The National Bank's supervisory mandate does not end with the banking sector: the Organic Law on the National Bank shapes it as the single regulator of the entire financial market — from payment systems to the securities market and the pension fund, from loan-giving entities to virtual asset service providers. This page brings together which entity enters the supervisory system under which regime — registration, licensing, authorization or recognition — and what the essence of supervision is for each of them.
The common model: registration, license, authorization, recognition
For different entities the law sets different points of entry. Payment system operators, payment service providers, the credit information bureau, loan-giving entities and virtual asset service providers are registered with the National Bank; regulated participants of the securities market and asset management companies are licensed; investment funds undergo authorization or registration, while foreign funds and management companies are recognized. The common supervisory toolkit, however, is uniform: the Bank conducts inspections, regulates, issues written instructions, imposes additional requirements and restrictions and, in case of violation, imposes sanctions including monetary fines. In these spheres the amount and the procedure of fines are determined by the Bank's normative acts, and the fine is credited to the state budget.
Payment systems and the boundaries of credit activity
Supervision of a payment system operator and a payment service provider is exercised through registration and its revocation, inspection, additional requirements, the determination of initial and ongoing capital, restrictions and sanctions. The Bank decides on granting and revoking the status of an important system and of a significant payment service provider, and may grant a payment system the status of a systemically important or exceptionally important payment system; it also sets fitness criteria for administrators and verifies compliance with the requirements of the international tax compliance agreement.
The boundaries of credit activity are strictly drawn: no one may take deposits and, using them, issue credits without a banking license or a microbank license. An entrepreneur or a group of connected persons may not, without registration as a microfinance organization, a non-bank deposit-credit license or a banking license, attract repayable funds from more than twenty natural persons or advertise the attraction of repayable funds from a wide circle of persons. This restriction does not apply, for example, to a public offering of securities or a private offering to an experienced investor, insurance activity, a voluntary private pension scheme, the activity of a brokerage company, services related to electronic money, investment funds and securitization special purpose entities, as well as to a natural person lending to another non-entrepreneur natural person, or a partner or shareholder lending to the enterprise or making a contribution to its capital. A microbank, in turn, may attract repayable funds from natural persons in accordance with the law on microbanks.
The securities market and investment funds
Within the supervision of the securities market the Bank regulates the relations arising when issuers issue and circulate securities, as well as ownership-related matters, and ensures the prevention, detection and suppression of violations. The Bank issues and revokes the licenses of regulated market participants, sets their minimum capital requirements, approves the emission prospectus and conducts monitoring, inspection and investigation. Where a violation or a threat to investors' interests is suspected, as well as on the basis of a request from a foreign supervisory authority, the Bank may demand a written or oral explanation from any person.
Supervision of investment funds and asset management companies covers the authorization or registration of a fund founded in Georgia, the recognition of a foreign fund and management company, and the annulment of these statuses; for management companies the law provides licensing or registration and, where necessary, revocation of the license. The Bank regulates the relations arising from the issue and circulation of fund units, sets procedures for liquidation and temporary appointment, imposes additional requirements on the specialized depository servicing the fund, and, in case of violation, fines the fund, the management company, the depository and other persons.
The credit information bureau and loan-giving entities
A credit information bureau must register with the National Bank and satisfy its requirements. Supervision of the bureau pursues financial stability, consumer protection, information security and continuity of activity: the Bank inspects and regulates the bureau, gives instructions, sets financial and operational requirements, including restrictions on the service fee, and imposes sanctions. A loan-giving organization must supply the bureau with loan information under the Bank's procedure; the Bank sets the rules for providing information to the bureau in Georgia, for recording it in the bureau's database and for access to it. For violations the Bank fines both the bureau and the entity supplying information.
A loan-giving entity is likewise registered with the National Bank and must satisfy its requirements; registration is not required of a financial sector representative or of an entrepreneur lending to its own partner, shareholder or employee. A loan-giving entity must observe the confidentiality of information: borrower information may be given only to the parties to the transaction and their authorized representatives, the National Bank, the dispute resolution commission at the National Bank, the Financial Monitoring Service in cases defined by legislation, and the State Audit Service during an inspection under the personal data protection law. Other persons may receive such information only under a court decision or the borrower's prior written consent; transferring the information to another body, including the mass media, before a court decision is prohibited.
Supervision of the pension fund
The National Bank regulates and supervises the pension fund's activity in accordance with the law on funded pensions. The Bank agrees the fund's investment policy document and risk management framework and periodically verifies their compliance; it issues binding instructions; it assesses the charters and activity of the fund's committees and, where necessary, sets minimum standards for them; upon discovering a significant violation it may dismiss the fund's executive director, issue a binding instruction and set a reasonable period for remedying the violation. The Bank sets fitness criteria and agrees the appointment of executive directors, minimum allowable ratings for instruments, the temporary special administration regime, and additional regulatory rules for the specialized depository. It authorizes licensed asset management companies and specialized depositories to manage pension assets, recognizes their foreign counterparts, inspects them on site and, where necessary, itself performs the functions of the specialized depository.
Virtual assets and financial conglomerates
A virtual asset service provider must register with the National Bank: the provision of such services by an unregistered person or by a financial sector representative without the relevant authorization is impermissible. A provider may not engage in any activity other than providing virtual asset services, the auxiliary activity necessary for them and the exchange of its own virtual asset. The Bank demands information on the origin of capital and beneficial owners and sets requirements for owners of a significant share, fitness criteria for administrators, the minimum amount of supervisory capital, and standards for the storage of virtual assets and for risk management, including operational and cyber-security risks. Where there is heightened money laundering or sanctions-evasion risk, or where traceability of transactions or supervision is impeded, the Bank suspends or restricts the provider's operations. Fines imposed for violations are credited to the state budget.
Finally, with respect to regulated enterprises within a financial conglomerate the Bank exercises additional supervision under the relevant law — together with other supervisory authorities it adopts decisions, conducts measures and issues the corresponding normative and individual administrative-legal acts.