LITHUANIA Law and Practice Contributed by: Donatas Šliora and Marius Matiukas, ADON legal
its website. Listing standards typically set a number of requirements based on the Law on Markets in Financial Instruments (eg, to ensure that any financial instruments admitted to trad - ing on a regulated market are capable of being traded in a fair, orderly and efficient manner and, in the case of transferable securities, are freely negotiable); however, some provisions are more market-specific (eg, to be listed in the main list, there should be a free float of at least 25% of shares or shares with a market value of at least EUR10 million). Trading in MTFs and OTFs also necessitates meeting certain requirements, which are less strict than the requirements for admission to the regulated market. 6.5 Order Handling Rules Order handling rules depend on the type of ser - vice and trading platform, and the main require - ments are set in the Law on Markets in Financial Instruments. Investment service providers must provide ser - vices in the best interest of the clients. When executing orders, the best possible result for their clients is attained by taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other considera - tion relevant to the execution of the order. In addition, an execution policy must be adopted. Law on Markets in Financial Instruments requires that order handling rules ensure fair, transparent and efficient trading, as well as contain detailed provisions on trading procedures, settlement rules and dispute resolution mechanisms. The investment firms and regulated market operators that administer MTFs or OTFs must approve and apply transparent rules and pro -
cedures that ensure fair and orderly trading, and must establish objective criteria for efficient order execution. Specific requirements for the prevention of conflict of interest are applicable. With respect to MTFs, such rules must be non- discretionary. 6.6 Rise of Peer-to-Peer Trading Platforms Crowdfunding platforms are subject to licensing and regulation under the Crowdfunding Regula - tion. The crowdfunding market is well developed in Lithuania and the introduction of EU licens - ing under the Crowdfunding Regulation has not changed this situation. Prior to the introduction of the Crowdfunding Regulation, “secondary market” for crowdfund - ing projects was widely used (though, typically, for loan-based crowdfunding). However, after the implementation of the Crowdfunding Regu - lation, the “secondary market” functionality was either changed to “bulletin board” (ie, a place where each party may provide notes on intention to sell/purchase investment without automatic execution rules) or fell within the framework of the Law on Markets in Financial Instruments. The main challenges are transparent pricing and robust risk assessment of the proposed projects for financing. As crowdfunding has attracted a significant portion of high-risk borrowers and some of the loans are non-performing, it is likely that limitations of liability of crowdfunding plat - form operators will be tested in courts. Peer-to-peer lending platforms (both for con - sumer credits and mortgage credits) are regu - lated and licensed under national regimes. Peer-to-peer lending is specifically regulated under:
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