The Estonian Minister of Finance has adopted a regulation establishing new rules for investment fi rms on calculating capital requirements, reporting and disclosure of information on capital adequacy, and on risk management. The regulation aims to clarify the principles of the Securities Market Act by establishing technical rules and methodologies to implement the new prudential rules. The regulation unifi es the Estonian legal environment with Directives 2006/48/EC and 2006/49/EC, which in turn form an equivalent to the provisions of the Basel II framework agreement adopted by the Basel Committee on Banking Supervision on 26 June 2004.

      While the bulk of improvements in Basel II are related to calculation of credit risk, the most noticeable changes affecting investment fi rms include rules on operational risk and disclosure of information on capital adequacy and risk management. The new regulation came into force on 7 September 2008, though until 31 December 2008 investment fi rms may calculate risk-weighed capital according to the old regulation. The rules on disclosing information come into force on 1 January 2009.

      Additional information: Reimo Hammerberg

      e-mail: reimo.hammerberg@sorainen.ee