Financial Compliance & Supervision

Financial compliance refers to adherence to laws, regulations, codes of conduct, and internal policies that govern financial institutions and market participants. It ensures transparency, fairness, and market integrity.

Slovenia’s financial system is regulated primarily by the Bank of Slovenia (Banka Slovenije), the Securities Market Agency (Agencija za trg vrednostnih papirjev – ATVP), and the Insurance Supervision Agency (Agencija za zavarovalni nadzor – AZN). These authorities ensure compliance with national legislation and the transposed EU directives.

Important legislation includes the ZBan-3 (Banking Act), ZTFI-1 (Financial Instruments Market Act), ZISDU-3 (Investment Funds Act), ZPPDFT-2 (Anti-Money Laundering Act), and ZZavar-1 (Insurance Act), which implement and complement EU regulations.

At the EU level, key supervisory bodies include the European Central Bank (ECB), the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA). They promote regulatory convergence and financial stability.

Under the SSM, the ECB directly supervises significant eurozone banks, including some in Slovenia. The Bank of Slovenia continues to supervise less significant institutions under ECB guidelines and EU law.

The Markets in Financial Instruments Directive (MiFID II) and its companion regulation (MiFIR) regulate investment services, transparency, and conduct of business rules. Slovenian investment firms must align with these EU-wide investor protection standards.

Firms must implement robust Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) controls, conduct customer due diligence (CDD), and report suspicious activity to the Office for Money Laundering Prevention (Urad za preprečevanje pranja denarja).

The Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR) set out capital adequacy, liquidity, and risk management obligations. Slovenian banks must meet these obligations under EU law and Bank of Slovenia enforcement.

Compliance with the General Data Protection Regulation (GDPR) is critical for financial institutions managing sensitive client data. Firms must implement strict privacy controls, data subject rights procedures, and breach reporting protocols.

MAR governs insider trading, market manipulation, and disclosure obligations. Investment firms, issuers, and insiders operating on regulated markets must adopt internal procedures and training programs to prevent misconduct.

Financial firms must establish secure, anonymous internal channels for whistleblowing, following the EU Whistleblower Directive transposed into Slovenian law. Compliance departments must handle reports professionally and without retaliation.

Institutions must maintain a three-lines-of-defense model: operational management, compliance/risk functions, and internal audit. This structure ensures ongoing compliance monitoring and escalation of breaches.

Institutions must perform KYC checks and classify customers based on risk. Enhanced due diligence is required for politically exposed persons (PEPs), high-risk jurisdictions, or unusual transactions.

Firms must monitor for suspicious transactions and file reports (SARs) with relevant authorities. Regular reports to the ATVP, Bank of Slovenia, and EU bodies (where applicable) are also mandatory.

Outsourcing critical services (e.g., IT, cloud) must comply with EBA and ECB guidelines. Contracts must ensure data confidentiality, audit rights, and service continuity.

Supervisory authorities evaluate the professional qualifications, integrity, and independence of directors and key function holders. Ongoing suitability is a requirement under CRD and Slovenian law.

Breaches may lead to administrative fines, license revocation, or criminal proceedings. Slovenian and EU regulators can impose sanctions, initiate investigations, or mandate remedial actions.

Firms conducting cross-border services within the EU must notify home and host regulators under passporting regimes. Non-EU firms must adhere to equivalence and third-country access rules.

Firms must integrate ESG risk into their risk management, compliance, and reporting frameworks in line with the EU Sustainable Finance Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSRD).

Supervisors are adopting advanced technologies (AI, big data analytics) to monitor compliance. Firms increasingly use RegTech for automated reporting, KYC onboarding, and policy management.