Specifics of filling out questionnaires submitted to the Bank of Lithuania: common mistakes and practical tips

Financial market participants supervised by the Bank of Lithuania - whether seeking to obtain or expand a license, or undergoing changes in shareholders, executives, or key function holders - must submit a comprehensive set of documents. A crucial part of this package is a set of questionnaires used by the Bank of Lithuania to assess the suitability and reliability of executives, key personnel, and shareholders.

When assisting clients with licensing services, we’ve noticed that completing these questionnaires often presents significant challenges. These forms play a vital role in the evaluation process, so it’s essential to approach them with care and provide all requested information.

This article outlines the most common mistakes and key areas to focus on to ensure a smooth and efficient process - whether you're undergoing licensing or structural changes.

1. Completeness of Information – A Mandatory Requirement

When filling out questionnaires for the Bank of Lithuania, you must adhere to the principle of completeness. Every question must be answered fully and accurately, regardless of how it's presented - whether in main text, smaller font, or parentheses.

• Example: If you're listing previous employers, pay attention to any additional information requested in parentheses. If asked to describe the company’s activities or your experience there, this must be included.

• The Bank expects executives to have sufficient qualifications and knowledge not only of financial markets but also of the specific sector in which the company operates.

• A common oversight is failing to mention all roles held. If you're completing the form as an executive but also serve as a shareholder or board member, this must be disclosed.

Omitting or skipping information can lead to delays, additional questions from the supervisory authority, or even a negative decision.

2. Properly Justifying the Source of Acquisition Funds

   
   

Shareholder questionnaires differ from those for executives or key personnel in that they require justification of the acquisition price and supporting documents. “Acquisition price” refers not only to the cost of purchasing shares but also to the formation of share capital during the licensing process. Common mistakes include failing to justify the origin of funds or not providing documentation on how the funds moved during the transaction.

You must provide:

• Proof that you had sufficient funds to invest

• Details on how those funds were accumulated

• Documentation of the fund flow: from which account to which, including loans or assets used, and their valuation

• If cryptocurrency was used, you must provide wallet addresses and full traceability from acquisition to transaction

The more precise your documentation, the smoother and faster the evaluation process will be.

3. Financial Reliability

   
   

This section often takes the longest to process and is considered critical. A frequent issue is insufficient data or documentation regarding the shareholder’s financial reliability. Common problems include incomplete asset declarations, lack of official documents proving asset origin, or inadequate evidence supporting asset value.

All financial reliability information must be backed by official documents:

• Cash and equivalents: bank statements showing the balance for the relevant year

• Real estate: registry extracts, valuations, purchase documents

• Dividends: documentation of allocation and/or payment

• Other income: e.g., rental income supported by contracts or other proof

Understanding the purpose of this section helps clarify what to submit. The Bank of Lithuania uses this information not only to verify the legal origin of funds but also to assess whether the shareholder could inject additional capital if needed to ensure the company’s financial stability.

4. Minor but Important Observations

   
   

Other frequent errors include:

• Missing signatures in required fields

• Failure to disclose administrative violations from the past 10 years

• Omitting past evaluations by supervisory authorities

Even small formal mistakes can lead to delays or additional questions, so it's crucial to thoroughly review the entire questionnaire before submission.

Conclusion

The licensing process with the Bank of Lithuania demands not just formal document submission but also high standards of quality and completeness. Each questionnaire is a vital part of the process and must be completed with legal precision. Proper preparation and thorough information can significantly reduce the risk of complications and save time.

If you’re facing these challenges or want to avoid them altogether - reach out to us, and we’ll be happy to assist you.

Would you like help drafting a sample response or preparing documentation for the Bank of Lithuania?