CAPITAL MARKET ACT

(Official Gazette Nos. 65/18, 17/2020, and 83/2021) (Unofficial Consolidated Text)

PART ONE

GENERAL PROVISIONS

Article 1 (OG 83/21)

This Act regulates:

1. The approval for operation and business of investment companies and other persons authorized to provide investment services, and the initial capital of investment companies;
2. The approval for operation and business of market operators and regulated markets;
3. The approval for operation and business of data reporting service providers;
4. The conditions for the public offer of securities and the admission of securities to trading on a regulated market;
5. Obligations regarding the disclosure of information by issuers whose securities are admitted to trading on a regulated market;
6. The prohibition of market abuse;
7. The safekeeping of financial instruments and the settlement and clearing of transactions in financial instruments;
8. The cooperation of competent authorities; and
9. The powers, obligations, and conduct of the Croatian Financial Services Supervisory Agency (HANFA) in the implementation of this Act, including, among other things, supervisory powers and tools for the prudential supervision of investment companies and publication in the area of prudential regulation and supervision of investment companies.

Transposition of European Union Legislation

Article 2 (OG 83/21)

(1) This Act transposes the following acts of the European Union into Croatian legislation:

1. Council Directive 89/117/EEC of 13 February 1989 on the disclosure of annual accounting documents by branches of certain credit and financial institutions established in a Member State, where the head office is located outside that Member State (OJ L 44, 16.2.1989);
2. Directive 97/9/EC of the European Parliament and of the Council of 3 March 1997 on investor-compensation schemes (OJ L 84, 26.3.1997) (hereinafter: Directive 97/9/EC);
3. Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166, 11.6.1998), as last amended by Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (Text with EEA relevance) (OJ L 257, 28.8.2014) (hereinafter: Directive 98/26/EC);
4. Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities (OJ L 184, 6.7.2001) (hereinafter: Directive 2001/34/EC);
5. Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004), as last amended by Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013 amending Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading and Commission Directive 2007/14/EC laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC (Text with EEA relevance) (OJ L 294, 6.11.2013) (hereinafter: Directive 2004/109/EC);
6. Commission Directive 2007/14/EC of 8 March 2007 laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (OJ L 69, 9.3.2007), as last amended by Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013 amending Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading and Commission Directive 2007/14/EC laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC (Text with EEA relevance) (OJ L 294, 6.11.2013);
7. Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (Text with EEA relevance) (OJ L 176, 27.6.2013) (hereinafter: Directive 2013/36/EU);
8. Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 amending Directives 2003/71/EC and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 with regard to the powers of the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) (OJ L 153, 22.5.2014);
9. Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse (Market Abuse Directive) (OJ L 173, 12.6.2014);
10. Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council (Text with EEA relevance) (OJ L 173, 12.6.2014);
11. Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (Text with EEA relevance) (OJ L 173, 12.6.2014) (hereinafter: Directive 2014/65/EU);
12. Directive (EU) 2016/1034 of the European Parliament and of the Council of 23 June 2016 amending Directive 2014/65/EU on markets in financial instruments (Text with EEA relevance) (OJ L 175, 30.6.2016);
13. Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (Text with EEA relevance) (OJ L 87, 31.3.2017);
14. Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019 amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures (Text with EEA relevance) (OJ L 150, 7.6.2019);
15. Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (Text with EEA relevance) (OJ L 314, 5.12.2019);
16. Directive (EU) 2019/2177 of the European Parliament and of the Council of 18 December 2019 amending Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), Directive 2014/65/EU on markets in financial instruments and Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (Text with EEA relevance) (OJ L 334, 27.12.2019);
17. Directive (EU) 2020/1504 of the European Parliament and of the Council of 7 October 2020 amending Directive 2014/65/EU on markets in financial instruments (Text with EEA relevance) (OJ L 347, 20.10.2020);
18. Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending Directive 2014/65/EU as regards information requirements, product governance and position limits and Directives 2013/36/EU and (EU) 2019/878 as regards their application to investment firms, to support recovery from the COVID-19 outbreak (Text with EEA relevance) (OJ L 68, 26.2.2021).

(2) This Act ensures the implementation of the following acts of the European Union:

1. Commission Regulation (EC) No 1287/2006 of 10 August 2006 on the implementation of Directive 2004/39/EC of the European Parliament and of the Council with regard to record-keeping obligations for investment firms, reporting on transactions, market transparency, admission of financial instruments to trading and certain definitions for the purposes of the said Directive (Text with EEA relevance) (OJ L 241, 2.9.2006);
2. Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (Text with EEA relevance) (OJ L 201, 27.7.2012) (hereinafter: Regulation (EU) No 648/2012);
3. Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance) (OJ L 176, 27.6.2013) (hereinafter: Regulation (EU) No 575/2013);
4. Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Text with EEA relevance) (OJ L 173, 12.6.2014) (hereinafter: Regulation (EU) No 596/2014);
5. Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (Text with EEA relevance) (OJ L 173, 12.6.2014), as last amended by Regulation (EU) 2019/2175 of the European Parliament and of the Council of 18 December 2019 amending Regulation (EU) No 1093/2010 establishing the European Supervisory Authority (European Banking Authority), Regulation (EU) No 1094/2010 establishing the European Supervisory Authority (European Insurance and Occupational Pensions Authority), Regulation (EU) No 1095/2010 establishing the European Supervisory Authority (European Securities and Markets Authority), Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and Regulation (EU) 2015/847 on information accompanying transfers of funds (Text with EEA relevance) (OJ L 334, 27.12.2019) (hereinafter: Regulation (EU) No 600/2014);
6. Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (Text with EEA relevance) (OJ L 257, 28.8.2014) (hereinafter: Regulation (EU) No 909/2014);
7. Regulation (EU) 2016/1033 of the European Parliament and of the Council of 23 June 2016 amending Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) No 596/2014 on market abuse and Regulation (EU) No 909/2014 on improving securities settlement in the European Union and on central securities depositories (Text with EEA relevance) (OJ L 175, 30.6.2016);
8. Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Directive 2003/71/EC (Text with EEA relevance) (OJ L 168, 30.6.2017) (hereinafter: Regulation (EU) No 2017/1129);
9. Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements applicable to investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (Text with EEA relevance) (OJ L 314, 5.12.2019) (hereinafter: Regulation (EU) No 2019/2033).

(3) The Croatian Financial Services Supervisory Agency (HANFA) shall be competent and responsible for the implementation and supervision of the application of this Act and the regulations of the European Union referred to in paragraph 2 of this Article, and shall be the contact point with European supervisory authorities within the meaning of this Act and Regulation (EU) No 600/2014. Where this Act provides for the power of the Croatian Financial Services Supervisory Agency to adopt by-laws, such by-laws shall be adopted by the Board of Directors of the Croatian Financial Services Supervisory Agency.

(4) Guidelines issued by European supervisory authorities in accordance with their powers shall be binding on the Agency and on persons whose obligations are defined by the provisions of this Act and relevant regulations, to the extent determined by the Agency's statement referred to in point 1 of this paragraph, provided that the following conditions are met:

1. that, in accordance with the procedure prescribed by the regulations establishing European supervisory authorities, the Agency has stated that it commits itself to fully or partially comply with the provisions of certain guidelines or that it intends to comply with certain guidelines by a certain deadline; and
2. that the Agency has published a notice of the statement referred to in point 1 of this paragraph on its website, whereby the entry into force and start of application are determined by the individual guidelines, unless the Agency has stated its intention to comply with certain guidelines by a certain deadline, in which case the entry into force and start of application are determined by the statement referred to in point 1 of this paragraph.

(5) The Agency shall publish on its website links to the texts of guidelines to which the Agency and/or supervised entities will fully or partially comply or with which they intend to comply by a certain deadline, together with a notice which, with regard to individual guidelines, shall contain the following information:

1. which supervised entities the guideline applies to;
2. whether the guideline applies fully or partially; and
3. the date of entry into force and start of application of the guideline, with defined transitional periods, if applicable.

(6) Supervised entities of the Agency and persons to whom the guidelines referred to in paragraph 4 of this Article apply shall be obliged to take all necessary actions to comply with those guidelines, to the extent and within the timeframes determined in the Agency's notice referred to in paragraph 4, point 2 of this Article.

(7) The Croatian Financial Services Supervisory Agency (HANFA) shall inform the European Commission, ESMA, the competent authorities of Member States and, where applicable, the EBA, of the tasks and responsibilities assigned to it by this Act.

Definitions

Article 3 (OG 83/21)

Certain terms in this Act shall have the following meanings:

1. Agency means the Croatian Financial Services Supervisory Agency, whose competences and scope of work are defined by the Act on the Croatian Financial Services Supervisory Agency ("Official Gazette", Nos. 140/05, 154/11 and 12/12) and this Act;
2. Algorithmic trading means trading in financial instruments in such a way that a computer algorithm automatically determines individual parameters of orders, such as the decision to initiate the order process, the time of placing the order, the price or quantity, or the way of managing the order after it has been placed, with limited human intervention or without it. Algorithmic trading does not include systems used solely for routing orders to one or more trading venues or for processing orders without determining trading parameters or for confirming orders or processing executed transactions after trading;
3. Without delay or immediately or without postponement means taking some action or business no later than the next working day;
4. Certificates means certificates as defined in Article 2(1)(27) of Regulation (EU) No 600/2014;
5. Third-country CSD means a third-country CSD as defined in Article 2(1)(2) of Regulation (EU) No 909/2014;
6. Clearing member means a clearing member of a clearing system managed by a central counterparty as defined in Article 2(1)(14) of Regulation (EU) No 648/2012;
7. Companies under common control are companies that are not connected in the manner referred to in points 25 and 129 of this Article, but are connected in one of the following ways:
   a) companies are equal and under common control, in accordance with a concluded contract or provisions of the statute; b) the majority of members of the management board or supervisory board of those companies are the same persons;
8. Subsidiary means a dependent company or subsidiary within the meaning of the law governing the accounting of entrepreneurs and the application of financial reporting standards, including the subsidiary of a dependent company or the subsidiary of the ultimate parent company;
9. Company from a third country means a company that would be a credit institution providing investment services or carrying out investment activities or an investment company if its head office or registered office were located in the European Union;
10. Ancillary services company means a company whose main activity is ownership or management of assets, management of data processing services or similar activity that is ancillary to the main activity of one or more investment companies;
11. Management company means a management company as defined by the law governing the establishment and operation of open-ended investment funds with a public offer and management companies managing them, or an alternative investment fund manager as defined by the law governing alternative investment funds;
12. Host Member State means a Member State, other than the home Member State:
    a) for an investment company, the Member State in which the investment company has a branch or provides investment services and/or activities; b) for a regulated market, the Member State in which the regulated market, through appropriate mechanisms, facilitates access to trading in its system for members with remote access or participants established in that Member State; c) for a central securities depository, the Member State in which the central securities depository has a branch or provides services as a CSD;
13. Member State means a Member State of the European Union and a State signatory to the Agreement on the European Economic Area;
14. European supervisory authorities means ESMA, EIOPA and EBA;
15. EBA means the European Banking Authority, established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EU and repealing Commission Decision 2009/78/EZ (OJ L 331, 15.12.2010) (hereinafter: Regulation (EU) No 1093/2010);
16. EIOPA means the European Insurance and Occupational Pensions Authority, established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EU and repealing Commission Decision 2009/79/EZ (OJ L 331, 15.12.2010) (hereinafter: Regulation (EU) No 1094/2010);
17. ESMA means the European Securities and Markets Authority, established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EZ and repealing Commission Decision 2009/77/EZ (EU) (OJ L 331, 15.12.2010);
18. ESRB means the European Systemic Risk Board established by Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on macro-prudential oversight of the financial system in the Union and establishing a European Systemic Risk Board;
19. ESCB means the European System of Central Banks;
20. Electronic form means any permanent medium other than paper;
21. Financial counterparty means a financial counterparty as defined in Article 2(8) of Regulation (EU) No 648/2012;
22. Financial institution means a financial institution as defined in Article 4(1)(14) of Regulation (EU) No 2019/2033;
23. Financial analyst means a financial analyst as defined in Article 2(1)(2) of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (Text with EEA relevance) (OJ L 87/1, 31.3.2017) (hereinafter: Delegated Regulation (EU) No 2017/565);
24. Financial instruments are:
    a) transferable securities; b) money market instruments; c) units in collective undertakings; d) derivatives, which include:
    da) options (options), futures (futures), swaps (swaps), forward rate agreements (forward rate agreements) and all other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances or other derivative instruments, financial indices or financial measures which can be settled physically or in cash; db) options, futures, swaps, forwards and all other derivative contracts relating to commodities, which must be settled in cash or may be settled in cash at the request of one of the contracting parties, except in the case of default or other termination reasons; dc) options, futures, swaps and any other derivative contracts relating to commodities, which can be settled physically, provided that they are traded on a regulated market, a multilateral trading facility (MTF) or an organized trading platform (OTP), except those relating to wholesale energy products traded on an organized trading platform which must be settled physically in accordance with the conditions of Article 5 of Delegated Regulation (EU) No 2017/565; dd) options, futures, swaps, forwards and any other derivative contracts relating to commodities, which can be settled physically, if they are not listed in the third sub-point of this point and do not have a commercial purpose, which have characteristics of other derivative financial instruments; de) credit derivative instruments; df) financial contracts for differences (financial contracts for differences); dg) options, futures, swaps, forward rate agreements and any other derivative contracts relating to climate variables, freight rates, inflation rates or other official economic statistical data, which must be settled in cash or may be settled in cash at the request of one of the contracting parties, except in the case of default or other termination reasons, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not listed in this point, which have characteristics of other derivative financial instruments, taking into account, among other things, whether they are traded on a regulated market, a multilateral trading facility or an organized trading platform; dh) emission allowances consisting of any units recognized for compliance with the requirements of the law governing environmental protection (emissions trading system);
25. Exchange-traded fund or ETF means a share or stock in a collective investment undertaking whose...