The PanSlovenian Investors' & Shareholders' Association (VZMD) President, Mr. Kristjan Verbič, sent the Speaker of the National Assembly, presidents of parliamentary parties and leaders of deputy groups a letter with substantiated warnings and an appeal in view of the Bill on amending Financial Instruments Market Act (ZTFI-G), as adopted by the Government of the Republic of Slovenia at its last session on 5 January and sent for reading to the National Assembly by way of summary procedure today. Furthermore, in its accompanying press release, the Government of the Republic of Slovenia communicated that one of the main goals of the amending act would be "to eliminate identified deficiencies and inconsistencies of the applicable Financial Instruments Market Act".
VZMD was shocked and appalled to see that “the Government of the Republic of Slovenia treats thousands and thousands of minority shareholders only as“deficiency and inconsistency” on the financial instruments market. By way of the proposed amending act, the Government of the Republic of Slovenia is committed to definitively eradicating all remaining minority shareholders that managed to survive on the financial instruments market - following the exodus triggered by the inconceivable abolishing of the registry accounts - only through the “Share SUPPORT” organized by VZMD.«
For this reason, VZMD would like to call on all recipients not to become a part of the trivial and narrow interest-driven campaign of the “financial industry” and theSecurities Market Agency (ATVP) which has taken actions against thousands of minority shareholders by misusing the legislative procedures and to abide by their principles which guided them to adopt the highest possible amounts which may be charged to the minority shareholders by the financial industry and which were applied during the adoption of the authentic interpretation which has revalidated such strong will and decision a little while ago.
At the same time, VZMD would like to raise the following concerns: “Is the ATVP also going to propose even the wording of the act forbidding VZMD and everyone working with VZMD to use legal means normally available to everybody else?! How far have the Government and the National Assembly of the Republic of Slovenia been ready to go while participating in the fight against and prevention of the universally useful mission?!”
As stated by the VZMD President in the letter, the twelve-year long promotion of minority shareholders and investors, their rights and interests, as well as wider public interests and interests of companies to keep minority shareholders in their ownership structures has been widely known. During the abolishment of registry accounts and revisions of the Book Entry Securities Act (ZNVP), all those efforts were reflected also in the extended transfer deadline for natural persons, in abolishment of court deposit costs for those with lowest portfolio values, in limitation of the amounts charged by financial intermediaries to their clients, and most of all in the most advantageous option to survive on the market through the “Share SUPPORT” organized by VZMD in the long run.
The idea of the Share SUPPORT stems from the use of a trust account for securities (that is, collective ownership of securities), which was not introduced in the Republic of Slovenia until the Financial Instruments Market Act (ZTFI) was passed in 2006 in order to provide large (foreign) financial intermediaries with such kind of ownership. In fact, the idea of the Share SUPPORT has been much more self-restricted than the trust accounts of foreign financial intermediaries as the ownership of shares on a trust account of a foreign financial intermediary allows for transactions and hidden changes to ownership, whereas the Share SUPPORT scheme allows for none of this - but, in case of transactions, requires previous transfer of securities to a separate trading account of the owner).
According to Mr. Verbič, this was the first blow of the kind given by the ATVP to which VZMD responded with a solution which, however, inevitably raised the price of the Share SUPPORT scheme to a certain extent, but did provide for its establishment nevertheless: this was the case of attracting a distinguished lawyer to whom the ATVP could not deny the opening of a trust account for securities. “The financial industry” - headed by the ATVP - responded to this possibility by proposing the amendment to the fourth paragraph of Article 255 of ZTFI. In accordance with the proposed amendment, the possibility of a trust account for securities would be restricted only to persons performing custodial activities as part of their line of business or profession whereby managing securities on a trust account must not be the reason why the person and client enter into a legal relationship. Therefore, the securities might have been managed on a trust account only by those who would not have a legal relationship with the client on these grounds!Despite the fact that VZMD is the owner of a trust account and renders custodial services for its clients in this regard, the ATVP deployed all efforts to prevent opening of the trust account once VZMD wanted to open a trust account for securities in the first half of 2015. Such action by the ATVP was taken despite clear wording of the fourth paragraph of Article 255 of ZTFI, which stipulates the possibility of a trust account for all persons rendering custodial services as part of their line of business or profession.
This was the second blow given by the ATVP. And this blow, according to the VZMD President, was targeted highly imprecisely as the conditions that you must not have a relationship with clients in regard to what you do for them cannot be met by anybody. Therefore, the ATVP was prepared to block everyone, including foreign financial intermediaries only to block the Share SUPPORT as well.”
Numerous protests were definitely effective and that is why the ATVP tried their luck for the third time. But now, the ATVP convinced Ministry of Finance of the Republic of Slovenia and the Government of the Republic of Slovenia - as it seems - with the proposal that lawyers and public notaries must not offer managing of securities on a trust account as an independent service. In this context, an independent offer of managing a trust account is considered an independent service by a lawyer or a public notary if their clients call on the owners of book-entry securities to transfer their book-entry securities to that account.
This is the third of blow of such kind given by the ATVP which is not much more lucid than the previous one. The question whether a lawyer or a public notary offers the managing of trust accounts as an independent service does not depend on actions of a lawyer or a public notary, but on those of their clients, which is an oxymoron.
“Is the ATVP for the fourth time going to propose even the wording of the act forbidding VZMD and everyone working with VZMD to use legal means normally available to everybody else?! How far have the Government and the National Assembly of the Republic of Slovenia been ready to go while participating in the fight against and prevention of the universally useful mission,”is the question posed by the VZMD President in the letter as he continues:
“For what reason, is it imperative to follow and please particular interests of the ATVP, which in the last year clearly positioned itself as the protector of the financial industry of the influential and economically strong financial market players, from payments the ATVP is financed from and is seen only as a club atop of the minority shareholders, who “imagine” themselves to be equal to the big ones? Is merely more than a month really enough to forget about the scandalous speeches of the representatives of the ATVP and the Ministry of Finance of the Republic of Slovenia in the National Assembly of the Republic of Slovenia when they were advocating for higher charges in the financial industry and opposing the authentic interpretation of Article 48 of the Book Entry Securities Act (ZNVP-1)? Is it really possible to overlook how these same representatives even today still fail to apply ZNVP-1 for all brokerage companies in a manner which would be in accordance with the authentic interpretation?! Is it really possible to blindly follow the proposals of those who have failed disastrously in attempts to protect the minority shareholders and individual investors (recall only the million gap in Moja delnica d.d. last year)?”
VZMD is still wondering how a couple of hundred of shareholders who - after having been let down by the state following a (never truly convincing) decision to abolish the registry accounts at KDD - were later on able to survive on the market under the shield of the Share SUPPORT, would accept the fact that the state once again intends to change the law in order to deprive them of this possiblity as well
CONSTITUTIONAL COURT - VZMD also lodged a proposal for the temporary decree for PROHIBITING THE SALE OF Nova KBM bank - to prevent direct damage to the Republic of Slovenia and its citizens
STRESS TESTS – new and obvious proof of the extremely unequal adjudication of Slovenian banks – are they guilty in Brussels or Ljubljana, and what are their motives? The PanSlovenian Shareholders' Association (VZMD) has called on the Bank of Slovenia (BA) and the European Central Bank (ECB) to explain, why only in Slovenia are we left to use »static« and extremely pessimistic assumptions, while in other countries and banks of the EU fresh data and »dynamic« valuations are used and even allow for