The new Capital Market Law (hereinafter: Law) has been harmonized with the EU regulations governing markets in financial instruments (MiFID II), issuance of prospectus, investor compensation schemes, transparency, market abuse, settlement finality in payment and securities settlement systems.
The main changes introduced with the new Law include, but are not limited to:
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introduction of the definition of central counterparty, cross selling, high-frequency and algorithmic trading, exchange-traded funds, short selling, etc.;
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introduction of the settlement finality concept in the payment and securities settlement systems which will reduce the possibility of disturbances in the securities settlement system caused by the inability to settle the obligations of participants;
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nominee account as a new account categorization at the CSD level (further details will be provided after the update of CSD Rules of Operations);
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new principles and rules on the prospectus that needs to be presented, approved and published during the public offering of securities or the admission to the trading on a regulated market.
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a legal framework regulating more advanced organized trading systems, in addition to the regulated market, is prescribed;
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to maximize transparency and reduce data fragmentation, the institution of data service providers delivery was introduced;
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with regard to the development of technology and market infrastructure, greater regulatory requirements are being introduced, especially with regard to the new trading platforms, high-frequency and algorithmic trading;
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the obligations of the market participants are more precisely regulated in relation to the market abuses;
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in order to strengthen transparency, the reporting obligations towards the Securities Commission have been increased, the supervisory powers of the Securities Commission have been expanded and stricter measures/sanctions have been prescribed towards legal and natural persons.
The new Law on Capital Market will enter into force on 5 January 2022. The Securities Commission shall issue the regulations for the implementation of this Law within six months from the date of entry into force of the Law. After one year from the date of entry into force, the new Law on Capital Market will replace the current Capital Market Law.
Impact on Investors: The new Capital Market Law has been harmonized with the EU regulations. It will improve the efficiency of the domestic capital market and will bring greater transparency and legal security of the market participants and investors.