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15.03.2017

Regulation on holding equity interest in the capital of banks, approved by the DCA if the NBM no.127 of June 27, 2013

Published în the Official Monitor of the Republic of Moldova no. 198-204 of September 13, 2013, Art no. 1419

Annex
to the Decision of the Council of Administration
of the National Bank of Moldova
no.127 of June 27, 2013

Last amended by the Decision of the NBM #218 of 11.08.2016 (in force: 26.08.2016)

 

REGULATION
on holding equity interest in the capital of banks

CHAPTER I
GENERAL PROVISIONS

1. This Regulation establishes requirements on acquisition and alienation of substantial quotas in the capital of the bank, on setting up bank’s shares as the object of pledge, procedures of prudential assessment of potential purchasers, including persons and holders of quotas in the capital of the bank referred to in Article 15, paragraph (1) letter b) of the Law on financial institutions and on continuous monitoring of the quality of bank’s shareholders as well as the information and documents that shall be submitted to the National Bank for these purposes.    

2. The notions utilized in this Regulation have the significances stipulated in Article 3 of the Law on financial institutions.

3.For the purposes of this Regulation, the terms used have the following meanings:

1) Dominant influence over the person - the existence of facts or organizational or financial arrangements for:
a) the distribution of the annual profit or covering the losses of the person;
b) coordination of business management of the person by others persons that pursue a common goal;
c) assignment with powers higher than those derived from the interests held;
d) assignment with powers to choose the members of the supervisory or executive body of other persons than those that are to possess such powers under the shares held;
e) joint management of persons arising from the composition of governing bodies;
f) cases where a majority of the members of the supervisory or executive body of the person or the shareholder owning at least 50% of shares with voting rights or in the capital of the entity are accustomed or obliged to act as to manage the entity in accordance with the instructions of another entity;
g) capacity to hold a decisive majority to vote the matters provided for by law, within the competence of the general meeting of shareholders.

2) Close links - defined as two or more persons linked in any of the following ways:
a) by a shareholding, meaning ownership, direct or by way of control, of 20% or more of the voting rights or capital of a legal entity;
b) by control;
c) by the fact that both or all these persons are linked to the same third person by control;

3) Persons acting in concert - persons are acting in concert when each of them decides to exercise the rights linked to the shares acquired in accordance with an explicit or implicit agreement made between them. Concerted activity and acquisition date conducted in violation of the Law on Financial Institutions shall be determined by the National Bank. Until proven otherwise, the following persons are presumed to act in concert, but not limited to:
a) persons that acquired bank shares in circumstances denoting coordinated acquisition or common intention of these persons to acquire shares of the bank;
b) involved persons:
persons controlling or controlled by another person or which are under common control;
persons that are direct or indirect part of agreements to jointly obtain or exercise the voting rights, if the shares, the subject of the agreement, constitute a substantial quota;
individuals with control and management functions within that person;
spouses, relatives and in-laws up to the second degree of the individuals mentioned in the above paragraphs;
persons that can appoint the majority of members of the management body within an entity;
any person who, under civil legislation is related to the physical person by a relationship of first and second degree of kinship, their wives and related persons and as well as companies under their control;
c) parent undertaking with its subsidiaries and any subsidiaries of the same parent undertaking between them;
d) a person with the board members and with the persons involved and these persons between them;
e) a person with its pension funds and with the person managing these funds;
f)   persons using in carrying out of economic transactions the financial resources having the same source or originating from various entities that are involved persons;
g) persons directing in carrying out of economic transactions the benefits obtained to the same recipient or recipients that are involved persons;
h) legal entities which ownership structures or management bodies have mostly the same composition;
i) persons that have adopted or adopt a similar investment policy by purchasing financial instruments issued by the same issuer or involved persons with the same issuer and/or by disposal of financial instruments issued by the same issuer or involved persons with the same issuer;
j) persons which identical exercise of rights conferred by the securities issued by the bank   reveals a common long-term policy related to the bank;
k) persons, which for carrying out of economic transactions, for the representation of interests or for the exercise of the voting rights conferred by the financial instruments held, have appointed or appoint as mandatory(s), mandatory of the same person, respectively persons that are involved persons. 
l) persons associated in any legal form recognized by law and the purpose or objective of the association consists in operations in connection with the bank;
m) persons that held or hold simultaneously equity interests in one or more legal entities exerting control over them and conducting a common policy;
n) persons that conducted or conduct economic transactions together.

4) Potential purchaser - any physical or legal person, association or group of persons acting in concert, registered as such or not, who follow to acquire by any means, directly or indirectly, a significant quota in a bank or to increase their substantial quota so that the proportion of their voting rights or of the quota in the capital of the bank reaches or exceeds the level of 5%, 10%, 20%, 33% or 50% or so, that the bank becomes its own subsidiary or which follows to acquire, individually or in concert, by any means, a quota in the capital of the bank over which there have become incidental the provisions of Article 15 paragraph (2) of the Law on financial institutions. In applying this Regulation, the obligations incumbent upon the direct or indirect potential acquirer/purchaser/holder of quota in the bank’s capital pertain and to its effective beneficiary.

5) Potential pledging debtor – the shareholder whose substantial quota of shares of the bank is expected to be constituted as object of the pledge.

 

CHAPTER II
REQUIREMENTS AND RESTRICTIONS ON
PARTICIPATION  QUOTAS IN THE CAPITAL OF THE BANK

4. Without prior written permission of the National Bank:
1) no potential acquirer may acquire, by any means, a substantial quota in the capital of the bank or increase its substantial quota so that the proportion of its voting rights or of participation quota in the social capital shall reach or exceed the level of 5%, 10%, 20%, 33% or 50%, or so that the bank becomes its subsidiary;
2) no person may acquire, individually or in concert, by any means, a quota in the social capital of the bank over which there have become incidental the provisions of Article 15 paragraph (2) of the Law on financial institutions;
3) no potential pledging debtor can constitute as object of the pledge a substantial quota of shares of the bank.

5. Any proposed acquirer shall require the prior written permission of the National Bank before making the payment for the shares (primary placement) and up to conducting the sell/buy transaction or transfer of shares transaction (secondary placements) and up to conducting any other transactions leading to owning by him/her of a quota, for which it is necessary the permission  of the National Bank of Moldova.
Any potential pledging debtor shall request the prior written permission of the National Bank before signing the pledge agreement.

6. If the acquisitions are made in violation of item 4 sub-items 1) – 2) of this Regulation, the exercise of voting rights, the right of convening and holding of the general meeting, the right to bring issues to the agenda, the right to propose candidates for the members of the board, executive body and auditing committee of the company, the right to receive dividends, shall be suspended as of the date of purchase. Within 5 days as of the date of acquisition carried out under the terms of this paragraph, the National Bank shall inform the acquirer and the bank that the provisions regarding suspension of the exercise of the aforementioned rights become applicable. These actions shall be taken into account in determining the quorum at a general meeting of shareholders, but shall not be taken into account when adopting the decisions.
In case, a significant quota of bank’s shares will be established as collateral object by infringement of provisions of item 4 sub-item 3) of this Regulation, the National Bank shall apply the provisions of article 38 of the Law on financial institutions.

7. Within 3 months as of the date of acquisition, persons that have violated the provisions of item 4 sub-items 1) – 2) of this Regulation shall dispose fully of the quota held in the capital of the bank.
If, after the expiry of the 3 months’ term, the shares were not disposed of, notwithstanding the provisions of the Law no.1134-XIII of 2 April 1997 on Joint Stock Companies and Law no.199-XIV of 18 November 1998 on Securities Market, within 15 days, the bank's executive body shall:
1) order the cancellation of shares;
2) order the issuance of new shares in the same number and with the same face value;
3) to expose the new shares for sale on the stock exchange, given that the funds received from sale to be made available to the former holder, after deduction of selling expenses and the amounts of the fines that have been imposed.
If the shares issued for sale were not sold or partially sold, notwithstanding the provisions of the Law on Joint Stock Companies and the Law on Securities Market, the executive body of the bank shall take the decision to buy the respective equity interest in order to reduce the share capital.

8. The provision of item 4 sub-items 1) – 2) of this Regulation shall not apply where a significant interest in the capital of the bank is obtained in objective circumstances, i.e. by succession, inheritance, donation or other means of free transfer, as a result of the reduction in the share capital of the bank. In such cases, the exercise of voting rights, the right of convening and holding of the general meeting, the right to bring issues into the agenda, the right to nominate for the members of the board, executive body and auditing committee of the company, the right to receive dividends, shall be suspended as of the date of acquisition and up to the date of issue of permission by the National Bank. Within 5 days as of the date of acquisition carried out in objective circumstances, the National Bank shall inform the acquirer and the bank that the provisions regarding suspension of the exercise of the aforementioned rights become applicable. These actions shall be taken into account in determining the quorum at a general meeting of shareholders, but shall not be taken into account when adopting the decisions.

9. Acquirers that have received significant interest in the capital of the bank or increased their equity interest, under the terms set forth in item 8 of this Regulation, shall inform the National Bank about this, within 15 days as of the date of acquisition, and shall request the permission of the National Bank, within 60 days as of the date of acquisition as in accordance with this Regulation. If the acquirers fail to require the permission of the National Bank within this period or if, after the assessment, the National Bank refuses to issue the permission, the shareholders shall dispose fully of the shares held in the capital of the bank within 3 months as of the date of acquisition of significant interest such acquired or as of the date of refusal. If after the expiry of the term, the shares were not disposed of, the provisions of paragraphs 2) and 3) of item 7 of this Regulation become applicable.

10. Residents of jurisdictions, which according to regulations of the National Bank were classified as jurisdictions that do not implement the international standards of transparency, and/or groups of persons acting in concert and have involved a person from those jurisdictions cannot hold directly or indirectly equity interest in the capital of a bank.

11. When applying the provisions of this Regulation, the calculation of voting rights shall be carried out in accordance with the regulations of the National Bank in coordination with the National Commission for Financial Markets.

 

CHAPTER III
PRIOR PERMISSION REQUEST BY THE POTENTIAL ACQUIRER AND
THE DECISION-MAKING PROCESS

12.The proposed acquirer shall submit a written request to the National Bank, drawn up in accordance with Annex 1 to this Regulation.
Every page of the request for the permission of the National Bank to hold/gain/increase the equity interest in the capital of the bank and the annexes thereto shall be signed by the proposed acquirer or by the legal representative (in case of legal entities - by a person authorized by law or statute, applying the stamp of that legal entity). Representatives authorized by power of attorney shall not be entitled to sign the request.
The request and the set of documents shall be submitted to the Governor of the National Bank in the state language of the Republic of Moldova. In case the request and/or the set of documents are drafted in a foreign language, their legalized translation in the state language of the Republic of Moldova is presented in accordance with the legislation.  

13. If the proposed acquirer is a group of persons acting in concert, a joint request shall be submitted with the attached list of these persons and the set of documents for each person in the group, which will include comprehensive information, including that related to the indirect proposed acquirer and the effective beneficiary owner of the direct potential acquirer, in accordance with the Annexes # 2-5 to this Regulation. 

14. After the receipt of the request from the proposed acquirer to obtain the prior permission, the National Bank shall verify the compliance with the Annexes no.2-5 to this Regulation, in terms of completeness of documents submitted and shall confirm in writing the receipt of the request, expressing itself upon the completeness of documents at the latest within 2 working days of receipt.

15. If the request is accompanied by all the documents, according to the Annexes no.2-5 to this Regulation, the National Bank shall inform the proposed acquirer in the confirmation referred to in item 14 of this Regulation about the deadline for assessment.

16. If the request is not accompanied by all the documents according to the Annexes no.2-5 to this Regulation, the National Bank shall inform the proposed acquirer in the confirmation referred to in item 14 of this Regulation about the need to complete the set of documents within 30 working days from the date of sending this confirmation. If the potential acquirer does not provide information or documents required within the timeframe specified in this item, the National Bank shall return the application and the set of documents presented.

17.National Bank shall assess the quality of proposed acquirer at the latest within 60 working days as of the date of the written confirmation of receipt of documents, according to the Annexes no.2-5 of this Regulation. If the request is not accompanied by all the documents, the assessment period shall begin as of the date of confirmation by the National Bank of receipt of all documents.

18. The National Bank may request in writing any additional information or documents necessary to complete the assessment, but not later than the expiration of 50 days from the assessment term indicated in item 17 of this Regulation.

19. The proposed acquirer shall submit the additional information or documents required by the National Bank no later than 30 working days as of the date of the request of the National Bank. During this period, the assessment term referred to in paragraph 17 of this Regulation shall be suspended. Any other request from the National Bank as to complete or clarify the information received shall not have the effect of suspending the assessment.
If the proposed acquirer fails to submit the information or documents requested within the term specified in this item, the National Bank shall not issue the permission.

20. As a result of the quality assessment of the proposed acquirer under this Regulation, the National Bank shall issue or refuse to issue the prior permission as in accordance with item 21 or 24, as appropriate.

21. National Bank shall issue the prior permission to the potential acquirer only if it is assured of the suitability and adequacy of the quality of the proposed acquirer, including its financial strength in relation to the proposed acquisition in order to ensure sound and prudent management of the bank.

22. In case of prior permission issuance, the National Bank may fix a maximum period, which shall not be less than 3 months, to complete the proposed acquisition. National Bank may extend this period in case of circumstances that do not depend on the will of the proposed acquirer and that justify such an extension.

23. National Bank shall issue the prior permission within 2 working days as of the date of the decision in question.

24. National Bank shall not issue the prior permission if there are reasonable grounds for doing so on the basis of the criteria laid down in Chapter IV of this Regulation, or if the information and documents provided by the proposed acquirer are incomplete.

25. If the National Bank takes the decision to refuse to issue the prior permission, it shall communicate its decision in writing to the proposed acquirer, within 2 working days of its adoption, and shall not exceed the limit indicated in item 17 of this Regulation, specifying the reasons behind the decision.

26. If the solicitant is a group of persons acting in concert, the permission is issued to the group. The validity of the respective permission is dependent upon the following:
1) The permission issued to a group of persons acting in concert shall not be valid for every person separately from the group.
2) In case of liquidation of the group of persons acting in concert, the permission held by the respective group shall lose its validity.
3) In case one or more persons leave the group, the validity of the permission shall be retained within the limit of the shares of those remaining. In this case, the validity will be confirmed by the National Bank via a letter within 5 days as of the date on which it became aware of this fact.
4) In case a person joins the group, he/she shall submit the set of documents in accordance with Annexes # 2-5 to this Regulation, in order to solicit a new permission;
5) When transfers of shares are made within a group of persons acting in concert, totally or partially, from one person to other persons from the group, the permission held by this group shall not lose its validity.
6) In case when within the group acting in concert, increases of quotas are made by one or more people, so that the group’s quota ownership reaches or exceeds the level of limits specified in article 15 paragraph (1) of the Law on financial institutions, this/these persons shall present the set of documents in accordance with the Annexes # 2-5 to the Regulation, in order to solicit a new authorization.

 

CHAPTER IV
ASSESSMENT OF PROPOSED ACQUIRER

27. The quality assessment of the proposed acquirer shall be made in compliance with the principle of proportionality, which applies both to the structure and complexity of the information required for the conduct of the assessment and for the assessment procedure itself.

28. National Bank shall assess the quality of the proposed acquirer by examining all of the following criteria:
1)  reputation of proposed acquisition;
2) qualifications, reputation and experience of any person who will act as the administrator of the bank as a result of the proposed acquisition (assessed according to the National Bank regulations related to the requirements to bank administrators);
3) financial soundness of the proposed acquirer, in particular in relation to the type of business carried on by the bank at the moment and that expected to be carried out by the bank related to the proposed acquisition;
4) bank's ability to meet prudential requirements imposed to the bank, according to the legislation in force, in particular the requirement according to which the financial group of which it is part of shall have structure that makes it possible to exercise effective supervision, to effectively exchange information between competent authorities and to determine the distribution of powers among these authorities;
5) existence of reasonable grounds to suspect that, in terms of the proposed acquisition, an offense or attempted offense of money laundering or terrorist financing was committed, within the meaning of legislation, or that following the proposed acquisition such a risk could increase;
6) existence of reasonable grounds to suspect that the beneficial owner of the proposed acquisition is a person other than that declared to the National Bank.

281. In case of gaining a quota in a bank’s capital inferior to the substantial one, in order to solicit the permission provided in Article 15, paragraph (1) letter b) of the Law on financial institutions, the National Bank shall evaluate the quality of the potential acquirer by cumulative examination of the following criteria:
1) the reputation of the proposed acquirer;
2) existence of reasonable grounds to suspect that, as for the proposed acquisition, there is or has been committed an infringement or an attempt of infringement of money laundering or of financing terrorism as provided by the relevant legislation, or that as a result of the proposed acquisition such a risk might increase; 
3) existence of reasonable grounds to suspect that the beneficial owner of the proposed acquisition is another person than the one declared to the National Bank.

29. As a result of examination of the solicitation and of the set of documents presented in accordance with the provisions of this Regulation, the National Bank may decide to assess only the person that is indirectly the ultimate holder of significant interest (or the beneficial owner thereof) and the person that is to hold directly the significant interest, except when the National Bank considers necessary to evaluate one or several intermediary holders from the participants.

30.Reputation assessment of the proposed acquirer in accordance with the items 28 and 281 of this Regulation involves the identification of the existence of suspicions based on the integrity and professional competence of the proposed acquirer.
The reputation assessment involves the following elements:
1) integrity;
2) professional competence;
If the proposed acquirer is a legal person, the assessment of the integrity and professional competence shall cover the legal entity itself and the persons directing the activities of that legal entity.

31.The proposed acquirer is deemed to meet the requirement of integrity until proven otherwise.

32.When assessing the integrity of the proposed acquirer, at least the following aspects and situations shall be taken into consideration, as far as relevant, in the sense that these can induce doubts about the criterion fulfillment: 
1) existence of convictions for economic crimes, crimes against proper conduct of work in the public sector, corruption offences;
2) existence of civil sanctions for infringements in the economic sector;
3) measures and sanctions applied by any supervisory authority or professional body in the economic field;
4) any indication that the proposed acquirer has not been transparent, open and cooperative with the supervisory authority or regulatory authority, including any indication that he/she tried to avoid the assessment within the authorization proceedings of a regulated entity, ignored knowingly the obligation to notify the intention of acquiring a significant interest in a regulated entity or tried to avoid prudential assessment which supposed to be subject to as a proposed acquirer of a significant interest in such regulated entity;
5) the proposed acquirer was refused to be registered, authorized or to be licensed for an authorized or licensed activity, or such a registration, authorization, license was revoked, withdrawn or cancelled;
6) the proposed acquirer was dismissed or excluded from a trust position, a fiduciary relationship or a similar situation or was asked to resign or leave such a position;
7) the proposed acquirer is prohibited to occupy a leading position in a legal entity;

33.When assessing the proposed acquirer, it shall be also taken into account the assessment of the persons controlled or managed in the past or currently by the proposed acquirer in terms of situations provided for in item 32 of this Regulation.

34. National Bank shall assess the relevance of situations as provided for in item 32 of this Regulation, taking into account the seriousness of the circumstances specific to each case, and that such cases may be material considered together, even if taken separately may not have relevance.

35.When assessing the integrity of the proposed acquirer, the National Bank may take into account the relevant information from the point of view of the integrity of any person connected with it, such as any person that has or appears to have a business relationship with the proposed acquirer.

36.The National Bank shall assess the integrity of the proposed acquirer regardless of the level of shareholding to be held in the bank and the expected involvement in the management of that bank.

37.Professional competence of the proposed acquirer includes competencies in administration, so-called managerial competencies, and competencies in the financial activities carried out by the bank, so-called technical competencies.

38. Managerial competency can be assessed, taking into account the previous experience of the proposed acquirer in acquiring and managing an equity interest in the capital of a legal entity, demonstrating competence, diligence and compliance with the relevant standards.

39.Technical competencies can be assessed, taking into account the previous experience of the proposed acquirer gained as a shareholder that exercised control over a company that operates in the financial market and/or as a person that administrated and managed the activity of such companies. In this case, the experience of the proposed acquirer shall also demonstrate competence, diligence and compliance with the relevant standards. In case of a proposed acquirer - legal entity, the assessment of the competencies shall consider especially the financial activities currently carried out by the proposed acquirer and/or by the entities in the financial group to which it belongs.

40.When assessing the technical competence requirements, the peculiarities of each case shall be taken into account, especially the level of shareholding to be held in the bank and the expected involvement in the management of the proposed acquirer in the management of that bank. To this end, the National Bank shall take into account the following circumstances:
1)proposed acquirer is not in a position to exercise or does not intend to exercise influence over the bank. In this case, holding an appropriate level of managerial competencies shall be sufficient to meet the criterion of reputation;
2)proposed acquirer is to participate in bank's capital in order to diversify the portfolio and/or to obtain dividends or income from the capital and not in order to be involved in the management of the bank. In this case, it shall be proven that the managerial competencies requirement is met and the technical competency requirements can be significantly reduced;
3) proposed acquirer is to hold the control over the bank or to exercise a dominant influence over it, for example through a shareholding conferring a right of veto. In this case, it shall be proven that the managerial competencies requirement is met and the level of the technical competency shall be higher, taking into account the nature and complexity of the proposed activities.

41. National Bank shall assess the qualifications, reputation and experience of any person that will act as the administrator of the bank as a result of the proposed acquisition only where the proposed acquirer has the power to appoint the administrators of the bank and has identified the candidates.
In this case, the National Bank shall conduct a preliminary assessment of qualifications, reputation and experience of any person that will act as the administrator of the bank as a result of the proposed acquisition on the basis of documents related to the person submitted by the proposed acquirer according to Annex no.1 to this Regulation on requirements to bank administrators and the list of affiliated persons that  will act as the administrator of the bank (as defined in Article 3 of the Law on Financial Institutions and taking into account the definition of the Regulation on bank transactions with its affiliated persons), indicating the following data: affiliation criterion, in case of a legal entity - name, address, name of managers, equity interest in the capital of the entity (entity name, country of residence and the equity interest value), in case of an individual - name, surname, address, place of employment and position held, equity interest in the capital of the entity (entity name, country of residence and the equity interest value).

42.If the proposed acquirer intends to propose an administrator for appointment that does not meet the requirements of the National Bank, the National Bank shall refuse to issue the prior permission.

43.Final assessment with subsequent confirmation or non-confirmation of persons that will act as the administrator of the bank as a result of the proposed acquisition shall be carried out by the National Bank after their approval by the competent body of the bank and after the submission of the set of documents according to the regulations of the National Bank related to the requirements to bank administrators.

44.The National Bank shall assess the financial soundness of the proposed acquirer on the basis of documents submitted according to the Annexes no.2-5 to this Regulation in terms of its ability to fund its interest and to maintain a solid financial structure and to ensure a prudent and healthy management of the bank in the future (3 years). This ability shall be reflected in the overall objective of its participation in the bank's capital and in its policy on the participation and also, in case of a proposed acquirer that is to have control over the bank, in the projected financial objectives that shall be consistent with the strategy contained in the activity plan.

45.When assessing the financial soundness of the proposed acquirer, it shall be taken into account whether the proposed acquirer was actively engaged in economic, financial and other type of activities in the last 3 years before requesting the permission to hold the respective equity interest in the capital of the bank.

46.In case of a proposed acquirer that is to hold control over the bank, its financial soundness shall be analyzed in correlation with the criterion mentioned in item 28, paragraph 4) of this Regulation with regard to bank's ability to meet the prudential requirements.

47. The National Bank shall examine whether funding mechanisms used by the proposed acquirer to finance its equity shareholding in the capital of the bank or the financial relationships between the proposed acquirer and the bank can generate conflicts of interest, which could destabilize the financial structure of the bank.

48.The analysis of the financial soundness of the proposed acquirer shall be reported to its nature and be proportionate to its shareholding in the capital of the bank, applying different approaches of analysis in depth and methods when the proposed acquirer will exercise control over the bank and when the proposed acquirer will exercise a dominant influence; even in the latter case, it shall be taken into account the involvement of the proposed acquirer in the management of the bank.

49.If the proposed acquirer is a non-resident legal entity, prudentially regulated and supervised by the supervisory authority of the country of which the prudential regulations are considered equivalent, the National Bank shall take into account the assessment of the financial situation of the respective potential acquirer made by its supervisory authority, supported with the documents sent directly by the supervisory authority of the proposed acquirer to the National Bank.

50.The assessment of the adequacy of the quality of the proposed acquirer shall also consider whether the bank will be able to comply with the prudential requirements stipulated by the Law on Financial Institutions and its subordinated normative acts, in particular, whether the financial group of which it is part of has a structure that allows for an effective supervision, an effective exchange of information with the competent authorities and for a distribution of responsibilities between the competent authorities.

51.The structure of the financial group refers to the group members, including the parent undertaking and subsidiaries as well as the intra group administration and management rules (decision-making mechanisms, level of independence, and management of capital).

52.As to ensure an effective supervision, the close links of the bank with other individuals or legal entities or the laws, regulations or administrative measures of other state governing the individual or legal entity with close links with the bank, or the difficulties in the implementation of these laws, regulations or administrative measures shall not hinder the National Bank from the fulfillment of its supervisory obligations.

53.Prudential assessment of the proposed acquirer shall target its ability to support a proper organization of the bank within the financial group. Both the bank and the group shall have documents with clear and transparent provisions on corporate governance, internal control and independent control functions (risk management, internal audit).

54.The National Bank shall take into account whether the proposed acquirer will be able in the future:
1) to provide financial support to the bank that might be needed for the proposed activity;
2) to provide the capital to the bank that might be needed for further development of the activity;
3) to implement any appropriate solution to adjust the future needs of bank's own funds.

55.The assessment criterion on money laundering and terrorist financing shall be carried out in conjunction with the assessment of the integrity and regardless of the value or other features of the equity interest that is intended to be held in the bank.

56.The funds used for the acquisition of the equity interest in the capital of the bank shall originate from legitimate sources and funding mechanism shall be transparent. In this respect, it shall be proven at least that the funds are not transferred through financial institutions that are supervised by the competent authorities of non-cooperating countries and with increased risk of money laundering and terrorist financing and/or that do not have enough rules on combating money laundering and terrorist financing.

57. The quality of a potential acquirer will not be considered adequate, if he/she is suspected or known by the competent authorities, domestically or internationally, as being:
1) involved in money laundering operations or in attempts of this kind, whether or not they are related to the proposed acquisition;
2) terrorist or financing acts of terrorism.

571. The provisions of items 21, 37-41, 44, 45, 47-50, 53, 54 do not apply in case of acquisition of a quota in the bank’s capital that falls below the substantial one.

58. If the prior permission of the National Bank is requested for two or more proposed acquisitions targeting the same bank, the National Bank shall ensure non-discriminatory treatment to all proposed acquirers.

 

Chapter IV1
PRELIMINARY PERMIT SOLICITATION AND EVALUATION OF THE POTENTIAL PLEDGING DEBTOR, ADOPTION OF THE DECISION

581. The potential pledging debtor shall submit a written application to the National Bank, prepared in accordance with Annex # 11 to this Regulation.
The application for obtaining permission of the National Bank on establishing as object of collateral a significant quota of bank’ shares, as well as of its annexes shall be signed directly, every page, by the potential pledging debtor or by his/ her legal representative (for legal entities - by the person authorized by law or statute by applying the stamp of the legal entity). The application is not permitted to be signed by representatives empowered by power of attorney.
The application and the set of documents shall be submitted to the Governor of the National Bank in the state language of the Republic of Moldova. If the request and / or the set of documents are drafted in a foreign language, their legalized translation according to legislation shall be presented.
The following information and documents shall be attached by the potential pledging debtor - physical person/legal entity to the application for obtaining the permission of the National Bank:
1) the certified copy in accordance with the legislation of the passport or of the ID card /extract from the State Register issued by the competent organ of state registration of legal entities and of keeping their evidence (compiled within maximum 30 days preceding the date of application) including a copy of the document confirming the state registration authenticated by notary;
2) information on the legal or physical person acting on behalf or on the account of the potential pledging debtor – physical person and legal or physical person, on behalf of whom or on whose account the potential pledging debtor acts– physical person, who will specify the respective powers (by annexing certified copies of confirmative documents);
3) information on bank’s shares that are foreseen to be pledged, prepared in written form, which will include at least: the number of shares pledged, the nominal value, their market value and their weight in the bank’s capital;
4) the draft copy of the pledge agreement;
5) copy of the credit agreement;
6) the document that attests the notification by the issuing bank about the intention of the potential pledging debtor to put into pledge the shares of the bank;
7) affidavit on concerted activity with the persons soliciting the loan, with the lenders and with owners and managers of these persons or on absence of such a concerted activity. In case of existence of such an activity, the list of persons acting in concert with the potential pledging debtor (in accordance with the definition given to item 3 of this Regulation) shall be also presented and by indicating the following data: the criteria which determines the concerted activity (expressed very explicitly and in detail) in the case of legal person - name, address, name of the manager, participation quotas in the capital of companies (name of the company, its location, share in relative and absolute size), and in the case of physical person - name, surname, address, employment and official duties, including administrative functions employed in other companies, equity interest in the capital of commercial societies (name of the company, its location, the quota in relative and absolute size);
8) the affidavit of the effective beneficiary, in written form, on holding the status of effective beneficiary of shares foreseen to be pledged as well as the information confirming this status;
9) information on the funds that will originate from the solicited credit, including the requested loan amount, the purpose of utilization of the loan, institution/s through which the transfers (the network used to transfer funds) will be conducted for achieving the goal of the loan and other relevant information regarding the utilization of borrowed funds. 

582. If the potential pledging borrower/borrowers are a group of persons acting in concert, a joint application with an attached list of persons and a set of documents for each person of the group shall be submitted, in accordance with the provisions of the paragraph 581 of this Regulations.

583. After receiving the application for obtaining the permission, in accordance with item 581 of this Regulation and after verification of compliance of request, of information and of documents attached to the provisions of this chapter, in terms of completeness (totality), the National Bank shall confirm in writing to the potential pledging borrower about the completeness of documents, at the latest within 4 working days from the receipt of solicitation.
In case the application is accompanied by all documents stipulated in this Chapter, the National Bank shall notify about the fact the potential pledging debtor, in accordance with the procedure described in this item, specifying the deadline for evaluation.
In case that not all the documents shall be presented as required by paragraph 581 of this Regulation, the National Bank informs the potential pledging borrower about the need to complement the set of documents.
In case when, at the repeated solicitation of the National Bank the potential pledging borrower does not present all the documents, in accordance with the provisions of the paragraph 581 of this Regulation, the National Bank within 30 working days from the date of sending the confirmation under this item, informs the potential pledging debtor about the refusal of issuing the prior permission.

584. The National Bank evaluates the quality of the potential pledging debtor not later than during 30 working days after the written confirmation of documents’ receipt in accordance with item 581 of this Regulation. If the request is not accompanied by all documents, assessment period shall start from the date of confirmation by the National Bank about the receipt of all documents.

585. The National Bank may request in writing any additional information or documents or conduct necessary additional investigation to evaluate the potential pledging debtor. From the date of solicitation of additional information or documents, the assessment period stipulated in item 584 of this Regulation shall be suspended until documents presentation.  In case the potential pledging debtor shall not provide all the information or documents required within the term specified by the National Bank, it will inform the potential pledging debtor about refusal of issuing the preliminary authorization.

586. The National Bank evaluates the quality of the potential pledging debtor by examining the following cumulative criteria:
1) existence of reasonable grounds to suspect that by the proposed pledging of bank’s shares there could be an attempt of infringement of money laundering or of financing terrorism, within the provisions of the legislation in the domain; 
2) existence of reasonable grounds to suspect that the beneficial owner of the bank’s shares foreseen to be pledged is another person than the one declared to the National Bank;
3) existence of reasonable grounds to suspect that the potential pledging debtor does not comply to the Law on financial institutions.
In case the creditor shall be a bank from the Republic of Moldova, it will be considered the bank’s capacity to meet prudential requirements, in accordance with the existent legislation, as a result of granting the credit.

587. The National Bank will not issue the preliminary authorization if there are reasonable grounds in this respect, on the basis of criteria set out in item 585 of this Regulation or if the information and documents provided by the potential pledging debtor are incomplete or contain erroneous data.

588. If the National Bank refuses to issue prior permission, it shall notify in writing about its decision to the potential pledging debtor, within 2 working days from the date of adoption of decision and not exceeding the term specified in item 583 of this Regulation, indicating the reasons that formed the basis of the decision.

589. The assessment of the criteria on money laundering and terrorist financing is implemented through transparency of utilization of funds that originate from the solicited loan. In this respect, it shall be proven at least that the respective funds will not be transferred through certain institutions which are supervised by the competent authorities of non-cooperating countries and with increased risk of money laundering and terrorist financing and/or which do not dispose of sufficient norms on combating money laundering and financing terrorism.
Establishment of pledge will not be permitted, if the person soliciting the loan, foreseen to be secured with bank’s shares is suspected by the competent authorities or known domestically or internationally, as being:
1) involved in money laundering operations or in attempts of this kind;
2) terrorist or financing acts of terrorism.

 

CHAPTER V
NOTIFICATION ON DISPOSAL OR REDUCTION
OF THE EQUITY INTEREST IN THE BANK

59. Any direct or indirect holder of a significant interest in the capital of the bank that has decided to dispose of a significant interest in a bank or to reduce the significant interest, so that the proportion of the voting rights or equity interest in the capital of the bank to fall below 1%, 5%, 10%, 20%, 33%, 50% or so that the bank would cease to be a subsidiary of that person, shall notify in writing the National Bank about this decision. The notification shall be made prior to the transmission of ownership of securities.

60.The notification referred to in item 59 of this Regulation shall be carried out by an official letter signed by the direct or indirect holder of the equity interest in the capital of the bank that has decided the disposal of, attaching the information provided for in the Annex no.6 to this Regulation and the following documents:
1) extract from the register of holders of securities of the company registrar, confirming the rights of holder of securities of the bank;
2) data regarding the identity of the persons acting in concert with the shareholder and / or the bank which shares are subject to sale, specifying their relations;
3) written declaration, confirming that the data and information presented are true;
4) data relating to the identity of the purchaser if it is known.

 

CHAPTER VI
MONITORING OF SHAREHOLDERS QUALITY

61. The quality of direct and indirect holders of significant quota in the share capital of a bank must meet permanently the requirements set out in Chapter IV of this Regulation to ensure a sound and prudent management of the bank, the compliance of the provisions of this legislation. In this respect, direct and indirect holders, including their beneficial owners present to the National Bank the survey, the pattern of which is provided in Annex 4 to this Regulation annually, at the latest before April 30 of the year following the year of management. If the information presented above have undergone changes to Chapters I and II of the questionnaire, the direct and indirect holders, including their beneficial owners present to the National Bank the changes concerned within 30 days from the date of occurrence of modifications.

62.National Bank may request from the bank and any direct or indirect holder of the equity interest in the capital of the bank, including from their beneficial owners any information deemed necessary for the examination of compliance of the direct and indirect holders with the requirements outlined in Chapter IV of this Regulation.
Where appropriate, the National Bank may require:
1) the bank to submit information available on the identity of the direct and indirect holders, including of effective beneficiaries of significant interests and their size;
2) the bank and/or any direct or indirect holder, including the effective beneficiary of the equity interest in the capital of the bank to submit information related to its activity, including annual reports, income statements, and other information necessary to carry out the prudential assessment in the manner and under the conditions laid down in Chapter IV of this Regulation.
The bank and direct and indirect holders shall submit the information in the manner and conditions indicated in the request of the National Bank.

63.Within 3 working days of the date on which it became aware, the bank shall notify the National Bank about:
1) any direct or indirect acquiring of equity interests in the share capital of the bank that reaches or exceeds 1%, 5%, 10%, 20%, 33%, 50% or as a result of which the bank becomes a branch;
2) any direct or indirect disposal of equity interests in the share capital of the bank which are below  1%, 5%, 10%, 20%, 33%, 50% or so that the bank ceases to be a subsidiary;
3) any facts or circumstances giving rise to the suspicion that such acquiring or disposal of, in accordance with the item 63 sub-items 1) and 2) of this regulation, was conducted in non-compliance with the laws and/or normative acts of the National Bank, attaching supporting documents. This information shall be submitted by the bank and to shareholders concerned.

64. Within 10 days as of the date on which it knew or should have known, any direct or indirect holder of significant interest in the share capital of the bank shall notify the National Bank on changing the beneficial owner. For this purpose, the holder shall submit at least the following information:
1) identity of the direct holder, indicating the value of the equity interest held in the capital of the bank;
2) identity of the beneficial owner until the change, country of residence and address, as well as information on the relationship of control over direct holder;
3) identity of the beneficial owner after the change, country of residence and address, as well as information on the relationship of control over the direct holder.

65.The National Bank shall be informed of any agreement, regardless of the form in which it was concluded, which has the purpose or effect the concerted exercise of voting rights at general meetings of shareholders of the bank or general meetings of the persons exercising control over bank, concerted activity in bank management or persons exercising control over it, or the exercise of the right to appoint the majority of board members or executive body of the bank, or persons exercising control over it.
Participants in such an agreement and the bank's governing bodies or persons to which this agreement relates shall inform the National Bank within 5 working days as of date of signing such an agreement or as of the day on which the circumstances that reveal its existence become known, when the agreement is not concluded in writing, submitting at least the following information:
1) the identity of the participants, indicating the equity interests and voting rights held individually and aggregately;
2) where applicable, the identity of persons referred to in the agreement;
3) the date of signing of the agreement or the date on which the circumstances that reveal its existence become known;
4)beneficial owners of participants in the agreement, and, where appropriate, those of the persons referred to in the agreement.

66. Information submitted under this chapter may be verified by the National Bank.

 

CHAPTER VII
MEASURES TAKEN IN CASE OF NON-COMPLIANCE OF SHAREHOLDERS’ QUALITY REQUIREMENTS

67.If the bank and/or direct or indirect holder of equity interest in the capital of the bank fail to comply with the quality requirements set out in Chapter IV of this Regulation, the National Bank may apply remedial measures and sanctions in accordance with Article 38 of Law on Financial Institutions.

68.Independent of other measures or sanctions that can be applied to bank, its administrators, direct or indirect holder of significant interest in the share capital of the bank and its beneficial owner, if the direct or indirect holder of significant interest no longer meets the requirements of the law and related normative acts of the National Bank issued with regard to shareholders quality or exercises over the bank an influence that is likely to endanger the prudent and sound management of the bank and when the direct or indirect holder or its beneficial owner failed to submit to the National Bank the information that reveals with certainty the identity of the beneficial owner, the National Bank may:
1) withdraw the prior permission of holders of significant interest in share capital of the bank, informing about this fact according to the Law;
2) may provide for the suspension of:
a) the exercise of voting rights attached to those shares;
b) right of convening and holding of the general meeting;
c) right to bring issues to the agenda;
d) right to nominate candidates for members of the board, the executive body and auditing committee;
e) right to receive dividends;
3) may provide for the disposal of shares held by the person which right to vote has been suspended.

69. In case of withdrawal of the preliminary permission, the holders of substantial quota in the capital of the concerned bank shall dispose of their shares within 3 months as of the date of withdrawal of the permission. In case that the shares were not disposed of within that period, there shall apply the provisions of Article 156, paragraph (3) of the Law on financial institutions.

70. If the prior permission of holders of significant interest in the share capital of the bank has been withdrawn, which cumulatively hold more than 50% of the share capital, the National Bank may establish special bank administration.

71. Persons to which were imposed the measures set out in item 68 of this Regulation shall no longer hold directly or indirectly new shares of the bank.

 

CHAPTER VIII
THE LIST OF SHAREHOLDERS

72.The list of bank shareholders entitled to attend the general meeting of shareholders is void unless the written opinion of the National Bank on this list has been issued.

73.To this end, at least 7 days before the general meeting of shareholders, the bank or persons convening the extraordinary general meeting of shareholders shall submit to the National Bank the list of shareholders entitled to participate in the general meeting of shareholders, prepared in accordance with Article 54, paragraph (3) of the Law on Joint Stock Companies.

74.The bank or persons convening the general meeting of shareholders shall submit to the National Bank, the latest 2 days before the date of the general meeting of shareholders, the information obtained under Article 158, paragraph (2) of the Law on Financial Institutions and information on the person and or persons who shall convene the general meeting of shareholders, the contact persons by indicating postal address, telephone number, fax, e-mail.

75.The National Bank shall examine the documents submitted under items 73 and 74 of this Regulation and shall transmit to the Commission of registration of participants in the general meeting of shareholders of the bank and to the bank or person convening the general meeting of shareholders the written opinion on the list of shareholders.

 

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