Qualities required of significant shareholders
Legal and regulatory framework:
- Banking Law: Articles 18, 46-54 and 72/1
- Relevant thematic NBB circulars:
- Communication NBB_2021_19 of 1 September 2021 on the ECB IMAS Portal and the digitalisation of forms related to qualifying holdings and the freedom to provide services and the freedom of establishment
- Communication NBB_2017_22 of 14 September 2017 to candidate shareholders and assigning shareholders
- Circular NBB_2017_23 of 14 September 2017 to financial institutions on acquisitions, increases, reductions and transfers of qualifying holdings
- International reference documents:
- Joint Guidelines of EBA, EIOPA and ESMA of 5 May 2017 on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector
From a prudential point of view, it is essential that the significant shareholder(s) should have the qualities necessary to ensure that they will exercise their influence to promote sound and prudent management and continuity-oriented development of the institution. They should also take into account the sound governance expectations to be met by institutions.
Not only is this prudential requirement a prerequisite for obtaining an authorisation, but it also continues to apply in the course of the business operations of the institution. It is reflected especially in the prudential assessment which must be made of the qualities of natural or legal persons who have decided to acquire or significantly increase a qualifying holding in the capital of the institution.
Any changes in the institution’s capital structure (an increase above or decrease below certain thresholds) should be reported by the significant shareholders and the institution - as soon as it becomes aware - to the supervisory authority.
The institution should provide the supervisory authority with all relevant information on its significant shareholders of which it is aware and which can have an influence on the prudential assessment of these shareholders. This obligation also applies to the shareholders concerned.
The criteria for the prudential assessment, both in the context of the application for authorisation and subsequently, are explained in the Joint Guidelines of EBA, EIOPA and ESMA on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector. Existing and potential shareholders should read these Guidelines in conjunction with Communication NBB_2017_22 and Communication NBB_2021_19. The rules applicable to institutions are specified in Circular NBB_2017_23.
Charter of the families/partners
Institutions with a family shareholding or a shareholder structure comprising a restricted number of partners are recommended to draw up a charter governing the relationships between the family or partners on the one hand and the institution on the other hand, as regards the latter’s sound governance, corporate vision, financial objectives, monitoring of managers, careers, remuneration, etc.
Prohibition on granting loans, credits or guarantees to acquire shares
No loans, credits or guarantees may be granted, directly or indirectly, to persons to enable them to directly or indirectly acquire or subscribe to shares or other securities that confer the right to dividends of the institution or of a company with which a close link exists, or that confer the right to acquire such securities. This type of transaction, where the repayment or cancellation of the resulting commitment depends to some extent on the payment of dividends by the institution, undermines the loss-absorbing capacity of the capital thus financed.