment when the investor has become aware of the fact that the scheme participant has not met its obligations but no later than within five years as of the date of the default on the respective obligations.
  • Safekeeping fee is calculated based on the value of the portfolio on the last date of the calendar month. Securities are priced according to the month end prices of the Bank’s local agents, market price or nominal value. Bonds are priced at nominal value. Fees are debited on the 20th or later date of the following month from the Client’s cash account linked to the securities account.
  • ETF safekeeping fee equals to the safekeeping fee of its trading country.
  • Safekeeping of Depositary Receipts (ADR, GDR) is subject to the respective DR Agent’s fees in addition to safekeeping fees.
  • Fee for the tax reclaim or voting service will be debited from the Client’s cash account linked to the securities account within 15 days after the tax reclaim documents or voting documents were submitted. External costs debiting may also happen in later months depending when the Bank is invoiced by its counterparty. The fee will not be refunded in case the application is rejected by third parties.
  • Maintenance fee of an owner account is charged in addition to monthly securities safekeeping fee. Owner account is an account in the name of the Client opened at Nasdaq CSD SE and used only on behalf of the specific Client.
  • Owner account at Nasdaq CSD SE may be opened only at the branch office.

Equities (also called stocks or shares) are securities, which represent an ownership interest in a company and an entitlement to dividends or other type of income. Shareholders (or stockholders) are co-owners of the company.

The shares of public companies are traded on stock exchanges and their prices fluctuate depending on demand and supply, as well as on company performance and other factors.

Making a profit from share price fluctuations

Stock investors and traders can benefit from changes in company share prices on stock exchanges. Investors can employ both shorter-term and longer-term investment strategies.

Receiving dividends from holdings in a company

The majority of companies pay their investors dividends from the profits that they earn. In this way company owners receive return on their invested capital.

Making long-term investments in stocks

Investors can make long-term investments in order to benefit from company growth over time.

An opportunity to buy shares in foreign companies

Swedbank offers its clients possibilities to buy and sell shares traded not only on Baltic stock exchanges but also on the largest Western European, Scandinavian, US and Canadian stock exchanges. Equity investments can be made in companies of various countries.

Liquidity

Stocks can be bought and sold at any time when stock exchanges are open for trading. Minimum transaction amounts may apply in some stock exchanges.

Tax on earned income (profit)

Capital gain, or profit earned from disposal of equities, is subject to tax. The personal income tax rate on capital gain is 20%. Capital gain calculation, income declaration and the payment of the tax is the responsibility of the customer. Swedbank does not provide advice on taxes payable on transactions with shares.

Income tax (dividends)

In Latvia, dividends paid to shareholders of public companies are subject to 20% income tax. It is the responsibility of the securities account holder to withhold tax from dividends paid to the shareholder for publicly traded stocks and transfer the tax withholding into the state budget. Dividends paid to shareholders of foreign public companies may be subject to a higher tax in the country where the dividends are paid out.

Market risk - stock prices may fluctuate substantially and this may create both a profit potential and increased investment risks. Stock investors must have the capacity to assume the high risk of price fluctuations associated with investing in equities. Equity prices are affected by various factors, such as company performance, economic factors and investor sentiment.

Liquidity risk - the risk that the investor might be hard-pressed to buy or sell equities quickly, in desired volume and at an acceptable price. The stocks of large companies are normally easier to buy and sell as because such shares are traded by many investors. The liquidity risk is higher with stocks of smaller companies.

Macroeconomic risks - the prices of equities may change in case of changes in economic data, interest rates and other indicators reflecting a country's economic performance. The business of companies is affected by the national economies or even the global economy.

Company performance risk - investments in stocks are subject to the risk of the performance of the company. It's possible for company's profit figures to decrease. Businesses may operate with a loss and, in worst-case scenarios, even go bankrupt - in case of bankruptcy shareholders usually lose the greater part or all of the value of their investment.

Effective from 01.04.2023

Service Price, EUR
Receiving
Account opening 0,00-4,50 Via Internet Banking - Free of charge
At branches - 4.50
Account statements
Statement of holdings 0,00-7,00 Via Internet Banking - Free of charge
At branches – 7.00
Statement of transaction 0,00-7,00 Via Internet Banking - Free of charge
At branches – 7.00
Monthly Securities Safekeeping Fees
  • Safekeeping fee is calculated based on the value of the portfolio on the last date of the calendar month. Securities are priced according to the month end prices of the Bank’s local agents, market price or nominal value. Bonds are priced at nominal value. Fees are debited on the 20th or later date of the following month from the Client’s cash account linked to the securities account.
  • If Client only holds securities of Estonian, Latvian or Lithuanian companies under liquidation or bankruptcy proceedings according to the Nasdaq CSD SE data, no safekeeping fee is charged.
  • ETF safekeeping fee equals to the safekeeping fee of its trading country.
  • Safekeeping of Depositary Receipts (ADR, GDR) is subject to the respective DR Agent’s fees in addition to safekeeping fees.
Swedbank Group funds Free of charge
Baltic securities Free of charge
Other investment funds, equities and bonds*
- Up to 100 000 EUR** Free of charge
- From the value above 100 000 EUR** 0.008%
* Securities registered in Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, UK, USA and Depositary Receipts (ADR, GDR), Eurobonds.
** Swedbank Group Funds and Baltic securities are excluded from the calculation of the portfolio value for safekeeping fee calculation.
Other countries Subject to agreement
Other services
  • Tax relief at source / tax reclaim and general meeting services are subject to availability on each specific market.
  • Maintenance fee of an owner account is charged in addition to monthly securities safekeeping fee. Owner account is an account in the name of the Client opened at Nasdaq CSD SE and used only on behalf of the specific Client.
  • Owner account at Nasdaq CSD SE may be opened only at the branch office.
Owner securities account opening at Nasdaq CSD SE 50.00
Owner securities account monthly account maintenance 50.00
Participation in general shareholder meeting 120 EUR + external costs + VAT
  • The service fee is subject to 21% VAT.
  • The general meeting service is subject to availability on each specific market.
Processing of electronic voting instructions at general meeting 50 EUR + external costs + VAT
  • The service fee is subject to 21% VAT.
  • The general meeting service is subject to availability on each specific market.
Other corporate action Subject to agreement We set the fee for other corporate actions as „Subject to agreement“ as the range and technical nuances vary.
Tax reclaim 60 EUR + external costs + VAT
  • The service fee is subject to 21% VAT.
  • The tax reclaim service is subject to availability on each specific market.
Tax relief at source Free of charge The tax relief at source service is subject to availability on each specific market.
Mandatory corporate actions Free of charge
Closing
All securities account types Free of charge
Transactions with securities See Securities and Other Exchange-traded financial instruments
Transactions with investment fund units See Investment Funds

Effective from 01.04.2023.

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Contacts

“Swedbank” AS
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LV-1048, Latvia
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This is Internet Banking site of companies offering financial services - "Swedbank" AS, "Swedbank Līzings" SIA, "Swedbank Atklātais Pensiju Fonds" AS, "Swedbank Ieguldījumu Pārvaldes Sabiedrība" AS, "Swedbank P&C Insurance" AS Latvia branch, "Swedbank Life Insurance" SE Latvia branch. Before signing any agreement read the terms and conditions of the respective service.