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Bonds - debt securities

Bonds - debt securities

  • Annual coupon income
  • Convenient transactions via our internet bank
  • A great alternative for long-term investors

Bonds are a suitable solution for customers who prefer investments with a predictable level of earnings. These fixed-income securities have a pre-defined and fixed interest income (coupons) and a pre-defined maturity term. You can sell bonds before their maturity date. In such a case, the bond price will depend on the market situation existing at the time of the selling thereof and of the level of interest rates.

To engage in securities transactions, you will need:

  • A current account to make settlements for securities transactions, pay commissions, receive coupons and the principal amount upon the maturity of the securities;
  • A securities account for holding and transacting in securities. A securities account can be opened online, free of charge, so you can easily monitor your securities portfolio.

Trading in debt securities requires certain investing skills, the ability to assume risk, as well as willingness to keep track of the changes in securities markets.  If you are new to securities transactions, we encourage you to apply for a consultation  during which you would find out what kind of investments are most suitable for you.

You can engage in bond trading transactions conveniently via SEB internet bank or at the branch of the bank.

  • When submitting a bond trade order, you would need to specify the nominal value of the securities, the transaction price expressed in percent. The submitted order would be valid for one working day.
  • Upon receiving the customer's order, the bank would reserve the necessary funds in the customer's current account and the nominal value of the securities in the securities account.

Bond transfers

You can transfer debt securities from your securities account to the securities accounts of other natural or legal persons with AS SEB banka or any other bank using the simple transfer of securities or the delivery versus payment (DVP) option.

Simple securities transfer:

  • only securities are transferred through the bank;
  • before entering into the transaction, the parties involved – the transferor and the recipient of the securities – need to agree on the number of securities as well as on the settlement date (the date on which the securities will be transferred from one securities account to another). Thereafter both the parties to the transaction would submit orders to the bank, i.e., the transferor of the debt securities would need to submit a securities transfer order whereas the recipient of the debt securities would need to submit a securities receipt order.

Delivery of securities against payment (DVP):

  • a simultaneous delivery of securities and cash occurs through the bank. The DVP is the safest way for a transaction between two customers in different banks, because the transfer of securities and the related cash payments occur simultaneously, excluding the risk that the parties to the transaction default either to deliver the securities or make the payment;
  • before entering into the transaction, the parties involved — the seller and the buyer of the debt securities — need to agree on the number of debt securities, their price as well as on the settlement date (the date on which DVP settlements will take place). Thereafter, both the parties to the transaction would submit their orders to the bank, i.e., the seller of the debt securities would need to submit a securities transfer order providing for DVP settlements, whereas the buyer of the securities would need to submit a securities receipt order providing for DVP settlements.

Under the law On Personal Income Tax, capital gains derived by natural persons are subject to tax (including net gains on transactions with investment funds); we would therefore like to explain how the tax is levied.

Under the law On Personal Income Tax, the Government charges the tax at the rate of 20% of the gains on securities. The tax is not levied on the entire amount invested in securities, but only on the gains derived. The payment of the tax on capital gains is the responsibility of the investor himself/herself, who is also required to report his/her gains derived from transactions with securities as well as to pay the said tax.

Over what period of time and where should the tax be paid?

Under the law On Personal Income Tax, anyone deriving capital gains, is required to report their gains to the State Revenue Service once a quarter (if the capital gains exceeds 1000 EUR), or until the 15th of January of the following taxation year (if the capital gains are lower than 1000 EUR). The calculated tax must be contributed to the State budget within 15 days from the date of submission of the declaration.

The account details for making the personal income tax payment are as follows:

Beneficiary: The Treasury
Registration number: 90000050138
Account number: LV91TREL1060000110000
Beneficiary’s BIC code: TRELLV22

After 3rd January 2018, new rules of the Markets in Financial Instruments Directive 2014/65/EU (MiFID II) will come into force and will affect each investor who engages in transactions in financial instruments.

What do MiFID II and MiFIR mean?

The Markets in Financial Instruments Directive (MIFID) that regulates the rendering of financial investment services has been effective in Latvia since 2007. The requirements of MiFID II are to be regarded as the next step aimed to provide additional protection to investors and promote the transparency of financial markets in terms of transactions in financial instruments. Whereas the Markets in Financial Instruments Regulation (MiFIR) is more applicable directly to the execution of transactions in financial instruments, publication of data and reporting to competent authorities.

What will MiFID II mean to investors?

The requirements of the new directive will ensure the following to investors:

  • additional protection, through receiving from the issuers of financial instruments and providers of services more detailed information on financial instruments and investment services;
  • greater transparency of financial markets.

Under the new EU regulatory framework requirements, all legal entities engaged in carrying out transactions in financial instruments need to have an international identifier.

From 3 January 2018 on, in carrying out their activity, the providers and recipients of investment services and investment ancillary services have to comply with the requirements of the Markets In Financial Instruments Directive 2014/65/EU (MiFID II) and the Markets In Financial Instruments Regulation No. 600/2014 (MiFIR), under which all legal entities carrying out transactions in financial instruments need to be additionally identified with a unique international legal entity identifier (LEI).

An LEI is a unique 20 alphanumeric identifier, which allows identification of the counterparties of transactions in financial instruments regardless of the country. The LEI does not replace the registration number assigned to the company by the Register of Enterprises of the Republic of Latvia.

Who needs LEI and why?

As of 3 January 2018, all legal entities engaged in transactions (e.g., acquisitions or disposals) in various financial instruments (such as stocks, bonds, ETFs, derivatives, etc.) are required to have LEI to comply with the reporting duty under MiFID II and MiFIR. LEIs are also required for such transactions of legal entities, which are aimed to dispose of the financial instruments that were acquired before the date on which the new requirements started to apply.

The purpose of LEIs is to ensure better supervision and transparency of the financial market because, reporting the financial transactions carried out by legal entities to supervisory authorities (the Financial and Capital Market Commission), credit institutions are require to use LEIs as company identifiers. Unless the company notifies the bank of its LEI, SEB bank isn’t allow to accept such financial instrument transaction orders.

Where can an LEI be obtained?

LEIs are issued by the Local Operating Unit of the Global Legal Entity Identifier Foundation (GLEIF).

Without recommending any particular local operating unit, below we have listed the contact information of some of the most favoured local operating units issuing LEIs in the Baltic and Nordic countries:

A full list of the local operating units that issue and maintain LEIs

If your company already has an LEI, a new identifier would not be required. The LEI must be submitted to the bank under the procedure described below. If you do not know whether your company has a valid LEI, you can check it on the GLEIF website by reference to the company’s name.

What needs to be done to get an LEI?

To apply for an LEI, choose an LEI issuer (the local operating unit from the list of the institutions mentioned on the www.gleif.org list). Then fill in the application on the website of the relevant local operating unit, specifying the required information therein.

Usually, the information required will include the company's full name, business form (e.g., a limited liability company), registration number, country, and registered office.

How much does an LEI cost and what is the waiting time before I get it?

Registration and annual subscription fees are charged for an LEI. Therefore, before you buy an LEI, you should by all means ascertain the likely costs – they may vary depending on the LEI issuer selected by you.

Currently, the registration of an LEI costs about 65-200 euros, whereas the annual subscription fee is in the range of 50-100 euros.

It usually takes one -two weeks to receive an LEI.

If your company is not contemplating to engage in new financial transactions immediately after the entry of the requirements into force, purchasing of an LEI needs not to be done immediately, however, it should be taken into consideration that upon resuming transactions, an LEI will be a mandatory company identifier for transactions in financial instruments to be specified before carrying out the first transaction.

Where and to whom can I submit the received LEI at SEB bank?

To be able to engage in transactions in financial instruments, please to submit your LEI through Internet Bank section Securities/Securities accounts or notify your manager about your LEI before the contemplated transaction.

Who to contact to in case of further questions?

If you have any further questions, please call +371 26668777, +371 67779988, Skype (SEB_Latvia) You can also contact your manager at SEB bank.

Information available only in Latvian.

Key Investor Information Documents regarding investment funds and Key Information Documents regarding Life insurance with savings and derivatives you can find in SEB bank’s web page.

From 3 January 2018 on, in carrying out their activity, the providers and recipients of investment services and investment ancillary services have to comply with the requirements of the Markets In Financial Instruments Directive 2014/65/EU (MiFID II) and the Markets In Financial Instruments Regulation No. 600/2014 (MiFIR), under which all investment services providers have to make public, on an annual basis, for each class of financial instruments, the top execution venues and brokers where they executed client orders in the preceding year and information on the quality of execution obtained.

MiFID II requirements entered into force from 3 January 2018, therefore report for the year 2017 may lack some information, since SEB banka have been collecting information for the preceding year under MiFID I best execution obligations.

  1. What does MiFID II mean?
    Since 2007, Markets in Financial Instruments Directive (MIFID) of the European Union was effective in Latvia, regulating provision of financial investment services. Requirements of MiFID II should be considered as the next step in order to ensure additional protection to the investors and to promote transparency of the financial market in transactions with financial instruments.

  2. When does MiFID II Directive become effective?
    In Latvia, MIFID II Directive should be complied with as of 3 January 2018. In addition, providers of investment service must also adhere to MiFIR Regulation which is linked to MIFID II Directive. Requirements arising from the MiFID II Directive in 2018 will be incorporated also in the Latvian legislation, including the Law on Financial Instruments Market; but the provider of investment services should observe the requirements arising from MIFIR directly.

  3. What is the main purpose of MiFID II?
    The main purpose of the Directive is to increase protection and awareness of investors, as well as to promote transparency and orderliness of the financial market of the European Union.

  4. How does MIFID II differ from MiFID I Directive, which was implemented in 2007?
    When evaluating the implementation process of MIFID I and the consequences of the financial crisis observed during its validity time, the regulators proposed additional amendments: MiFID II / MIFIR, which actually continues to establish the effective regulation of the financial market and to enhance the applicable area, for example, MIFID II is applicable to a wider range of financial assets.

  5. Which investment products and services are included in MiFID II?
    MiFID II is applicable to such financial instruments as funds, shares, structured deposits, bonds, currency swap transactions, interest rate swap transactions, etc., as well as such investment services as acceptance and execution of orders, investment advice and portfolio management.

  6. Is MiFID II applicable to savings products as well?
    MiFID II is not directly applicable to such savings products as the savings account or pension savings.

  7. What will change for me as a customer in 2018?
    Along with implementation of MiFID II, the customers will be able to receive more information on financial instruments, related risks, potential costs, etc. They will receive more information on financial transactions as well.

  8. What is LEI (Legal Entity Identifier), and which customers will need it?
    All legal entities performing transactions with various financial instruments (for example, with shares, bonds, exchange traded funds, derivative financial instruments and other financial instruments) as of 3 January 2018 will need a special Legal Entity Identifier – a LEI code. Investment companies will not be further allowed to provide investment services to the customer, unless the legal entity has acquired a LEI code. More information on LEI is available in the LEI section.

LEI

Under the new EU regulatory framework requirements, all legal entities engaged in carrying out transactions in financial instruments need to have an international identifier.

From 3 January 2018 on, in carrying out their activity, the providers and recipients of investment services and investment ancillary services have to comply with the requirements of the Markets In Financial Instruments Directive 2014/65/EU (MiFID II) and the Markets In Financial Instruments Regulation No. 600/2014 (MiFIR), under which all legal entities carrying out transactions in financial instruments need to be additionally identified with a unique international legal entity identifier (LEI).

An LEI is a unique 20 alphanumeric identifier, which allows identification of the counterparties of transactions in financial instruments regardless of the country. The LEI does not replace the registration number assigned to the company by the Register of Enterprises of the Republic of Latvia.

Who needs LEI and why?

As of 3 January 2018, all legal entities engaged in transactions (e.g., acquisitions or disposals) in various financial instruments (such as stocks, bonds, ETFs, derivatives, etc.) are required to have LEI to comply with the reporting duty under MiFID II and MiFIR. LEIs are also required for such transactions of legal entities, which are aimed to dispose of the financial instruments that were acquired before the date on which the new requirements started to apply.

The purpose of LEIs is to ensure better supervision and transparency of the financial market because, reporting the financial transactions carried out by legal entities to supervisory authorities (the Financial and Capital Market Commission), credit institutions are require to use LEIs as company identifiers. Unless the company notifies the bank of its LEI, SEB bank isn’t allow to accept such financial instrument transaction orders.

Where can an LEI be obtained?

LEIs are issued by the Local Operating Unit of the Global Legal Entity Identifier Foundation (GLEIF).

Without recommending any particular local operating unit, below we have listed the contact information of some of the most favoured local operating units issuing LEIs in the Baltic and Nordic countries:

A full list of the local operating units that issue and maintain LEIs

If your company already has an LEI, a new identifier would not be required. The LEI must be submitted to the bank under the procedure described below. If you do not know whether your company has a valid LEI, you can check it on the GLEIF website by reference to the company’s name.

What needs to be done to get an LEI?

To apply for an LEI, choose an LEI issuer (the local operating unit from the list of the institutions mentioned on the www.gleif.org list). Then fill in the application on the website of the relevant local operating unit, specifying the required information therein.

Usually, the information required will include the company's full name, business form (e.g., a limited liability company), registration number, country, and registered office.

How much does an LEI cost and what is the waiting time before I get it?

Registration and annual subscription fees are charged for an LEI. Therefore, before you buy an LEI, you should by all means ascertain the likely costs – they may vary depending on the LEI issuer selected by you.

Currently, the registration of an LEI costs about 65-200 euros, whereas the annual subscription fee is in the range of 50-100 euros.

It usually takes one -two weeks to receive an LEI.

If your company is not contemplating to engage in new financial transactions immediately after the entry of the requirements into force, purchasing of an LEI needs not to be done immediately, however, it should be taken into consideration that upon resuming transactions, an LEI will be a mandatory company identifier for transactions in financial instruments to be specified before carrying out the first transaction.

Where and to whom can I submit the received LEI at SEB bank?

To be able to engage in transactions in financial instruments, please to submit your LEI through Internet Bank section Securities/Securities accounts or notify your manager about your LEI before the contemplated transaction.

Who to contact to in case of further questions?

If you have any further questions, please call +371 26668777, +371 67779988, Skype (SEB_Latvia) You can also contact your manager at SEB bank.

Examples of costs and charges

Information available only in Latvian.

KID

Key Investor Information Documents regarding investment funds and Key Information Documents regarding Life insurance with savings and derivatives you can find in SEB bank’s web page.

Questions and answers

  1. What does MiFID II mean?
    Since 2007, Markets in Financial Instruments Directive (MIFID) of the European Union was effective in Latvia, regulating provision of financial investment services. Requirements of MiFID II should be considered as the next step in order to ensure additional protection to the investors and to promote transparency of the financial market in transactions with financial instruments.

  2. When does MiFID II Directive become effective?
    In Latvia, MIFID II Directive should be complied with as of 3 January 2018. In addition, providers of investment service must also adhere to MiFIR Regulation which is linked to MIFID II Directive. Requirements arising from the MiFID II Directive in 2018 will be incorporated also in the Latvian legislation, including the Law on Financial Instruments Market; but the provider of investment services should observe the requirements arising from MIFIR directly.

  3. What is the main purpose of MiFID II?
    The main purpose of the Directive is to increase protection and awareness of investors, as well as to promote transparency and orderliness of the financial market of the European Union.

  4. How does MIFID II differ from MiFID I Directive, which was implemented in 2007?
    When evaluating the implementation process of MIFID I and the consequences of the financial crisis observed during its validity time, the regulators proposed additional amendments: MiFID II / MIFIR, which actually continues to establish the effective regulation of the financial market and to enhance the applicable area, for example, MIFID II is applicable to a wider range of financial assets.

  5. Which investment products and services are included in MiFID II?
    MiFID II is applicable to such financial instruments as funds, shares, structured deposits, bonds, currency swap transactions, interest rate swap transactions, etc., as well as such investment services as acceptance and execution of orders, investment advice and portfolio management.

  6. Is MiFID II applicable to savings products as well?
    MiFID II is not directly applicable to such savings products as the savings account or pension savings.

  7. What will change for me as a customer in 2018?
    Along with implementation of MiFID II, the customers will be able to receive more information on financial instruments, related risks, potential costs, etc. They will receive more information on financial transactions as well.

  8. What is LEI (Legal Entity Identifier), and which customers will need it?
    All legal entities performing transactions with various financial instruments (for example, with shares, bonds, exchange traded funds, derivative financial instruments and other financial instruments) as of 3 January 2018 will need a special Legal Entity Identifier – a LEI code. Investment companies will not be further allowed to provide investment services to the customer, unless the legal entity has acquired a LEI code. More information on LEI is available in the LEI section.

Services Fees
In Internet bank At the Bank's branch

Opening of a securities account

Opening of an intrabank securities account Free of charge 4.50 EUR 
Securities account opening in Central Securities depository 5.00 EUR 10.00 EUR

Transactions with securities listed in Latvia

Securities transfer from Initial Register (Deregistration of securities) 4.50 EUR
Securities transfer back to Initial Register 4.50 EUR
Free of payment (FOP) financial instrument delivery 7.00 EUR
Free of payment (FOP) financial instrument  delivery within SEB bank 2.00 EUR
Receive/delivery versus payment (DVP) 7.00 EUR
Receive/delivery versus payment (DVP) in non EUR currency 50.00 EUR
Receipt of securities Free of charge
Transfer of securities to shareholders' register of insolvent companies 4.50 EUR
Revocation of a securities transaction By agreement

Transactions with foreign securities

Free of payment (FOP) receipt/delivery and receive/delivery versus payment (DVP) for securities registered in Estonia and Lithuania 7.00 EUR
Free of payment (FOP) receipt/delivery and receive/delivery versus payment (DVP) of other securities 21.00 EUR
Free of payment (FOP) delivery within SEB bank 2.00 EUR
Revocation of a securities transaction By agreement
Processing of securities-related optional events 35.00 EUR

Securities holder's meetings

Blocking of securities for a securities holder’s meeting 2.00 EUR
Representation of a client at the securities holder’s meeting By agreement,
min 215.00 EUR

Securities account custody fee1

Monthly fee for debt securities of the Latvian Government 0,0025%, min 1.00 EUR
Monthly fee for other Latvian debt securities 0,0055%, min 1.00 EUR
Monthly fee for Latvian shares and investment fund units 0,0150%, min 1.00 EUR
Monthly fee for Estonian and Lithuanian securities 0,0150%, min 1.00 EUR
Monthly fee for debt securities registered in Euroclear/Clearstream system or in the USA 0,0100%, min 1.00 EUR
Monthly fee for securities stored in Swedish, Danish, Norwegian, Finnish, Austrian, British, Irish, German, Spanish, Italian, Swiss, French, Dutch, Belgian, Greek and Portuguese depositories 0,0150%, min 1.00 EUR
Monthly fee for securities stored in Polish, Hong Kong, Canadian, Japanese, Australian, Singaporean and the South African depositories 0,0200%, min 1.00 EUR
Monthly fee for securities stored in Bulgarian, Czech, Croatian, Kazakhstan and Hungarian depositories 0,0250%, min 1.00 EUR
Monthly fee for stocks of Russian companies for trading in the Russian Trading System 0,0750%, min 1.00 EUR
Monthly fee for securities stored in Bosnian, Rumanian, Serbian, Slovakian and Slovenian depositories 0,1000%, min 1.00 EUR
Monthly fee for the USA stocks 0,0150%, min 1.00 EUR
Monthly fee for storage of ADR/GDR 0,0250%, min 1.00 EUR
Monthly fee for securities stored in other foreign depositories By agreement
Monthly fee for storage of foreign investment fund units 0,0150%, min 1.00 EUR
Monthly fee for storage of SEB mutual fund units, distributed by SEB bank 0,0050%
Monthly fee for account with no balance, and account with exclusively such Latvian securities the issuer of which is in insolvency, rehabilitation, bankruptcy or liquidation 1.00 EUR

Commission for transactions with SEB mutual funds2, 3

Subscription and regular subscription of mutual fund units:
   •  Price group 3 (equity and alternative funds) 0,75% 0,75%
   •  Price group 2 (bond, conservative, balanced and active strategy funds) 0,5% 0,5%
   •  Price group 1 (money market and short bond funds) 0% 0%
Redemption of SEB mutual fund units (for all SEB funds) Free of charge  Free of charge 
Switch Free of charge Free of charge

Minimum amount for subscription and switch of SEB mutual fund units

  1.00 EUR or equivalent in another currency

Preparing account statements

Balance report for securities account Free of charge 4.00 EUR
Operation report for securities account Free of charge 4.00 EUR

Brokerage fees in the stock exchanges of the following countries4, 5, 6

Services Order has been submitted to the Internet bank Order has been submitted to a branch / to SEB bank`s brokers
Baltic shares 0,30%, min 3.00 EUR 0,50%, min 5.00 EUR
USA shares if a share price is less than 5 USD 0.02 USD for each share,
min 15.00 EUR
0.03 USD for each share,
min 35.00 EUR
USA shares if a share price is more than 5 USD 0,30%, min 15.00 EUR 0,50%, min 35.00 EUR
Scandinavian shares 0,30%, min 15.00 EUR 0,50%, min 35.00 EUR
German, French, Belgian, Dutch, Swiss, British, Spanish, Portuguese, Canadian shares 0,30%, min 40.00 EUR 0,50%, min 50.00 EUR
Latvian debt securities auction 0,1% of the amount, min 10.00 EUR
Eurobonds 0,1% of the amount, min 50.00 EUR
Other securities By agreement
Penalty for delayed settlements 0.3% per each day from the full amount of transaction

 

SEB Bank is entitled to withhold state fees or similar payments and other third parties' commission fees.

 


 

1 Commission is calculated according to the market value of securities or face value at the end of the month, and it is set in the equivalent of EUR according to the currency exchange accounting rates set by the European Central Bank (or if necessary by the rates of the respective national central bank). A minimal fee is applied for securities stored in each country separately.

2 Regular payment orders or operations in Internet bank are possible only for those funds that are publicly distributed by SEB and indicated in SEB bank's home page.

3 The maximum allowed subscription fee is indicated in prospectus regulating SEB mutual funds. In cases when maximum allowed subscription fee indicated in the prospectus exceeds the fee indicated in the pricelist, the smallest fee will be applied.

4 Commission is charged in the currency or its equivalent in another currency according to the pricelist of SEB bank for an executed or partially executed transaction and it is calculated in accordance with the currency exchange rate set by SEB bank.

5 To apply a transaction to SEB bank’s brokers, the “Agreement on execution of financial instrument transactions” must be concluded.

6 Third-party commission fees may apply to securities purchase and/or sale transactions.

Contacts

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