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LAW OF THE REPUBLIC OF MOLDOVA

of November 20, 2020 No. 198

About the facultative pension funds

The parliament adopts this organic law.

This law is partial transposition of the Directive (EU) of 2016/2341 European Parliament and Council of December 14, 2016 about activities of organizations of professional provision of pensions and supervision of these activities (IORP) published in the Official magazine of the European Union by L 354 of December 23, 2016.

Chapter I General provisions

Article 1. Subject and scope of the law

(1) This law establishes the legal basis of organization and activities of the facultative pension funds within the facultative pension system based on the individual capitalized savings, requirements to the organization, licensing of administrators of the facultative pension funds and the activities performed by them, rules about depositaries of the facultative pension funds, and also powers of the National commission on the financial market (further - the National commission) on supervision of these subjects.

(2) This law is applied to the physical persons and legal entities of the Republic of Moldova, foreign physical persons and legal entities and stateless persons performing activities or rendering the services connected with creation of the facultative pension funds and management of them.

(3) This law is not applied:

a) to body of the central public management which manages the budget of the national social insurance;

b) to the employers creating reserves in balance for ensuring pension payment to the workers.

(4) the National commission is competent authority on application of this law according to the powers established by the Law on the National commission on the financial market No. 192/1998.

(5) According to this law the personal data extremely necessary are processed and not going beyond the set purpose it agrees to the powers conferred by the law, with ensuring proper level of safety and confidentiality concerning the risks caused by processing and nature of information according to the principles established by the legislation on personal data protection.

Article 2. Concepts

For the purposes of this law the following concepts are used:

the potential acquirer - physical person or legal entity which independently or together with persons acting in coordination intends to acquire directly or indirectly shares in the authorized capital of pension society;

net assets of the facultative pension fund - the size received as a result of subtraction of cost of obligations of the facultative pension fund from the cost of its assets;

personal assets - the cash amount equal to the work of quantity of the investment shares belonging to it which is saved up on the individual account of the participant or beneficiary and cost of investment share in day of calculation;

the administrator - pension society, the regulated subject of the financial sector or the legal entity having the operating authority on management of the pension funds in other state (further - the foreign administrator) which according to provisions of this law has the license for management of the facultative pension funds;

the placement agent - the regulated subject of the financial sector, and also the insurance (reinsurance) intermediaries having permission to placement of facultative pension plans based on the order provided by the administrator with the right to sign with participants from name and at the expense of the administrator individual agreements of accession to the agreement of particular partnership (further - individual agreements of accession);

employer - the legal entity or physical person determined in Article 1 of the Labor code No. 154/2003;

the beneficiary - the person determined according to the legislation having the right to retirement benefits from the facultative pension fund;

the individual account of the participant - opened addressed to the participant or the beneficiary in the register of owners of investment shares of accounts which is used for accomplishment of the transactions allowing to accumulate fees for the purpose of receipt of facultative pension, and represents the cost of personal assets;

the trust management agreement - the prisoner between the administrator and the employer the agreement which subject is management of the professional pension fund;

fee - the sum granted by the participant and/or the employer from employee name on the facultative pension fund;

depositary of assets of the facultative pension fund (further - depositary) - investment society, including bank which according to the Law on the capital market No. 171/2012 has the right to perform custodial activities, or activities for storage;

placement of facultative pension plans - any activities consisting in provision of consultations according to the conclusion of the individual agreement of accession in the offer of the individual agreement of accession or in carrying out other preparatory actions for the purpose of the conclusion of such agreement, and also in its conclusion or in support for management of it;

the regulated subject of the financial sector - the insurer (overcautious person), society of trust management of investments or the society on investment management licensed according to the legislation regulating spheres of their activities;

outsourcing - use by the administrator of the service provider who can be the affiliated subject as a part of group or the third-party subject, for the purpose of implementation by it on contractual and permanent bases of activities or rendering services or execution of key positions according to this law;

Fund of guaranteeing fees in the facultative pension system - the fund created from fees of administrators for the purpose of protection of the rights of the participants and beneficiaries acquired by them within the facultative pension system;

the facultative pension fund (further - the pension fund) - the fund which does not have the status of the legal entity, founded by means of the agreement of particular partnership signed in writing, acting on the basis of the principle of financing by capitalization only for the purpose of providing with facultative pensions;

the professional pension fund - the facultative pension fund in which the employer lists fees for the workers and which is operated by the administrator based on the trust management agreement signed with the employer;

close ties - the situation determined in article 6 of the Law on the capital market No. 171/2012;

the participant - person who lists and/or on behalf of whom fees in the facultative pension fund were listed and who in the future has the right to facultative pension;

qualified participation - immediate or indirect possession in at least than 10 percent of the authorized capital of the administrator or the ownership allowing to have significant effect on control exercised of the administrator in which there is the corresponding participation;

facultative pension - the benefit paid in case of retirement or in the long term retirement to the participant or the beneficiary in case of observance of the conditions provided by this law, in addition and separately from the pension issued within the state system of social insurance;

persons holding key positions - the physical persons holding positions of the managing director of risks, the internal auditor and the actuary as a part of the administrator;

affiliates - the physical persons and legal entities determined in Article 203 of the Civil code of the Republic of Moldova No. 1107/2002;

persons acting in coordination - two or more persons determined by article 6 of the Law on the capital market No. 171/2012;

persons managing activities of the administrator - physical persons which by law, the charter or the administrative act or according to the individual employment contract assume liabilities also perform independently or together with other persons of obligation according to the order and control from name and at the expense of the administrator, namely:

a) in case of pension society - sole executive body, members of collegiate executive body and members of council of society, and also persons holding key positions;

b) in case of the regulated subject of the financial sector - division managers, responsible for activities for management of the facultative pension funds, and also the faces holding key positions;

c) in case of the foreign administrator - heads of department in the Republic of Moldova, and also persons holding key positions;

the facultative pension plan - the conditions and rules developed by the administrator and, on circumstances, approved with the employer paying fees according to which the administrator collects fees and puts assets of the facultative pension fund for the purpose of receipt of facultative pension by participants;

technical reserve - the adequate amount of liabilities corresponding to the financial liabilities following from portfolio of the existing facultative pension agreements, covering biometric and investment risks;

biometric risks - the risks connected with death, restriction of opportunities and survival;

the worker - the physical person determined in Article 1 of the Labor code No. 154/2003;

pension society - the joint-stock company having the license granted based on provisions of this law which exclusive object of activity is management of the facultative pension funds;

investment share - not materialized equity financial instrument in the form of records on accounts certifying the right of its owner to part of net assets of the facultative pension fund.

Chapter II Pension funds

Article 3. Creation of the pension fund

(1) the Pension fund is created by the administrator based on the agreement of particular partnership signed in writing which party is participant after signing of the individual agreement of accession and transfer of fee. The pension fund shall have at least 15 participants.

(2) the Professional pension fund is created provided that the employer intending to pay fees for the workers, accepts the facultative pension plan and signs the trust management agreement with the administrator.

(3) Creation of the pension fund, including approval of the prospectus of the facultative pension plan, is competence of council of the administrator.

(4) the Location of the pension fund is the location of the administrator of the relevant fund. The administrator performs all rights connected with ownership and asset management of the pension fund.

(5) the Name of the pension fund shall contain, on circumstances, the phrase "facultative pension fund" or "professional pension fund". The name of the pension fund shall not mislead participants, potential participants or other persons.

(6) Manages the pension fund and only the administrator represents it in the relations with the third parties, including in degrees of jurisdiction.

Article 4. Issue of permission to organization of the pension fund

(1) the Pension fund is established on condition of receipt of preliminary permission of the National commission according to this law and its regulations.

(The administrator gives 2) For receipt of permission to organization of the pension fund to the National commission according to the procedure, established by its regulations, the written application with application of documents and the data, connected:

a) with the created pension fund;

b) with the facultative pension plan;

c) with depositary.

(3) By issue of permission to organization of the pension fund the National commission approves the prospectus of the facultative pension plan and depositary.

(4) in case of organization of the pension fund for which the administrator provides protective measures from biometric risks and/or guarantee of investment profitability or the established benefit level data on the actuary of the pension fund are represented.

(5) the National commission in time, not exceeding 30 days from the date of submission of all established documents, considers the submitted documents and in case of lack of violation of the law issues permission to organization of the pension fund.

(6) On any request of the National commission about submission of the additional information or modification of originally filed documents the current of the term established in part stops (5).

(7) the National commission rejects the statement for issue of permission to organization of the pension fund in the presence of at least one of the following bases:

a) the submitted documents and/or data contradict requirements of this law and regulations of the National commission and/or are developed, approved and provided contrary to the procedures established by the legislation or contain provisions which can cause damage to interests of participants or do not provide their proper protection;

b) the organizational structure of depositary, and also the personnel given with functions of depositary do not conform to requirements of this law and regulations of the National commission.

(8) the Changes made to the documents submitted for issue of preliminary permission to organization of the pension fund will be approved with the National commission in the procedure established by it before their application.

Article 5. Prospectus of the facultative pension plan

(1) the Facultative pension plan is offered to competent persons based on the prospectus of the facultative pension plan containing information established by this law.

(2) the Prospectus of the facultative pension plan is developed and offered by the administrator. Having signed the individual agreement of accession with the administrator, the participant accepts the facultative pension plan.

(3) in case of creation of the professional pension fund the prospectus of the facultative pension plan is approved with the employer.

(4) the Administrator has the right to promulgate the prospectus of the facultative pension plan (including in its changed type) only after its approval by the National commission under the threat of revocation of license on management.

(5) the Prospectus of the facultative pension plan is provided to competent persons and participants on the durable carrier or by means of the web page of the administrator and/or the employer, on circumstances. The printing copy of the prospectus is provided to competent persons and participants in case of their address is free.

Article 6. Requirements to contents of the prospectus of the facultative pension plan. Modification of the prospectus of the facultative pension plan

(1) the prospectus of the facultative pension plan contains at least the following elements:

a) name, location and other information about the administrator and his governing bodies;

b) name of the pension fund, date of issue National commission of permission to its organization;

c) conditions of competence of joining of participants to the pension fund;

d) the fee size, method of its payment, and also method of separation of fee between the worker and the employer, on circumstances;

e) characteristics of investment shares, the rights and obligations of participants concerning investment shares, the rule of rounding of decimal fraction and method of distribution among participants of investment results;

f) investment principles, rules of investment of assets and investment profile of the pension fund;

g) the financial, technical and other risks connected with the facultative pension plan;

h) general information about individual accounts of participants, and also mark about acquisition of exclusive right of ownership of participants and beneficiaries for personal assets;

i) conditions of payment of facultative pensions and/or other benefits;

j) conditions of purpose of facultative pensions on restriction of opportunities;

k) the maximum levels of the sales and other charges or expenses incurred by the pension fund and participants with breakdown on categories;

l) frequency and procedure of submission of the reporting to participants;

m) conditions and procedures of the termination of participation and transfer to other pension fund;

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