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
Iwell as the payment and settlement systems
between banks. More details can be found at:
www.cnb.cz.
The responsibility for preparing primary legis-
lation 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 Occu-
pational Pensions Authority and the European
Securities and Markets Authority) on unifying
supervisory procedures and creating condi-
tions for close cooperation between home and
host supervisors. The CNB also closely cooper
ates with the European Central Bank in its role
of banking supervisor within the Single Super-
visory Mechanism.
Prudential rules for banks, credit unions and in
vestment 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 require-
ments of Basel III/CRD IV into Czech legislation.
Solvency II, a new, harmonised EU-wide insur-
ance regulatory regime, will be effective from 1
January 2016 in all EU member states, includ-
ing the Czech Republic.
Licences
The licensing of banks and other financial in-
stitutions and matters connected with mergers
and acquisitions and other market entries are
fully within the responsibilities of the CNB.
A foreign financial institution can enter the
Czech market in the following four ways:
― as a new company, with up to a 100
percent foreign ownership;
by acquiring an equity stake
in an existing entity;
by establishing a branch of the parent
institution with a separate licence;
- by establishing a financial institution
of the parent based on the licence of
the parent institution (applicable to all
banks and insurance companies with
a registered office in the EU under
the "single licence principle").
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