The Minister of Finance is authorized to purchase fixed income securities of state capital companies

The Minister of Finance will have the right to purchase fixed income securities of state capital companies, according to the amendments to the Law on Budget and Financial Management adopted in the final reading in the Saeima on Thursday, April 25.

For the purchase of fixed income securities, the Minister of Finance will be able to use state budget funds, including by borrowing. This will apply to those companies in which the state has a decisive influence.

The authorization for the purchase of fixed income securities with budget funds will be granted to the Minister of Finance by a decision of the Cabinet of Ministers. Also, a separate Saeima decision on consent to a specific transaction will be required, the amendments stipulate.

When directing the consideration of the issue in the Cabinet of Ministers, the Ministry of Industry will have to justify the positive effect of this transaction on the state budget in the long term, the authors of the amendments in the Ministry of Transport stated. The purchase transaction of fixed income securities is considered a financial transaction without impact on the state budget balance.

Amendments to the law are necessary so that, by giving the right to the Minister of Finance to purchase fixed income securities issued by companies, they can support capital companies under the decisive influence of the state, thus promoting the participation of Latvian companies in the capital market, the annotation of the amendments states.

Until now, the conditions of state budget investment were determined by the state fiscal management regulations provided by law, allowing only short-term transactions and using free funds.

Amendments to the law will enter into force the day after their announcement.

Saeima Press Service