Financing

Approved by

Resolution No.1

Chairman of the Board of Directors

Financial Market Supervision Authority

Republic of Azerbaijan

April 5, 2017

      ____________________

             Rufat Aslanlı

 

Regulation on the Supervisory Fees collected by the Financial Market Supervision Authority of the Republic of Azerbaijan

1. General

1.1 This Regulation has been developed in line with the Law of the Republic of Azerbaijan “On banks”, Article 46.1, “On non-bank credit institutions”, Article 25.1, “On insurance”, Article 96, “On securities”, Article 89, “On investment funds”, Article 51, “On physical education and sports”, Article 53-1.7, “On postal service”, Article 13-6, “On credut bureaus, Article 7.3, “On lotteries”, Article 10.4 and sub-paragraph 5.3.19 of the Charter of the Financial Market Supervision Authority of the Republic of Azerbaijan (Charter) approved by Presidential Decree No.828 of March 10, 2016, and identifies the amount and payment procedures for the supervisory fees collected by the Financial Market Supervision Authority (hereinafter referred to as FIMSA) from the supervised entities (hereinafter referred to as supervised entities).

1.2 In determining the amounts and frequency of payment of supervisory fees, FIMSA will be guided by the principles of ensuring its sustainable operations, and supporting sound, stable and effective development of the financial markets.

2 Terms and definitions

2.1 Terms and definitions used herein shall have the following meanings:

2.1.1 supervisory fees – regular payments and charges payable by supervised entities to FIMSA;

2.1.2 regular payments – fees payable by all supervisory entities based on their line of business and differentiation criteria;

2.1.3 charges – fees payable for certification of the executive officers of supervised entities as defined under the applicable laws, and for extraordinary (supplementary) onsite inspections conducted by FIMSA staff;

2.1.4 bank administrators – members of a bank’s Executive Board, head of the internal audit function, chief accountant / chief financial officer (head of the bank’s accounting department) and their deputies with signatory powers, as well as directors and chief accountants / chief financial officers (heads of accounting departments) of branch offices of local and foreign banks, and their deputies with signatory powers;

2.1.5 differentiation criterion – critetion used as the basis for grouping designed to assess regular fees in consideration of the assets held by banks and non-bank credit institutions, and annual premiums collected by insurers and reinsurers.

3. Valuation of supervisory fees

3.1 FIMSA shall collect supervisory fees from:

3.1.1 banks;

3.1.2 non-bank credit institutions;

3.1.3 national postal operator;

3.1.4 insurers and reinsurers;

3.1.5 stock exchanges;

3.1.6 investment companies;

3.1.7 central depository;

3.1.8 clearing houses;

3.1.9 investment funds;

3.1.10 investment fund manager;

3.1.11 investment fund depository;

3.1.12 credit bureaus;

3.1.13 lottery participants (except for promotional lotteries);

3.1.14 sports betting operators.

3.2 Regular fees shall be assessed in consideration of the following as per Annex 1 hereof:

3.2.1 for banks and non-bank credit institutions, fees shall be assessed with the differentiation criterion being their total assets as of December 31 of the previous year;

3.2.2 for insurers and reinsurers, regular fees shall be capped at the threshold specified herein to be calculated in proportion to quarter-end insurance and reinsurance premiums collected;

3.2.3 for credit bureaus, regular fees shall be capped at the threshold specified herein to be valued in proportion to the fees collected in the current yeas;

3.2.4 for the central depository, regular fees shall be capped at the threshold specified herein to be valued in proportion to the previous year’s net profits;

3.2.5 the national postal operator, stock exchanges, investment companies, clearing houses, investment funds, investment fund managers, lottery participants and sports betting operators shall pay flat rate regular fees.

3.3 Charges shall be assessed in consideration of the following as per Annex 2 hereof:

3.3.1 onsite inspection charges shall be assessed by multiplying the total hours spent by FIMSA staff on an onsite inspection by the per hour rates as specified in Annex 2 hereof, on the man-hour basis;

3.3.2 flat rate charges shall be payable for certification of bank administrators, executive officers of insurers, members of the governing bodies of investment companies, stock exchange, clearing house and investment fund depository, branch managers of investment companies, as well as members of the governing bodies of shareholder investment funds and investment fund managers.

3.4 Flat rate fees and the related thresholds as well as charges shall be assessed as follows for each year starting from 2018 based on the average annual consumer price index as determined annually by the State Statistics Committee of the Republic of Azerbaijan:

                                                                                             

                        Where: 

                        ST– total fees paid to FIMSA in year T;

                        S0–  flat fee regular fees and thresholds, and charges as determined under Annexes 1 and 2 hereof;

                        T – the year the fees were assessed for;

                        CPIt– consumer price index for year t.

 

4 Payment procedures for supervisory fees

4.1 Regular fees shall be payable on a quarterly basis as follows against invoices submitted by FIMSA:

4.1.1 for insurers and reinsurers, quarterly regular fees shall be assessed as per Annex 1 hereof and payable by the end of the first month of each quarter, less the regular fees already paid for the previous quarters of the current year;

4.1.2 for credit bureaus, quarterly regular fees shall be payable by the end of the first month of each quarter as a percentage of the service fees they have collected during the preceding quarter as determined under Annex 1 hereof;

4.1.3 other supervised entities shall pay their quarterly regular fees by the end of the first month of the quarter by dividing their annual fees as defined under Annex 1 hereof into equal increments.

4.2 Charges shall be payable lump-sum against invoices presented by FIMSA.  

4.3 FIMSA shall present invoices for regular fees to supervised entities no later than 10 business days prior to the payment deadline as identified under paragraph 4.1 above. Invoices for charges shall be presented to supervised entities no later than 3 business days prior to the commencement of the planned activities.

4.4 The supervised entity shall transfer the invoiced amount to FIMSA’s bank account within 10 business days. FIMSA shall conduct certification proceedings only upon payment. Charges paid shall not be subject to refund regardless of the results of certification.

4.5 Supervised entities shall be free to pay their regular fees earlier than defined herein. To this end, the supervised entity shall formally request FIMSA to submit an additional invoice for an early payment.

Regulation on the Supervisory Fees collected by the Financial Market Supervision Authority of the Republic of Azerbaijan

Annex 1

Annual Fee

MATRIX

 
                                                                                                         in AZN

Supervised entity

Differentiation criterion

Amount payable

Threshold

Bank

With total assets over 1 billion

Flat fee
800.000

 

With total assets from 500 million to 1 billion

Flat fee
500.000

 

With total assets under 500 million

Flat fee
300.000

 

Non-bank credit institution

With total assets over 20 million

Flat fee
50.000

 

With total assets from 3 to 20 million

Flat fee 30.000

 

With total assets under 3 million

Flat fee
15.000

 

National postal operator

 

Flat fee
70.000

 

​​Life insurer

With insurance and reinsurance premiums over 30 million

180.000 + (H1 – 30 mil)×1%

700 000 per insurer

With insurance and reinsurance premiums from 10 to 30 million

40.000 + (H – 10 mil)×0.70%

With insurance and reinsurance premiums under 10 million

H × 0.40%

Non-life insurer 

With insurance and reinsurance premiums over 30 million

198.000 + (H – 30 mil)×1.1%


750 000 per insurer

With insurance and reinsurance premiums from 10 to 30 million

44.000 + (H – 10 mil)×0.77%

With insurance and reinsurance premiums under 10 million

H × 0.44%

Reinsurer (for exclusive reinsurers)

With foreign and domestic reinsurance premiums over 30 million

180.000 + (H – 30 mil)×1%


700.000 per reinsurer

With foreign and domestic reinsurance premiums from 10 to 30 million

40.000 + (H – 10 mil)×0.70%

With foreign and domestic reinsurance premiums under 10 million

H × 0.40%

Stock exchange

 

Flat fee 15.000

 

Investment company

                   

Flat fee
10.000

 

Central depository

 


30% of net annual profit

250.000

Clearing house

 

15.000

 

Investment fund

 

20.000

 

Investment fund manager

 

10.000

 

Credit bureau

 

10% of collected fees

250.000

Lottery organizers

 

Flat fee
160.000

 

Sports betting operator

 

Flat fee
475.000

 

 

____________ 

1 H – cumulative insurance and reinsurance premiums year to date

Regulation on the Supervisory Fees collected by the Financial Market Supervision Authority of the Republic of Azerbaijan

Annex 2

 
CHARGE MATRIX
 
                                                                                                          In AZN

Activity

Supervised entity

Unit of measure

Amount payable

Onsite inspection

All supervised entities

1 man-hour

30

        Certification

Bank administrators

1 person

500

Executive officers of insurer

1 person

300

Members of the governing bodies of investment companies, stock exchanges, clearing houses and investment fund depository, branch office managers of investment companies

1 person

500

Members of the governing bodies of shareholder investment funds and investment fund managers

1 person

500