The Czech National Bank’s approach to providing answers to professional queries on financial market regulation

A. Introduction

As the financial market supervisory authority, the Czech National Bank supports professional financial market participants by clarifying legal queries in order to facilitate compliance with, and prevent breaches of, financial market regulations. This takes the form of publishing answers to queries received which comply with the following conditions. This document does not relate to the approach to queries from other persons, such as the media or consumers. It does not relate to queries about the CNB’s FinTech contact point, either.

Assessment of compliance of one’s own actions with legal regulations is primarily the responsibility of each market participant. The Czech National Bank’s educational work cannot replace financial market participants’ own work or the work of their advisers, e.g. law firms. 

The answers to queries are aimed at raising awareness on the financial market by providing transparent information about the Czech National Bank’s approach in the event of ambiguities in the interpretation and application of existing legal regulations, the observance of which the CNB supervises, rather than generally assessing market participants’ specific business models or providing legal advice free of charge.

The Czech National Bank expects queries from market participants to be qualified, i.e. to comply with the rules for qualified queries described below. 

B. Definition of conditions for replying to queries from professional market participants 

1. The query relates directly to the competences of the Czech National Bank on the financial market

A query aimed at interpreting legal regulations governing the financial market, the observance of which the Czech National Bank supervises, can be regarded as a query relating directly to the competences of the Czech National Bank. The Czech National Bank also wishes to point out that if a similar query was or is being resolved at the level of the European Supervisory Authorities, the applicant will be informed of this and, as a rule, the Czech National Bank will not provide a factual reply.

2. The query is in written form

The Czech National Bank defines a query in written form mainly as a query sent through the form available on the CNB website. In other cases, the applicant also needs to take into account the rules defined in this document when making a query and express agreement with the publication of the query and the reply to it in accordance with section B.6.

3. The query contains sufficient information

In addition to containing the question itself and the circumstances relevant to the answer, the query should specify the legal rule that requires interpretation (the provision of a law or decree, the article of an official information document, etc.). The query should be specific enough so that it is clear that it addresses a problem that the market participant encounters in practice and that answering such a query may have a wider impact. The Czech National Bank therefore considers the identity of the applicant a relevant piece of information. If an opinion is being requested by an applicant’s representative (a member of their body, an attorney, auditor, other counsellor, etc.), the applicant (client) in whose interest they are acting or whom the query concerns must be identified. 

At the same time, a broader importance of the query for financial market participants, or the market’s individual sectors, should be apparent in the query.

4. The query does not relate to a specific business model and its general compatibility with applicable regulation

The Czech National Bank will not assess specific business models, their parts, the products being created or offered or reply to other queries which relate mainly to the applicant’s specific factual circumstances. The query should thus be formulated as a general interpretative question that points to ambiguities relating to applicable legal regulations in the financial market area in line with the other conditions for qualified queries.

5. The query includes an analysis of the issue and a proposed solution

The applicant includes an analysis of the issue and comments on the possible solution, or identifies the points that they find to be unclear and indicates which solution they propose or which solutions may in their opinion be considered, including a justification thereof. In usual cases, there is no reason for the Czech National Bank to comment on questions on how a particular situation should be addressed or on which regulations are relevant to that situation. Such questions should be answered by financial market participants themselves or with the assistance of their counsels. As the financial market supervisory authority, the Czech National Bank has neither the intention nor the capacity to substitute for them. The purpose of the answers of the Czech National Bank as the financial market supervisory authority is to provide an interpretation of relevant regulations above all when they appear unclear or ambiguous. The analysis prepared by the applicant also helps clarify the matter in question and identify the interpretative ambiguity.

6. The applicant agrees with the potential publication of the query, including the enclosed analysis of the situation and the proposed solution, and with the publication of the answer to the query 

The Czech National Bank usually expects the reply to be published in the form of a general opinion on the query. Depending on circumstances, however, it may also publish the query received or parts of it, and the query or the analysis enclosed to the query, including identification of the applicant, may be quoted in the published explanatory opinion.  

C. Dealing with the query

In order to use its resources efficiently when performing its tasks, the Czech National Bank will assess and deal with each qualified query with regard to its priority. Queries of a more general importance in terms of financial market regulation or of importance for a wider range of entities, typically queries sent through associations of market participants, are considered a priority.

If a qualified query pertains to the interpretation of EU acts, the CNB will send its relevant part for scrutiny to a relevant European Supervisory Authority, with the exception of cases where the interpretation is unambiguous.

The answer to the query will usually be dealt with by publishing an explanatory opinion on the query on the Czech National Bank website, and the applicant will be informed about the publication.

If the Czech National Bank finds when preparing the answer that the query is unlikely to be dealt with within three months, it will also inform the applicant about this.

The Czech National Bank reserves the right not to provide a factual answer to a query that does not comply with the above conditions and, in exceptional cases, also to another professional query (especially such that the answering thereof would not contribute to the aim of raising awareness on the financial market by providing transparent information about the Czech National Bank’s future approach to the interpretation of legal regulations in the financial market area, the observance of which it supervises).

The applicant will be informed of the rejection of a query.