At the Saeima session of 10 September 2009 a draft law “Law on Payment Servcies” was delivered to the commissions, which lists institutions entitled to provide payment services, as well as requirements for operations of the said institutions. With the said draft law requirements of Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 (Directive 2007/64/EC) concerning payment services in the internal market shall be introduced.

The new draft law will set forth the following regulation:

• Licensing procedure of payment institutions and requirements for acquisition of shareholding and management bodies;
• Requirements towards equity and initial capital and amounts thereof. Size of the initial capital shall be established depending on the types of payment services provided, while own funds have to be above or equal to 10% of the fixed overheads of the preceding accounting year;
• In accordance with the draft law the payment institution can provide services through agents. The draft law stipulates provisions concerning use of agents, branch offices or outsourcing entities;
• Supervisory provisions of payment institutions in order to reduce operational risk and protect the payment service users;
• Liability of a payment institution for compliance with laws and regulations establishing penalty sanctions starting from a warning up to imposition of a fine in the amount of up to LVL 1,000.

The draft law includes norms regulating relationship between a payment institution and service users, including requirements towards protection of consumer rights establishing an obligation for the payment service providers to notify clients about execution term of the payments and applicable charges. Likewise the draft law establishes detailed requirements for performance of payment services and data protection and contains provision concerning dispute resolution.

In accordance with provisions of Directive 2007/64/EC the law has to be adopted till 1 October 2009.