Investor Presentaiton

Regulation and supervision The Czech National Bank (CNB) is the central bank of the Czech Republic. It determines the country's monetary policy, carries out and coordinates the supervision of the Czech financial market, issues banknotes and coins, and manages the circulation of currency as well as the payment and settlement systems between banks. More details can be found at www.cnb.cz. The responsibility for preparing primary legislation for the financial market sector mainly lies with the Ministry of Finance; the CNB assists in this process. As the Czech Republic is an EU member, in the area of supervision the CNB cooperates with European institutions (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) on unifying supervisory procedures and creating conditions for close cooperation between home and host supervisors. Prudential rules for banks, credit unions and large class 1 investment firms are primarily regulated by the Capital Requirements Regulation (CRR) directly applicable in EU member states and a decree issued in 2014, driven by measures agreed on at the EU level and implementing the requirements of Basel III/CRD IV into Czech legislation. In June 2019 an amendment to CRR and CRD IV (CRR 2 and CRD V) entered into the force to further implement the Basel Ill reform into EU law. Both CRR 2 and CRD V were applied during 2021. All investment firms were previously subject to CRR and CRD, however, class 2 and 3 are now subject to a new prudential regime under the Investment Firms Regulation (IFR) and Investment Firms Directive (IFD), which entered into force in November 2019. While IFR is applicable from June 2021, IFD is still in the transposition process from EU law to national law. 62 62

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