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

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

The authorisation for the purchase of fixed-income securities will be granted to the Minister for Finance by a decision of the Cabinet of Ministers. A separate decision of the Saeima on consent to a particular transaction will also be required, amendment stipulate.

When requesting the examination of this issue by the Cabinet, the ministry will have to justify the positive effect of the transaction on the state budget in the long term, the authors of the amendments elaborated at the Ministry of Transport indicated. The transaction for the acquisition of fixed income securities shall be considered as a financial transaction without an impact on the balance of the state budget.

The annotation of the amendments notes that the amendments to the Law are necessary in order to enable the Minister of Finance to purchase fixed-income securities newly emitted by companies, to be able to support capital companies under the decisive influence of the state, thus facilitating participation of Latvian companies in the capital market.

Until now, the conditions for investments from the state budget were determined by the state fiscal management regulations laid down in the law, allowing only short-term transactions and using free funds. 

The amendments to the Law will come into force on the day after their promulgation.

Press Service of the Saeima