Agreement on Co-operation between the Czech National Bank, the Securities Commission and the Ministry of Finance of the Czech Republic in the Performance of Banking Supervision and State Surveillance

The Czech National Bank, the Securities Commission and the Ministry of Finance have concluded an "Agreement on Co-operation between the Czech National Bank, the Securities Commission and the Ministry of Finance of the Czech Republic in the Performance of Banking Supervision and State Surveillance". The agreement has been signed by the CNB Vice-Governor Ing. Pavel Kysilka, CSc., in charge of CNB management, the Minister of Finance Ing. Ivan Pilip and the Chairman of the Securities Commission Ing. Jan Muller.

The agreement on co-operation between banking supervision and state surveillance institutions follows the government measures adopted in 1997 aimed at making activities more transparent and standardising the terms for activities of business entities operating on money and capital markets. This agreement is based on the amendment to Act No. 6/1993 of the Coll. of Laws, on the Czech National Bank, stipulating that the Czech National Bank, in co-operation with the Ministry of Finance and the Securities Commission, shall prepare a system of mutual co-operation in the capital market area, within three months from the date Act No. 15/1998 of the Coll., on securities commission and changes and supplementation of further acts takes effect.

In compliance with the act, the agreement governs the co-operation of the Czech National Bank, the Securities Commission and the Ministry of Finance in controlling financial transactions and investment instrument trading, and among others, it suggests the co-ordination of activities chosen in the area of financial market regulation, consultation of banking supervision and state surveillance employees on, e.g. legal regulations in effect and those being prepared for the areas of banking, capital market, insurance and supplementary pension insurance.

Opportunities for co-operation between banking supervision and state surveillance authorities can be expected to gradually increase in harmony with the further development of legal regulations which at present do not conform to needs, particularly regarding the exchange of information on entities being supervised. As of yet, these regulations do not enable the full development of effective co-operation between banking supervision and state surveillance bodies in the capital market area, which is -a very significant element of the Act on the Securities Commission. The fulfilment of the agreement will also require its participants to make certain changes and improvements in the organisational and technical terms.

CNB - M. Švehla