Estonian Financial Supervision and Resolution Authority's Code of Ethics

Chapter I Scope and introduction

§ 1 Purpose of the Code of Ethics and its application

The Code of Ethics takes into account the important responsibility entrusted to the Estonian Financial Supervision and Resolution Authority to carry out independent national financial supervision, in some cases in cooperation with the European Central Bank as well as with other institutions and organisations. Meeting this high level of commitment requires integrity and high ethical standards from the staff.
The purpose of the Code of Ethics is to ensure that the highest standards of professional principles of ethics and integrity are upheld by the staff of the Estonian Financial Supervision and Resolution Authority, thereby avoiding misuse of confidential supervisory information and conflicts of interest, as well as mitigating such risks.
Considering the above and incorporating the requirements set out in § 31 (1) and (2) of the Financial Supervision Authority Act (hereinafter FSAA), as well as the compulsory observance of internal rules, the Estonian Financial Supervision and Resolution Authority specifies in this Code of Ethics the professional ethical obligations incumbent on the staff of the Estonian Financial Supervision and Resolution Authority.
The provisions of the Code of Ethics apply to the persons referred to in clause 2 (1) (a) of the Code of Ethics. This Code of Ethics does not affect the rights or obligations of the Members of the Management Board arising from the law or contracts.

§ 2 Terminology used in the Code of Ethics

The following terms are used throughout this Code of Ethics:
1. Staff member – a person appointed or elected to a position within the organisation of the Financial Supervision and Resolution Authority and with whom an employment contract, an authorisation agreement or a contract of a similar nature has been entered into. Also, a person who is involved in financial supervision on the basis of an agreement that is not of a permanent nature, such as a trainee An external auditor, an expert or a legal entity brought in by by the Estonian Financial Supervision and Resolution Authority to financial supervision is not considered a staff member.
2. Subject of financial supervision – subject of financial supervision as defined in § 2 (2) of the FSAA.
3. Single supervisory mechanism – as defined in Article 2 (9) of the COUNCIL REGULATION (EU) No 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions.
4. Immediate family of a staff member – spouse, de facto spouse, child, parent, sibling of a staff member.
5. Confidential information – as defined in § 54 (2) of the FSAA, information relating to the single supervisory mechanism or other information which has become known to a staff member in the course of the performance of their duties and which is not available to the public.

§ 3 Introducing and explaining the Code of Ethics

Staff members shall familiarise themselves with the Code of Ethics primarily on their own.
The Chair introduces the Code of Ethics to a Member of the Management Board on request. If necessary, other Members of the Management Board are also included in the introduction. The Members of the Management Board jointly introduce and explain the Code of Ethics to the Chair of the Management Board, if the latter has made such a request.
A Member of the Management Board introduces, upon request, the Code of Ethics to the head of department under their area of responsibility.
The head of department introduces and explains, upon such request, the Code of Ethics to the staff members of their department.
The professional ethics requirements set out in the Code of Ethics are interpreted on the basis of the law, the decisions of the Supervisory Board and the Management Board of the Estonian Financial Supervision and Resolution Authority, the clarifications provided under this section, the uniform practice established within the Estonian Financial Supervision and Resolution Authority and the conscience of the staff members.
If a staff member is in doubt as to which course of conduct to choose, they shall seek clarification on the Code of Ethics from the person designated in this section in order to avoid a breach of the Code of Ethics.

Chapter II Principles of professional ethics

§ 4. Public trust

The status of being a staff member and professional activity is a matter of public trust. The loyalty of a staff member to the constitution, the law, other legislative acts and the values set out in the Code of Ethics takes precedence over the personal interests of the staff. A staff member respects and adheres to the Code of Ethics in order to maintain the trust of Estonian citizens in the integrity of the governing bodies of the country.
Professional activity is the direct (restrictive, sanctioning) or indirect (advisory) application of public authority, as well as the related relations between staff members and with third parties.

§ 5. Ethical conduct

Ethical conduct of a staff member creates trust in their professional activities.
Ethical conduct, as understood in this Code of Ethics, is primarily expressed in terms of honesty, competence, independence, objectivity, respect, discretion, balance, diligence and the expression of those values in relation to the surroundings.

§ 6. Honesty

A staff member is honest in their professional conduct.

§ 7. Competence

A staff member exercises the best diligence, knowledge and skills in their professional activities in order to provide the most effective result for the Estonian Financial Supervision and Resolution Authority, in respect of the mission stated in its legislation and instituted by the Estonian Financial Supervision and Resolution Authority.
A staff member continuously updates and furthers their knowledge relevant to their professional activities.
A staff member shares their work-related knowledge and skills with other staff members. Knowledge and skills which are not specific to the supervision work may be shared with subjects of supervision activities and with other persons related to the professional activities. In certain cases, knowledge and skills relating to the specifics of supervision activities (supervision tactics and techniques, etc.) may be shared with law enforcement authorities.

§ 8. Independence

A staff member is guided in their professional activities by the law and other legal acts, internal rules of the Estonian Financial Supervision and Resolution Authority, their job description, orders, resolutions and other instructions of the head of the area of responsibility (Member of the Management Board) and the head of the department as well as best practices.
In the course of their professional activities, members of the staff will not submit to unjustified direct or indirect influence of the media, national or local authorities, subjects of financial supervision or other persons.
A staff member shall not be guided in their professional activities by their political or religious beliefs.

§ 9. Objectivity

A staff member is objective and unprejudiced in their professional activities, exercising full consideration of the circumstances and applying the law, best practices and their own competence.
A staff member shall not permit or allow any advantage or limitation of rights in the performance of their professional activities on the grounds of a person's sex, nationality, skin colour, race, mother tongue, social background, religious, political or other convictions, relation to military service, marital status, family commitments, health or membership of a civic association.
A staff member shall not use any relationships with subjects of financial supervision arising from their professional activities for their own personal interests.

§ 10. Respect, sustainability and prudence

A staff member treats their surroundings with respect, sustainability and prudence by their attitude and actions. A staff member maintains composure, modesty and dignity at their professional activity.
A staff member acts and behaves with respect towards the Estonian Financial Supervision and Resolution Authority, the Supervisory Board of the Estonian Financial Supervision and Resolution Authority, other members of the staff, their own and other members' professional activities within the Estonian Financial Supervision and Resolution Authority, the subjects of financial supervision, their leadership, employees and representatives, and anyone with whom they interact in their professional activities. Among other things, a staff member shall dress in a neat and presentable manner and avoid activities that may negatively affect their professional activities.
A staff member refrains from any conduct in the course of their professional activities that is damaging to the reputation of the Estonian Financial Supervision and Resolution Authority.

§ 11. Discretion

A staff member is discreet. A staff member communicates with the media on professional matters only through the Members of the Management Board or the head of public relations of the Estonian Financial Supervision and Resolution Authority, unless arranged otherwise by the Management Board or a Member of the Management Board.
A staff member does not present themselves as a staff member, financial supervisor or other public official in their private affairs in the pursuit of personal interests, unless there is an unavoidable need to do so in order to avoid a negative consequence for the staff member, other persons or the public.

Chapter III Conflict of interest and its management Principles of conflict of interest and disclosure

§ 12. Conflict of interest: definition and principles

A conflict of interest is a situation in which a staff member's professional activities are influenced or may be influenced by their own interests or the interests of the immediate family of a staff member. A conflict of interest is a situation in which a staff member is forced or motivated to pursue interests that do not coincide with the professional activities of the Estonian Financial Supervision and Resolution Authority or with the mission stated in relevant legislation and instituted by the Estonian Financial Supervision and Resolution authority.
Conflicts of interest can arise, inter alia:
1. Through indirect or direct economic or other financial interest;
2. If the professional activity directly affects or is likely to affect a direct or indirect relationship of the staff member concerned;
3. In relation to interests or connections in the past, present or future (e.g. employment with a subject of financial supervision, activities in leisure time, etc.).
In their professional conduct, a staff member acts in the sole interest of the Estonian Financial Supervision and Resolution Authority putting those interests ahead of their own and of third parties' interests.
A staff member organises their life and activities in such a way as to minimise the potential risk of a conflict of interest.
A staff member continues to perform professional activities while having a conflict of interest only on the basis of a decision to that effect by a Member of the Management Board responsible of their area of responsibility, by the Chair of the Management Board or on the basis of a decision of the Management Board.
A staff member discloses a potential conflict of interest without delay in accordance with section 13 of the Code of Ethics.

§ 13. Disclosure of conflicts of interest

A staff member shall immediately disclose to their direct superior all circumstances that create or may create a conflict of interest.
In addition to the provisions in subsection 1, staff members shall immediately inform the Chair of the Management Board of the occurrence of the circumstances provided for in § 33 (2) of the FSAA.
A member of the Management Board shall fulfil the duty of notification provided for in subsection 1 of this section to the Chair of the Management Board and the Chair of the Management Board shall notify the Management Board.
The recipient of the notification referred to in subsections 1 to 3 of this section communicates the information on the conflict of interest to the internal auditor and, where possible, to the Member of the Management Board responsible for their area of responsibility.
A staff member discloses information regarding investments in accordance with subsection 19 (4).

Communication with external parties

§ 14. Principles of communication with external parties

A staff member maintains neutrality with external parties, in particular representatives of the financial sector, and observes the principle of equal treatment and refrains from any conduct that may be perceived as conferring advantages, including advantages of a commercial or reputational nature, on external parties.
Staff members shall not disclose confidential information when communicating with third parties.
Staff members may disclose confidential financial supervision information or other confidential information only if this is permitted by existing law and has been expressly agreed in advance with the Member of the Management Board responsible for the area or with the Management Board, taking into account the provisions of subsection 11 (1).

§ 15. Lobbyist and lobbying

In the context of this Code of Ethics, a lobbyist is a person who, for remuneration or free of charge, lobbies on behalf of their own or their client's interests, including private or public interest or those of another social group.
A lobbyist may be, inter alia, a trade association defending the interests of the subjects of financial supervision or other concerned parties, a law firm, legal service provider or other consultant, a chamber of commerce and industry, a professional or business association, a trade union, a voluntary and interest group, other organisations and persons representing public interests.
A lobbyist is not considered to be a subject of financial supervision, a party to an administrative procedure, a public official, a civil servant, a research student, a diplomat or a political party acting within the scope of their duties.

Lobbying is a lobbyist's direct or indirect, structured and organised interaction with a staff member with the aim of influencing the decisions taken by the Estonian Financial Supervision and Resolution Authority, shaping the activities of the financial supervision, achieving a beneficial result for themselves or their client and/or representing their own or their client's interests.

§ 16. Recording and publication of meetings

A staff member prepares and records an overview of meetings with representatives of the financial sector that take place outside the normal supervisory dialogue.
Important meetings with lobbyists attended by the Members of the Management Board and/or heads of department of the Estonian Financial Supervision and Resolution Authority are published quarterly on their website.
During a meeting referred to in subsection 2 of this section, the following information is subject to publication:
1. the topic of the meeting;
2. the name of the lobbyist or the lobbyist's representative and organisation;
3. names of the staff members attending the meeting;
4. the date of the meeting;
The information referred to in subsection 3 is published on the website of the Estonian Financial Supervision and Resolution Authority for at least one year.
The information referred to in subsection 3 may be withheld by the Estonian Financial Supervision and Resolution Authority where justified, including for the purposes of ensuring the stability and fair functioning of the financial sector.

Investing

§ 17. Principles of investing

A staff member does not use any confidential information that has come to their knowledge for investment decision-making for the benefit of themselves, immediate family of a staff member or other third parties. The above covers both direct instructions and indirect recommendations as to whether or not to enter into a contract and if the contract is entered into by the staff member themselves, their relatives or other third parties.
The limitations set out in sections 17 to 21 of the Code of Ethics also cover investments made by a staff member through an association in which the staff member has a controlling interest, as set out in § 9 and 10 of the Securities Market Act.
A staff member takes great care to ensure that their activities do not qualify as market abuse as provided for in chapter 21 of the Securities Market Act, its supplementing and superseding relevant directly applicable European Union legislation and § 398 and 3981 of the Penal Code.
A staff member makes investment decisions on the basis of a long-term plan, avoiding short-term trading and investing in a way that could damage the reputation of the Estonian Financial Supervision and Resolution Authority.
The provisions of sections 18 to 20 of the Code of Ethics do not apply to transactions where a staff member has delegated the management of their personal investments to an independent third party under a written portfolio management service agreement.

§ 18. The making of investments with subjects of financial supervision of the Estonian Financial Supervision and Resolution Authority

A staff member is prohibited from making financial transactions with:
1. equity and debt instruments issued by subjects of financial supervision;
2. derivatives related to securities referred to in clause a;
3. shares of investment funds whose investment policy is aimed primarily at investing in, or intermediation in, the securities referred to in clauses (a) and (b).
The prohibition referred to in subsection 1 also applies to financial conglomerates which include a subject of financial supervision.
The prohibition referred to in subsections 1 and 2 also applies to associations subject to the supervision of the single supervisory mechanism.

§ 19. Making investments in markets under the supervision of the Estonian Financial Supervision and Resolution Authority

A staff member is allowed to make transactions with securities issued and traded on a regulated market under supervision of the Estonian Financial Supervision and Resolution Authority, with the exception of securities referred to in section 18, subject to the restrictions set out in this section.
The securities referred to in section 1 may not be transferred by a staff member within 6 months of their acquisition, nor may the transferred securities be repurchased before the lapsing of 6 months.
With the approval of the Management Board of the Estonian Financial Supervision and Resolution Authority, a staff member may transfer securities referred to in subsection 1 before the expiry of the time limit referred to in subsection 2 in the event of a merger of the issuer of the securities or a takeover bid in relation to the issuer, or in other exceptional circumstances disclosed to the Estonian Financial Supervision and Resolution Authority.
A staff member is obliged to submit an overview of their investments and of the securities referred to in subsection 1 of this section, in accordance with § 32 (3) of the FSAA, and to keep the respective information up to date.

§ 20. Issuance of securities

A staff member may not acquire subscription rights or any other tradable right in the context of issuances of securities which are or would be subject to sections 18 and 19.
In a situation where a staff member automatically acquires a subscription right, the staff member refrains from exercising the subscription right and from executing transactions with the subscription right.
If the issuance of the securities referred to in subsection 1 has been finalised, the staff member shall follow the provisions of sections 18 and 19.

§ 21. Sale of previously acquired securities

Securities acquired by a staff member prior to the commencement of the employment relationship are subject to the provisions of sections 18 and 19.
If the securities previously acquired by a staff member fall within the scope of section 18, the staff member must dispose of them during the probationary period or place them under the management provided for in section 17 (5).
If the securities previously acquired by a staff member fall within the scope of section 19, the staff member must comply with the restrictions set out in that section when carrying out transactions.
In a situation where a staff member holds securities of an association which is a subject of financial supervision, the staff member complies with the obligation set out in subsection 2 within 6 months from the moment when the securities in question become subject to the provisions of section 18.

Gift

§ 22. Gifts

A staff member accepting gifts in connection with professional activities must ensure that the gift arrangement does not constitute an illegal activity (bribery, corruption, etc.).
A staff member does not enter into a gift arrangement in connection with their professional activities under which the value of the gift item accepted by the staff member exceeds EUR 50.
A staff member immediately informs their superior or, in the case of a Member of the Management Board, the Chair of the Management Board, or, in the case of the Chair of the Management Board, the Management Board, of any item of value exceeding EUR 50 which is unexpectedly presented to them and the return of which is impolite or impractical.

A staff member and their superior, the Chair of the Management Board in the case of a Member of the Management Board, or a Member of the Management Board appointed by the Management Board in the case of a Chair of the Management Board, shall arrange for the gifted item referred to in section 3 to be given to the Estonian Financial Supervision and Resolution Authority and for the item to be deposited.

§ 23. Lunches, dinners and other events

Section 22, with the exception of subsection 4, is applicable to the participation of a staff member in a business lunch, dinner or similar event organised by third parties in connection with their professional activities. Business lunches and dinners are a good way to showcase your professional activities, but should not become too frequent or often exceed EUR 50.
In considering whether to accept invitations to participate in an event, a staff member is guided by the following:
1. independently evaluate information about the event, including any undesirable impact on the independent activities of the Estonian Financial Supervision and Resolution Authority, including any unusual costs incurred by the participants at the event, etc;
2. if there are doubts about the compliance of participation at the event with the Code of Ethics, the provisions of section 3 are to be considered or the participation refused.
A staff member may not accept gifts or other favours in the course of on-site inspections or audits, except for hospitality of insignificant value at the time of the inspection.

Suspicious transactions

§ 24. Transactions different from market conditions

A staff member does not enter into a contract that differs significantly from the prevailing conditions of the local market due to being a staff member and/or because of the performance of their professional activities.
A staff member verifies, when receiving an offer that differs significantly from the prevailing local market conditions, whether the difference is due to them being a staff member and/or because of the performance of their professional activities.
Subsections 1 and 2 of this section do not apply to agreements entered into by Eesti Pank and the Estonian Financial Supervision and Resolution Authority.

Cooling-off

§ 25. Cooling-off measures when terminating an employment relationship

If a staff member's employment is soon the be terminated (e.g. by submitting a resignation application or by giving notice of termination), they must tolerate additional measures by the Estonian Financial Supervision and Resolution Authority to ensure that any potential conflict of interest is avoided.
The measures referred to in subsection 1 include, inter alia, the right to restrict a staff member's access to data held by the Estonian Financial Supervision and Resolution Authority and to suspend the performance of their professional activities while ensuring the payment of wages for the duration of the contract.
The access restriction referred to in subsection 2 applies at least 30 days before the end of the employment relationship of the staff member.

§ 26. Cooling-off measures after the end of the employment relationship

If required, the Estonian Financial Supervision and Resolution Authority enters into a non-compete agreement with the staff member which assesses and manages potential conflicts of interest within a reasonable period of time after the end of the employment relationship.
The Estonian Financial Supervision and Resolution Authority assesses the need to enter into and amend a non-compete agreement and the duration of the restrictions set out therein on a case-by-case basis for each staff member.

§ 27. Publications and speeches

If a staff member wishes to publish, alone or with others, a document, an article or a book or to make a public presentation (hereinafter referred to as an article) and it relates to the financial supervisory activities of the Estonian Financial Supervision and Resolution Authority, the article must first go through the regular publication process of the Estonian Financial Supervision and Resolution Authority.
Articles that fulfil the prerequisite set out in subsection 1 but are published for scientific purposes (e.g. in the context of a Bachelor’s, Master's or doctoral thesis) may be published without the publication procedure set out in subsection 1, provided that it is clearly indicated that this is the personal opinion of the staff member and that the applicable confidentiality framework is observed.
Articles that meet the prerequisites set out in subsection 1 and for which a remuneration is received must be declared to the internal auditor.
The Members of the Management Board of the Estonian Financial Supervision and Resolution Authority are not required to comply with the provisions of this section with regard to the articles referred to in subsection 1 of this section, but they must inform the Management Board of the article and its content prior to publication, subject to the special right of the Chair of the Management Board to restrict or prohibit publication of the article under § 23 (2) 3) of the FSAA.

Chapter IV Supervision

§ 28. Compliance monitoring of the Code of Ethics

The Chair of the Management Board and the head of human resources ensure that the Code of Ethics is in compliance with the needs of the Estonian Financial Supervision and Resolution Authority and the applicable law and that it is implemented.
If a staff member identifies a conflict with the objectives of the Code of Ethics or with applicable law, they will notify the head of human resources, stating their reasons. If a staff member identifies a possible breach of the Code of Ethics by another staff member, they will observe section 29.
The head of human resources analyses the report referred to in subsection 2 and forwards them to the Chair of the Management Board.
The Chair of the Management Board may submit an overview to the Supervisory Board on the notifications received under subsection 3.

Notifying of breaches of the Code of Ethics

§ 29. Notification of breaches of the Code of Ethics

A staff member reports any breach of the Code of Ethics or of the principles set out therein to the head of human resources by e-mail.
If a staff member wishes to report on the activities of the head of human resources, they report verbally or by e-mail to the Chair of the Management Board.
If a staff member wishes to report on the actions of the Chair of the Management Board, they will send the report by e-mail to the head of human resources, who forwards the complaint to the other Members of the Management Board.

§ 30. Receiving and processing the reports

The head of human resources analyses the report provided for in subsection 29 (1) upon receipt of the report and collects additional information from relevant sources. Once sufficient information is available, the head of human resources forwards the report, together with the relevant documents, to the Chair of the Management Board.
The head of human resources and the Chair of the Management Board analyse the report and, if necessary, the implementation of measures to remedy the situation and/or prevent further breaches.
The Chair of the Management Board organises, upon receipt of the report provided for in subsection 29 (2), the collection of additional information from relevant sources and, if necessary, the implementation of measures to remedy the situation or prevent further breaches.

Other Members of the Management Board upon receipt of the report provided for in subsection 29 (3) arrange for the collection of additional information from relevant sources and submit the report, together with the relevant documents, to the internal auditor, who informs the Chair of the Supervisory Board, when necessary.
If the person who has submitted the report has requested an overview of the measures taken or the reasons for not taking action, they are informed accordingly.

§ 31. Proceedings for discovery of a breach of the Code of Ethics

If a breach of the Code of Ethics is discovered, proceedings may be initiated against the staff member in order to establish a breach of an obligation arising from the law or from a contract entered into with the staff member and to decide, if necessary, on the imposition of a sanction or remedy under the law.
The Chair of the Management Board informs the European Central Bank of any significant breach of ethical standards of which they are aware of, when the breach relates to the performance of their professional activities regarding the single supervisory mechanism. In case of such a breach, notification is given:
1. To the Governing Council of the European Central Bank via the Organisational Development Committee and the Supervisory Board.

In urgent cases, the report may also be sent directly to the Governing Council of the European Central Bank and

1. the Audit Committee of the European Central Bank.

§ 32. Anonymity of the person who submitted the report

The head of human resources and the Chair of the Management Board ensure the anonymity of the person submitting the report provided for in section 29 vis-à-vis other members of the staff.
The information of the person submitting the report is disclosed to the extent necessary only if:
1. the person submitting the report has expressly expressed so at the time of reporting or
2. if it is necessary in order to comply with the obligations of the Estonian Financial Supervision and Resolution Authority under applicable law.

Chapter V Implementation

§ 33. Implementation of the Code of Ethics

A staff member ensures that their activities comply with the provisions of this Code of Ethics no later than by 1 January 2024.
A staff member submits the information required by subsection 19 (4) of this Code of Ethics for the first time to the internal auditor of the Estonian Financial Supervision and Resolution Authority no later than by 1 January 2024.
If a staff member is unwilling or unable to fulfil the obligations referred to in subsections 1 and 2 of this section by the due date specified in those subsections, the staff member informs their direct superior and the Member of the Management Board responsible for their area of responsibility by 1 December 2023 at the latest.
If the situation described in subsection 3 arises, the Management Board arranges for the resolution of the conflict between the staff member and the Code of Ethics.