LAW
No. 76/2023
For Private Pension Funds[1]
In support of Articles 78 and 83, paragraph 1, of the Constitution, on the proposal of the Council of Ministers,
Parliament
of the Republic of Albania
SET:
Chapter I
General Provisions
Article 1
Purpose and object of the law
This law is intended to establish a regulatory legal framework for the creation, licensing, administration, and supervision of private pension funds in the Republic of Albania.
2. The object of this law is to establish the rules and procedures for:
a) the licensing and activities of the management company for private pension funds in the Republic of Albania.
b) the establishment and operation of open-participation private pension funds and closed-participation private pension funds with defined contributions in the Republic of Albania.
c) the licensing and activities of the depository of the private pension fund.
c) the supervision of the management company, private pension funds, the depository of the private pension fund, and other entities in accordance with this law.
d) the cross-border activities of management companies offering closed-ended private pension funds.
Neni 2
Definitions
For the purposes of this law, the following terms have these meanings:
1. “Authority” means the Financial Supervisory Authority, established in accordance with the applicable legislation on the Financial Supervisory Authority.
2. “Administrator” is the natural person with managerial and administrative responsibilities in the management company.
3. “Member” is the individual who joins the pension fund on the basis of a membership agreement with the management company, in whose name and for whose benefit a pension account has been opened in the pension fund, and who has the right to receive benefits from the pension fund in the future.
4. “Potential member” is the individual who is entitled to participate in a pension fund.
5. “Actives” are securities, cash, and other assets owned by the pension fund member, the management company, or the depositary, in accordance with the provisions of this law.
6. “External auditor” is the legal entity, in its capacity as an audit firm, for the purpose of the independent audit of annual individual and/or consolidated financial statements, and has the same meaning as defined in the legislation in force on statutory audit, the organization of the profession of statutory auditors and authorized accountants.
7. “Member State regulatory authority” means the regulatory authority of another State which, under applicable law or regulatory act, supervises pension fund management companies, pension funds, and depositaries established outside the Republic of Albania.
8. “Pension fund agent” is a legal entity established as a financial institution and registered by the Authority to promote the pension fund and to offer membership contracts in the pension fund on behalf of the management company.
9. “Depository” means the bank licensed by the Authority to carry out, as its activities, the safekeeping of the private pension fund's assets and the duties and functions specified in this law.
10. “Private pension fund” is a segregated group of assets without legal personality, approved by the Authority and administered by the management company, for the account of the fund's members in accordance with the provisions of this law. A private pension fund may be open-participation or closed-participation.
11. “Open participation pension fund” is the pension fund established by the management company, of which any individual, including employees of employers, may become a member by choosing to contribute to the fund offered by the management company, without creating a closed pension fund.
12. “Closed-participation pension fund” means the professional pension fund established by an employer, multiple employers, or an entity organized as an employers' association, a trade union or federation of trade unions, an association, or any combination thereof, under a founding act or an agreement agreed upon among them. Participation in this fund is limited solely to the employees/members of the entities mentioned in this point.
13. “Securities lending” in relation to the private pension fund means the lending of financial instruments by one party to another party at a specified interest rate and for a specified period of time.
14. “Financial instruments” are the financial instruments defined in accordance with the legislation in force for capital markets.
15. “Money market instrument” means a debt security that gives the holder the unconditional right to receive a specified fixed sum of money on a specified date and that is issued at a discounted value based on the interest rate and the time remaining until maturity. This includes treasury bills, commercial and financial paper, bank-guaranteed notes, and negotiable certificates of deposit with an initial maturity date, not more than one year, as well as short-term papers issued by a unit organized for the issuance of short-term papers.
16. “Management/Supervisory Board” is the body of the managing company with primary responsibility for management and oversight, in accordance with the applicable legislation on commercial companies.
17. “Transfer fee” is the fee that the member pays to the managing company at the time of transferring assets from one managing company's private pension fund to another managing company.
18. “Annual administration fee” is the periodic fee paid to the private pension fund's management company, calculated as an annual percentage based on the net assets of the pension fund.
19. “Return on investment” is the result obtained from investing assets and capital gains.
20. “Pension share” means the proportional ownership interest in the pension fund's asset portfolio. All shares represent equal fractional ownership of the pension fund's assets, and the total value of all pension fund shares at any time equals the total net value of the assets of that pension fund.
21. “Related party” means the individual or legal entity that has a relationship with the administering company because it is:
a) a member of the management board/supervisor or an employee of the management company;
b) a member of the company's internal audit;
c) the spouse, the adopter and the adoptee, or a close relative up to the second degree of a member of the board of directors/supervisor or internal auditor, shareholder or employee of the company, or director of the company, in accordance with the provisions of this law;
c) a member of the management/supervisory board of any trading company in which the managing company has an interest of more than 20%;
d) the individual or legal entity that has the right to make decisions or that influences the company's decisions under a contract or on any other basis.
22. “Pension payments” are cash payments, in the form of a pension, of the shares held in the member's pension fund account, valued at the share price on the date the member's withdrawal request is submitted.
23. “Beneficiary” is the individual who receives pension benefits under the provisions of the applicable laws.
24. “Contribution earnings period” (vesting periodThe period before the employee is entitled to the benefits of the contributions paid by the employer is considered.
25. “Key persons” are individuals who, in accordance with the provisions of applicable legislation, represent the management company and perform management functions, including the administrator and members of the management board/supervisory board of the company and, in the case of a depositary, the depositary services manager.
26. “Key personnel” are individuals in senior positions who are responsible for the key functions of the management company, including: the head of the asset/investment management unit, the head of the risk management unit, the head of the compliance unit, the head of the anti-money laundering and counter-terrorist financing unit, the head of the internal audit unit and, in the case of the depositary, the head of internal audit, the head of risk management and the head of compliance.
27. “Influential participation” means the direct or indirect ownership of 10% or more of the capital or voting rights, or the ownership of a participation that enables the exercise of significant influence over the management of a fund management company.
28. “Organized Trading Platform (OTP)” means the multilateral system that is neither a regulated market nor a multilateral trading facility, in which the interaction of multiple third-party buy and sell interests is permitted under applicable capital markets legislation.
29. “Multilateral Trading Facility (MTF)” means the multilateral system operated by a commission firm or a market operator under the applicable capital markets legislation.
30. “Private pension fund management company” (hereinafter “management company”) is a joint-stock company established in accordance with the applicable legislation on commercial companies and licensed by the Authority to manage one or more private pension funds.
31. “Sponsor” means an individual or legal entity which, in its capacity as an employer or self-employed person, including trade unions, associations of independent professions, other entities or any combination thereof, establishes a closed-participation pension fund and pays contributions to the fund on behalf of the employee, who is a member of the fund.
32. “Transferable securities” are securities within the meaning of the Law “On Capital Markets.”.
33. “Transfer of assets” is the transfer of assets from one pension fund to another pension fund.
34. “Regulated market” is the multilateral system operated and/or administered by a market operator that brings together, or facilitates the bringing together of, multiple third-party buy and sell interests in financial instruments, in accordance with applicable capital markets legislation.
35. “Member State” means a country that is a member state of the European Union.
36. “Cross-border activity” means the management of a closed-participation pension fund by a management company established in a Member State on behalf of a sponsor with its seat in the Republic of Albania, or the management of a closed-participation pension fund by a company located in the Republic of Albania on behalf of a sponsor located in a Member State.
37. “Net asset value per share” is the net value of the pension fund's assets divided by the number of shares at the time the net asset value is calculated.
38. “Net asset value” is the aggregate value of the pension fund's assets after subtracting the total amount of liabilities at the time of calculation.
Chapter II
Administrative Company
SECTION I
Establishment of the Administrative Company of Private Pension Funds
Article 3
The performance of the private pension fund administration activity
1. The administration of private pension funds in the Republic of Albania may be carried out by:
a) a management company licensed in accordance with the requirements of this law;
b) a management company from another Member State which, in accordance with the provisions of this law, is recognized by the Authority to carry out the management of closed-participation private pension funds in the Republic of Albania.
2. A management company of collective investment undertakings also carries out the management of private pension funds in accordance with the terms and requirements of this law, provided that these activities are conducted separately from one another.
Article 4
General operating principles of the management company
1. The managing company collects and invests the assets of the private pension funds in accordance with the provisions of this law, as well as in accordance with the principle of risk diversification, in order to provide pension benefits to persons who become members of the private pension fund.
2. The management company, when admitting new members and managing the assets of the private pension fund, acts honestly, fairly, and professionally in accordance with the best interests of the member or prospective members. The management company ensures that any investment advice is deemed appropriate before being provided to the member or prospective members.
3. The management company undertakes all necessary steps to achieve the best possible results in the management of the pension fund's assets, including, at a minimum, execution price, cost, speed, probability of execution and settlement, as well as any other factor deemed necessary for the management of the pension fund's assets.
Article 5
Legal framework
The management company is established as a joint-stock company with an indefinite duration, with its registered office in the Republic of Albania, in accordance with the applicable legislation on commercial companies and the requirements of this law.
Article 6
Use of the name “Administrating Company of the Private Pension Fund”
1. The name of the management company must include the words “Private Pension Fund Management Company.” If the company is not licensed as a management company, it must change its name from “Private Pension Fund Management Company” within one (1) month.
2. The name of the management company must not contain any words that could mislead current or prospective members or anyone else, and it must not make direct or indirect references suggesting that investments are guaranteed.
3. The designation “Private Pension Fund Management Company” or any similar designation is used in the Republic of Albania only by entities that hold the relevant license issued by the Authority under this law or by entities that hold a license issued by an authority of a Member State under an equivalent law and have been recognized by the Authority.
Article 7
Authority Register
1. The Authority maintains the register of management companies, private pension funds, the depository, and any licensed, registered, or recognized entity under this law. The register is published on the Authority's official website and made available to the public.
2. The Authority's register contains:
a) updated information on the name of the pension fund, the type of pension fund, the number and date of the decision approving the pension fund, as well as information on the sponsor that contributes to the closed-participation pension fund;
b) updated information on the name of the management company that manages pension funds in the Republic of Albania, the type of pension fund, the number and date of the management company's licensing decision, its shareholding structure and key personnel, and information on the depositary.;
c) information on management companies carrying out cross-border activities under the conditions and requirements of this law, specifying the Member State in which the activity is carried out.
3. Any change to the data specified in paragraph 2 of this article shall be reflected in the Authority's register.
4. The authority issues regulations on the content and manner of keeping the register.
SECTION II
Activities of the Administrative Society
Article 8
Activity of the managing company
1. The main object of the managing company's activity is:
a) the creation of the private pension fund;
b) administration of the assets of the private pension fund;
c) other administrative activities.
2. Other administrative activities, as provided in paragraph 1(c) of this Article, include the following:
a) offering and promoting the private pension fund to interested parties and to the fund's members;
b) monitoring the compliance of the company's and the private pension fund's activities with applicable laws and regulations;
c) handling of requests for information and complaints from members of the private pension fund or from third parties;
c) maintaining records of private pension funds, as well as updating them;
d) the creation and maintenance of complete, up-to-date accounting records for pension funds and the accounting of the fund's assets, revenues, and expenses, so that they can be immediately identified at any time;
d) carrying out the transfer of fund members' assets under the conditions specified in this law;
e) informing members about the fund's performance, as well as submitting to the Authority all reports related to the activities of the pension funds and the management company;
e) calculating and making pension payments to fund members upon fulfillment of the conditions specified in this law;
f) ensuring an appropriate governance, risk management, and internal audit structure;
g) any other function assigned by the Authority under this law, or regulations adopted in implementation of this law.
Article 9
Share capital
1. The shares of the company managing pension funds must be registered shares, with each share carrying the right to one vote.
2. The minimum share capital of the management company is 1,580,000 lek.
3. The share capital of the managing company must be fully paid up in cash only and may not be sourced from loans, credit, or advances from entities or third parties.
4. The management company cannot issue preferred shares.
5. The shares of the management company may not be listed on a regulated market, a Multilateral Trading Facility (MTF), or any other organized market.
6. The share capital of the management company of the pension fund cannot be increased by a public offering.
Article 10
Requirements for the capital adequacy of the management company
The management company must at all times have sufficient capital to meet all its anticipated financial obligations, which in any event must not be less than 15,800,000 lekë.
2. The fund management company must at all times hold its own funds, which are:
a) not less than 15,800,000 lek and, in the event that the total assets under management exceed the amount of 31,600,000,000 lek, its own funds increase by 0.021 TP3T of the total assets under management that exceed the 31,600,000,000 lek threshold, up to a maximum of 1,300,000,000 lek;
b) not less than 1/4 of the fixed expenses of the managing company, calculated based on the financial statements of the previous year;
c) For the purposes of paragraph (a) of this point, in calculating the total value of assets that exceed the specified limit, the portfolios of collective investment undertakings and the portfolios of pension funds that the company manages on a delegated basis shall be excluded.
3. The private pension fund management company may have its own funds, additional reserves, or professional liability insurance to cover possible liability risks arising from professional negligence.
4. Its funds are invested only in assets that meet the requirements set forth in the regulations approved by the Authority.
5. The management company shall not, directly or indirectly, grant credit or provide guarantees for the purchase of its shares or for the purchase of shares of persons with whom it has ownership relationships or is a related party.
6. The capital amounts provided for in this law may be increased by the Authority from time to time, but no more frequently than once a year, in accordance with the official inflation rate.
7. The management company shall immediately notify the Authority if its capital falls below the required level specified in this article.
8. The Authority shall establish by regulation the capital adequacy requirements for the management company, as well as the form, calculation, and amount of its own funds that the private pension fund management company must hold.
Section III
Licensing of the Administrative Company
Article 11
Requirements for licensing the management company
The management company must not begin promoting the private pension fund, enter into a pension fund contract, or accept members into the pension fund before being licensed by the Authority.
2. The application for the issuance of a license to act as a management company is accompanied by:
a) documents proving that the applicant is a joint-stock company registered under the applicable law, the company's statute, and the document proving that the company's registered capital has been fully paid;
b) documents proving that the company meets the requirements of this law for the share capital, including the source of the capital, the relevant financial statements verifying the company's capital source, as well as a statement signed by the board of directors/supervisory board of the company that the financial statements accurately reflect the company's financial condition;
c) To verify the source of the initial minimum capital and the additional capital, the following information and documentation shall be filed with the Authority:
I. For legal entities:
i. evidence of the source of the creation of the founding capital, such as: the report of the licensed auditor, annual financial statements, gifts or other sources intended to be used for the purchase of shares of the pension fund management company;
ii. a certificate issued by the competent authorities, which provides information on the company's balance sheet and on the fulfillment of tax obligations;
iii. The borrower's report from the credit registry or a statement of credit status in the banking system.
II. For individuals:
i. proof of the sources of capital formation, such as: purchase or sale, gift;
ii. salary, cash deposits in banks and/or branches of foreign banks, or other evidence of the source of the capital's formation;
iii. certificates proving the settlement of tax obligations;
iv. verification of the status of loans in the banking system.
c) a document on the shareholding structure, including information on influential holdings, if any, and the value of these holdings;
d) documents proving that the company's shareholders, the administrator, key persons, and key personnel are individually and collectively suitable and capable of conducting this activity in accordance with the provisions of Article 15 of this law.
d) the statement of responsibilities, describing the responsibilities of key persons, as well as the description of the main functions and responsibilities if a key person will perform more than one function;
e) the business plan of the management company for a period of no less than five years, describing the activities the applicant intends to develop, how the capital adequacy requirements will be met, and how the projected business will be developed. The business plan must contain detailed information on:
i. information about the products or services to be offered by the applicant;
ii. the marketing/promotion plan of the managing company;
iii. the financial plan, including a description of how the startup costs of the business will be covered and how the capital adequacy requirements will be met;
iv. the risk analysis, including a description of how the applicant will address the relevant risks, in particular operational risk, agency risk, credit risk, market risk, compliance risk, and reputational risk;
e) a conflict of interest statement for key personnel and key staff, as well as the methods for identifying instances of conflict of interest and the ways in which such instances can be eliminated or kept under control and disclosed;
f) policies for conducting transactions with related parties;
g) information on reporting and notification procedures, such as for the purposes of internal governing bodies, fund members, and the Authority;
g) detailed information on the risk management and liquidity process under this law;
h) the draft prospectus of the pension fund(s) to be administered in accordance with the requirements of this law;
i) the management contract for the administration of the fund between the management company and the sponsor in the case of a closed-ended fund;
j) draft contracts for the open-ended pension fund;
k) information on the type of fund to be managed by the company, the method of promoting the fund, and the applicable fees;
l) a written presentation of the company's internal organization and key functions, in particular a description of:
i. internal control procedures;
ii. risk management procedures;
iii. information technology systems.
ll) a description of each function delegated, specifying the method of oversight, as well as the delegatee's obligation to provide the Authority with information and access whenever requested.;
m) the contract entered into between the management company and a licensed depository, specifying the obligations and rights of the parties in accordance with the provisions of this law, which takes effect upon approval of the management company's license.;
n) a description of the company's procedures for handling complaints in accordance with the requirements of Article 31 of this law;
nj) the determination of procedures for compliance with legislation on the prevention of money laundering and the financing of terrorism.
3. The Authority may request additional information and documents from the managing company or require verification of information if deemed necessary.
4. The Authority approves additional rules regarding the licensing requirements for private pension fund management companies and the procedures for reviewing and approving such applications.
Article 12
Granting the license as a managing company
1. The authority assesses whether the licensing application is complete or not and informs the applicant of its status.
2. The license application may be withdrawn by written notice at any time before the Authority makes a decision on the application.
3. The license is approved or denied by the Authority within three months from the date the complete application is received.
4. The Authority may limit the scope of the license granted to a management company with respect to the type and nature of pension funds under management, in particular regarding the fund's investment strategies.
5. The Authority shall provide written reasoning for its decision to refuse or restrict the license. The applicant may appeal the Authority's decision to the administrative court in accordance with the deadlines, conditions, and provisions of the legislation in force governing administrative courts and the adjudication of administrative disputes.
6. The managing company may reapply for a license when it has been refused by the Authority, or request an expansion of the license's scope when it has been issued a license with a limited scope of activity.
Article 13
License refusal
The Authority refuses the management company's application for a license:
a) if the requesting entity does not meet any of the requirements of articles 5, 6, 7, 8, 9, 10, 11 of this law, and in particular if the Authority is not convinced of the suitability of the shareholders, key persons or key personnel, taking into account the prudent management of the company;
b) if it assesses that the company will not be able to meet the requirements of this law;
c) when the effective exercise of the Authority's supervisory functions is impeded by:
i. ownership links between the requesting entity and other legal or natural persons;
ii. the legislative, regulatory, or administrative acts of another country or territory that govern the activities of individuals or legal entities with which the requesting entity has close ties;
iii. difficulties related to the mandatory implementation of legislative, regulatory, and administrative acts.
Article 14
License validity
1. The license issued by the Authority in accordance with the provisions of this law is valid indefinitely.
2. The license is valid until it is revoked by the Authority if the managing company is in violation of the provisions of this law and the regulations adopted pursuant to it or:
a) the management company seeks to voluntarily cease its business operations;
b) liquidation or bankruptcy proceedings have been initiated against the company;
c) the company has not commenced operations within 12 months from the date of issuance of the license.
Article 15
Requirement for adaptability and skills
1. Any person who is or will be a shareholder, administrator, member of the management or supervisory board, key person, or key personnel in a management company must be fit and proper to hold the specified position.
2. To determine whether a person is fit and proper, the Authority conducts an assessment of the person's commercial or financial activities and past conduct, assessing, among other things:
a) integrity;
In assessing integrity, the Authority considers whether there is evidence demonstrating that the person:
i. is not the subject of any investigation or legal proceedings, convicted by a final judgment for crimes against property or economic crime, or other criminal offenses related to commercial companies, for organizing and operating fraudulent and pyramid lending schemes for money laundering and the financing of terrorism;
ii. has not acted in violation of any of the requirements and legal standards of Albania or of the similar standards or requirements of other regulatory authorities;
iii. has not been excluded or suspended by a regulatory body.
b) professional skills;
In assessing professional competence, the Authority considers whether the person:
i. meets the relevant requirements of sound judgment, preparation, and professional skills, as set by the Authority for the duty it performs or intends to perform;
ii. has demonstrated through experience and professional preparation that he is suitable or will be suitable, if approved, to perform the function.
c) financial skills;
In assessing financial capacity, the Authority considers whether the person:
i. has been involved in, collaborated on, or is connected to financial losses caused by dishonest, irresponsible, or negligent actions in connection with the provision of financial services and the administration of other companies; or
ii. has directly or indirectly owned at least 50% of the voting rights or capital of a trading company, or has been an administrator of a trading company that has become subject to bankruptcy or compulsory liquidation proceedings;
iii. is or has been involved in tax evasion, money laundering, and the financing of terrorism, or in any business practice that the Authority considers inappropriate, which casts doubt on the manner in which this person provides financial services or other commercial activities.
3. The administrator and one of the members of the management/supervisory board must hold international or domestic qualifications in investment analysis, investment management, or fund management, which the Authority deems appropriate for managing pension funds.
4. A shareholder, administrator, member of the management/supervisory board and key personnel of a management company may not be a shareholder, administrator, member of the management board/supervisor and key personnel of the depository holding the assets of the managing company's pension fund or of a party related to the depository.
5. The requirements for suitability and ability must be met by the persons specified in paragraph 1 of this article at all times while they occupy the relevant position. The Authority has the right to require the management company to verify their suitability and ability whenever it deems reasonable.
6. The Authority issues regulations specifying further requirements for competence and fitness within the meaning of paragraph 2 of this article.
Article 16
The administrator, the members of the management/supervisory board of the managing company
The management company is managed by at least one administrator.
2. Administrators, members of the board of directors/supervisors of the management company must enjoy a good reputation, have the required professional qualifications and sufficient experience, in order to ensure sound and prudent management/oversight of the management company.
3. The Authority shall, by regulation, establish the requirements that administrators/members of the management board or supervisors of the managing company must meet, the content of the application for approval for this position, and the documents that must accompany the application.
Article 17
Approval of appointment
1. A person may be appointed as administrator, member of the management/supervisory board of the managing company, and key personnel of the company only with the approval of the Authority.
2. The request for granting the approval, as specified in paragraph 1 of this article, must be submitted by the competent body of the management company.
3. The requesting entities, as defined in paragraph 1 of this article, must attach documentation proving compliance with the requirements set out in Article 15 of this law.
4. A person who has obtained the Authority's approval for a function in a management company must reapply for the Authority's approval before being appointed to the same position in another management company.
5. The Authority refuses to grant approval for the appointment of an administrator, a member of the management/supervisory board, and key personnel if:
a) the proposed person does not meet the conditions set forth in Article 15 of this law;
b) has objective and verifiable reasons to believe that the activities, which the person has carried out or is carrying out, pose a risk to the management of the management company in accordance with the risk management requirements set forth in Article 26 of this law and the secondary legislation adopted for its implementation;
c) the request for approval contains false statements or information.
6. The Authority approves any change or reappointment of the administrator and the member of the management/supervisory board and of the key personnel of the managing company. The Authority approves any substantive amendment to the managing company's articles of association.
Article 18
Revocation and expiration of the approval period for the appointment of the administrator, member of the board of directors/supervisor
1. The Authority revokes approval for the appointment of the administrator, member of the board of administration/supervision in the following cases:
a) the administrator, member of the board of administration/supervisor no longer meets the original conditions of appointment;
b) the administrator, the member of the board of administration/the supervisor repeatedly fails to fulfill the duty to determine and assess the effectiveness of the internal policies or procedures intended to ensure that all necessary measures are taken so that the managing company complies with this law, or fails to fulfill the obligation to take the necessary measures to eliminate irregularities in the managing company's activities;
c) if the approval was granted on the basis of false data.
2. In the case provided for in paragraph 1 of this article, the management company appoints a substitute for a period of up to three months and notifies the Authority.
3. Within the three-month period specified in paragraph 2 of this article, the Authority, in accordance with the procedure set forth in Article 17 of this law, approves the administrator, the member of the management/supervisory board.
4. The approval granted to an administrator, member of the management board/supervisory board of the managing company becomes invalid if:
a) the person is not appointed or does not assume the position to which the approval relates within 12 months from the date the approval is granted;
b) the person's term of appointment expires;
c) the employment contract of the person with the management company terminates.
Article 19
Key personnel
1. In the managing company, the following will be considered key personnel:
a) the head of the Asset/Investment Management Unit;
b) the head of the Risk Management Unit;
c) the head of the Compliance Unit;
c) the head of the Anti-Money Laundering and Counter-Terrorist Financing Unit;
d) the head of the Internal Audit Unit.
2. The procedure for the approval, lapse of approval, reappointment, or revocation of approval of key personnel is the same as the corresponding procedure for an administrator, a member of the board of administration/supervision, as provided in Articles 17 and 18 of this law.
3. The management company informs the Authority of any replacement of the persons specified in paragraph 1 of this article.
4. It is the responsibility of the board of directors/of the supervisory board of the management company to ensure that key personnel who perform the key functions, as defined in paragraph 1 of this article, meet the competence and suitability criteria set out in Article 15 of this law.
5. Regardless of whether some of the functions specified in paragraph 1 of this article may be delegated, the management company remains liable for any act or omission of third parties to whom the function has been delegated.
Section IV
Exercise of the Administrative Society's Cross-Border Activities
Article 20
Recognition of the foreign managing company in the Republic of Albania
1. A management company licensed in a Member State to carry out the management of pension funds may carry on the activity of managing a closed-participation pension fund for a sponsor in the Republic of Albania directly from its country of origin.
2. In implementing paragraph 1 of this article, the Authority recognizes the administering company of the Member State in the case of the direct exercise of the activity.
3. The management company, for the purpose set forth in paragraph 1 of this article, notifies the Authority in advance.
4. The notification under paragraph 3 of this article shall include:
a) the license data or an equivalent document issued by the competent authority of the country of origin;
b) the principal address in the Republic of Albania, where it will carry out its activities;
c) the names of the key persons responsible for conducting the activity in the Republic of Albania;
c) a description of the targeted services to be provided and the organizational structure, including reporting lines and information on how the foreign managing company will ensure compliance with the laws and regulations of the Republic of Albania.
5. Recognition under this article shall be granted only if the entity meets the following requirements:
a) the foreign managing company or the regulatory authority of the country of origin of the foreign managing company has forwarded to the Authority the information specified or requested by the Authority;
b) cooperation has been established between the regulatory authority of the country of origin of the managing company and the Authority;
c) the management company is subject to appropriate supervision in the country of origin;
c) the management company meets the requirements set for conducting commercial activities in the country of origin, and these requirements provide members in the Republic of Albania with protection at least equivalent to that afforded when they join domestic management companies;
d) the process of signing the contract/agreement for membership in the fund is carried out through an authorized representative of the management company in the Republic of Albania in accordance with this law.
6. In the process of recognizing a foreign managing company, the authority takes into account the existence of joint cooperation agreements for the recognition of foreign managing companies.
7. Within three months from the date of receipt of the notification under paragraph 4 of this article and upon fulfillment of the conditions set out in paragraph 5, the authority notifies the competent authority of the country of origin and the pension fund management company of the recognition.
8. If the Authority determines that the administrative structure or financial position of the managing company in relation to the planned activity is not appropriate, and the conditions of this article are not met, the Authority shall refuse recognition.
9. The management company recognized by the Authority shall notify the Authority in writing of any change regarding its activities in the Republic of Albania before implementing the change, except when such change is communicated through the regulatory authority of the management company's country of origin.
10. The provisions of this law apply to foreign management companies that administer a pension fund in the Republic of Albania. The management company is responsible to the Authority for compliance with these requirements.
11. The foreign managing company must ensure that it is able to provide the Authority with the necessary information to monitor its compliance with this law and with the regulatory acts adopted by the Authority.
12. The Authority adopts regulations on further requirements for the recognition of a foreign company of a Member State operating in the Republic of Albania.
Article 21
Managing companies carrying on activities in a Member State
1. A private pension fund management company, established in the Republic of Albania and licensed under this law, may administer a closed-participation pension fund in a Member State for that Member State's sponsor directly by providing services from the Republic of Albania.
2. For the purpose set forth in paragraph 1 of this article, the management company notifies the Authority in writing.
3. The notice provided for in paragraph 2 of this article contains:
a) the place where it intends to carry out activities;
b) the sponsor's headquarters;
c) information about the fund it seeks to administer;
c) the program of activities.
4. If the Authority deems the internal structure or financial situation of the management company to be appropriate, taking into account the planned activities, within three months of receiving the notification and complete documentation, pursuant to paragraph 3 of this article, authorizes the management company to carry out activities abroad, and forwards the notification to the regulatory authority of the relevant country. The Authority shall attach to this notification confirmation that the management company is licensed to carry out activities in accordance with this law and any applicable restrictions. The Authority shall notify the management company in writing of the transmission of this notification.
5. The management company notifies the Authority in writing of any change to the information specified in paragraph 3 of this article at least one month before implementing the change. If the change compromises the managing company's compliance with the provisions of this law, the Authority shall promptly inform the host country authority of the managing company of this change.
6. If the Authority determines that the internal structure or financial position of the management company in relation to the planned activity is not appropriate, the Authority may refuse to authorize the company and to transmit the notification. The management company is notified in writing of the reasons for refusal within three months after receipt of all information and documentation.
7. Cross-border administration by Albanian management companies in a foreign country is permitted only if the appropriate cooperation rules between the regulatory authorities of the country of origin and the Authority are in place, and if the management company complies with the provisions set forth in this law.
8. The Authority may revoke the authorization granted to the management company if it finds a violation of this law. The Authority shall consult with the foreign regulatory authority of the country of origin before revoking the authorization of that management company.
Section V
Organization of the Administrative Society
Article 22
The responsibility of the management company
1. The management company of private pension funds, in accordance with the requirements of this law and the regulations adopted by the Authority, must:
a) to be able to fulfill its obligations properly and in a timely manner in accordance with the principle of liquidity and the principle of solvency;
b) to administer the funds in such a way that each fund is able to meet its obligations properly and in a timely manner, in accordance with the principle of liquidity and the principle of solvency.;
c) to manage the fund in accordance with the investment strategy and risk defined for each fund it manages;
c) to fulfill in a timely, proper, and efficient manner all rights and obligations provided for by this law and by the fund's prospectus;
d) to establish supervisory systems and mechanisms that ensure the management company acts in compliance with this law and the fund's prospectus and that enable monitoring of all decisions, orders, and transactions involving the fund's assets;
d) to ensure that materials containing promotional content, publications, and reports for the fund's members, whether delivered to them or published in print or electronic media, are clear, accurate, do not lead to misleading conclusions, and comply with the Authority's requirements.;
e) to administer the fund's assets in the name and for the account of the fund, holding them solely with the licensed depository, in accordance with this law and the relevant regulations;
e) to send to the depository copies of all original documents or documentation with an electronic signature and/oror electronic seal, in accordance with the applicable legislation on electronic signature, electronic identification, and trusted services, relating to fund asset transactions and important for the performance of the depository's duties under this law and the relevant regulations, immediately upon their compilation or receipt;
f) to publish information about the management company and the funds it manages in accordance with this law, the regulations adopted under this law, and the other rules of the fund;
g) to submit regular reports to the Authority and to act in good faith and honesty in its dealings with the Authority;
g) to prepare, maintain, and make available to the Authority all data/information specified in the Authority's regulations, in a complete and accurate manner and within the time specified by the Authority;
h) to enable inspection by the Authority whenever requested and at the appropriate time, including interviews with persons performing key activities in the management company;
i) to ensure compliance with the provisions of this law and not to enter into any contract the purpose of which is to reduce or alter the managing company's liability;
j) to order the depository to carry out actions regarding the pension fund's assets;
k) to ensure a fair valuation of the assets and the fund's assets, as well as to accurately determine the share price on a daily basis;
l) to ensure compliance with the other requirements provided for by this law and the regulations adopted pursuant to this law.
Article 23
Conflict of interest and confidentiality in the management company
1. The pension fund management company, taking into account the type, scope, and complexity of its activities, prevents any conflict of interest that may arise in connection with its commercial operations.
2. The pension fund's management company takes all necessary steps to identify and monitor any conflict of interest that may arise in connection with the administration of the pension funds. This includes conflicts of interest between:
a) the management company, including its employees, its directors, persons with whom it has ownership ties or any of its affiliated entities, and any pension fund under the management of the management company;
b) pension funds or members of the funds and another client of the management company;
c) pension funds or fund members and the management company itself.
3. The fund management company must have organizational separations in place to prevent or minimize the risk of conflict of interest.
4. The management company shall not invest the pension fund's assets in securities or money market instruments issued by:
i. the managing company or any shareholder of the managing company;
ii. the depository of the pension fund;
iii. any person or party affiliated with the entities listed in subparagraphs “i” and “ii” of this item.
5. When the steps taken to prevent or minimize a conflict of interest are not sufficient to protect the members' interests, the managing company informs the members of the potential conflict of interest before carrying out any commercial activity on behalf of the members.
6. Key persons or key personnel of the management company who have a conflict of interest regarding transactions carried out by the management company shall notify the internal audit in writing of the conflict of interest before participating in any decision-making or any meeting where such conflict of interest arises. Key persons or key personnel who fail to comply with the requirements of this provision are prohibited, for five years from the date of the breach of this obligation, from being elected or appointed as key persons or key personnel in any institution supervised by the Authority.
7. The fund management company, in relation to each pension fund it manages, does not enter into any transaction with persons with whom it has ownership ties or with whom it is a related party, and which results in undeclared benefits for either party, or where the benefits arising from the transaction would not have arisen if the transactiontion had been carried out on normal market terms at the time of the transaction.
8. Key persons, key personnel, and employees of the managing company of pension funds treat as confidential and in accordance with applicable legislation on the protection of personal data any information about members that they may become aware of in the course of their duties, except in cases where otherwise provided for by laws and regulations. The obligation to maintain confidentiality also applies to persons performing tasks on behalf of the fund management company, including entities to which it has been delegated in accordance with Article 34 of this law, as well as their employees.
Article 24
Monitoring compliance with the relevant regulations
1. The managing company develops and implements compliance monitoring policies to identify any risk of non-compliance with this law and the regulations adopted in its implementation.
2. The Compliance Monitoring Policy provides the basic principles for monitoring the activities of the managing company in accordance with this law and the regulations adopted pursuant to it or other legal acts, as well as to ensure that the conduct of the company's key personnel or other responsible individuals complies with this law, the regulations adopted pursuant to this law, or other internal company policies.
Article 25
Internal audit
1. The managing company must have an internal audit unit of an appropriate size and capacity for the activities it performs.
2. The internal audit unit reports directly to the management/supervisory board.
3. The internal audit unit of the managing company applies a risk-based methodology to carry out the following tasks:
a) to verify whether the management company is organized in such a way as to promote the effective and prudent management of the business operations, and to monitor the board of directors/supervisory board for the fulfillment of its management duties;
b) to monitor the implementation of the decisions of the administrative/supervisory board, as well as the senior management level's fulfillment of its administrative duties and responsibilities for its position;
c) to ensure that all employees are properly trained, understand their roles and responsibilities, and that all operational personnel comply with the rules and procedures pertaining to their specific positions.;
c) for identifying the weak points of systems and control measures that could lead to losses or non-compliance;
d) to oversee and enforce the governance principles of the management company, to advise key personnel on setting policies and strategies to ensure compliance with these principles, and to annually monitor the implementation of these policies and strategies.;
d) to ensure that the accounting function of the management company provides accurate and timely information regarding capital adequacy and profitability;
e) to ensure that the systems involved in assessment, pricing, and communication with the depositary function properly and are free of errors;
e) to ensure the adequacy of financial control and compliance with the approved limits of responsibility for incurring expenditures;
f) to identify and investigate possible cases of theft, fraud, or misconduct by personnel;
g) to recommend and provide the necessary information to key individuals and personnel for the improvement or review of objectives, strategy, and business plans, including data protection and key policies governing the entity's activities.
Article 26
Risk management
1. The management company establishes a comprehensive, effective, and independent risk management system in accordance with the size, nature, scale, and complexity of its activities, which also includes the management of money laundering and terrorist financing risks. The risk management system must include:
a) the risk management policy and procedures;
b) techniques for measuring risk;
c) monitoring and reporting of risk.
2. The risk management system must be effective and well integrated into the organizational structure and decision-making processes of the managing company. The risk management system takes into account risk from the perspective of members and beneficiaries.
3. The risk management system covers the risk associated with the management company, the pension fund, as well as third parties to which functions and duties have been delegated in accordance with Article 34 of this law, taking into account at least the following:
a) management of assets and liabilities;
b) investments, especially in derivatives, securities, and similar instruments;
c) the risk of liquidity and concentration;
c) operational risk;
d) insurance and other risk mitigation techniques;
d) the environmental, social, and governance risk associated with the investment portfolio of closed-ended funds, if these risks are taken into consideration;
e) the risk borne by members and beneficiaries.
4. The management company establishes, implements, documents, and regularly updates an effective, comprehensive risk management policy in order to identify risks related to the management company's operations and the operation of the funds under management.
5. In the risk management process, the management company determines the risk profile of the funds it manages, the individual risk in relation to a fund's overall risk profile, with the aim of establishing the acceptable level of risk.
6. The management company, based on the risk management policy and the determination of the acceptable level of risk, must adopt risk measurement techniques and risk management measures, in order to identify, measure, manage, and monitor all risks to which the funds are exposed.
7. The managing company is obligated to monitor, evaluate, review, and update the adequacy of the risk management policies and procedures and risk measurement techniques, and their suitability, as well as the comprehensiveness and effectiveness of the risk management policies and procedures and risk measurement techniques and their adequacy, as well as the effectiveness of the measures taken, in order to eliminate any possible deficiencies in the risk management strategies, policies, and procedures.
8. The risk management system is approved by the management/supervisory board of the managing company.
9. The risk management policy is filed with the Authority. In the event of significant changes in risk exposure, the management company assesses the suitability and effectiveness of the risk management policy of the company and the pension funds. The revised risk management policy is filed with the Authority.
10. The administering entity must use separate procedures to appropriately and independently assess the value of the derivatives used.
11. The management/supervisory board of the managing company and the key personnel are responsible for the risk management process.
Article 27
Responsibilities of the risk management structure
1. The fund management company separates the risk management function from the operational units, including the portfolio management functions, in order to ensure that specific safeguards against conflicts of interest enable the independent performance of risk management activities and that the risk management process is continuously effective.
2. The private pension fund management company establishes risk management systems that continuously identify, measure, manage, and monitor all risks related to the investment objective and strategy to which the pension fund may be exposed. This includes procedures for analyzing the pension fund's investments in accordance with its investment objective and strategy and the risk profile of the fund in question.
3. The risk management system is implemented by the risk management structure.
4. The risk management structure regularly reports to the management/supervisory board of the management company on the individual and aggregate risks to which the pension funds and the management company itself are or may be exposed, as well as the interdependencies of these risks.
5. The risk management structure is responsible for:
a) to recommend to the management board/oversees the approval of the risk management system for each pension fund, which includes defining and monitoring approved policies, so that all key risks are continuously identified, measured, monitored, and controlled;
b) for monitoring the risks to which the company and the funds are exposed, including market risk, credit risk, operational risk, agency risk, legal and reputational risk, and risk related to actions that conflict with the interests of participants and shareholders;
c) to oversee the activities of the management company and its administration of the pension fund by providing daily instructions to ensure that the management company operates within the risk limits set by the board of administration/supervisory and as expressed in the pension fund contract and in the prospectus;
c) for the submission of regular reports to the board of administration/supervising the levels of exposure to risk of the management company and each pension fund under management, as well as any current and foreseeable breaches of risk limits to ensure that appropriate measures are taken in a timely manner;
d) for the assessment and, where applicable, participation in the assessment procedure for derivatives under point 10 of Article 26.
6. The pension fund management company regularly reviews the risk management system, but no less than once every three years and after any unusual event that could cause potential crises in the financial market.
Article 28
Risk self-assessment
1. The management company conducts and documents its risk assessment in a manner appropriate to its size, internal organizational structure, and the size, nature, scale, and complexity of its activities. This assessment is taken into account when making the company's strategic decisions.
2. The management company must conduct a self-assessment of risk at least every three years or immediately if there is a significant change in the risk profile of the pension fund(s).
3. The risk self-assessment, in accordance with points 1 and 2 of this article, shall be carried out taking into account:
a) a description of how the risk self-assessment is integrated into the company's management process and decision-making process;
b) the assessment of the effectiveness of the risk management system;
c) an assessment of the management company's capital requirements, including a description of the recovery plan;
c) the assessment of risks to fund members and pension beneficiaries regarding the payment of benefits from the pension fund and the effectiveness of corrective measures;
d) qualitative assessment of operational risk;
d) the assessment of risks related to ecological, social, and governance factors, in the event that the managing company takes these factors into account in its investment decision-making process;
e) the methodology applied to identify and assess the risk to which it is or may be exposed in the short or long term, which could affect the managing company's ability to fulfill its obligations.
4. The methodology must be appropriate in relation to the size, nature, scale, scope, and complexity of the company's activities.
Article 29
Reward policy
1. The managing company develops and implements policies for compensation:
a) of key persons;
b) of key personnel;
c) of other persons, whose activities have a material impact on the risk profile of the company or pension fund.
2. The remuneration policy must be appropriate to the size and internal structure of the management company and to the size, nature, scale, and complexity of its activities.
3. The managing company applies the following principles:
a) the remuneration policy is drafted and implemented in accordance with the fund's activities, risk profile, objectives and long-term interests, financial stability and performance, with the aim of sound, prudent and efficient management of the fund;
b) the compensation policy must be in line with the long-term interests of the beneficiaries;
c) the remuneration policy must include measures to prevent conflicts of interest.;
c) The remuneration policy must be consistent with sound and effective risk management and with the company's risk profile and fund regulations.
4. The general principles of the remuneration policy must be reviewed by the management company at least every three years. The remuneration policy and its oversight must be subject to clear, transparent, and effective rules.
Article 30
Documentation and data storage
1. The management company establishes clear and transparent procedures for the retention of data and documents related to its activities and the funds under management.
2. The procedure for the retention of data and documents includes clear rules, ensuring that every transaction can be traced and documented from the outset and that the relevant documentation proves that each fund's assets are managed in accordance with applicable legal provisions, as well as guaranteeing protection for individual member data.
3. The management company is required to organize its activities and keep its documents and data up to date so that the individual work carried out on its own behalf or on behalf of a fund can be checked at any time forto enable the Authority to exercise effective oversight in accordance with the provisions of this law and the regulations adopted pursuant to it.
4. The management company must keep the pension fund's data and documents separate from its own data and documents.
5. The managing company is responsible for any loss of or inaccuracies in the data and documents of its operations or of the funds under its administration. Documents shall be retained in such a way that, when required, they can be reproduced in a clear and legible form.
Article 31
Handling complaints by the management company
1. The management company is required to establish and implement appropriate procedures to ensure that complaints from members of private pension funds, employers, and the sponsor are addressed and handled properly. The complaint-handling procedure is filed with the Authority.
2. The managing company retains the data and documentation for each recorded complaint, including the measures taken to resolve the complaint, for at least the past five years.
Article 32
Maintenance of financial accounts by the management company
1. The management company applies the following requirements regarding accounting:
a) Keeps accurate, complete, and up-to-date accounting books and records to clearly and correctly present its activities, explain its operations, transactions, and financial position, and enable the Authority to verify compliance with the requirements of this law.;
b) prepares annually, for the financial year, the financial statements in accordance with the IFRS, unless otherwise specified in regulations issued by the Authority;
c) In the case of a group, the controlled company prepares and presents individual and consolidated audited annual financial statements.
2. The audited financial statements of the management company are submitted to the Authority within four months after the end of the financial year.
Article 33
Appointment of the external auditor
1. The managing company appoints as external auditors only legal entities in accordance with the provisions of the applicable legislation on statutory audit, the organization of the profession of statutory auditors and approved accountants.
2. The statutory auditor is appointed by the pension fund management company with the approval of the Authority. The external auditor may not serve as auditor of the same management company and the funds it administers for more than four consecutive years.
3. Within three months from the date of licensing, in accordance with this law, the management company must appoint an external auditor to audit its accounts.
4. The management company may not appoint as its statutory auditor an entity whose key personnel—administrators, shareholders, or employees—include a person with a financial interest in the management company and in one of its businesses. For the purposes of this article, a person is not deemed to have a financial interest if they are a member of the pension fund.
5. The management company must obtain the Authority's approval for any change of the statutory auditor of the company and of the funds it manages. If the appointment of the external auditor is terminated for any reason, the external auditor must submit to the Authority a statement explaining, in the external auditor's view, the reason for the termination of the engagement and to inform the Authority in writing of any matters relating to the management company of which the external auditor has become aware in the course of the engagement and which, in his opinion, could impair the licensee's ability to comply with the requirements of this law.
6. The Authority, if it does not agree with the audit report, may request the auditor to:
a) additional information;
b) to provide explanations for the audit report;
c) to expand the scope of the audit or to carry out other procedures that do not conflict with applicable legislation.
If the Authority does not agree with the audit report even after these steps, it may request a quality control review of the audit conducted in accordance with the provisions of the applicable legislation on statutory audit, the organization of the profession of statutory auditors and approved accountants.
7. The Authority, if it deems it necessary, may reject the audit report and require the conducting of a new audit at the expense of the external auditor or both.
8. The auditor of the management company shall not be considered to have violated any applicable law for having informed the Authority in good faith, whether or not requested by the Authority, for providing information or opinions on a matter of which the auditor becomes aware in their capacity as auditor of the management company and which relates to the Authority's functions under this law.
9. If the auditor, to whom the request for information is made, refuses or neglects to provide this information or provides false or misleading information, The Authority may report the auditor to the Public Oversight Board of the Republic of Albania and request that measures be taken against them in accordance with the applicable legislation on statutory auditing, the organization of the profession of statutory auditors and approved accountants.
10. The management company shall not appoint as an auditor any person against whom disciplinary measures have been imposed by the Public Oversight Board under the provisions of the applicable legislation on statutory auditing, the organization of the profession of statutory auditors and approved accountants, for as long as such measure remains in effect.
11. The Authority issues regulations on the criteria and requirements for the external statutory auditor of the management companies.
Article 34
Delegation of functions
1. The managing company may, in the course of its business, delegate one or more functions to a third party, except where such delegation makes it difficult to supervise the delegated activity or the fund manager's entire commercial activity, or prevents the fund manager from acting in the best interests of the members of the funds it manages.
2. The management company may delegate to a third party the administrative functions specified in Article 8, paragraph 2, from letter “a” to letter “f”, including the function of preventing money laundering and the financing of terrorism, internal audit and information technology. Other functions of particular importance, such as fund asset management and risk management provided for in this law, may not be delegated.
3. The functions under paragraph 2 of this article may be delegated to third parties only with the approval of the Authority. The management company remains responsible for fulfilling the delegated function, for the proper functioning of the functions, and for supervising the persons to whom these functions are delegated by contract, including ongoing compliance with the requirements set out in letters “b,” “c,” and “ç” of paragraph 5 of this article. The private pension fund management company ensures effective cooperation between itself and the entity to which the functions have been delegated and ensures that effective supervision by the Authority is not impeded by the delegation.
4. The contract for delegating functions must clearly define the rights and obligations of the contracting parties and is approved by the Authority. The Authority, if it deems it reasonable, shall oversee the delegate's activities in order to protect the fund's members.
5. Delegation by the pension fund management company must meet the following conditions:
a) the fund management company must objectively justify the delegation;
b) that delegation shall not impede oversight of the management company and, in particular, shall not prevent the management company from carrying out its functions in the interest of the members;
c) the delegate has sufficient resources to carry out the respective tasks;
c) the management company verifies that the delegate is qualified, has sufficient experience, is competent and suitable to undertake the functions in question and that the management company is at all times able to effectively monitor the delegated activity, to give further instructions and to revoke the delegation immediately, if this is in the interest of the members;
d) the prospectus for pension funds under the administration of the pension fund management company shall list all functions it is permitted to delegate to the pension fund management company, and shall provide information on the entities to which those functions have been delegated.;
d) any entity, to which the delegation is made, must hold the necessary license or permit to perform the delegated functions under this law or under the applicable capital markets legislation or under foreign law, equivalent thereto in the case of a foreign entity, as recognized by the Authority.
6. The Authority shall draw up rules for delegating the functions of the management company.
Article 35
Change of control of the managing company
1. Any individual or legal entity that intends to acquire, directly or indirectly, or to increase its participation in a management company, which reaches or exceeds the threshold of 10%, 20%, 30%, 50%, 75% of the company's capital or voting rights, must first obtain the Authority's approval.
2. The individual or legal entity that intends to acquire or increase its participation in the management company by becoming an influential shareholder shall notify the Authority in writing of its intention. The application for approval of the influential shareholder must include:
a) the number and nominal value of the shares to be purchased;
b) the documentation provided for in Articles 11 and 15 of this law.
Article 36
Decrease in participation
Any individual or legal entity that intends to directly or indirectly reduce its level of equity or voting rights in the management company, within the limits provided in paragraph 1 of Article 35, must notify the Authority in writing, specifying the level of shares it intends to reduce.
Article 37
Cooperation with other authorities
1. The Authority cooperates with other regulatory authorities when conducting the assessment to determine whether the proposed purchaser of the influential stake is one of the following:
a) a bank, insurance company, reinsurance company, investment company, management company or alternative investment fund manager licensed in another state or in a sector other than that in which the acquisition is proposed;
b) parent company of the entities specified in subparagraph (a) of this point;
c) the natural or legal person who controls the entities referred to in subparagraph (a) of this point.
2. In cooperation with other competent authorities and when assessing the request for approval of influential participation under paragraph 1 of this article, the Authority may require the following:
a) all data necessary for the assessment specified in Article 38 of this law;
b) other data available to another competent authority that may be relevant to the assessment provided for in Article 38 of this law;
c) where appropriate, the opinion of the other competent authority regarding the intended purchaser.
Article 38
Review of influential participation
1. When reviewing a request for approval of an influential stake in the management company, the Authority assesses the suitability of the prospective purchaser and his financial soundness, taking into account all of the following criteria:
a) the proposed buyer to be capable and suitable;
b) any key person and key personnel who will manage the business of the fund management company as a result of the targeted acquisition must be competent and suitable.;
c) the financial condition of the target purchaser, in particular with respect to the type of activity of the managing company in which the acquisition of an influential stake is proposed;
c) whether the management company will be able to comply with and continue to comply with the requirements of applicable law and legislation, in particular whether the group, of which the management company for the funds will become a part, has a structure that enables effective supervision, the effective exchange of information between competent authorities and, where possible, the allocation of responsibilities among the competent regulatory authorities;
d) the source of capital;
dh) if there are reasonable grounds to believe that in connection with the intended acquisition money laundering or terrorist financing has been carried out or may be carried out within the meaning of the legislation governing money laundering and terrorist financing.
2. The Authority may also request the documents and requirements provided for in Article 11 of this law, to the extent applicable.
Article 39
Approval of influential participation
1. The Authority may require the individual or legal entity applying to become an influential shareholder, or seeking to increase or decrease their participation in the company, to provide further information and documents that the Authority deems necessary.
2. The Authority assesses whether the individual or legal entity is suitable and competent before approving its influential participation in the management company.
3. The authority approves or rejects the request of the individual or legal entity to become an influential shareholder in order to increase or decrease participation in the company within three months from the date of full notification.
4. The authority, in its decision to approve influential participation in the management company, may set the maximum interest limit that this individual or legal entity is allowed to reach, by providing reasons for the decision.
5. The Authority, in the decision approving the influential participation in the managing company, may, as appropriate, specify the deadline within which the intended purchase or proposed sale must be completed and may extend the deadline if appropriate. The approval period granted by the Authority for an influential shareholder under this article expires one year from the date of approval if the individual or legal entity has not become an influential shareholder.
Article 40
Opposition to the Influential Shareholder
1. In cases where the Authority has information that the individual or legal entity, who is an influential shareholder of a management company, does not meet the requirements of suitability and ability pursuant to Article 15 of this law, it notifies the company in writing, providing the reasons that led the Authority to conclude that the individual or legal entity no longer meets the requirements of fitness and suitability to be an influential shareholder.
2. The Authority is not required to specify in the notice issued under paragraph 1 of this article the reason when doing so would lead to the disclosure of confidential information or could harm a third party.
3. Before issuing the notice under paragraph 1 of this article, the Authority shall first notify the influential shareholder, providing the reasons why they are not suitable to be an influential shareholder of the management company.
4. The shareholder who has received the notice under paragraph 3 of this article may, within a period of 20 working days, respond in writing by providing their own reasons. The Authority evaluates every written submission it has received from the influential shareholder and responds within 25 business days from the date of receipt of the written submissions. The Authority rejects the shareholder's submissions if it becomes convinced that this shareholder is no longer a suitable and competent person to be an influential shareholder.
Article 41
Restrictions on an influential shareholder who is not fit and proper.
When a person has become or continues to be an influential shareholder without approval from the Authority, the Authority may order that his shares, until further notice, be subject to the following restrictions:
a) any transfer or agreement for the transfer of the influential shareholder's shares is suspended;
b) no voting rights may be exercised on the shares;
c) No payment of any amount arising from the shares shall be made by the managing company to the influential shareholder.
Article 42
Voluntary transfer of the administration of the pension fund
1. The pension fund management company licensed under this law may transfer the administration of the pension fund to another management company licensed by the Authority.
2. The proposed transfer is notified in writing to the Authority in advance, which grants approval before the transfer is carried out.
3. The management company that transfers the administration of the pension fund notifies the members of the fund(s) under administration of the transfer three months prior to the transfer. During this period, no transfer fee applies to the transfer of assets to the other managing company, and no penalty is imposed if the member withdraws assets from the pension fund.
4. The managing company that transfers the right to manage enters into a contract with another licensed managing company for the transfer of management, which contains:
a) a detailed description of all procedures and actions to be undertaken by both companies for the transfer of administration;
b) a timeline that begins with notifying the pension fund members and ends with the completion of the transfer.
Article 43
Forced transfer of pension fund administration
1. The pension fund management company licensed under this law is required to transfer the administration of the pension fund to another management company licensed by the Authority if:
a) The Authority revokes the managing company's license to administer the pension fund;
b) bankruptcy or liquidation proceedings have been initiated against the management company;
c) the competent authority of the host Member State prohibits the management company in the Republic of Albania from managing a closed-ended fund in the territory of that Member State;
c) The Authority prohibits the management company of a Member State from managing a closed-ended fund in the territory of the Republic of Albania.
2. The forced transfer to another managing company is approved by the Authority before the transfer is carried out.
3. From the moment the management company is in one of the conditions specified in this article until the approval of the transfer of the pension fund's management to the other management company takes effect, the depository performs all the necessary duties for the administration of the pension fund, in order to protect the interests of the fund's members.
Article 44
Selection of the management company during the mandatory transfer of the pension fund
1. The management company, within 60 business days of the occurrence of any of the circumstances provided for in Article 43, shall take measures to transfer the management of the pension fund to another management company licensed by the Authority.
2. The transfer, pursuant to this article, shall be carried out only with the approval of the Authority. In deciding to approve the transfer of the pension fund's administration to another company, the Authority shall consider only the interests of the fund's members. The managing company that transfers the right to administer the fund enters into a contract with the receiving managing company setting out the terms of the transfer. The contract contains at a minimum the terms specified in Article 42 of this law.
3. Within one month from the conclusion of the transfer agreement, the administering company transfers the administration of the pension fund to the receiving company.
4. The management company that transfers the fund's management notifies the fund's members about the transfer three months in advance. During this period, no penalty applies to the withdrawal of assets from the fund. Members of the pension fund who are transferred involuntarily have the right to request that their assets be transferred to another fund managed by a different management company, without paying any transfer fees.
5. The Authority approves regulations regarding the procedures, timeframes, and content of the contract for the voluntary and involuntary transfer of the administration of the pension fund, particularly regarding the distribution of the fund's members to other funds, the liquidation of the fund itself, and its deregistration from the register of funds.
Article 45
Voluntary cessation of the managing company's commercial activities
1. The pension fund management company may, by decision of the General Assembly of Shareholders, decide to cease its business operations and transfer the administration of the pension fund(s) to another company in accordance with Article 42 of this law.
2. The decision specified in paragraph 1 of this article and the notice of cessation of operations shall be sent to the Authority and to the depository of the pension fund at least three months before the date on which the administration of all funds is to cease.
Article 46
Procedure for transferring the administration of the pension fund
1. The managing company must, within three months of sending the notice specified in Article 45 of this law, carry out the procedure for transferring the administration of the pension fund to another managing company in accordance with the provisions of this chapter.
2. If the management company finds itself unable to transfer the management of the funds to another management company, it must immediately notify the Authority. In this case, the provisions of this chapter on the mandatory transfer of fund management shall apply.
3. After implementing the fund transfer procedure to another managing company or after completing the forced transfer, the Authority revokes the license granted to the pension fund management company, which is then deregistered from the Authority's register.
Chapter III
Creation of the Private Pension Fund
SECTION I
Pension Fund
Article 47
Private pension fund
1. A private pension fund is a pool of assets, without legal personality, established for the purpose of collecting monetary contributions into the individual accounts of the fund's members and investing those funds to increase the value of the pension fund's assets.
2. The private pension fund is jointly owned by its members, where individual ownership is represented by the number of shares in the pension fund.
3. The administration of the pension fund is carried out by the pension fund management company.
Article 48
Administration of the private pension fund
1. The private pension fund is administered by a private pension fund management company or a collective investment undertakings management company, provided that this activity is not prohibited by other applicable laws and that approval has been obtained from the Authority in accordance with this law.
2. Deviating from the provisions of paragraph 1 of this article, a closed-ended participation fund established by a sponsor in the Republic of Albania may be managed by a management company from another Member State in accordance with Article 20 of this law.
Article 49
Name of the private pension fund
The name of the private pension fund contains the words “Open Participation Pension Fund” or “Closed-Participation Pension Fund,” and no person or other entity, other than a pension fund approved by the Authority, may use this name or any other terminology that would lead an individual to believe it is a private pension fund.
Article 50
Types of pension funds
1. A private pension fund, under this law, may be established as:
a) an open-participation pension fund, established by the management company, that does not impose any restrictions on membership. Any individual, including employees of employers, who chooses to contribute to the fund established by the management company, without creating a separate pension fund under paragraph (b) of this article, may become a member of this fund.
b) a closed-participation pension fund, which is established by an employer, multiple employers, or an entity organized as an employers' association, a union, a federation of unions, an association, or any combination thereof, in its capacity as sponsor, pursuant to an agreement or a founding instrument. Participation in this fund is limited solely to the employees or members of the aforementioned entities.
2. The assets of an open-ended fund must be completely segregated from the assets of a closed-ended fund and from other assets managed by the management company. The assets of a closed-end fund must be segregated from the assets of any other closed-end fund.
Article 51
The right to establish a closed-participation pension fund.
1. The right to establish a closed-participation fund, pursuant to Article 50 of this law, is held by an employer, multiple employers, or an entity organized as an employers' association, a union or federation of unions, an association, or any combination thereof, in the capacity of sponsor, on the basis of:
a) the act establishing the governing body's fund, in the case of a single sponsor;
b) the agreement for the creation of the fund, in the case of the merger of more than one sponsor.
2. A contract is signed between the management company and the sponsor for the administration of the pension fund's assets.
3. The sponsor seeking to establish a closed-participation pension fund for its employees, pursuant to paragraph 1 of this article, negotiates the terms of the pension fund and of the administration contract with the management company.
Article 52
Approval of the private pension fund
1. The application for approval of the private pension fund is submitted to the Authority by the management company and must include:
a) documents proving the licensing or recognition status of the management company and the full name, address, telephone number, and email address of the authorized representative;
b) the name of the fund, including its investment objectives and strategy;
c) the fund's prospectus;
c) the standard contract for membership in the open-ended fund;
d) the standard declaration of acceptance of participation in the fund, both for employees of an employer in the open-participation fund and for employees of a sponsor in the closed-participation fund;
d) the agreement between the management company and the depositary for the performance of the depositary's activities;
e) the agreement with the independent statutory auditor and the documents proving the auditor's compliance with the requirements of Article 33;
e) documents proving that the management company meets the organizational requirements set forth in Section V of Chapter II of this law, except in cases where the management company manages at least one fund approved by the Authority.
2. In the case of a closed-ended fund, the contract between the sponsor and the management company for the management of the fund's assets is filed, and, as applicable, the agreement for the establishment of the closed-ended fund when more than one sponsor comes together, or the act of establishment in the case of a single sponsor.
3. In the event that the management company of a Member State seeks to manage a closed-participation pension fund in the Republic of Albania, it shall submit the document proving the foreign company's recognized status or licensing, as well as the name, address, and contact details of its officially authorized representatives.
4. The applicant submits proof of payment of the application fee for approval to the Authority.
Article 53
Granting approval
1. The authority assesses whether the request is complete or not and informs the requesting party of this.
2. The authority shall, within three months from the date of receiving the complete application, issue a written decision approving or denying approval of the private pension fund.
3. The Authority may request additional information from the managing company or a modification/update of the information. The documentation must be submitted to the Authority within 30 calendar days from the date of the Authority's request.
4. The Authority shall terminate the review procedures for the approval request in cases where the documentation required for approval is not submitted by the applicant within the deadline specified in paragraph 3 of this article.
5. The application for approval may be withdrawn by written notice at any time before the Authority makes a decision.
6. The Fund shall commence operations only after its approval by the Authority.
7. The authority consults in advance with the regulatory authority of the member state of the foreign managing company regarding the approval of the pension fund in the Republic of Albania.
8. The management company notifies the Authority of any further changes to the contract, prospectus, or fund rules.
Article 54
Refusal of approval
1. The authority decides to deny the request for approval of a fund if:
a) the submitted documentation does not comply with the requirements of this law and the regulations adopted in its implementation;
b) it is determined that the content of the documents undermines the interests of the fund's members and does not provide them with adequate protection.;
c) the prospectus is not in compliance with the provisions of this law and the regulations adopted pursuant to this law;
c) the management company does not meet the necessary conditions for the administration of the pension fund, as provided in this law and the regulations adopted pursuant to this law;
d) the management company does not have the organizational structure in accordance with the requirements of this law, or the key persons and key personnel of the management company or of the depositary are not fit and proper under Article 15 of this law, or do not have sufficient experience for the Authority to be satisfied that the fund's management will be conducted in the best interests of the members.
2. In the event of refusal to grant approval, the Authority provides written justification for its decision not to grant approval.
3. The Authority may refuse the managing company's request to approve the pension fund if a supervisory measure has been imposed on that company for violations of this law and the regulations adopted under it.
Article 55
Simultaneous approval
The Authority simultaneously decides on the approval of the application for the establishment and administration of the private pension fund, the model membership contracts, including the asset management contract entered into between the management company and the sponsor for the closed-participation fund, as well as the prospectus for each private pension fund.
Article 56
Revocation of approval of the pension fund
1. The Authority may revoke approval of the fund when:
a) the conditions set forth in the prospectus are not met;
b) The management company is stripped of the right to carry out the administration of pension funds.
2. The company is prohibited from investing the fund's assets from the moment the pension fund's approval is revoked and must take immediate steps to transfer the administration of the pension fund.
Article 57
Protection of the member's assets
1. The pension fund's assets may not be subject to claims or executions carried out on behalf of and for the account of the creditors of the pension fund's management company.
2. The pension fund's assets are segregated from the assets of the management company and cannot be part of the management company's bankruptcy proceedings.
3. A pension fund member may not pledge as collateral or guarantee the assets held in their pension fund account.
4. The funds in a fund member's personal account may be inherited in accordance with the applicable legislation governing the right of inheritance.
Article 58
Calculation of the pension fund's net asset value
1. The management company is responsible for determining the net asset value of the pension fund, deducting all liabilities of the fund. The calculation of the pension fund's net asset value must ensure impartial treatment of all fund members and must be in the interest of all fund members.
2. The managing company is responsible for the accuracy of the calculation of the pension fund's net asset value for each member in accordance with the provisions of this law.
Article 59
Contributions to the pension fund
1. Contribution payments made to the member's personal account, as well as assets transferred to the fund, will be converted into pension shares on the day the payment is received in the fund's account at the share price on that day.
2. The initial price of the fund's shares is determined in the fund's prospectus.
3. The management company is responsible for converting contributions into pension benefits.
4. For valuation purposes, each pension share represents a proportional ownership interest in the pension fund's assets. The total value of the shares in the pension fund is always equal to the total net value of the pension fund's assets.
Article 60
Responsibility for calculating the net asset value of the pension fund,
as well as the price of the quote
1. The net asset value and the fund's share price shall be calculated by the management company in accordance with the approved accounting policies and the valuation methodology, as provided in this law, the regulations adopted thereunder, and the fund's prospectus.
2. The methodology for valuing the pension fund's assets is approved by the fund management company and the depository and is generally described in the pension fund prospectus.
3. The fund depository checks and verifies the calculation of the fund's net asset value and the share price in accordance with accounting policies and valuation methodology. The depository is responsible for the accuracy of the calculation and signs the document containing the determination of the asset value, keeping a copy in its own file, which is made available to the Authority upon inspection, upon request.
4. If the depository, during the review of the calculation of the fund's net asset value, identifies inaccuracies and/or irregularities, it immediately notifies the management company in writing or electronically.
5. The external auditor of the pension fund, during the annual audit, verifies to ensure that the valuation requirements have been met, that the calculated share price is accurate, and that the management fee complies with this law and with the regulatory acts adopted by the Authority in implementation of this law.
6. The management company publishes on its official website each day the fund's share price and the net asset value after reconciliation and confirmation with the fund's depositary.
7. The management company is responsible for the accurate valuation of the fund's assets, the accuracy of the calculation of the net asset value, and the share price.
8. If the calculation and verification of the fund's net asset value are not completed within the prescribed deadline, the management company and the depositary must notify the Authority, specifying the reasons why it is impossible to determine the net asset value of the pension fund.
9. The Authority issues regulations on the method and deadline for calculating the pension fund's net asset value and for converting contributions into shares, including the share price, as well as the reporting procedures.
Article 61
Protection of the pension fund member
1. The obligations of the management company itself cannot be charged to the pension fund.
2. The fund members are not liable for the obligations of the management company arising from legal actions undertaken in the name of the management company itself and for the account of the fund members. The management company may not enter into any legal transactions that could give rise to direct liabilities for the fund's members. Any legal acts in violation of this paragraph are void.
SECTION II
Membership in the Pension Fund
Article 62
Membership Agreement
1. Membership in the open-ended fund is obtained through:
a) the signing of the individual membership contract, when the fund member is an individual;
b) the employee's signing of the declaration accepting participation in the employer-selected pension fund.
2. The declaration of acceptance of participation in the fund is also signed by the sponsor's employees, who establish the closed-participation pension fund.
3. Employees' enrollment in both the open-participation fund and the closed-participation fund is carried out through the employer or sponsor.
4. The managing company publishes on its website the standard membership contracts and the participation acceptance statement for the employees of an employer or a sponsor.
5. The membership contract or declaration of acceptance to participate is signed only after the prospective member has been provided with the pension fund prospectus.
6. Upon signing the membership contract or the declaration of acceptance of participation, the management company is obligated to register the member in the register of members, to open a personal account in the name of the fund member and, upon receipt of payment into the fund's account, to convert the latter into shares, to provide the member with the corresponding credentials, and to undertake all other legal actions necessary for the administration of the pension fund.
7. Before signing the membership contract, the managing company or the pension fund agent is required to inform the fund member of all the fees that will be charged, payment options for the pension upon the vesting of pension rights, the conditions under which pension rights vest, the conditions for withdrawal from the fund or transfer of assets, investment risks, as well as the methods and deadlines for notifying the pension fund member.
8. The Authority shall, by regulation, determine the elements of the contract of membership in the open-ended fund, the participation acceptance statement, both for an employer's employees in the open-ended participation fund and for the employees of a sponsor in the closed-ended participation fund, as well as the asset management agreement between the sponsor and the management company.
9. Membership in the pension fund may be obtained through a distance contract concluded by electronic means, provided that the requirements of the applicable legislation are met.
10. The Authority may adopt rules on the binding procedure, deadlines, and withdrawal from distance contracts.
Article 63
Refusal of membership
1. The managing company may refuse to enter into the membership contract if:
a) there are grounds to suspect that the crime of money laundering or financing terrorism may be committed;
b) there is a lawful cause or a court order preventing the management company from admitting the member to the fund.
2. When the management company refuses to enter into the fund membership contract, it must inform the prospective member of the reasons for the refusal, unless prohibited by applicable law.
Article 64
Membership termination
1. The fund member may, within 30 calendar days from the date the first contribution payment is made to the fund account, cancel the fund membership agreement without penalty, without stating any particular reason, by notifying the management company in writing or by email.
2. In the event specified in paragraph 1 of this article, the management company must return to the member the value of the contributions paid into the account, including the return on investment, excluding the management fee for that period.
3. The managing company must make the payment within five business days from the date of receiving the member's written request, as provided in paragraph 1 of this article.
Article 65
Termination of membership
1. If a member of the pension fund has chosen to receive pension payments through a life insurance company pursuant to Article 74, his membership in the fund terminates upon the transfer of assets to the member's account with the life insurance company, in accordance with the member's choice, in accordance with the provisions of Article 74 of this law.
2. If the fund member meets the conditions for receiving pension payments and has chosen to receive payments through the management company, his membership in the fund will not end with the conclusion of the contract with the management company, as provided in Article 75, but only when the final contributions to the member's account in the pension fund have been paid in accordance with the provisions of that contract.
3. A member of an open-participation fund may withdraw from membership in that fund under the conditions and in the manner specified in the membership contract, while a member of a closed-ended fund may withdraw from membership in the fund in the event that they no longer meet the conditions set forth in Article 66 of this law.
4. If the member temporarily or permanently ceases to contribute to the pension fund, he remains a member of the pension fund and has the same rights as the other members of the pension fund.
Article 66
Membership in a closed-end fund
1. Members of the closed-participation pension fund may be:
a) the employees of an employer who, in the capacity of sponsor, establishes a closed-participation fund, including that employer's former employees;
b) members of a union that sponsors a closed-participation fund, including former members of that union;
c) members of an association of independent professions or professional associations that sponsor a closed-participation fund, including former members of those associations;
c) self-employed persons organized in the form of an association/organization.
2. Membership in a closed-ended participation fund is governed by the prospectus, the agreement for the establishment of the closed-ended participation fund or the founding act, as well as the statement that the employee agrees to become a member of the closed-ended participation fund.
3. The sponsor/employer may establish a period before the employee acquires the right to receive the contributions paid by the employer on his behalf. This obligation also applies to an employer who chooses to contribute to an open-enrollment fund on behalf of his employees.
4. The period before an employee is entitled to receive the benefits of contributions paid by the employer may not exceed five years.
Article 67
Transfer of assets
1. A pension fund member has the right to transfer assets in his account to another pension fund managed by the same management company or by another management company. The transfer of assets to another pension fund managed by the same management company is not subject to a transfer fee.
2. In the event of transferring a member's assets to another managing company, the managing company, upon receiving the member's written request to transfer the assets, shall notify the other managing company of the member's request within five business days.
3. The managing company shall execute the transfer of assets to the account within 10 business days from the date of receipt of the confirmation from the other managing company, as provided in paragraph 2 of this article.
4. In the case of a transfer within the same managing company, the transfer is executed within 5 business days from the date the request is received from the member.
5. Within five business days from the date of the account transfer, the company notifies the member of the execution of the transfer, the total net value of the transferred assets, including the return on investment, as well as any fees deducted.
6. The transfer of assets into a member's account in a pension fund managed by another management company is subject to a transfer fee from the fund of up to 0.5% of the amount transferred.
Article 68
Transfer of assets to a closed-ended fund
1. Upon the termination of the contractual employment relationship with the sponsor that established the closed-ended participation fund, the member may:
a) maintain the quality of a fund member without contributing until the right to a pension arises;
b) to transfer the value of the assets to the personal account in an open-participation pension fund managed by the same management company;
c) to transfer the value of the assets to a personal account in an open-participation pension fund managed by another management company;
c) to transfer the value of the assets to a personal account in a closed-participation pension fund established by another sponsor managed by the same management company;
d) to transfer the value of the assets to the personal account in a closed-participation pension fund established by another sponsor and administered by another management company.
2. The transfer of assets under paragraph 1(b) and (c) of this article shall not be subject to a transfer fee.
Article 69
Non-discrimination
Membership in a closed-participation fund must not be restricted to certain employees and must be offered to all employees without discrimination among fund participants.
2. An employee cannot be required to participate in or continue participating in a closed participation pension fund, and without his written consent no deduction may be made from his salary for contributions to the pension fund.
3. The member may suspend, reduce, or increase individual contributions at any time.
4. The sponsor or employer who contributes to a pension fund for his employees establishes internal rules on employee enrollment in the fund, their information, and the level of contributions, especially for new employees.
5. The provisions of this article also apply to the employer who selects the open-ended participation fund.
Article 70
Schedule of contributions to the pension fund
1. Before the deposit of contributions for the closed participation pension fund, the sponsor provides the management company with the contribution schedule, including the amount of the contribution paid by the sponsor for each employee and the amount of the contribution paid by the employee into the pension fund.
2. The obligation provided for in paragraph 1 of this article also applies to an employer who chooses to contribute to the open-ended fund for his employees.
3. The sponsor must update the schedule each month if there are changes in the contribution amounts. The schedule must include any additional payments on behalf of the employee once they have been withheld from pay.
4. The sponsor is liable to the employees for the non-payment of contributions.
5. The management company verifies the conformity of each schedule with the closed-participation pension fund contract, as well as with the contributions received each month. In the event of discrepancies, the management company notifies the sponsor within a reasonable time and requests correction of the schedule or of the contributions paid in error. If the sponsor does not pay contributions within three months according to the agreed schedule, the management company must notify the member.
Article 71
The right of a member transferred for work to another Member State
1. A member of the pension fund who is transferred for work on behalf of the sponsor or employer to a Member State or to another country will continue to be a member of the pension fund.
2. The sponsor or employer is required to ensure the continuation of payments into the member's personal account in the pension fund to which the member belongs.
3. The managing company must take all necessary measures to ensure the preservation of the pension right and the rights acquired by the fund member.
Article 72
Early withdrawal
1. The withdrawal of the net value of assets from an individual pension fund account before meeting the conditions set forth in Article 73, paragraph 1, of this law is called an early withdrawal.
2. Early withdrawal is subject to penalties calculated based on the time the member has been enrolled, from the moment of their first contribution until the moment of early withdrawal.
3. The Authority issues regulations on penalties applied in the event of early withdrawal from the pension fund.
Section III
Pension Payment
Article 73
Pension payment
1. The member of the pension fund, at their election, is entitled to receive either an immediate lump-sum payment of the net value of the assets in their account or periodic pension payments equivalent to that value when:
a) reaches the retirement age provided by law for the mandatory pension system applicable to that member;
b) 5 years before reaching the retirement age provided for in paragraph (a) of this point;
c) becomes permanently unable to work and this is verified in accordance with applicable legislation.
2. The pension fund member has the right to use the net value of the assets in his or her account, or a portion thereof, to purchase a life insurance annuity contract issued by a life insurance company licensed by the Authority.
3. The unqualified right of the fund member to receive the immediate payment of all net assets in his account in the pension fund or periodic payments in the form of a pension, upon fulfillment of the conditions, pursuant to applicable legislation, must be clearly stated in the contract and prospectus of the private pension fund.
4. The management company that carries out cross-border activity makes the pension payment in the country where the beneficiary resident resides.
5. The Authority approves regulations on the manner, deadlines, and procedure for the payment of pensions.
Article 74
Pension payment through the life insurance company
1. If the member of the pension fund, upon meeting the conditions set forth in Article 73, paragraph 1, of this law, decides to purchase a life insurance contract in the form of an “annuity” from a life insurance company, the net value of the assets in the fund member's account shall be transferred to the life insurance company according to the option chosen by the fund member.
2. The management company notifies the life insurance company of the fund member's request and obtains confirmation from the latter for the purchase of the life insurance contract in the form of an annuity. The life insurance company providing the pension payment service, in addition to the provisions of this law, must also apply the provisions of the law governing the establishment and operation of insurance companies.
3. The net value in the pension fund member's account, transferred to the life insurance company pursuant to paragraph 1 of this article, shall be used solely for the purpose of purchasing a life insurance annuity contract issued by a life insurance company.
Article 75
Periodic pension payments
1. Regardless of the net asset value in his account, upon fulfilling the conditions set forth in Article 73(1) of this law, the fund member may elect to receive periodic monthly payments in the form of a pension extended over a period of not less than two years.
2. A separate contract is entered into between the fund member and the management company regarding the terms of pension payment.
3. Payments received by a member of the pension fund immediately before the two-year period provided for in paragraph 1 of this article are taxed at the rate in effect under the legislation governing personal income tax.
Article 76
Immediate pension payment
Upon fulfilling the conditions set forth in Article 73, paragraph 1, of this law, the fund member is entitled to receive the net value of the assets in his account as a single lump-sum payment.
2. Upon receiving notice from the management company, pursuant to Article 105 of this law, the fund member submits a request to the company for the full payment of the net asset value in his account.
3. In implementation of paragraph 2 of this article, once the member has acquired the right to receive the pension, the administering company shall ensure that the net value of the assets in the member's account is paid to the member within 15 business days from the date the member submits the request.
Article 77
Sponsor of the closed-end fund
1. The sponsor of a closed-ended fund regularly pays contributions to the closed-ended fund on behalf of the fund's members.
2. The prospectus of the closed-participation fund must specify the timing of the deposit of sponsor contribution payments into members' personal accounts.
3. The sponsor established in a Member State pays contributions to the closed-ended fund when the fund is managed by a management company established in the Republic of Albania. Likewise, the sponsor established in the Republic of Albania pays contributions to the closed-ended fund when the fund is managed by a management company established in a Member State.
Article 78
Fund ownership register
1. Pension fund shares are dematerialized and held electronically in the fund's register of ownership. The fund's register of ownership constitutes conclusive evidence of members' rights to the shares recorded therein.
2. The fund's ownership register must record:
a) the first name, last name, and address of each member and the personal identification number or the number of an equivalent foreign document;
b) the number of shares held by each member;
c) the date of membership in the fund.
3. The managing company is responsible for ensuring that the register is complete, accurate, and up to date.
4. The Authority shall, by regulation, determine the form for organizing and maintaining the fund's ownership register, as well as the manner of publishing the data from the register.
Article 79
Responsibility for maintaining the register of ownership
1. The management company is responsible for creating and maintaining the pension fund's share register. The pension fund depository simultaneously maintains the record of the fund's shares and verifies and controls that every action of the management company regarding this record complies with the requirements of this law and its implementing regulations.
2. If the share register is maintained by a third party in the event of delegation, the managing company is responsible for maintaining the register and for the accuracy of the data.
Article 80
Member's ownership document
1. The management company, upon request by a fund member, shall provide information about the pension fund and the individual account. This information must include:
a) the member's first and last name;
b) the name of the fund, the management company or the registered office of the management company, in the case of cross-border activity;
c) the number of shares in the member's personal account;
c) the share price for that day;
d) the value of the assets in the member's personal account;
dh) the dates and amounts of payments made by the member, the employer, and the sponsor;
e) the return on investment for the period from the date of membership, as well as for the 12-month period;
e) information on the fees charged to the fund and the member up to the date of issuing the document.
Chapter IV
Promotion of the Pension Fund in the Republic of Albania
Article 81
Promotion of pension funds
1. The promotion of pension funds and the management company is carried out by:
a) the managing company itself;
b) the management company licensed in a Member State, which is recognized by the Authority to carry out activities in the Republic of Albania;
c) the fund agent.
2. The pension fund agent may offer prospective members participation in the pension fund by signing the membership contract on behalf of and for the account of the management company. The agent, when offering membership in the pension fund, acts as a sales representative of the management company under a written contract with the management company.
3. No benefit may be offered to employers, to parties affiliated with the employer, to the union, or to any other form of employee organization for the purpose of encouraging employees to join a private pension fund.
4. The authority issues regulations on the conditions and criteria that persons acting as agents of the pension fund must meet.
Article 82
Promotional activity
1. The promotion of pension funds and the management company is carried out through promotional activities in print and electronic media and includes:
a) brochures;
b) advertising in the daily press, magazines, radio, television, and websites;
c) promotional materials sent by regular or electronic mail, fax, or other means;
c) telemarketing, which includes the use of a specialized telemarketing service provider, based on a contract entered into with the management company;
d) materials or other promotional tools that can be read, viewed, or delivered to the public.
2. The promotional activity provided for in paragraph 1 of this article must be prepared in the Albanian language. The management company is required to retain copies of materials containing promotional content, as well as the sources of the information mentioned in those materials, in accordance with the timeframes provided in the applicable legislation. These data are made available to the Authority for any possible inspection.
3. All activities and materials with promotional content are approved by a key individual of the managing company on behalf of the licensed managing company.
4. Any information or promotional document concerning pension funds and the management company must be notified to the Authority before publication or release.
Article 83
Method of promotion
1. Promotional activity for the pension fund and the management company must not contain any information that contradicts or diminishes the importance of the information contained in the fund's prospectus.
2. In the case of promotional activities for the pension fund and the management company, the following criteria must be met:
a) the purpose of the activity is not concealed or presented in a misleading manner;
b) an accurate and truthful description of the pension fund being promoted, as well as the obligations and risks associated with it;
c) The facts stated must be complete, clear, accurate, true, and understandable as of the date they are provided, and must not be misleading or presented in a way that could be interpreted as a forecast of possible future activity results. Every fact provided must be verifiable;
c) the appearance, content, or form of the promotional material must not distort or diminish the importance of any statement, warning, or claim made under this law or any regulation adopted pursuant to this law.;
d) any comparison made must be based on facts that are accurate and up-to-date. Also, the main conclusions of these comparisons must be presented clearly, and every comparison must be presented fairly and impartially, in a manner that is in no way misleading and is based on all the key factors for this type of comparison.;
dh) no misrepresentation shall be made, in particular with respect to the professional qualifications of the persons responsible, the assets and purpose of the fund, the business activities of the management company, and the ownership or number of shares in the pension fund;
e) to ensure that the presentation, content, or form of advertising information does not distort, conceal, or diminish the significance of the statements, warnings, or references provided under this law or the regulatory acts adopted by the Authority in its implementation.;
e) to ensure that no license issued by the Regulatory Authority is cited without the permission of this Authority, and to ensure that no third party believes that the license issued by the Regulatory Authority has a different meaning from the certificate, which certifies that the entity in question has fulfilled all conditions for obtaining the legal status indicated on the license;
f) any data must be included if omitting that data would make the promotional activity inaccurate, untrue, unclear, or misleading.
3. The Authority approves regulations on the content, advertising formats, amendments, and preservation of promotional materials for the pension fund and the management company.
Article 84
Publication of the pension fund's performance
The management company publishes the performance of the pension fund under management. Presentation of the pension fund's performance:
a) should not offer any guarantee or promise;
b) it should not be drafted in the form of an assessment of any kind;
c) must reflect the results of the fund's activities from its establishment until the date of presentation or for the last five years;
c) must contain up-to-date information through the date of the fund's performance publication.;
d) it must not be presented in a way that suggests it is a forecast of the pension fund's future results.
Article 85
Unsolicited activities
1. If the Authority determines that the promotional activity, any form of marketing of the pension fund or the management company, or the publication of the fund's performance is or may be misleading, it immediately prohibits the publication, distribution or offering of the product or orders the management company to correct the information or the product.
2. The authority may prohibit a certain activity by declaring it undesirable and publishing the reasons why it has made such a decision:
a) for all or a specific category of pension funds;
b) for all or for a specific category of persons who provide services for pension funds
3. The authority immediately orders the suspension of the undesirable activity.
Article 86
Pension fund agent
1. During the promotion of the fund and the signing of the membership contract for a pension fund, the agent acts as a sales representative of the management company.
2. The legal relationship between the pension fund agent and the management company is governed by a written contract entered into between the parties.
3. The managing company must notify the Authority in writing within 5 business days of any contract entered into under paragraph 2 of this article and provide the list of agents.
Article 87
Responsibilities of the pension fund agent
1. The pension fund agent must act in good faith, fairness and professionalism in accordance with the best interests of the prospective member, and must assess, before signing the pension fund contract, the suitability of the private pension fund for the prospective member's circumstances and conditions.
2. The agent must not provide incorrect or misleading information to a potential member regarding the status of the fund, present false or inaccurate facts about the fund, its investment objectives, or associated risks, the share price, the return on investment, or any other matter relating to the fund or the management company.
3. When promoting the pension fund or offering membership in the fund, the agent shall use only the prospectus, the monthly reports on the fund's performance, and the promotional materials approved by the management company.
4. The pension fund agent must keep complete records for every contract signed. The agent must promptly forward the executed membership contracts to the administering company.
5. The pension fund agent must maintain confidentiality regarding all information obtained from the prospective member. The pension fund agent must not sign the contract without first discussing whether a conflict of interest exists.
6. The management company is responsible for the agent's actions and omissions in relation to the prospective member. The management company monitors the pension fund agent's activities. In cases of damages caused to a fund member, the management company must immediately notify the Authority, specifying the actions to be taken to stop the violation and, where appropriate, provide compensation or review the actions taken.
7. The Authority approves regulations for agent registration and the conditions for conducting business.
Article 88
Register of pension fund agents
1. The management company maintains the register of its pension fund agents. The register must be kept up to date and made available to the Authority for reference and inspection purposes.
2. The register must contain the name, the registered office, and describe the specific powers that the pension fund agent must exercise on behalf of and for the account of the management company.
3. The Authority maintains the central register of agents and continuously requests information from the managing company in order to update it.
4. The management company must notify the Authority in writing immediately after terminating its relationship with the agent to have that pension fund agent's name removed from the register.
5. The management company is responsible for the accuracy of the information published for the purpose of promoting pension funds and the management company's activities.
Chapter V
Investment of the Fund's Assets
Article 89
Investment Rules
The assets of pension funds must:
1. Invested in the members' long-term best interests in accordance with the purpose of a private pension fund.
2. Investments are made in accordance with the principles of safeguarding the fund's assets, portfolio diversification, and maintaining adequate liquidity, with the aim of achieving long-term gains to secure assets and income in retirement.
3. Investments shall be made only when they meet the criteria for permitted active investments under this law and the investment regulations approved by the Authority, including criteria related to the quality, marketability, and liquidity of the assets.
4. Be diversified in order to avoid accumulating risk at the portfolio level, as well as to avoid concentration in a single asset or issuer belonging to the same group.
5. The management company, if when making investment decisions it takes into account the potential long-term impact of those decisions on environmental, social, and governance factors, must disclose this in the prospectus.
6. The Authority establishes further rules for the pension fund's permitted investments, the restrictions, and the maximum investment limit.
Article 90
Permitted investments
The assets of a pension fund may only be invested in the following instruments:
a) debt securities issued or guaranteed by the government of the Republic of Albania;
b) transferable securities or money market instruments, issued in the Republic of Albania and admitted to trading on a regulated market;
c) transferable securities and money market instruments admitted to trading on the official list of a regulated market in an OECD country, provided that the choice of regulated market is specified in the pension fund's contract or prospectus;
c) monetary instruments and deposits in banks licensed in the Republic of Albania and/or OECD countries;
d) debt instruments issued by banks and non-bank financial institutions that are not admitted for trading on a regulated market;
d) derivative financial instruments only for investment risk hedging purposes. If the management company decides to use derivatives, it must have an internal policy or procedure that sets limits on the risks associated with their use. The risks associated with the use of these instruments must be reflected in the pension fund's prospectus;
e) shares of undertakings for collective investment in securities offered to the public, excluding alternative investment funds;
e) shares of open-ended collective investment undertakings with a public offering, including collective investment undertakings in transferable securities, provided that:
i. that these undertakings are not managed by the same company that manages the pension fund;
ii. that these undertakings be licensed, in accordance with laws providing that they are subject to supervision, which the authority considers to be equivalent to that provided for in the applicable legislation on collective investment undertakings, and that sufficient cooperation between authorities is ensured;
iii. the level of protection for participants in other undertakings is equivalent to that provided for participants in open-ended collective investment undertakings with a public offer in the Republic of Albania and, in particular, to the rules on segregation of assets, borrowing, lending and the naked sale of transferable securities and money market instruments, which are equivalent to the corresponding requirements in this law;
iv. The activities of other enterprises shall be reported in the annual and interim reports and in the financial statements to enable the assessment of assets and liabilities, revenues, and operations during the reporting period.
Article 91
Limitations on exposure
1. The assets of a pension fund must meet the following requirements regarding exposure limits:
a) does not invest more than 5% of the fund's asset value in transferable securities or money market instruments issued by a single issuer, except where:
i. the 5% limit may be increased to 10%, but in this case the total value of securities and money market instruments of certain issuers, in which the pension fund invests more than 5% of the value of its assets, does not exceed 40% of the pension fund's asset value;
b) does not invest more than 21% of the value of the fund's assets in debt securities issued by a single issuer by banks and non-bank financial institutions that are not admitted to trading on a regulated market. In total, the value of debt securities issued by banks and non-bank financial institutions that are not admitted to trading on a regulated market does not exceed 51% of the value of the pension fund's assets;
c) does not invest more than 20% of the fund's asset value in deposits with a single entity;
c) except as provided in paragraph (a) of this point, if debt securities are issued or guaranteed by the government of the Republic of Albania, they may invest up to 100% of the pension fund's asset value in that single issuer;
d) except as provided in subparagraph (a) of this paragraph, if transferable securities or money market instruments are issued or guaranteed by the central government of an OECD member country, they may invest up to 301 TP 3T of the value of the pension fund's assets in that single issuer;
dh) in the case provided for by subparagraph “d” of this paragraph, the pension fund may invest more than 30% of the value of the fund's assets in securities issued by a single issuer, provided that:
i. the management company, before making this investment, consult with the depositary and, on that basis, assess whether the issuer of these securities is suitable in accordance with the investment objectives of the fund in question;
ii. no more than 30% of the fund's asset value may consist of securities of a single issuance;
iii. the pension fund's assets include securities issued by the same issuer or by another issuer with at least six different issuances bearing different International Securities Identification Numbers (ISINs) or their equivalents; and
iv. that this fact has been reflected in the pension fund's prospectus;
e) with respect to investment in covered bonds, the 101% limit under paragraph (a) of this point is raised to 251% of the value of the pension fund's assets;
e) does not invest more than 10% of the value of the pension fund's assets in shares or units of a single collective investment undertaking with a public offering, provided that the total exposures do not exceed 30% if these undertakings are not classified as SICAVs in the Republic of Albania or UCITS in the European Union.
2. If the investment is in shares or units of collective investment undertakings with a public offering, the pension fund prospectus must clearly state the management fee applicable to the undertakings in which it will invest. Also, the audited annual statements must include clear information on the maximum management fee percentages charged to the pension fund by the collective investment undertakings in which it intends to invest.
3. The pension fund's assets must not be invested in:
a) precious metals or those exposed to other commodity exchanges;
b) in physical assets that are not regularly quoted on organized markets and for which valuation is uncertain, such as antiques, works of art, motor vehicles, etc.
Article 92
Statement of Investment Principles
The management company prepares the investment policies for each pension fund under management.
2. Investment policies are included in the management contract for closed-ended funds, as well as in the rules for managing the open-ended pension fund.
3. The management company also prepares a statement of the investment policy principles for each fund, which must at a minimum include:
a) methods for assessing investment risk;
b) the risk management process;
c) strategic allocation of assets, taking into account the nature and duration of pension liabilities, as well as environmental, social, and governance factors, if applicable.
4. The statement set out in point 3 is published on the company's official website and reviewed once every three years, or immediately if there are significant changes to the investment policies.
Article 93
Loan
1. The managing company may take loans within the timeframes and limits provided in this law and in the regulatory acts adopted by the Authority in implementation of this law.
2. The management company may borrow only on behalf of the pension fund, up to 51% of the pension fund's net asset value, solely for liquidity purposes and on a temporary basis.
3. The management company, on behalf of the pension fund, may borrow through repurchase agreements (REPO) for a period not exceeding 90 (ninety) days.
4. The managing company reports to the Authority on the borrowings for the pension fund.
Article 94
Related-party transactions
1. The management company, in managing the pension fund's assets, may not enter into transactions on its own behalf and for the account of the fund with members of the company's management or supervisory board.
2. If the management company carries out transactions on behalf of the fund and the other party is:
a) the shareholder of the managing company;
b) sponsor a closed-ended fund; or
c) any other person who is a related party of the legal entities or individuals specified in subparagraphs (a) and (b) of this point, the managing company is required to keep records and submit them to the Authority in the financial reporting for that period.
3. The managing company is required to retain data and documentation for transactions with related parties for up to 7 (seven) years after the transaction is completed. The Authority has the right at any time to request all data, call and communication records, and printouts of quotations at the time the transaction was carried out in order to verify compliance with this law.
4. The Authority, when it deems it necessary and especially to protect the interests of the fund's members, may prohibit the management company from conducting transactions on its own behalf or on behalf of the pension fund with a related party or through the intermediation of a related party for a specified period of time.
5. The managing company may not use the assets of the pension fund it manages to purchase other assets, to grant loans, to assume any obligation, or to provide guarantees in favor of any person specified in paragraph 2 of this article.
Article 95
Notice to members of the pension fund
1. The management company is required, in accordance with the provisions of this law, for each pension fund under its administration:
a) to draft the fund's prospectus;
b) to prepare and publish the interim reports and the audited annual report;
c) to draft any other rules for the operation of the fund;
c) to regularly inform, and, when required by this law, the members of the fund about the fund's activities.
2. The information and documents specified in paragraph 1 of this article must be prepared in the Albanian language, unless otherwise specified, and must be easily readable and easily understandable. The information and documents must be published on the website of the managing company.
3. In the case of a closed-ended fund, the most recent version of the documents, as well as the documents and the notice provided for in paragraph 1 of this article, must be made available to all fund members electronically and free of charge.
Article 96
The managing company's liability for damage caused by false and incomplete information.
The management company is liable for any damage caused to a fund member by its actions or omissions if the documents or information required in the prospectus contain false or incomplete data and information.
2. The management company is also liable for any damage caused to a fund member when its actions or omissions were carried out on the basis of false, incomplete, or misleading data and information, including:
a) promotional materials or other notices of the management company; or
b) documents sent to the fund member by the company, including those sent by persons who, on behalf of the management company, carry out the activities of offering the pension fund.
Chapter VI
Prospectus of the Private Pension Fund
Article 97
Prospect
1. Membership in a pension fund in the territory of the Republic of Albania is only permitted after the Authority has approved the pension fund's prospectus.
2. The pension fund prospectus does not constitute an invitation to join the fund, but serves as an informational tool regarding the features, characteristics, and risks associated with membership in a private pension fund.
3. Prospectus information must be clear, accurate, up-to-date, and not misleading.
4. The prospectus is written in clear, easily readable, and easily understandable language for all individuals.
5. The pension fund's management company is responsible for the content of the fund's prospectus.
6. The fund prospectus is accompanied by the membership agreement or is attached to the declaration of participation in the fund.
Article 98
Prospect approval
Within three months from the date of submission of the complete application, the Authority shall decide to approve or reject the approval of the fund's prospectus.
2. The application for approval of the prospectus shall be deemed proper and complete if, in accordance with the requirements of this law, it contains all necessary information and all documentation has been attached.
Article 99
Obligation to publish the prospectus
1. The management company, within five days of receiving written notice of the prospectus's approval by the Authority, publishes the prospectus on its website.
2. Any material change to the prospectus, following approval by the Authority, as well as any other change, is announced on the website of the management company and made available to every fund member by regular mail or by email.
3. The pension fund prospectus is made available free of charge to prospective members before entering into a membership contract with the fund.
4. Published prospectuses and any changes to the prospectus must be identical in content and form to the original approved by the Authority.
5. In the case of a closed-ended participation fund, the management company is required to make the fund's prospectus available to all fund members electronically, free of charge, as well as the most recent version of the prospectus in the event of any amendments.
Article 100
Prospectus contents
The pension fund prospectus must contain at least the following information:
1. For the pension fund:
a) the name of the fund, the fund's base currency, and the designation for the type of fund (open-ended/closed-ended);
b) the date of the fund's establishment;
c) the address of the managing/sponsoring company in the case of cross-border activity, the address of the recognized managing company;
c) the location where the member can obtain copies of the prospectus, the interim financial statements, the audited annual report, or other publications issued by the management company;
d) the manner of publishing the prospectus, the interim financial statements, and the audited annual report;
dh) information on the tax regime applicable to the pension fund;
e) information on the pension fund's statutory auditor;
e) the method of converting contributions into the member's personal account as pension quotas, the options for paying the pension, as well as the conditions for transferring funds from the member's personal account to a life insurance company or for transferring the account to another fund;
f) the rights arising from membership in the fund and, in particular, the right to information, the right to a return on investment, and the right to a pension;
g) the procedure, conditions, and method for registration in the fund's register, the procedures and conditions for offering pension products, and information on how to pay contributions to the pension account, close the account, or suspend membership;
g) the type of assets in which the pension fund invests;
h) the principles, strategy, and investment objectives of the pension fund;
i) information verified by an authorized actuary regarding the amounts a member must invest annually in a pension fund in order to receive an adequate pension upon reaching the specified retirement age. The explanations should be accompanied by examples illustrating different scenarios for various ages and how changes in age affect the amount to be contributed.
2. Regarding the pension fund's investments, the following elements:
a) the investment objectives of the pension fund, including financial objectives (e.g., as applicable, achieving investment returns or income) and the manner of achieving the fund's objectives;
b) the investment policy (e.g., specialization by geographic or industrial sectors), as well as information on whether the investment policy takes environmental, climate, social, and corporate governance factors into account, and how these factors are considered;
c) any limitation of the investment policy;
c) the rights, manner, and instruments of borrowing or other legal transactions equivalent to credit, which may be used for the administration of the fund;
d) risks related to the investments and the fund's asset structure, including liabilities, a tabular presentation of the risks and the extent of their impact on the fund and the management company, as well as the risk management method and the risk profile, risk tolerance, and risk capacity.
3. The method and timing for calculating the fund's net asset value, the method and frequency for calculating the share price, and the method for publishing them.
4. Information on all fees charged by the management company on the assets of the private pension fund, as well as information on how they are charged and paid.
5. The fund's return on investment since its inception and the return on investment for the past five years, or since its inception if the fund is less than five years old;
6. Information on the management company as follows:
a) the name of the company, its registered office or its principal office, if it is different from the registered office;
b) information regarding the company, if the management company is established in a country other than the fund's country of origin;
c) the organizational structure of the management company with clear lines of responsibility;
c) the description of responsibilities and the manner of making investment decisions;
d) information on the legal auditor of the management company;
dh) the names and positions in the company of persons with key functions, including information on their principal activities outside the company, if they are relevant to the company;
e) the amount of the management company's share capital, including information on paid-in capital;
e) the list of functions that the company has delegated to third parties, including information about the company performing the delegated function.
7. Information regarding the depositor:
a) the identity of the fund's depositary and a description of its duties and any conflicts of interest that may arise;
b) a description of the storage functions that the depository has delegated, the list of delegates and sub-delegates, and any conflict of interest that may arise from the delegation;
c) updated information regarding items “a” and “b” of this point.
8. Information on when the pension fund is marketed in another country.
9. The management company makes the pension fund prospectus available to any person who wishes to become a member of the fund.
10. The management company delivers the prospectus to each fund member upon request, free of charge.
11. The Authority details the content and structure of the fund's prospectus by regulation.
Article 101
Refusal to approve the prospectus
1. The Authority shall refuse to approve the pension fund prospectus or any material amendment thereto if the prospectus does not comply with the requirements of this law or fails to provide the information this law requires for a private pension fund.
2. The Authority provides written reasons for the disapproval of the fund's prospectus or for the disapproval of material changes to the prospectus.
Article 102
Important changes to the prospectus
1. If, after the publication of the fund's prospectus and during the pension fund's offering, there is any material change affecting the information contained in the prospectus, or in the event of any new material information, the prospectus shall be amended and updated accordingly. The updated prospectus is submitted to the Authority and made available, upon request, to the regulatory authority of the Member State.
2. Material changes to the pension fund's prospectus are changes that alter the purpose or nature of the fund, that may have significant, undesirable consequences for the fund member, that change the fund's risk profile or payment method. These changes include:
a) the increase of administration fees, transfer commission, as well as the inclusion of a new commission not previously disclosed in the prospectus, within the limits set by this law;
b) the change in the fund's investment objectives and the risks associated with the fund's planned investments;
c) change in the pension fund's risk profile or risk-bearing capacity.
3. The changes under paragraph 2 of this article are subject to approval by the Authority.
4. Within 10 business days from the date of obtaining approval from the Authority, the management company sends a notice by regular mail or email to all fund members regarding significant changes to the prospectus. Significant changes to the prospectus are also published on the company's official website.
5. Within 30 business days from the date of member notification and publication of the notice, as provided in paragraph 4 of this article, any member of the fund may request a change of pension fund without paying a transfer fee.
6. The Authority does not approve prospectus changes that, if implemented, would result in noncompliance with the requirements of this law.
Chapter VII
Member Information
Article 103
Verification of the fund member's pension account status
The management company prepares a statement of the pension account balance for each member of the private pension fund.
2. The document referred to in paragraph 1 of this article must contain the words “Certificate of the status of the fund member's pension account.”.
3. The certification must contain accurate, up-to-date information and be made available to every member, free of charge, in electronic form at least once a year. Along with any electronic information, members are also provided with a physical copy upon request.
4. Any significant change in the information contained in the verification of the fund member's pension account status, compared to the previous year, must be clearly identified.
Article 104
Verification of the fund member's pension account balance.
1. The verification includes at least the following information:
a) the name of the managing company, its address, and identifying information of the pension fund to which the member belongs;
b) the pension fund member's data;
c) information on the net value of accumulated assets;
c) information on the member's return on investment for the 12-month period;
d) information on contributions paid by the member or by the employer on behalf of the member during the last 12 months;
d) a breakdown of costs or fees waived by the management company during the last 12 months;
2. The Authority approves regulations on the format and content of the verification of the account balance of a fund member's pension account.
Article 105
Information that must be provided to members before retirement
In addition to the statement on the status of the fund member's pension account, as provided for in Article 103 of this law, The managing company must inform the member, three months before the member reaches retirement age under Article 73, paragraph 1, of the current valuation of the individual account, as well as provide the member with options for the methods of pension payment, and to provide instructions on how each option can be implemented.
Article 106
Additional information on request
1. Upon request by the member, beneficiary, or their representatives, the administering company provides the following additional information:
a) the financial statements and annual reports specified in Article 110;
b) the investment principles set forth in Chapter V;
c) any other information regarding the data specified in Article 104 of this law.
Chapter VIII
Audit, Reports and Financial Statements of the Private Pension Fund
Article 107
Auditing
1. The management company appoints an independent statutory auditor, who is approved by the Authority and holds this position for the entire financial year. The criteria for selecting the independent statutory auditor are determined by regulation by the Authority, based on the applicable regulatory provisions in force.
2. The statutory auditor must be registered with the public register of the Professional Organization of Statutory Auditors, in accordance with the provisions of the applicable legislation on statutory auditing and the organization of the profession of statutory auditors and approved accountants.
3. The auditor shall act as the external auditor of the management company and the private pension fund for no more than four consecutive years.
4. The auditor's report, including any qualifications, is included in full in the annual report and the fund's audited financial statements.
5. The fund's financial statements, in accordance with Article 108 of this law, are audited by an independent auditor who meets the requirements of this article.
6. The auditor shall immediately notify the Authority in writing if, after reviewing the facts available or the circumstances, he reasonably believes that the management company has violated this law or may have acted in contravention of this law or the fund's prospectus.
7. The annual financial statements, provided for in paragraph 5 of this article, are audited by an independent statutory auditor in accordance with the provisions of the applicable legislation on statutory audit and the organization of the profession of statutory auditors and authorized accountants.
8. An audit, for the purposes of this law, is considered to be of economic and public interest, and every legal audit engagement is considered a legal and sub-legal audit engagement of a public interest entity and is subject to the legal obligations as specified in the applicable legislation on legal auditing, the organization of the profession of statutory auditors and approved accountants.
Article 108
The pension fund's annual report and financial statements
The management company for each pension fund it administers prepares the annual report and annual financial statements in accordance with internationally accepted SNRF accounting standards, in compliance with the provisions of this law and the regulations adopted by the Authority for its implementation.
2. The audited financial statements are submitted to the Authority within four (4) months after the end of the financial year.
3. The annual report of the managing company is submitted to the Authority in June of the following year.
4. The annual report and the audited financial statements are published on the company's official website.
5. Notwithstanding the provision of paragraph 3 of this article, the management company, upon request, makes the annual report available to the employer of the open-ended fund and to the sponsor electronically.
6. The annual report of the private pension fund must include:
a) the annual financial statements and the letter to management;
b) any significant change to the pension fund during the reporting period;
c) material information that enables members to make an informed judgment about the progress of the pension fund's activities and its results;
c) the auditor's report, which must be included in full in the annual report;
d) the administration fee paid by the pension fund, including the company's salary and incentive compensation policy, as well as changes to the salary and incentive compensation policies, in accordance with the rules approved by the Authority.
7. The Authority approves regulations on the form and content of the interim and annual financial reports and statements of the management company and the pension fund.
Article 109
Interim financial statements and reports
The management company for each pension fund it administers prepares interim reports and interim financial statements in accordance with the requirements of this law and the regulatory acts adopted by the Authority in its implementation.
2. The interim report and financial statements are submitted to the Authority within two (2) months after the end of the first half of the financial year and are made available to the fund's members free of charge upon request.
3. The interim report and interim financial statements are published on the company's official website no later than two (2) months after the end of the first half of the financial year.
4. Notwithstanding the provision of paragraph 3 of this article, the management company, upon request, makes available to the employer in the case of an open-participation fund and to the sponsor in the case of a closed-participation fund the electronic report and the annual report.
Article 110
Member Information
The management company makes the fund prospectus and the most recent annual and interim reports, as well as the financial statements, available to the member upon request and free of charge for each fund under management.
2. The prospectus and the fund's rules are made available to the member free of charge in printed form on paper before signing the membership contract or declaration of acceptance of participation and, upon request, are also provided in electronic format via a durable communication medium. The updated prospectus is also made available for download on the management company's website.
3. The management company makes the latest annual reports and financial statements available on its website in the manner provided in the prospectus, in accordance with the requirements of this law.
4. The management company and any legal entity acting as an agent of the pension fund, in accordance with Article 86 of this law, make the prospectus available to members, as specified in paragraph 2 of this article, before signing the membership contract.
5. The management company publishes, respectively, each day the pension share price and the net asset value for each fund under management, as confirmed by the depositary.
6. The management company shall enable members to access information on their assets at any time via electronic means by logging into their individual account, including the net asset value and the total change in assets for the 12-month period -month period, the fund's rate of return for the 12-month period, the return on investment since the start of participation in the fund, the dates of contributions and asset transfers made by or on behalf of the member during the relevant period. If the member is to be informed in writing, the management company must provide the member with the information, according to the indicators detailed in this paragraph of this article, at regular intervals of at least every 30 (thirty) days.
7. For a closed-ended participation fund, the annual reports are sent to the sponsor, who is responsible for informing the members, in accordance with the terms of this law.
Article 111
Information for members of the closed-ended fund in the Republic of Albania
1. The management company of a Member State that manages a closed-participation pension fund in the Republic of Albania must provide the members of that fund with all the documentation and information it provides to the members of a closed-participation fund in the fund's Member State.
2. The management company of a member state shall provide the members of the closed-ended participation fund with all the documentation and information specified in paragraph 1 of this article, in the manner, form, and timeframes provided for by this law.
3. The documentation and information provided to members of the closed-ended fund must be in the Albanian language.
4. The managing company of a member state is responsible for the content of the documentation and information, as well as for the truthfulness and accuracy of the translation of the documentation and information.
Article 112
Submission of the documentation of the fund managed by the management company of a Member State
The management company of a member state that manages a closed-ended fund for a sponsor in the Republic of Albania submits to the Authority the updated documentation specified in Article 110 of this law.
Chapter IX
Depository
Article 113
Depository of the private pension fund
1. The management company appoints a depository to hold and safeguard the assets of the private pension fund by entering into a contract signed by both parties. The depository is licensed by the Authority after fulfilling the requirements of this law.
2. The depository of the private pension fund is a bank or a branch of a foreign bank registered in the Republic of Albania and licensed by the Bank of Albania to hold and administer financial instruments on behalf of the client, including custody and depositary and trust services.
3. The depository performs only the functions specified in this law and in the contract for the performance of depository activities with the management company.
4. The depository must be willing and able to fulfill all organizational requirements and necessary conditions set forth in this law.
5. The depository may not act as the management company for private pension funds, but it may perform depository functions simultaneously for multiple funds. In carrying out the duties specified in Article 118 of this law, the depository acts exclusively in the interest of the fund's members.
6. When performing the depositary's functions for multiple pension funds, the fund's assets and records for each fund must be kept completely separate from both each other and from the depositary's own assets.
7. The depository is obligated to maintain the confidentiality of any information received.
Article 114
Conditions for the licensing of the depository
1. The depository of the private pension fund is licensed by the Authority if it meets the following conditions and requirements:
a) has the necessary infrastructure to ensure the safekeeping of the pension fund's assets;
b) has appropriate policies and procedures to ensure that its activities, including those of its employees, comply with the requirements of this law;
c) has sound administrative and accounting procedures, internal control mechanisms, effective risk assessment procedures, and effective control and protection measures for information processing systems;
c) has appropriate and effective organizational and administrative procedures for the purpose of preventing conflicts of interest;
d) has taken the necessary measures to maintain records and data for all services, activities, and transactions it carries out, which must be sufficient to enable the Authority to fulfill its supervisory duties in accordance with the provisions of this law.;
dh) has taken all necessary steps to ensure continuity and regularity in the performance of the depositary's functions through the use of appropriate and proportionate systems, resources, and procedures;
e) the head of the depository services and his key personnel certify that they are competent and suitable, in accordance with Article 15 of this law, and that they possess the necessary ability and experience to understand the depository's activities, including the main risks. Any change of the depositary services manager and his key personnel, or of any person replacing them in office, shall be notified to the Authority.
2. A depository licensed as a depository for collective investment undertakings with a public offering may also be licensed as a depository for a private pension fund.
3. The entity applying for a depository license must have financial audit reports with unqualified opinions for the last three years.
Article 115
Depository license
The depository of the private pension fund may not commence operations without first obtaining a license from the Authority.
2. The application for the license to operate as a fund depository is accompanied by the following documentation:
a) documents proving that the entity meets the requirements of paragraph 2 of Article 113 of this law;
b) documents proving that the head of the depositary services and his key personnel are fit and proper under Article 15, including academic, professional, and administrative qualifications, CVs, as well as certificates of good conduct;
c) documents proving that the entity meets the requirements of paragraph 1 of Article 114 of this law.
3. The Authority adopts rules regarding the requirements for submitting and processing the application for a license as a private pension fund depository.
Article 116
Granting the depositary license
1. The Authority consults in advance with the Bank of Albania regarding foreign banks or branches of foreign banks that seek to be licensed as depositaries in the Republic of Albania.
2. The authority assesses whether the application is complete or not and informs the applicant of its decision within three (3) months from the date of receipt of the complete application regarding approval or denial of the license.
3. The license application may be withdrawn by written notice at any time before the Authority makes a decision on it.
4. In the event of a refusal, the authority provides written reasoning for the decision made.
Article 117
License refusal
1. The authority refuses to grant the license of the pension fund depositary if:
a) the applicant does not meet the requirements of Article 114 of this law and, accordingly, if the Authority, taking into account the need to ensure the sound and prudent management of the depositary, considers that the entity does not meet the suitability requirements for the manager of depositary services or for its key personnel;
b) judges that the company is not able to comply with the requirements of this law;
c) the effective exercise of his supervisory functions is impeded by:
i. ownership links between the depository and other legal or natural persons;
ii. the legislative, regulatory, or administrative acts of another country or territory that govern natural or legal persons with which the depository has an ownership relationship;
iii. the difficulties involved in implementing these laws, regulations, and administrative provisions.
c) the required fee has not been paid.
Article 118
Duties of the depository
1. The depository of the private pension fund performs the following duties:
a) holds and records the fund's assets/activities;
b) continuously monitors the cash flows of the fund and in particular ensures that all payments made by or on behalf of the member have been collected and that all cash assets of the pension fund have been recorded in the cash accounts in the name of the fund, the management company for the account of the fund or the depositary for the account of the fund;
c) maintains the register of the fund's members and the data for each transfer to pension funds;
c) keeps account of the pension fund's assets and ensures the segregation of assets for each fund for which it provides depositary services from the assets of the depositary and of the depositary's and the management company's other clients;
d) monitors that the pension fund's assets are invested in accordance with the approved investment objectives and strategy, the provisions of this law, and the regulations adopted for its implementation.;
d) informs the Authority and the management company of the procedure for calculating the value of the assets and the price of the pension fund's share, confirms the calculation and ensures that the calculation of the fund's net asset value and the pension fund share price have been performed in accordance with the approved accounting policies, valuation methodologies, and in compliance with this law and the regulations adopted pursuant to it;
e) executes the orders of the management company regarding the transactions of the fund's assets, provided they do not conflict with this law and the regulations adopted pursuant to it;
e) reports to the management company on trading activities related to the fund's assets held in custody and executes the management company's orders;
f) guarantees the return of any respective amount to the pension fund within the specified timeframes;
g) ensures that all revenues arising from transactions with the fund's assets are transferred to the fund's account within the specified deadlines;
g) guarantees that the pension fund's revenues are used in accordance with this law and the regulations adopted pursuant to this law;
h) ensures that the costs or fees paid by the pension fund comply with the provisions of this law and the regulations adopted pursuant to it;
i) performs all other duties provided for in the contract for the performance of the pension fund depositary's activities.
2. The depository shall immediately report in writing to the Authority any breach or any reasonable suspicion of a breach of this law and of the contract for the performance of the depository's activities for the fund associated with the management company. In this case, the depositary also informs the Authority of the steps taken by the depositary to remedy the breach as soon as possible and provides the deadline for remedying the breach in question. The depositary further informs the Authority whether the remedy has been completed within that deadline.
3. The depository keeps the necessary records that enable it to comply with the requirements of this law and retains these records for a period of time in accordance with applicable legislation in force.
Article 119
Safeguarding the fund's assets
The depository holds the assets as follows:
1. Financial instruments held in custody:
a) the depository holds all financial instruments, which are recorded in a securities account in dematerialized form;
b) The pension fund's assets that cannot be registered in the securities account in dematerialized form, as well as materialized financial instruments delivered to the depository, are recorded in other accounts appropriate for this purpose.
2. Funds cash are held in a transaction account (fund account in cash) for business purposes and may not be used for claims arising against the depositary or the management company.
3. The depository, for the purposes of safeguarding the fund's assets, ensures that all financial instruments are recorded in the depository's books in separate accounts, distinct from its own assets and those of other funds.
4. The depository updates the data held in its registers;
5. The Authority shall establish by regulation further rules on the manner of safeguarding the fund's assets by the depository.
Article 120
Notice from the Authority
Upon request by the Authority, the depositary shall make available to it information on all material matters, in order to enable the effective exercise of its supervisory functions over the depositary's activities.
2. When the depository, in the course of performing its duties under Article 118 of this law, identifies irregularities on the part of the management company in fulfilling its obligations, the regulations adopted in implementation of this law, or the prospectus, but which do not constitute an infringement under paragraph 2 of Article 118, shall promptly notify the management company in order to correct or clarify the circumstances that led to the irregularity.
3. If the management company continues to breach its obligations even after notifying the depository, the depository shall notify the Authority without delay of the circumstances of the breach.
Article 121
Separation of the depositary's activities from other activities
1. The asset preservation activity and all other activities that the depository performs for a management company must be functionally separated from the activities that the depository carries out in accordance with the law governing the establishment and operation of banks or credit institutions.
2. The fund's assets shall be held by the depositary in such a manner that at all times assets belonging to the fund are clearly identified and segregated from the depositary's own assets and those of the depositary's other clients.
3. The depository and sub-depositories may not use the pension fund's assets to carry out transactions for their own account or for their own benefit, or for the benefit of their founders or employees, except for the benefit of the fund's members.
4. The pension fund's assets may not be subject to enforcement actions for obligations that the depository has to third parties. The pension fund's assets must be segregated from the depository's assets by virtue of the right of segregation in bankruptcy proceedings and are not included in the settlement of the depository's creditors' claims.
Article 122
Conflict of interest
1. The depositary, in the performance of its duties as provided by this law and the contract for the performance of depositary activities, must act with the care of a prudent expert, in good faith and in an honest manner, independent of the management company, its shareholders, or the members of the fund for which it performs depositary functions.
2. The depository, through its organizational structure and internal acts, in carrying out the activities and duties provided for by this law and the contract for the performance of the depository's activities, must avoid conflicts of interest between the depository itself, the shareholders and/or the holder of an influential stake and the management company.
3. Any potential conflict of interest is appropriately identified, managed, and monitored by the responsible structures, in order to prevent any undesirable consequences in the interest of the fund's members.
4. The company licensed as a depository does not hold a license as a management company, but may partially or fully own a company that holds a license as a fund management company. In this case, the management company and the depositary bank, as shareholders of that company, may not perform their functions for the same pension fund.
5. The depository's key persons, key personnel, and other employees may not be key persons, key personnel, and employees of the management company, and vice versa.
Article 123
Custodian's responsibility
1. The depository executes the orders and instructions of the management company only if they comply with the provisions of this law, the regulations adopted pursuant to it, and the pension fund prospectus.
2. The depository is liable to the management company, the pension fund, and the fund members for any loss caused by itself or by a third party to which the safekeeping of the fund's assets has been delegated.
3. In the event of loss of the stored assets, the depository guarantees their replacement with the identical type or an amount corresponding to the pension fund. The depository shall not be liable if it demonstrates that such loss occurred as a result of circumstances beyond its control and that the consequences were unavoidable, despite all efforts to prevent them.
4. The depository also bears liability to the pension fund and its members for all losses caused by the depository's negligence or by its willful failure to fulfill its obligations under this law and the regulatory acts adopted by the Authority.
5. The depositary's liability provided for in this article shall not be excluded or limited by contract or agreement. Any agreement or contract that conflicts with this requirement is void.
Article 124
Fee for the depositary's activity
The management company pays the depository a fee for performing the depository's functions under the written contract entered into with the management company. The fund depository may not charge a pension fund member any fee or commission other than those provided in the prospectus.
Article 125
Use of the subdepository
The depository may contract a sub-depositary by agreement with the management company if necessary for investments outside the territory of Albania. Such an agreement does not limit the depository's legal responsibilities, and any contrary agreement is void. The depository notifies the Authority of the agreement with the sub-depositary.
Article 126
Change of the fund's depositary at the Authority's request.
1. The Authority may at any time order the management company to change the depository under the following circumstances:
a) the depository fails to fulfill its duties in accordance with the requirements of this law, the regulations adopted pursuant to it, and the contract signed with the management company;
b) there are circumstances that cast doubt on the depositary's ability to perform its duties in a timely and high-quality manner, in accordance with the requirements of this law, the regulations adopted pursuant to it, and the contract signed with the management company.;
c) The Authority is satisfied that the management company and the depository are acting jointly to the detriment of the interests of the pension fund's members;
c) the depository is in breach of the obligations arising from the depository's internal control policies;
d) there are changes in the depository's internal organizational structure that could jeopardize the security of the fund's assets and the interests of the pension fund's members.
2. The Authority requires the management company to replace the depository within three (3) months of receiving the decision, in accordance with paragraph 1 of this article. If the management company fails to replace the depository, the Authority appoints a new depository for the pension fund.
Article 127
Change of depository at its request
1. The fund depositary may request to discontinue the performance of the depositary's functions or to terminate the contract for performing the fund depositary's functions by notifying the Authority and the management company in writing of its intention at least three months before the planned termination of the discontinuation. of the activity.
2. The depository, in the written notice to the Authority, also includes any matter concerning the pension fund's activities of which the depository has become aware in the performance of its functions and which, in the depository's opinion, risks impairing the fund's ability to operate in compliance with the requirements of this law.
3. The depository that terminates the contract as depository on behalf of the pension fund also informs the new depository of any circumstance it has reported to the Authority under paragraph 2 of this article.
4. In the event that the management company does not enter into a contract for the performance of the depositary's activities with another depositary within 3 (three) months from the date of receipt of the notice specified in paragraph 1 of this article, the depositary will continue to provide depositary services for one additional month, during which the management company is required to enter into a contract with a new depositary.
5. If the management company does not enter into a contract with a new depository within the one (1) month period specified in point 4 of this article, the Authority revokes the management company's license. In this case, the existing depository acts as the depository of the pension fund until the pension fund is closed.
Article 128
Change of depository at the company's request
1. The management company, in accordance with the conditions set forth in this law, may replace the existing depository with a new depository only with the approval of the Authority.
2. The change of depository must be made in such a way as to ensure the uninterrupted continuity of the depository's activities with respect to the fund's assets.
3. The previous depositary must inform the Authority in writing within 3 (three) days from receipt of the management company's request to terminate or resolve the contract for performing the depositary's activities, if, to the depositary's knowledge, there are violations of this law or the regulations adopted pursuant to it.
Article 129
Submission of documents
In the event of the depositary's contract being terminated or resolved, the depositary is required to transfer, within 30 (thirty) days, all of the fund's assets and books of account for safekeeping and administration to a new depositary with which the management company has entered into a contract.
2. The depository shall deliver to the fund's new depository the registers and all other documents and materials important to the fund's operations for which it previously performed depository functions, in written or electronic form, depending on the manner in which such records are maintained.
Article 130
Bankruptcy or liquidation of the depository
1. In the event of the opening of bankruptcy proceedings or the commencement of liquidation proceedings against the depository, the management company must:
a) to immediately notify the depositary of the contract's termination, as well as the Authority of the request submitted to the depositary and its circumstances;
b) to immediately select a new depositary, as well as to seek the Authority's approval.
2. If the management company does not take the measures specified in paragraph 1 of this article, the Authority shall order the change of the depository in accordance with Article 126 of this law.
3. The Authority may order the management company to change the depository if the depository's financial or organizational soundness has been significantly weakened, thereby posing a potential threat to the safety of the fund's assets.
4. The Bank of Albania notifies the Authority of any case that, according to the Bank of Albania's criteria, may cause a significant weakening of the depositary's financial or organizational soundness.
Article 131
Revocation of the depositary license
1. The Authority may revoke the depositary's license under the following circumstances:
a) the approval was issued on the basis of false, inaccurate, or fraudulent information;
b) the depositor does not comply with the conditions under which the license was issued;
c) The Authority finds that the depository is not fulfilling its duties in accordance with the obligations undertaken and/or the provisions of this law and the regulations adopted pursuant to it, and it is deemed that revoking the license is more appropriate than replacing the depository, in accordance with Article 126 of this law.;
c) there are circumstances that cast doubt on the depositary's ability to carry out its duties in a timely and high-quality manner in accordance with the obligations undertaken and/or the provisions of this law and the regulations adopted pursuant to it;
d) the depository repeatedly violates the provisions of this law, the regulations adopted pursuant to it, and the pension fund prospectus.
Chapter X
Consolidation and Division of the Private Pension Fund
Article 132
Consolidation, division, and transformation of the pension fund
1. The private pension fund may be divided into two or more funds or may be merged with two or more other funds with the approval of the Authority.
2. A closed-ended fund may be converted into an open-ended fund with the approval of the Authority.
3. Changing the form of a private pension fund by merging, splitting, or converting the fund is not permitted if it weakens the economic position of the fund members or is detrimental to their interests.
4. The conversion of the closed-ended fund into an open-ended fund is mandatory in the event of the opening of bankruptcy proceedings, the commencement of liquidation procedures for the fund's sponsor, or when the fund's sponsor decides to cease its business activities. The change of form of the closed-ended fund is made with the approval of the Authority.
5. Failure by the sponsor to make regular payments into a closed-ended participation fund, in accordance with Article 77 of this law, constitutes grounds for the mandatory conversion of the fund's form as specified in paragraph 4 of this article.
6. The Authority adopts regulations on the procedure, documentation, conditions, and manner of implementing changes to the form of funds.
Article 133
Consolidation of funds
1. The merger of pension funds is carried out by transferring to an existing fund or by creating a new fund as follows:
a) All rights and obligations of a pension fund/pension funds (transferring fund) merging are transferred to an existing pension fund (receiving fund). Members of the pension funds participating in the merger receive shares in the receiving fund, and the pension funds participating in the merger are dissolved.;
b) All rights and obligations of a fund/funds being merged (transferring fund) are transferred to a newly established receiving pension fund; members of the pension funds participating in the merger receive shares in the receiving pension fund, and the pension funds participating in the merger are dissolved.
2. After the merger, the net asset value of the receiving fund must be equivalent to the net asset value of the transferring fund.
3. The total value of all shares held by the member in the receiving fund, after the fund's status changes as a result of the merger, must be equivalent to the total value of the shares the member held in the transferor fund before the status change.
4. The managing company that administers the fund after the merger will continue all legal relationships that the transferor fund's managing company had in the name of and on behalf of the transferor fund.
Article 134
Distribution of funds
1. The division of a pension fund is carried out when all the rights and obligations of a pension fund are transferred to two or more receiving funds and the transferring fund is dissolved.
2. A fund split in which rights and obligations are transferred to two or more existing funds is a takeover split. A fund split in which rights and obligations are transferred to two or more funds established for the purpose of the split is a formation split.
3. An open-ended fund may be split into only two or more open-ended funds, whereas a closed-ended fund may be split into open-ended funds or closed-ended funds.
4. After the split is completed, the net asset value of the receiving fund must be equal to the net asset value of the splitting fund.
5. The total value of all shares held by the member in the receiving fund, after the fund's status changes as a result of the split, must be equivalent to the total value of the shares the member held in the split fund before the status change.
Article 135
Approval of the merger or division of the pension fund
1. The Authority approves any request to consolidate or split private pension funds. The request for approval of the consolidation or split is submitted by the pension fund management company.
2. The request for approval is accompanied by:
a) the draft agreement for merger or demerger;
b) the opinion of the depositories in implementation of Article 137 of this law;
c) the draft information to be sent to members in implementation of Article 138 of this law;
c) the fund prospectus and any other rules of the receiving fund;
d) documentation proving that an agreement has been entered into with the depositor and the auditor regarding the preparation of the confirmation following the implementation of the merger or demerger, in accordance with Articles 140 and 141 of this law.
3. The Authority may request additional information, in addition to the information and documentation specified in paragraph 2 of this article, within 10 business days of receiving the request. The Authority may request changes to the information submitted to members if that information does not comply with the requirements of this law.
4. The application for merger is reviewed within three months after the submission of the complete application. The authority grants approval if the provisions of Chapter X of this law have been met and if it is deemed that the merger or division of funds will not harm the interests of the members.
5. The provisions of this chapter do not apply to cross-border mergers.
6. The management company is liable for any damage caused to the fund's members as a result of the merger or split of the pension fund, unless it proves that it acted with due care and in the members' interest during the process of merging or splitting pension funds.
Article 136
The Union Agreement
1. The administering societies that manage the transfer fund and the receiving fund are required to draft a merger agreement.
2. The merger agreement must include:
a) the name and type of the funds participating in the merger procedure, and the management companies that manage the respective funds;
b) a brief description of the reason that led to the merger of the funds;
c) a description of the foreseeable consequences of the merger for the members of the transferor fund and the transferee fund;
c) a description of the method for valuing the assets and liabilities of the transferring fund and the receiving fund on the date the replacement rate is calculated (replacement ratio);
d) a description of the method that will be used to calculate the replacement rate;
d) the target date of the merger;
e) a detailed description of the procedures regarding the transfer of the transferor fund's assets to the receiving fund.
3. The merger agreement is signed by the management/supervisory board of the participating companies in the merger.
4. The Authority may request additional information, in addition to the information and documentation specified in paragraph 2 of this article, within 10 business days of receiving the request.
Article 137
Depositary's opinion on the merger
Based on the merger agreement, pursuant to Article 136 of this law, the fund depositaries participating in the merger procedure, independently of one another, prepare a merger opinion for each fund for which they serve as depositary.
2. The depositaries“ opinion on the merger must include a statement as to whether the requirements set out in letters ”c,“ ”ç,“ ”dh,“ and ”e" of paragraph 2 of Article 136 of this law have been drafted in accordance with the provisions of this law and the fund's prospectus.
Article 138
Notice to members of the pension fund
1. Members of the pension funds being merged are informed of the merger plan once preliminary approval has been granted by the Authority and at least 30 (thirty) business days before the merger takes effect.
2. The information must enable members to make an accurate assessment of the merger and includes:
a) the justification for the proposed merger;
b) the potential impact on the fund's members, including changes in the investment objective and strategy, costs, expected investment return, periodic reporting, and any possible decline in performance;
c) a description of the members' rights in relation to the merger, including the right to obtain further information and a copy of the merger confirmation;
c) the relevant procedural aspects and the planned date of the merger's entry into force.
3. Members of the pension funds merging who decide to withdraw from the fund due to the change in the fund's status will not pay early withdrawal penalties. In the event that members decide to transfer assets to another fund managed by the same management company or by another management company, the asset transfer must be completed within 30 (thirty) days from the effective date of the merger. Members will not pay any transfer fee.
Article 139
Denial of a request for reunification
The authority shall refuse the request for approval of the merger if it finds that the conditions of Chapter X of this law are not met.
Article 140
Audit of the union
1. Before the day on which the replacement rate is calculated and the day of the merger, the merger process must be audited by an auditing firm appointed by the management company that manages the transfer fund.
2. The auditor prepares a report on the merger, which includes and highlights:
a) if the proposed merger complies with the principle of immutability of the economic position of the fund's members, as set forth in Article 132 of this law;
b) the method for assessment pursuant to Article 136, paragraph 2, letter “ç”, of this law;
c) the suitability of the methodology for calculating the replacement rate, as defined in Article 136, paragraph 2, letter “d,” of this law.
3. The auditor submits his report on the merger to the management/supervisory board that administers the transferor fund and the transferee fund. The management company of the transferee fund submits the auditor's report to the authority within three (3) business days from the date of receipt from the auditor.
4. If several funds participate in the merger procedure, the management companies of the transferor or transferee funds, in agreement with the funds' depositaries, may decide that the merger audit be carried out by the same auditor, who will prepare a single merger report.
5. Each member of the transferable fund has the right to request from the managing company of the receiving fund a copy of the auditor's report on the merger. The management company makes a copy of the report available to the member, electronically or in hard copy, within 10 (ten) days of receiving the request.
Article 141
Entry into force of the union
1. The Union shall enter into force upon the granting of approval, in accordance with Article 135 of this law.
2. The management company of the receiving pension fund guarantees that the depositary or the approved auditor, independently, confirms that upon the effective date of the merger:
a) the merger has been carried out in accordance with the criteria set forth in the merger agreement;
b) The method for calculating the replacement rate and the actual replacement rate is in accordance with the method set forth in the merger agreement.
3. The confirmation is made available to the members and the Authority.
Article 142
Procedure for allocating funds
The administering company that seeks to split the private pension fund shall follow the same principles and the same procedure provided in this chapter.
Chapter XI
OVERVIEW
SECTION I
Supervisory Activity
Article 143
Principles of oversight
1. For the purposes of this law, supervision is the verification of whether the licensed entity/registered acts in accordance with the provisions of this law, the regulations adopted pursuant to it, the risk management rules, as well as other rules that enable the proper functioning of the supervised entity.
2. The main objectives of oversight are:
a) the protection of the interests of members and beneficiaries;
b) ensuring the implementation of the provisions of this law for the safe custody, stability, and financial predictability of the pension fund's assets;
c) strengthening good governance, transparency, and preventing improper conduct or fraud by service providers for the pension fund's assets.
3. The Authority adopts rules for the risk-based supervision methodology.
Article 144
Supervision exercise
1. The Authority exercises oversight under this law through:
a) monitoring of activities, collection and verification of reports and notifications filed by fund management companies, depositaries, and other persons who, under applicable legislation, are required to report to the Authority or notify it of any particular fact or circumstance;
b) conducting on-site inspections of any private pension fund, pension fund management companies, the pension fund depository, or pension fund agents, for the purpose of determining whether the licensed entity's activities are in compliance with the provisions of this law, the regulations, the requirements, according to its license, the fund's prospectus, as well as any other document that governs its activity;
c) conducting administrative investigations of any activity of the licensed entity under this law, in order to determine whether it is carrying out activities in accordance with this law;
c) the imposition of supervisory measures under this law;
d) guaranteeing that the information under this law and the regulations adopted in its implementation is complete, clear, and easily accessible, including through electronic means, at least in one international language, and is continuously updated.
2. The Authority exercises its supervisory functions based on this law and risk-based methodology.
3. The Authority takes into account the type, field, and complexity of the supervised entity's activities when verifying and assessing its stability, financial position, and the risks to which the supervised entity is exposed or may be exposed.
4. In determining the frequency and method of supervision of a subject, the Authority takes into account the size and impact of the subject, the size and impact of the fund(s) the subject manages, as well as complexity and other indicators of activity.
5. The Authority exercises oversight to ensure compliance with anti–money laundering and counter–terrorist financing legislation by the entities subject to this law.
6. If there is reasonable suspicion that the violations are related to money laundering or the financing of terrorism, the Authority shall report it to the competent authority in accordance with the applicable legislation on the prevention of money laundering and the financing of terrorism.
Article 145
Supervised entities
1. The authority supervises the following entities:
a) private pension funds established under this law;
b) the management companies of private pension funds;
c) depositaries;
c) agents of the private pension fund;
d) a subject registered in a Member State that administers private pension funds on behalf of a sponsor, with closed participation in the Republic of Albania.
2. For supervisory purposes, the Authority has the right to inspect all data and documentation maintained by the supervised entities, in accordance with this law.
Article 146
Supervision of the administrative company of a member state
1. The management company or entity established in a Member State that has been recognized to manage a closed-ended fund of a sponsor in the Republic of Albania, in accordance with Articles 20 and 21 of this law, is subject to supervision by the Authority.
2. If the Authority, in the course of its supervision, discovers irregularities or violations of this law or the regulations adopted for its implementation, and any other act governing the pension fund, immediately notifies the competent authority of the country of origin, which, in cooperation with the Authority, takes the necessary measures to ensure the correction of the irregularities found.
3. If, despite the measures specified in point 2 of this article, the recognized entity continues to commit irregularities or violations of this law, the regulations adopted pursuant to it, and the fund's documents, Upon notification to the competent authority of the country of origin, the Authority further escalates measures to prevent or sanction irregularities or violations and, if necessary, prohibits the recognized entity from further administering the closed-ended fund on behalf of a sponsor in the Republic of Albania.
Article 147
Performing the supervisory activity
The Authority's supervisory activities are carried out through:
a) the drafting, approval, and amendment of regulatory acts, regulations, and guidelines provided for in this law, and any other act that the Authority deems necessary for the fulfillment of its duties;
b) the publication of guidelines regarding the interpretation and application of this law and of the regulations adopted by the Authority in implementation of this law;
c) the drafting and approval of model templates for licenses, recognition, and registration, as provided for in this law and used for reporting to the Authority in implementation of this law;
c) the granting, refusal, suspension, or revocation of licenses, recognition and registration under this law, and the approval of pension fund prospectuses within the deadlines, conditions, and procedures provided by applicable legislation;
d) approval of significant changes to licenses, recognition, and registration, in accordance with this law;
d) approval of changes in influential holdings in licensed entities, in accordance with this law;
e) the examination of requests for activities outside the territory of the Republic of Albania, including the opening of representative offices and/or branches in other countries;
e) approval or refusal of the transfer of private pension fund management contracts;
f) approval or refusal of mergers of pension funds and takeovers of management companies;
g) approval of the voluntary liquidation of licensed entities, in accordance with this law;
g) the opening and supervision of the process of temporary administration and compulsory liquidation of licensed entities, in accordance with this law, and the appointment of liquidators;
h) the filing of the financial statements of licensed entities, in accordance with this law;
i) the approval of model templates for financial reporting by licensed entities, in implementation of this law;
j) approval of independent auditors for the fund management companies and the pension fund based on the criteria set forth in the regulations;
k) the examination of reports filed with the Authority by licensed, recognized, and registered persons to assess compliance with this law and with the regulations adopted by the Authority in its implementation;
l) planning and conducting on-site inspections of the activities of licensed depositary management companies and pension fund agents, in accordance with this law;
ll) the search and subsequent evaluation of various information and documentation related to the activities of all persons subject to this law, including electronic communications, telecommunications, and their records;
m) conducting administrative investigations or appointing external professionals to conduct investigations on behalf of the authority;
n) the cessation of any activity that violates this law;
and the suspension of the licensed entity's activities and the immediate notification to the responsible authorities of any suspicion, information, or data related to money laundering or terrorist financing, economic crime, or criminal offenses involving commercial companies;
o) the temporary suspension of one or more functions of professional activity;
p) the imposition of administrative sanctions for violations of the provisions of this law;
q) to file a criminal complaint against the subjects of this law for violations of this law, on a case-by-case basis.
Article 148
Authorized supervisory personnel
Supervision under this law is carried out by the Authority's employees. For the performance of specific tasks, the Authority may seek the professional involvement of an independent auditor, an audit firm, or another professionally qualified person.
Article 149
Cooperation and information exchange
1. The Authority may enter into agreements or memoranda of understanding/cooperation with any other domestic and foreign regulatory authority, financial sector regulatory authority, and international organizations representing financial regulatory authorities, anti-money laundering and counter-terrorist financing agencies or institutions, or law enforcement agencies, to exchange necessary information or to cooperate in carrying out supervisory activities, as defined in this law.
2. The Authority exchanges with other regulatory authorities, domestic or foreign:
a) information on the issuance of licenses;
b) information on supervised entities:
c) information related to money laundering and the financing of terrorism;
c) information related to fraud in the course of activities connected with the pension fund;
d) information on key persons and key personnel of licensees, in implementation of this law.
3. The Authority shall cooperate and coordinate its work with other regulatory authorities and with other domestic or foreign law enforcement institutions, in order to oversee cross-border marketing and the administration of private pension funds. The Authority and the foreign authorities shall consult with each other before taking any further steps.
4. Any information that the Authority receives and exchanges with other regulatory authorities is treated as confidential and used solely for supervisory purposes.
5. The Authority is responsible for collecting and processing information about the facts and circumstances related to the fulfillment of its supervisory duties and responsibilities set forth in this law.
6. The regulatory authority of the country of origin of the management company, in cooperation with the Authority, upon its prior notification, may conduct an on-site inspection of a representative of the entity recognized in the Republic of Albania.
7. The Authority, when it deems it necessary, conducts on-site inspections at a representative office of a recognized entity in the Republic of Albania, with the aim of verifying the compliance of that office's activities with the legal and regulatory acts adopted by the Authority in implementation of this law.
8. The Authority, in implementing this article, may adopt additional rules regarding the cooperation, exchange, and handling of information with other foreign or domestic institutions.
Article 150
Protection of personal data and confidentiality
1. The processing of personal data by the Authority, in implementation of this law, shall be carried out in accordance with the applicable legislation on the protection of personal data.
2. Any information obtained by the Authority in the course of its functions is treated as confidential and shall not be disclosed by the Authority, its board members, employees, or contractors, and is used solely for supervisory purposes.
3. Confidential information is processed and stored in accordance with applicable legislation on the protection of personal data. This information is made available to criminal prosecution authorities and judicial bodies upon their request, and may also be made public after obtaining the consent of the individual or institution that provided it and/or is affected by it.
SECTION II
Reporting
Article 151
Obligation to provide information
1. The pension fund management company provides the Authority with any information required for matters related to its activities. The obligation to provide information also applies to licensed depositaries of pension funds in relation to their activities under this law, as well as to pension fund agents.
2. The Authority, in carrying out its supervisory duties, shall request information it deems important, in accordance with the provisions of paragraph 1 of this article, in accordance with this law and the applicable legislation governing the activities of the Financial Supervisory Authority.
3. Licensed entities shall immediately provide the Authority with any information they possess if they are aware of or have reason to believe that:
a) the information is important for the exercise of the Authority's supervisory and regulatory functions in relation to entities licensed under this law;
b) Failure to provide information leads to the misinforming of the Authority on matters of fundamental importance to the exercise of its functions.
4. The pension fund management company, its auditors, and the fund's depository immediately inform the Authority of any matter of which they are aware or have reason to believe, as follows:
a) the fund management company and the depository of the pension funds is or may become insolvent in meeting all its obligations within the specified period, or if its liabilities exceed the value of its assets;
b) the pension fund management company or the fund depositary is unable to meet the capital adequacy requirements of this law or of the applicable legislation on capital markets;
c) the existing or altered state of the activity may substantially jeopardize the rights of the fund members managed by the pension fund management company;
c) the external auditor plans to issue a report with substantial reservations regarding the audit of the pension fund, the fund management company, or the depositary;
d) any criminal activity related to the provision of their services, including money laundering and the financing of terrorism.
Article 152
Reporting to the Authority
1. The licensed/recognized private pension fund management company and the private pension fund depositories shall submit to the Authority reports and financial statements at the intervals and deadlines specified by this law and/or the Authority, covering the information required by the Authority.
2. The reports provided for in paragraph 1 of this article concerning the closed-participation private pension funds under the administration of the licensed/recognized pension fund management company include, among other things:
a) the ongoing compliance with this law of the operation of the closed-participation pension funds they administer;
b) the investments of the closed-participation pension fund under administration, the markets in which it invests, and the instruments in which the fund invests, including the categories of instruments in which investments are made;
c) data proving the compliance of each fund under administration with the relevant requirements of Title V of this law and with the liquidity requirements set forth in the regulations adopted under this law;
c) the net asset value and the price per share of the pension fund under management.
3. The reports provided for in paragraph 1 of this article concerning the management company of pension funds contain information on compliance with the requirements of this law, including, among other things:
a) the appointment and dismissal of key persons and key personnel;
b) the appointment and dismissal of the external auditor;
c) the commencement or cessation of activities;
c) the promotion of the pension fund;
d) delegation of functions;
d) business plans;
e) contracts entered into with pension fund agents.
4. The reports provided for in paragraph 1 of this article concerning the depositary contain information on compliance with the requirements of this law for private pension funds to which they provide services, including, but not limited to:
a) the appointment and dismissal of key personnel responsible for the depository unit;
b) the appointment and dismissal of external auditors;
c) the planned start or interruption of activities;
c) the delegation of functions;
d) the names of the management companies, as well as the names and value of the pension funds to which they provide services and the assets held in the name of these funds, including data verifying the existence of these assets;
dh) the daily net value of the assets and the price per share of the pension fund, and the total number of shares.
5. Reports, in accordance with the provisions of paragraphs 2, 3, and 4 of this article, shall be submitted every three months and more frequently, if deemed necessary by the Authority, in accordance with its requirements, except for the reports specified in subparagraph “dh” of paragraph 4 of this article, which must be submitted daily.
6. The Authority adopts additional rules regarding the reporting on the form, content, and deadlines of these reports concerning the reporting of financial statements and other reports, in accordance with the provisions of this article.
Section III
On-site Inspection
Article 153
On-site inspection
1. The Authority conducts on-site inspections of the activities of every private pension fund, management company, and branch of a foreign pension fund management company recognized by the Authority, depositary and agents of the pension fund to ensure compliance with the provisions of this law or the regulations adopted by the Authority in its implementation, as well as with the requirements for license enforcement and the prospectus.
2. Licensed and recognized/registered entities, as defined in paragraph 1 of this article, shall grant the Authority access to all commercial and accounting books, files, and any other document printed from the computer system or existing in original or electronic form.
3. The Authority may conduct on-site inspections with or without prior notice.
4. On-site inspections are conducted at any location related to the activities of the licensed entities specified in paragraph 1 of this article, their delegates, or their agents, as the case may be, to fulfill the supervisory and regulatory functions of the Authority.
Article 154
Inspection Program of Activities
1. In the case of an on-site inspection, with prior notice, the Authority shall send the entity specified in paragraph 1 of Article 153 of this law the inspection program for the activity before the inspection begins. The notice period for the licensed entity will depend on the type of inspection.
2. The activity inspection program contains the object of inspection.
3. During the inspection of the entity, if it deems it necessary in order to protect the interests of the fund's members, the Authority may, without prior notice, expand the inspection program and extend the planned duration of the inspection.
4. The Authority also conducts inspections in cooperation with other domestic or foreign regulatory authorities or law enforcement institutions, in accordance with joint inspection programs approved among them.
5. Upon completion of the inspection, the Authority's authorized representative prepares a report on the inspection conducted and delivers the document to the entity's senior management when presenting the inspection results.
Chapter XII
Commissions
Article 155
Commissions and fees
1. To cover the pension fund's costs, in accordance with the prospectus and any other fund rules, the management company may impose fees only in the following cases and in the following ways:
a) an annual commission for the administration of the pension fund by deducting each year a specified percentage of the net value of the assets under management, including fees and costs paid to the depository, annual audit costs, licensing fees or other fees paid to the Authority, and others.
b) a transfer fee if assets are transferred from members of one pension fund to a new pension fund of up to 0.51% of the amount transferred.
2. The management company is required to declare the total amount of costs and commissions provided for in paragraph 1 of this article and to publish them in the pension fund's audited annual report.
3. All commissions charged by the management company must be included in the prospectus, as well as in the fund's membership contract, listed in detail and made available to anyone seeking to become a member of the pension fund. The management company must clearly describe the fees it will apply and present them in a form easily understood by any individual. The total annual cost to be deducted from the pension fund's assets, as provided in paragraph 1(a), may in no case exceed 2.5 ‰ of the fund's net asset value.
4. Any increase in the fees charged by the management company within the above-specified limit must be notified to the members at least six (6) months before they take effect.
5. The authority issues regulations that further specify the elements and levels of fees and costs, as well as the method for calculating them.
Chapter XIII
TAX
Article 156
Tax regime of the pension fund
1. The contribution made by each member of a pension fund is deducted from his personal income for tax purposes.
2. The return on investment, including capital gains from investments made with the pension fund's assets, is not subject to tax, neither for the pension fund itself nor for the management company.
3. Contributions made by the employer and any other contributor, in the name of and for the account of a member of a pension fund, for tax purposes, are not considered the member's personal income.
4. The maximum monthly limit for tax relief, as defined in paragraph 1 of this article, is up to the level of the minimum wage approved at the national level.
5. The purchase of shares in a pension fund is a financial service and, as a result, is exempt from VAT.
6. The services provided by the depository to the management company and its members are considered financial services and are therefore exempt from VAT.
7. Early withdrawal is taxed at the then-applicable personal income tax rate on the full amount withdrawn early, including contributions.
8. The purchase of an annual-form life insurance contract from a life insurance company, which provides a regular, periodic income stream, shall be treated with the same tax benefits as the periodic pension payments provided for in Article 75 of this law.
Article 157
The tax treatment of contributions made by the employer
Contributions made by the employer on behalf of his employees to a pension fund are treated as operating expenses up to the annual amount per employee equal to the nationally approved annual minimum wage, and this amount is recognized as an expense for income tax purposes.
Article 158
The tax treatment of payments received by the member
1. Payments received by the pension fund member on a monthly basis are taxed in accordance with the applicable income tax legislation of the Republic of Albania.
2. Payments received by a member of the pension fund in a lump sum before the two-year period provided for in Article 75 of this law are taxed in accordance with the applicable income tax legislation of the Republic of Albania.
Article 159
Implementation
The minister responsible for finance is charged with issuing guidelines for the implementation of the provisions set forth in this chapter.
Chapter XIV
Member Protection and Prevention of Money Laundering and Terrorist Financing
Article 160
Complaints Procedure at the Authority
1. The Authority establishes procedures for handling complaints in the context of its duty to exercise due care toward the fund's members. The rules regarding the complaint procedures are published on the Authority's website.
2. Initially, all complaints are directed to the licensed entity. Only after exhausting the avenues of appeal with the licensed entity may a complaint regarding the entity's action or inaction be submitted to the Authority.
3. The complainant may file a complaint against another party only for activities that are regulated and supervised under this law.
4. The decision on the appeal is made based on what the Authority considers proper, fair, and reasonable under the circumstances of the case.
5. The Authority notifies in writing the licensed entity against which the complaint was filed, as well as the complainant.
6. If the Authority finds that the licensed entity has acted improperly and irregularly, it shall order the entity to rectify the situation at its own expense.
7. The Authority shall be exempt from legal liability for any damage arising from the complaint or from the performance of its functions during the review of the complaint.
8. The Authority may use the complaint as a basis to initiate an inspection of the licensed entity or as a basis to initiate disciplinary proceedings against the licensed entity.
9. The Authority may publish all or part of its report concerning a complaint if it deems that the matter should be brought to the public's attention.
10. Against the Authority's decision as provided in paragraph 4 of this article, the complainant has the right to appeal to the administrative court in accordance with the deadlines, conditions, and provisions of the legislation in force on administrative courts and the adjudication of administrative disputes.
Article 161
Prevention of money laundering and taking measures to eliminate it
of the violations found
1. Every entity licensed or registered under this law must take all necessary measures to prevent money laundering and the financing of terrorism in accordance with the provisions of the applicable legislation on preventing money laundering and the financing of terrorism and the regulatory acts adopted by the Authority.
2. Licensed/registered entities are required to immediately notify the Directorate General for the Prevention of Money Laundering, without prior notice and without involving the suspected or affected persons, of any case where they have knowledge of or suspect that money laundering is being committed, has been committed or attempted to be committed money laundering and the financing of terrorism, in accordance with the provisions of the applicable legislation on the prevention of money laundering and the financing of terrorism.
3. In cases where the Authority determines that the licensed/registered entity has breached its legal obligations regarding money laundering and terrorist financing, it shall impose on it one or more of the following measures:
a) suspends or partially or fully revokes the license/approval;
b) imposes administrative sanctions on responsible persons, such as fines, suspension, and/or removal from office, based on Chapter XVII of this law.
Chapter XV
Voluntary and Forced Liquidation of the Managing Company
SECTION I
Voluntary Liquidation of the Administrative Company of Pension Funds
Article 162
Liquidation of the management company
1. The liquidation of the management company under this law shall be carried out only after approval by the Authority.
2. Except as otherwise provided in this law, the provisions of the applicable legislation on traders and commercial companies shall apply to the voluntary and compulsory liquidation procedures of management companies established in the Republic of Albania, as defined in this law.
3. The request for approval of the voluntary liquidation and dissolution of the management company is submitted to the Authority by the management/supervisory board of the management company.
Article 163
Voluntary liquidation of the managing company of pension funds
1. The opening of the voluntary liquidation procedure is carried out by a decision of the Company's General Assembly. The decision must be adopted by no fewer than 75% of the members of the General Assembly of the licensed entity.
2. The application for voluntary liquidation is submitted to the Authority for approval together with the following documents:
a) the decision of the General Assembly of the managing company regarding liquidation;
b) reasons for liquidation;
c) the proposed names of the liquidators;
c) the audited statement of solvency;
d) a detailed report on the handling of revenues and expenses during liquidation, as well as an assessment of the duration of the process.
3. At least two natural persons shall be appointed as liquidators, with the approval of the Authority, who have the required experience and qualifications and are capable and suitable to carry out the duties.
4. The Authority shall decide on the request, as provided in paragraph 2 of this article, within three months from the date of receipt of the request, together with the complete documentation. The authority approves the voluntary liquidation only if it determines that all obligations to the company's owners and creditors can be paid. During this period, the company's key personnel carry out routine duties but do not incur new obligations to third parties.
5. The decision of the General Assembly has no legal effect if the Authority refuses to grant approval to initiate the voluntary liquidation procedure.
6. The authority publishes on its website the approval decision for the commencement of voluntary liquidation.
7. In cases where the Authority approves the voluntary liquidation procedure, it may decide:
a) to restrict the license to conduct the company's business and to allow the carrying out of specified activities or those activities necessary for voluntary liquidation;
b) to determine the extent to which the risk management rules apply to the company in voluntary liquidation;
c) notwithstanding clauses (a) and (b) of this point, the Authority may require the company to take special measures regarding the protection of the fund's members.
8. The company in voluntary liquidation continues to exist in order to settle expenses and obligations to third parties, distribute assets, and carry out the actions necessary to complete the voluntary liquidation.
9. Liquidators may be dismissed and replaced under the same conditions provided for their appointment.
10. The liquidator's activities assume the rights and obligations of the administrators, as of the date of his appointment. If the company appoints more than one liquidator, the liquidators shall exercise their rights and obligations jointly and severally in accordance with this law, except where the appointment instrument provides that the liquidators are to act separately from one another. The liquidators may authorize one of them to carry out transactions in a particular category. The liquidator is subject to the oversight of the General Assembly.
11. The duty of the liquidators is to wind up all of the company's affairs, to sell the company's assets, and to pay the creditors in accordance with the order of priority for claims under this law.
12. If, based on the creditors' enforceable rights, the liquidators conclude that the company's assets are insufficient to satisfy those rights, the liquidators suspend the liquidation procedure and petition the relevant court to open bankruptcy proceedings.
13. The liquidator prepares a balance sheet of the company's situation as of his appointment. If the liquidation procedure lasts more than one year, the liquidator also prepares the company's annual financial statements. The balance sheet is approved by a decision of half the members of the General Assembly.
14. The liquidator invites the company's creditors, excluding shareholders, to submit their claims in the voluntary liquidation. The company publishes this notice twice, at an interval of 30 days, on its website and on the website of the National Business Center.
15. The liquidator shall not distribute the remaining assets before the expiration of the three-month period following the publication of the second call to creditors to file their claims.
16. If an obligation cannot be immediately settled or is subject to enforceable claims, assets may only be distributed if the creditor has been provided with appropriate security.
17. After settling obligations to creditors and members, the liquidator distributes the remaining assets proportionally to the shareholders.
18. After settling the company's obligations to creditors and shareholders, the liquidator submits to the Authority, within 12 months, a report on the liquidation procedure and a proposal for his professional fees.
19. If the Authority does not approve the report, the liquidator follows the recommendation made by the Authority.
20. Upon approval of the liquidator's report, the Authority revokes the license issued to the company.
21. After the license is revoked by the Authority, the liquidator notifies the Business Registration Authority of the completion of liquidation and requests the company's deregistration in accordance with the applicable legislation governing the field for the Business Registration Authority.
22. No complaint or objection may be made against the liquidator's activities after the company's registration has been completed by the National Business Center.
23. The pension fund's assets, which are under the administration of a management company, may not be subject to execution as a result of the management company's liquidation or bankruptcy proceedings under Albanian law, nor to the settlement or enforcement of claims against the management company.
SECTION II
Compulsory Liquidation of the Administration Company of Pension Funds
Article 164
Opening of compulsory liquidation proceedings
1. The Authority decides to place the management company into compulsory liquidation when it finds that one or more of the following circumstances exist:
a) the company is unable to meet its obligations within the deadline;
b) the company is carrying out or has carried out activities in violation of this law;
c) the authority judges that it is the proper and fair decision for the company to cease its operations;
c) This procedure is recommended as part of the completed recovery and rehabilitation process.
2. The authority responsible for ensuring the protection of pension fund members may require that the fund(s) be transferred to another legal entity licensed as a management company for the administration of private pension funds.
Article 165
The decision for compulsory liquidation
The authority assesses the situation and decides on the initiation of compulsory liquidation procedures.
2. The Authority places the managing company into compulsory liquidation as soon as it reaches a conclusion regarding the relevant circumstances provided for in Article 164 of this law.
3. The authority publishes the decision to place the company into compulsory liquidation on its website.
Article 166
Appointment of liquidators
1. The Authority, based on the decision to initiate liquidation proceedings, appoints two or more liquidators to sell and distribute the company's assets. The liquidators are natural persons who are capable and suitable to carry out their duties and who have the experience and qualifications required under Article 15 of this law.
2. The compulsory liquidation process is carried out by the liquidators appointed by the Authority.
3. Liquidators shall comply with the legal requirements regarding the confidentiality of information in accordance with this law and applicable legislation.
Article 167
Consequences of involuntary liquidation
1. The placement of the management company into compulsory liquidation has the following legal consequences:
a) all powers and duties of the company are transferred to the Authority, which appoints the liquidator to sell and distribute the assets of the managing company in accordance with Article 166 of this law;
b) the suspension of the license of the management company, which does not carry out any new activities, except for those carried out in furtherance of the purposes set forth in paragraph (a) of this point;
c) the suspension and non-commencement of legal proceedings and the compulsory enforcement of the company. These procedures shall not be initiated or suspended, except when the Authority gives its consent and in accordance with the conditions specified by the Authority.;
c) the suspension for a six-month period of the right to compensation for the company's creditors;
d) no interest or other debt of the company shall be paid, except for such amounts as are necessary to carry out the regular execution of market transactions, in order to prevent a disruption of the functioning of the financial system. Liabilities to creditors are settled through the sale of the company's assets and in accordance with the exercise of the rights required, as provided in Article 169 of this law.;
dh) the termination of all powers and responsibilities of the shareholders' assembly and the company's board.
2. Any legal act for making payments or for transferring the company's title to its property is deemed invalid in the following cases:
a) during the last 3 months before the Authority places the company into compulsory liquidation; or
b) during the 12 months prior to the Authority's decision to order compulsory liquidation, that favors the beneficiaries over the company's other creditors;
c) beyond the periods provided in paragraphs (a) and (b) of this point, in cases where the liquidator demonstrates that the intent was to conceal the company's assets from creditors or that the action contributed to the company's insolvency.
Article 168
The liquidator's obligations and rights
The liquidator carries out the administration and sale of assets and liabilities and distributes the amounts collected to creditors.
2. The liquidator cooperates with the Authority and implements the Authority's instructions regarding the compulsory liquidation process.
3. Immediately upon appointment, the liquidator takes control of the company, securing its assets, books, and accounts. The liquidator has the right to access all of the company's assets, offices, and books.
4. The liquidator takes an inventory of the company's assets and liabilities and prepares a balance sheet and an explanatory report on the balance sheet items within 30 calendar days after the commencement of liquidation, which are submitted to the authority, while a copy is made available to the public.
5. The liquidator aims to achieve the maximum amount from the sale of the company's assets by carrying out the following actions:
a) continues or suspends financial transactions;
b) employs the necessary civil servants, employees, or professional consultants;
c) signs documents on behalf of the company and files and pursues lawsuits on its behalf after obtaining the Authority's approval.
6. The liquidator has the right to choose:
a) employment contracts with any person;
b) service contracts in which the company is a party;
c) any other obligation arising from lease agreements for real estate that the company holds in its capacity as lessee.
7. Within one month of appointment, the liquidator shall act as follows:
a) sends by registered mail to all shareholders and creditors, at the addresses recorded in the company's registers, an overview of the nature and amount of the alleged liabilities according to those registers;
b) records the creditors' claims as raised and documented.
8. Within one month of the last date specified in the notice given under paragraph 7 of this article, with respect to the alleged obligations, the liquidator:
a) determines the amount, if any, that the company owes to each known creditor;
b) prepares for registration with the Authority a structure of alleged obligations.
9. Any creditor or shareholder, who represents at least 10% of the issued shares, has the right to file an objection to the registration of the unsecured obligations with the Authority within 20 days after the registration of the structure of the claimed obligations, in accordance with paragraph 8 of this article. The Authority shall decide to accept or reject the objection within one month from the date of registration of the claim.
10. If the objection provided for in paragraph 9 of this article is accepted, the liquidator shall amend and, as appropriate, improve the structure of the alleged liabilities or the proposed measures for settling those liabilities.
Article 169
Order of claim satisfaction
1. The liquidator distributes the company's assets by settling liabilities to creditors and shareholders in the following order:
a) any creditor secured by collateral who cannot use the property securing his obligation due to the restrictions set forth in this law, up to the amount of the proceeds from the sale of the collateral;
b) the expenses of the liquidator and the authority incurred in connection with the compulsory liquidation;
c) the wages of the company's employees, retained by the liquidator to assist in the orderly liquidation of the fund;
c) secured and unsecured creditors with respect to the amount of the obligation that exceeds the value of the collateral;
d) shareholders.
2. When the amount available to satisfy creditors of the same priority rank is not sufficient to fully repay them, they are repaid proportionally according to their claims.
3. Any assets remaining after the settlement of all alleged liabilities are distributed among the shareholders in proportion to their rights and equity participation.
Article 170
Liquidator's report
1. The liquidator reports to the Authority every month on the progress of the liquidation process. These reports include information on the total amount of liabilities claimed, the total amount of assets sold by the managing company, and the amount of revenue expected from the sale of assets.
2. The liquidator submits a final report to the Authority after the liquidation process is completed.
Chapter XVI
Supervisory Measures
Article 171
Types of measures
The authority may take the following measures against the licensed entity:
a) recommendation for the key persons and/or key personnel of the managing company;
b) warning;
c) supervisory measures;
c) appointment of the management company to temporary administration;
d) revocation of the licensee's license for all or part of its activities.
Article 172
Recommendation for the key persons and/or key personnel of the managing company
1. When the Authority, during the supervision, verification, and assessment of the financial condition, position of the company, as well as the assessment of the risk to which the management company and the funds it manages are exposed or may be exposed, identifies weaknesses, deficiencies, and irregularities, that do not constitute violations of this law or the secondary legislation adopted pursuant to it, or when the Authority deems it necessary for the management company to take measures to improve operations, financial condition, and reduce risk, issues a recommendation to the key personnel and/oror the key personnel of the management company.
2. In the recommendation concerning key persons and/or key personnel, the Authority describes weaknesses, deficiencies, irregularities, as well as the risks or problems identified/assessed risks or problems to which the management company or the funds are exposed or may become exposed, and provides guidance for their elimination, for improving the financial situation, and for reducing risks in its operations.
3. The management/supervisory board of the managing company submits to the Authority a plan for the measures to be taken to eliminate weaknesses, deficiencies, and irregularities, as well as the deadlines for action, in accordance with the Authority's recommendations.
4. In order to improve its financial position and reduce the risks to which the management company is or may be exposed during its activities and operations with the pension funds under its administration, the Authority monitors the management company.
Article 173
Warning
1. When the Authority, during the supervision, verification, and assessment of the financial condition and position of the management company and the funds it manages, as well as the assessment of the risks to which the management company and the funds it manages are or may be exposed, identifies irregularities and/or violations that, by their nature and purpose, do not have a significant impact or consequences on the activities and operations of the management company, the funds, the market, and/or the fund's members, the Authority issues a warning to the management company.
2. The Authority may, depending on the circumstances, decide to publish the warning or part of it.
3. The Authority's warning may also include an order to correct any irregularities or violations found, as well as deadlines within which the managing company is required to act and to notify the Authority of the measures taken.
4. If the management company fails to take measures in accordance with the warning provided in paragraph 3 of this article, the Authority shall issue a decision ordering the company to eliminate the irregularities or violations found. The Authority shall verify the proper elimination of the irregularities found.
Article 174
Report on the Elimination of Violations
The managing company is required to eliminate the irregularities and violations identified under Articles 172 and 173 and to submit to the Authority a report on the measures it has taken to eliminate them within the deadline set by the Authority.
2. The report referred to in paragraph 1 of this article shall be submitted by the management company to the Authority, together with documentation proving that the irregularities and violations have been eliminated.
3. If the report under paragraph 1 of this article is incomplete or lacks documentation for the elimination of irregularities and violations, the Authority orders the management company to complete the report within the deadline set by the Authority.
Article 175
Supervisory measures
For the purpose of preventing, correcting, or terminating the circumstances provided for in Article 176 of this law, or actions that constitute a violation of the provisions of this law or the acts issued for its implementation, The Authority shall take the supervisory measures provided for in this section of the law.
Article 176
Circumstances of supervisory measures
1. The Authority shall take the supervisory measures provided for in Article 177 of this law if it deems that:
a) the management company is or is highly likely to become insolvent in meeting all its obligations on time, or its liabilities exceed its assets;
b) the management company is unable to meet the capital adequacy requirements under this law;
c) the existing or changed condition of the management company or depositary could materially jeopardize the rights of the fund's members managed by the management company;
c) the external auditor issues a report with substantial reservations on the pension fund, the management company, and the depositary.;
d) the supervised entity is in an investigative or judicial proceeding, convicted by a final judgment for crimes against property or in the economic sphere, or other criminal offenses related to commercial companies, for organizing and operating fraudulent and pyramid schemes, lending schemes, money laundering, and the financing of terrorism;
dh) the supervised subject has been found guilty of violating professional obligations;
e) the management company or depositary fails to implement the supervisory measures issued by the Authority pursuant to Article 177 of this law;
e) the management company or depository does not continuously meet the licensing requirements;
f) the management company or depository does not comply with the investment policy provided for in this law;
g) the holder of an influential stake, key personnel, a member of key personnel, or key persons do not continuously meet the requirements for competence and fitness under this law or have not obtained the Authority's approval;
g) members of the pension fund suffer losses as a result of a violation of the provisions of this law;
h) the fund's management company or the fund's depository fails to report to the Authority in accordance with the requirements of this law;
i) the fund management company or the fund depository has violated or acted in contravention of the provisions of this law or of the regulatory acts adopted by the Authority in its implementation.
2. The Authority may adopt additional rules regarding the circumstances of supervisory measures, as well as the principles and criteria for assessing those circumstances.
Article 177
Issuance of supervisory measures
1. In cases where the Authority determines that the licensed entity is in one or more of the circumstances specified in Article 176 of this law, it shall take one or more of the following supervisory measures against it:
a) orders the cessation of a specific act or orders the performance of a specific act of business ethical conduct or orders the performance of a specific act that, in the Authority's judgment, is necessary to remedy the situation and/oror for the prevention or correction of violations of this law and the regulatory acts adopted by the Authority in implementation of this law;
b) issues an order to eliminate irregularities and violations;
c) orders the licensed entity to implement a financial recovery plan to meet capital adequacy requirements;
c) orders the licensed entity to have an audit of its financial activities or of the fund under administration conducted by an auditor selected by the Authority, but at the expense of the licensed entity or the management company;
d) orders the licensed entity to dismiss the auditor and appoint another in accordance with the conditions set by the Authority;
dh) In addition to what is provided for in subparagraph “ç” of this point, the Authority may require the external auditor, at the licensee's expense, to conduct a special audit in the interest of the licensee's clients or fund members and to report on it to the Authority.;
e) orders the licensed entity to appoint, at its own expense, a person approved by the Authority to advise the licensed entity on the proper conduct of its activities and who reports to the Authority within three months from the date of his appointment;
e) orders the management company to hold assets in Albania, in an amount deemed necessary by the Authority, or to refrain from distributing dividends for a specified period and in a specified amount;
f) orders the managing company to reduce operating costs, including capping the salaries and other remuneration of the members of the management/supervisory board, the administrator, and the key personnel of the managing company;
g) orders the licensed entity to submit additional information and, if it deems necessary, the Authority increases the reporting frequency and conducts the corresponding inspections related to this reporting;
gj) if the Authority deems it necessary, it expands the facility and/or increases the frequency of on-site inspections at the licensee's premises or appoints authorized personnel to conduct inspections to maintain continuous coverage.;
h) orders the conduct of an assessment of some or all of the assets of the licensed entity or pension fund by the Authority or by a person appointed by the Authority, at the expense of the licensed entity or the management company;
i) orders the managing company to improve its risk management strategies, policies, and processes.
j) orders the licensed entity to dismiss or replace a key person, key personnel, or a member of the key personnel;
k) orders the management company to suspend membership in the fund;
l) orders the licensed entity to take measures against the responsible persons in the event of failure to eliminate violations, failure to implement the required measures, failure to submit complete reports within the deadline without justified reasons, or if it in any way obstructs the exercise of supervision by the Authority;
ll) orders the managing company to transfer the contracts for the administration of the pension fund(s) to another licensed managing company;
m) imposes an administrative sanction of a fine or suspension on the licensed entity.;
n) places the management company in temporary administration;
(nj) initiates the procedure for the compulsory liquidation of the licensed person.
2. The supervisory measures imposed by the Authority set the deadline for eliminating the violation or irregularity and are implemented by the licensed entity within the required timeframe.
3. The Authority may adopt additional rules regarding the imposition of supervisory measures in implementation of this article.
Article 178
Report on the implementation of supervisory measures
1. The supervised entity to which the supervisory measure is addressed submits to the Authority a detailed report specifying the measures taken to correct the circumstances. The report is submitted to the Authority at the frequency specified in the administrative order, which may be on a daily basis or at other intervals. Along with the detailed report, the supervised entity also submits any documents or other evidence demonstrating that the violations or irregularities in question have been eliminated. If it deems it reasonable, the Authority may also require the inclusion of a detailed report from an external auditor or another appointed expert regarding the steps taken to correct the circumstances or irregularities in question.
2. The Authority, immediately upon receipt of the report, in accordance with paragraph 1 of this article, verifies the correction of violations or irregularities as specified in the supervisory measures issued pursuant to Article 177 of this law. The Authority, before making a decision, may conduct another inspection of the licensed entity's activities, which it deems necessary to verify that the violations and irregularities have been eliminated.
3. If the report specified in point 1 of this article is incomplete or the evidence attached to this report does not verify that the violations or irregularities have been eliminated, the authority issues an administrative order to the licensee to complete the report referred to in point 1 of this article, within a specified time frame.
4. Failure to submit the complete report, with evidence of the elimination of violations, within the deadline specified in paragraph 3 of this article shall constitute grounds for the Authority to revoke the license.
5. The Authority reviews and decides on the report for correcting violations and irregularities within 30 calendar days from the date of receipt of the report and full information.
Article 179
The authority to appoint the managing company to temporary administration.
1. When the Authority determines that the fund management company is not able to settle all its obligations within the next six months, it may enter into insolvency within the next six months and, if the Authority deems it reasonable that there is a possibility of rehabilitating the management company's operations, then it may issue an administrative order placing the company under temporary administration in accordance with Article 171 of this law.
2. The authority informs the licensed entity of the reasons for the proposed measures under paragraph 1 of this article and the proposed period of temporary administration, which may not exceed 12 months.
3. Any administrative order issued by the Authority under paragraph 1 of this article shall be published on the Authority's website and on the website of the licensed entity in question.
Article 180
Consequences of temporary administration
1. All rights and responsibilities of shareholders, key persons, and key personnel of the managing company are suspended during the period of temporary administration.
2. This suspension takes effect from the date the notification of the Authority's administrative order is received, in accordance with paragraph 1 of Article 179 of this law.
Article 181
Duties of the temporary administrator
1. The term and scope of the interim administrator's authority are determined by the Authority in its decision to place the managing company under interim administration.
2. The Authority sets the fees and expenses of the temporary administrator and their payment by the managing company undertaking the temporary administration.
3. The Authority, when appointing the interim administrator, ensures that he is competent and suitable, in accordance with Article 15 of this law, and that he possesses the appropriate qualifications and experience for this position. The interim administrator must have at least five years of work experience in the field of fund administration.
4. A provisional administrator cannot be appointed as such if:
a) The authority, at the time of appointment, assesses his ability and suitability to perform the duties of the temporary administrator;
b) is the subject of a court order that makes it impossible to fulfill the duties of the temporary administrator; or
c) is in a conflict of interest with the Authority or with the management company.
5. The Authority may dismiss and replace the temporary administrator if it determines that the temporary administrator is not competent and suitable to carry out the temporary administration in accordance with the requirements of this law.
Article 182
The powers and duties of the temporary administrator
1. The interim administrator carries out the proper management of the managing company with the aim of restoring it to a stable financial position.
2. The interim administrator, upon appointment, publishes the notice in a daily newspaper with circulation throughout the territory of the Republic of Albania and on the Authority's website.
3. The management company provides the interim administrator with all records, accounts, and any other documentation, and prepares for the interim administrator and the Authority a report on its financial condition.
4. The interim administrator has the right to request additional information from the managing company in order to carry out its duties and functions.
5. The interim administrator takes all measures to preserve the assets of the managing company, including, but not limited to:
a) the keeping of records (electronically or in other formats) and the right of access to the premises of the licensed entity or to part of them;
b) ensuring key personnel to carry out daily work activities;
c) notification to all relevant parties that the authorizations granted prior to the appointment of the administrator are suspended and that payments for services, as of the date of the temporary administration, may only be authorized by the persons appointed by the temporary administrator.;
c) the suspension of the distribution of dividends, bonuses, or any form of distribution of share capital, effective as of the date of the appointment of the interim administrator.
6. All transactions carried out during the period of temporary administration without proper authorization from the temporary administrator are invalid.
Article 183
Business Rescue Plan
The temporary administrator, upon appointment, performs the following duties:
a) plans, if possible, the recovery of the managing company by taking at least one of the following measures:
i. the reclassification of the quality of the company's assets;
ii. the reclassification of the licensed entity's activities into activities with very little or no risk;
iii. identification of assets and liabilities, as well as taking steps to ensure their valuation and settlement;
b) draws up and submits to the Authority a business plan for the recovery and rehabilitation of the licensed entity, a plan that best protects the interests of that entity and its shareholders and creditors rather than forced liquidation;
c) sells all or part of the licensed entity's assets;
c) negotiates the merger or sale of the management company to another licensed entity or seeks additional capital for the management company; or
d) if the implementation of the measures provided for in letters “a” through “c” of this article does not yield the expected results, the provisional administrator informs the Authority that there is no alternative but to initiate the forced liquidation procedure.
Article 184
Reporting to the Authority
1. The temporary administrator periodically reports to the Authority on the progress of the temporary administration process regarding:
a) the company's financial position and operational status during the interim management process at least once a month;
b) the company's financial position and operational status regarding a possible rehabilitation within six months after being placed under temporary administration, including the following information and data:
i. assessing the shareholders' willingness to cover losses through a capital increase or through other sources of capital injection;
ii. the possibility of covering the losses remaining after the implementation of the measures provided for in subparagraph “i” of this point;
iii. any unforeseen or contingent liability or expense that has an impact on the managing company's debt;
iv. an assessment of possible measures for relief from financial difficulties and a cost estimate for implementing these measures;
v. assessment of the conditions that make it necessary to initiate the involuntary liquidation procedure.
2. In preparing the reports, in implementation of paragraph 1 of this article, the temporary administrator undertakes to protect the interests of the fund's members and that no amount representing assets or contributions of members that have been allocated for the settlement of transactions not yet settled may be included in the valuation of the available financial assets of the management company in question.
3. The Authority evaluates the results of the temporary administration every three months, starting from the date the decision on temporary administration is made.
4. The authority, based on the reports of the interim administrator, decides on the proposed recommendation for the recovery and rehabilitation of the managing company or, alternatively, for initiating the forced liquidation procedure, and notifies the company and the interim administrator of its decision.
5. The Authority shall prepare a final evaluation report on the interim administration of the managing company within three months of receiving the report at the conclusion of the interim administration, in accordance with Article 185 of this law.
Article 185
End of temporary administration
1. Temporary administration ends in the following cases:
a) upon the expiration of the period specified in the Authority's decision for the temporary administration of the managing company;
b) by decision of the Authority, before the end of the temporary administration period, when it considers the administering company rehabilitated, based on the final report on the evaluation of the results provided for in Article 184 of this law, and when:
i. The Authority finds that the company's financial condition has improved during the period of temporary administration.;
ii. the company has fulfilled all of its obligations;
iii. the company can carry on its business as usual;
c) by a decision of the Authority to place the management company in compulsory liquidation.
2. The decision issued by the Authority under paragraph (b) of point 1 of this article is accompanied by a detailed rehabilitation plan prepared by the interim administrator, identifying the weaknesses in the company's administration and operations and detailing:
a) the corrective measures necessary to improve the situation;
b) a financial plan for the proposed rehabilitation of the licensed entity.
Article 186
Revocation of license
1. The Authority revokes the license of the licensed/registered/recognized entity if:
a) the license/registration/recognition was granted based on false or inaccurate information;
b) the entity does not commence operations within 12 months from the date of licensing/registration/recognition;
c) the entity has not implemented the supervisory measures under Article 177 and within the deadlines set forth in paragraph 2 of Article 177 of this law, or has not reported on their correction under Article 178 of this law;
c) the entity carries out other additional or different activities from those for which it is licensed/registered/recognized;
d) the person no longer meets the conditions for which they were licensed/registered/recognized;
d) the management company fails to continuously meet the capital adequacy requirements and the risk-based capital requirements provided in this law for a period longer than four months;
e) supervisory measures have been repeatedly taken against the entity;
e) the parent company of the entity has been placed in bankruptcy proceedings or, if it is a licensed entity, its license has been revoked for non-compliance with the applicable laws;
f) the subject is convicted by a final judgment for crimes against property or in the economic sphere, or for other criminal offenses related to commercial companies, involving the organization and operation of fraudulent and pyramid lending schemes for money laundering and the financing of terrorism;
g) bankruptcy or compulsory liquidation proceedings have been initiated against the subject;
gj) the entity has not carried out regular commercial activities for a period of more than six months, except when it has obtained approval from the Authority;
h) the entity breaches the provisions on accurate and timely reporting to the Authority more than twice within a three-year period or obstructs the Authority from overseeing its activities;
i) the subject has provided the Authority with false, inaccurate, or misleading information.
2. If the Authority determines that the licensed or registered entity has violated the provisions of this law or the regulations adopted in its implementation, may issue a written administrative order suspending the licensee's or registrant's license or registration for a specified period, until the occurrence of a specified event, or until the fulfillment of specified conditions.
3. The Authority publishes every decision it makes on its official website, in accordance with the procedures and manner it has established for publishing official notices. Individual decisions are immediately notified to the interested parties.
Article 187
Partial license revocation
Except as provided in Article 186 of this law, the Authority may revoke the licensee's license for a specific activity if the license held by that entity permits more than one activity.
Article 188
Procedures for license revocation or deregistration
1. Before issuing the decision to revoke the license or deregistration, the Authority:
a) notifies the subject in writing and gives that subject the opportunity to respond in writing;
b) takes steps to notify other persons who may be affected by this decision;
c) In addition to the warning, it directs the licensed or registered entity to eliminate the violations or to implement measures related to the decision to issue a warning of license or registration revocation within a period specified in the administrative order. The authority establishes the restrictions or conditions to be met by the licensed or registered entity during the period specified by the authority.
2. If the Authority deems it necessary to protect members or to safeguard the stability of the financial markets, it may issue an administrative order without following the procedure set out in paragraph 1 of this article, and when the Authority has commenced that procedure, regardless of whether the written response period has expired.
3. If the Authority has applied the procedure set out in paragraph 1 of this article in relation to a particular matter, it shall not apply that procedure again if it decides to take any other measures in relation to that matter.
Article 189
License revocation or deregistration in case of repeated violation
If the licensed or registered entity commits repeated violations of this law, identical to those that were the basis for issuing a warning of license revocation, revocation or registration under Article 186 of this law, or fails to comply with the conditions set forth in paragraph 1(c) of Article 186 of this law, the Authority has the right to revoke the license, recognition, or registration.
Article 190
Notice of license revocation or deregistration
The Authority's decision to revoke a license or deregister is notified to the licensed or registered person within 10 calendar days from the date the decision is made.
Article 191
Consequences of license revocation or deregistration
1. Upon receiving notice of license revocation or deregistration, the licensed or registered entity shall cease:
a) the signing of new membership contracts;
b) the payment of the pension.
2. License revocation or deregistration:
a) does not invalidate an agreement, transaction, or action carried out by the entity in question before its removal or suspension;
b) does not affect the rights and obligations of any person arising from the agreement, transaction, or action in question.
3. In the event of license revocation, the Authority may, by written notice, require the subject entity to undertake the following actions:
a) not to manage the fund's assets and/or to transfer the assets or the documents or electronic records related to them to another entity specified in the written notice from the Authority; or
b) to allow the subject in question to carry out certain actions, subject to the conditions specified in the notification by the Authority, as follows:
i. to carry out certain commercial activity functions that are essential for protecting members' interests during the suspension period; or
ii. to carry out certain functions of commercial activity, with the aim of winding down that activity.
4. The revocation of a license or deregistration does not exempt the licensed or registered entity from its existing contractual obligations or from compliance with the requirements of this law.
5. The decision to revoke the license or the decision to deregister is subject to the right of appeal to the administrative court in accordance with the deadlines, conditions, and provisions of the legislation in force on administrative courts and the adjudication of administrative disputes.
6. In the event of revocation of the license of the fund management company, the contract for the administration of the pension fund(s) shall be transferred to another licensed entity within three months from the date of notification of the revocation, or otherwise the fund shall be liquidated.
7. In the event of revocation of the depository license, the depository contract shall be transferred to another licensed entity within three months from the date of notification of revocation, or otherwise the fund shall be liquidated.
Article 192
Request for license revocation or deregistration
1. The licensed or registered entity, in compliance with this law, may apply to the Authority for the revocation of its license or its deregistration.
2. The licensed or registered entity shall submit the request provided for in paragraph 1 of this article before ceasing its activities under the license or registration. In this case, the licensed or registered entity shall attach to the withdrawal request a timetable setting out the manner of ceasing the licensed or registered activity, not less than six months after the date the request is submitted. The withdrawal request is also accompanied by the reasons for withdrawal, as well as a copy of the general assembly resolution of the licensed entity or the decision of the management body in the case of the registered entity's cross-border activity.
3. The Authority may request further written information from the requesting party, in particular regarding how the interests of the fund's members will be protected, how obligations to beneficiaries will be fulfilled, and how pending complaints will be resolved.
4. The Authority may require the submission of reports, covered by expenses from the licensed or registered entity, prepared by independent legal experts or independent auditors, confirming the validity of the measures taken to transfer the pension fund's contracts and assets to another licensed or registered entity or to verify the accurate accounting of that transfer.
Chapter XVII
Fines and Sanctions
Article 193
General provisions
1. Any willful violation of the provisions of this law, when it does not constitute a criminal offense, shall be considered an administrative offense.
2. In addition to the supervisory measures provided for in this law, administrative infractions set forth in the following articles are subject to a fine.
3. When imposing an administrative measure, the Authority ensures that the administrative measure is:
a) effective and preventive; and
b) in proportion to the severity of the consequences that led to the imposition of the administrative measure/fine.
4. The Authority determines the amount of the administrative sanction in accordance with the provisions of this law, also taking into account the nature and scope of the violation and its impact on the private pension fund.
5. When imposing an administrative measure, the authority applies the principle of uniformity, under which it imposes similar sanctions for similar violations.
Article 194
Administrative measures against licensed entities
1. The Authority imposes administrative measures with a fine ranging from 500,000 (five hundred thousand) lekë to 3,000,000 (three million) lekë against the management company, as well as a fine of 1,000,000 (one million) lek to 1,500,000 (one million five hundred thousand) lek against the depositary, if:
a) carries out an activity for which it does not have the necessary license, in accordance with this law.
b) fails to inform the Authority in advance of a change in the owner of the influential stake and/or fails to obtain the Authority's approval for this change;
c) fails to inform the Authority in advance of a change of the key person or key personnel and/or fails to obtain the Authority's approval for this change;
c) fails to inform the Authority in advance of any significant change to the license conditions and/or fails to obtain the Authority's approval for such change;
d) fails to inform the Authority in advance of acquiring an influential stake in another company and/or fails to obtain the Authority's approval for this;
dh) establishes a pension fund without submitting an application to the Authority for approval and/or registration;
e) opens a representative office without the recognition of the Authority;
e) causes financial loss to the fund's members as a result of violating this law through an act or omission;
f) causes financial loss to members through action or omission in fulfilling the obligations under Article 8, or in complying with the requirements of Article 23 of this law concerning conflicts of interest or of Article 34 concerning delegation;
g) fails to appoint the fund's depositary or to replace the depositary within the prescribed deadlines;
f) fails to appoint the fund's external auditor or fails to replace the auditor within the prescribed deadlines;
h) provides false or inaccurate information in the prospectus, the statement of the fund member's pension account balance, the report, and the pension fund's annual or interim financial statements.
i) fails to fulfill the obligation to inform the member in accordance with the requirements of this law;
j) fails to report to the Authority as required by this law;
k) obstructs the Authority in exercising its supervisory powers in accordance with the applicable legislation governing the Authority's activities and this law;
l) in the case of the fund's depository, if a financial loss is caused to the fund's members through an act or omission in failing to fulfill the depository's obligations, under section 118 of this Act, or through action or omission to comply with the requirements of sections 120 or 122, 123 or 124 of this Act.
ll) repeatedly fails to submit the reports required by the Authority.
2. The authority imposes administrative measures in the form of fines ranging from 200,000 (two hundred thousand) lek to 400,000 (four hundred thousand) lek against the key person or key personnel, or any of its members, responsible for the violations specified in paragraph 1 of this article.
3. The Authority requires the licensed entity to dismiss or suspend for a specified period of time a key individual, key personnel, or any member thereof responsible for a violation of this law.
Article 195
Repetition of violations
If the violation is repeated by the same licensed or recognized entity, the fine is doubled with each repetition of the violation.
Article 196
The fine sanction against other persons
1. The Authority shall impose administrative penalties with fines ranging from 500,000 (five hundred thousand) lek to 1,000,000 (one million) lek on the pension fund agent who fails to comply with the requirements of Chapter IV of this law.
2. The authority imposes administrative fines of 500,000 (five hundred thousand) to 1,000,000 (one million) lek on any unlicensed person who uses designations that, under the provisions of this law, may only be used by licensed entities.
Article 197
Administrative measures against interim administrators and liquidators
The Authority imposes administrative measures with fines ranging from 500,000 (five hundred thousand) lek to 1,000,000 (one million) lekë against interim administrators who fail to submit the reports required under Article 184 of this law, or liquidators who fail to submit the reports required under Article 170 of this law.
Article 198
Administrative measures for violations of confidentiality requirements
The authority imposes administrative measures with a fine ranging from 200,000 (two hundred thousand) to 400,000 (four hundred thousand) lekë on the licensed entity, targeting key persons or key personnel, for breaches of confidentiality requirements.
Article 199
Other violations
For any other violation of this law, the Authority shall impose administrative fines ranging from 300,000 (three hundred thousand) lek to 500,000 (five hundred thousand) lek.
Article 200
Administrative investigation procedure, notification and appeal
1. During the administrative investigation to verify violations under this law, the authority may request information and explanations from the licensed entity, as well as obtain the necessary materials and documentation related to the administrative investigation under this law.
2. For the purposes of paragraph 1 of this article, the Authority shall set a deadline for the licensee to respond to its requests for information, to submit the relevant documents, and to send observations and/or necessary explanations, in accordance with the legislation governing administrative procedures and this law.
3. Upon completion of the administrative investigation, the Authority notifies the licensee in writing of the decision taken within 10 calendar days from the day after it makes that decision.
4. Against the Authority's decision, the licensed entity has the right to appeal to the administrative court in accordance with the deadlines, conditions, and provisions of the legislation in force on administrative courts and the adjudication of administrative disputes.
5. An appeal to the court does not suspend the enforcement of the Authority's decision.
Article 201
Enforcement of decisions
1. The administrative measures provided for in this section shall be deposited into a dedicated account of the Authority within 20 calendar days from the date of receipt of the notification.
2. If the amount of the administrative sanction is not paid within the deadline set forth in paragraph 1 of this article, the licensed entity and the responsible person shall pay late interest of 0.011% of the administrative sanction for each day of delay after the deadline has passed.
Chapter XVIII
Transitional Provisions
Article 202
Adaptability of licensed management companies, depositories, and funds
1. The license/approval that the Authority has issued to a management company/voluntary pension fund/depositary of a voluntary pension fund shall remain valid even after the entry into force of this law.
2. The management company, the pension fund, and the licensed/approved depository, in implementation of Law No. 10,197, dated December 10, 2009, “On Voluntary Pension Funds,” shall, within 18 months of the entry into force of this law, adapt their activities to the requirements of this law.
3. The references relating to the exercise of cross-border activities shall enter into force on the date of Albania's accession to the European Union.
4. Any new licensing application by the fund management company or the depositary, from the effective date of this law, shall comply with and satisfy the requirements of this law.
5. Every new application for approval of a private pension fund, from the effective date of this law, meets and complies with the requirements of this law.
Article 203
Transitional provision
The sponsor or employer, who on the effective date of this law pays contributions for his employees into voluntary pension funds, Within 18 months from the effective date of this law, the sponsor or employer who, as of that date, is contributing to voluntary pension funds for its employees may decide to withdraw from the open-participation fund and establish a closed-participation pension fund within the same management company or with another management company. For all members who transfer within this period from the open-participation fund to the closed-participation fund, the management company does not charge a transfer fee.
Chapter XIX
FINAL WILL
Article 204
Regulations
1. The authority shall adopt the secondary legislation to implement this law within 12 months from its effective date.
2. Until the entry into force of the implementing regulations of this law, the implementing regulations issued pursuant to Law No. 10/197 of December 10, 2009, “On Voluntary Pension Funds,” shall apply insofar as they do not conflict with the provisions of this law.
Article 205
Exemptions
The provisions of this law shall not apply to the supervision and administration of the pension fund established under the law on the Bank of Albania. The Bank of Albania registers the pension fund with the Authority and reports the number of members, the value of assets, and the value of net assets of the pension fund it administers.
Article 206
Cancellations
Upon the entry into force of this law, Law No. 10,197 of December 10, 2009, “On Voluntary Pension Funds,” is repealed.
Article 207
Entry into force
This law takes effect 15 days after its publication in the Official Gazette.
Approved on September 21, 2023
Proclaimed by Decree No. 288, dated October 16, 2023, of the President of the Republic of Albania, Bajram Begaj.
[1] This law partially transposes Directive (EU) 2016/2341 of the European Parliament and of the Council of December 14, 2016, “On the activities and supervision of occupational pension institutions (IORP II),” CELEX number 32016L2341, Official Journal of the European Union, L series, no. 354, December 23, 2016, pp. 37–85.
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Source: Official Gazette.