LITHUANIA: Central Bank conducted industry checks using secret shopping

16 November 2020 — Andrei Victor
This year, the Bank of Lithuania — the single supervisory authority for the whole financial sector in Lithuania, including the insurance market — conducted a mystery shopping exercise to evaluate the practices of certain companies and persons offering training and consultation on savings and investment.

"The mystery shopping exercise conducted during two separate periods in 2020 had indicated that investment services provided by specific financial brokerage firms were potentially offered and advertised during consultations and training. Such services may be offered and advertised only by entities included in the Public List of Tied Agents of Financial Brokerage Firms. As the organisers of the said events were not included in this list, they were not entitled to offer and advertise the services of the companies they represent, whereas their activity potentially violated the Republic of Lithuania Law on Markets in Financial Instruments. To prevent potential infringements of the legal acts regulating the financial market and investigate the actual circumstances in more detail, the Bank of Lithuania will contact these entities directly," as the Central Bank informed in a statement.

The representatives of the Central Bank mentioned that the objects of such exercise are investment, insurance, pension accumulation and other financial services and products provided or offered by supervised financial market participants and other persons. "The Bank of Lithuania may conduct an exercise itself or use professional external providers of mystery shopping services, as in the present case".

Jekaterina GOVINA, Director of the Financial Market Supervision Service of the Bank of Lithuania, said:

"Mystery shopping is an important supervisory tool that provides information on the actual market situation, when it cannot be gathered through usual supervisory measures, such as inspections or surveys. This tool allows to better understand the errors made by market participants and to prepare recommendations on their avoidance in the future. Meanwhile, the offenders exposed in this manner will receive our closer attention."

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