Amended Rules on Special Reserve Requirements for New Foreign Currency Inflows
The Rules on Special Reserve Requirements for New Foreign Currency Inflows, no. 490/2016, have been amended with Rules no. 892/2016, as is stated in the announcement on the Law and Ministerial Gazette (Stjórnartíðindi - in Icelandic).
The primary purpose of the amendments is to exempt specified types of capital from the special reserve base according to Article 2 of the rules and to exempt individuals from the special reserve requirement according to Article 3 up to a specified maximum amount. Other minor amendments have also been made. The special reserve base has been changed so that domestic currency deposits bearing less than 3.0% annual interest are exempt from the special reserve base when they derive from new investment or reinvestment of such new investments. This is in accordance with previous changes to the special reserve base. Furthermore, investments in unit share certificates in funds are exempt from the special reserve base if the combined total of cash and deposits constitutes less than 10% or more of the fund’s assets. This is a deviation from the requirement that investment in unit share certificates in funds must, without exception, create a special reserve requirement if the fund in question owns deposits. These changes in the special reserve base are intended to facilitate enforcement of the Rules without affecting their objectives and efficacy. Furthermore, individuals are exempted from the special reserve requirement up to a specified maximum amount, provided that they are the beneficial owners of the funds in question. Alongside individuals’ increased authorisations to export capital according to Act no. 105/2016 amending the Foreign Exchange Act, no. 87/1992, it is considered appropriate to authorise individuals to import capital up to the maximum amount specified in the aforementioned Act without creating a special reserve requirement under the Rules.
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