Acquisition or increase of qualifying holdings: Financial company
1. Notification to Banco de Portugal
Any natural or legal person who plans to own, directly or indirectly, a qualifying holding in one of the following financial companies (including investment firms) must inform Banco de Portugal of such intention in advance:
- Credit financial company
- Investment firm
- Financial leasing company
- Factoring company
- Mutual guarantee company
- Securities investment fund management company
- Real estate investment fund management company
- Wealth management companies
- Foreign-exchange or money-market mediating companies
Acts involving direct or indirect increases in a qualifying holding must also be previously notified to Banco de Portugal, whenever the proportion of the voting rights or of the capital held reaches or exceeds 10%, 20%, one third or 50% or so that the institution becomes a subsidiary of the acquiring entity.
On the other hand, any natural or legal person intending to dispose of a qualifying holding, or to reduce it so that the proportion of the voting rights or of the capital held would fall below any of the thresholds of 20%, one third or 50%, or so that the institution would cease to be its subsidiary, shall inform Banco de Portugal in advance, indicating the new proportion of the holding.
Any natural or legal person who acquires shares equal to or greater than 10% or more of the capital or voting rights of a regional development company, exchange office, credit securitisation fund management company or microcredit financial company, must inform Banco de Portugal accordingly, within 15 days of the acquisition. Banco de Portugal may request the submission of the information as referred to in Notice of Banco de Portugal No 5/2010.
Banco de Portugal may establish the suspension of the voting rights attached to a qualifying holding, to the extent necessary and appropriate to prevent the influence over the management which has been obtained through the act resulting in the acquisition of or increase in the said holding, provided that is had been acquired in breach of the applicable laws, without prejudice to other applicable penalties.
Type of legal act: Decision to oppose or not to oppose
Competent authority: Banco de Portugal
2. Regulations applicable
European Union law:
- Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 (Directive 2013/36/EU) (Articles 22 to 27 – Title III, Chapter 2).
- Legal Framework (Articles 102 to 107, with reference to Articles 196 (1) and 199-I (1));
- Notice of Banco de Portugal No 5/2010.
3. Application procedure
The acquisition of a qualifying holding must be communicated together with the data and information as referred to in Notice of Banco de Portugal No 5/2010 (Notice) and respective annexes, and in the Legal Framework:
- general information (Annex I):
- information on the proposed acquirer;
- information on the acquisition;
- information on the financing of the acquisition.
- additional information related to the relevance of the qualifying holding to be acquired (Annex II);
- declaration of honour (Annex III);
- in the case of acquisitions of indirect shareholdings, the data and information as referred to in Annexes I, II and III must be communicated not only by the proposed direct acquirers, but also by the person(s) at the top of the chain of shareholdings (Article 6 (1) of the Notice);
- Banco de Portugal may require the presentation of the data and information as referred to in Annexes I, II and III to intermediate participants, in case of doubts or any other reasons justifying its assessment, in particular if it is the case of an entity under the supervision of another supervisory authority of the financial sector (Article 6 (2) of the Notice);
- the proposed acquirer must inform Banco de Portugal of the identity of the beneficial owners, as defined in Article 2 (1) (h) of Law No 83/2017 of 18 August 2017 , of the qualifying holding in question, as well as any subsequent changes (Article 102 (5) of the Legal Framework).
- Banco de Portugal may, at any time, request additional data and information from the proposed acquirer and make the inquiries deemed necessary (Article 7 of the Notice and Article 103 (3) of the Legal Framework).
Banco de Portugal assesses whether the proposed acquisition fulfils all the conditions set out in applicable national or EU law. When assessing the acquisition project, Banco de Portugal evaluates certain criteria, taking into account:
- the suitability of the proposed acquirer;
- the likely influence of the proposed acquirer on the company;
- the financial soundness of the project.
(Article 103 (2) of the Legal Framework and Article 23 of Directive 2013/36/EU):
- the suitability of the proposed acquirer;
- the reputation, professional qualification, independence and availability of the members of the management body of the financial company, to be appointed as a result of the proposed acquisition, as referred to in Articles 30 to 33-A of the Legal Framework;
- the financial soundness of the proposed acquirer, in particular in relation to the type of business pursued or envisaged in the financial company;
- whether the financial company will be able to comply and continue to comply with the applicable prudential requirements and, in particular where it belongs to a group, whether the group has a structure that makes it possible to exercise effective supervision, effectively exchange information among the competent authorities and determine the allocation of responsibilities among the competent authorities;
- whether there are reasonable grounds to suspect that, in connection with the proposed acquisition, money laundering or terrorist financing within the meaning of Article 1 of Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005, is being or has been committed or attempted, or that the proposed acquisition could increase the risk thereof.
Cooperation between competent authorities
Within the scope of cooperation between the competent authorities, Banco de Portugal carries out a set of steps, in order to assess the proposed acquisition (Article 103-A of the Legal Framework and Article 24 of Directive 2013/36/EU), including consulting several databases, and requesting opinions from:
- the competent authorities of the home country;
- the Portuguese Insurance and Pension Funds Supervisory Authority, whenever the proposed acquirer corresponds to one of the types of entities authorised by that authority;
- the Portuguese Securities Market Commission, whenever the corporate object of the financial company includes intermediation involving financial instruments, or where the proposed acquirer corresponds to one of the types of entities authorised by that authority.
Procedures and deadlines
Receipt of the notification
After receipt of the notification of acquisition of a qualifying holding:
- if the notification is accompanied by all the required data and information, Banco de Portugal informs the proposed acquirer, in writing, of the expiry date of the assessment period;
- if the notification is not accompanied by all the required data and information, Banco de Portugal informs the proposed acquirer, in writing, of the missing data or information.
Assessment of the notification
After the date on which all data and information required have been submitted by the proposed acquirer, Banco de Portugal has a period of 60 working days to assess the notification of acquisition of a qualifying holding.
During the assessment period, but no later than the 50th working day of the assessment, Banco de Portugal may request further data and/or information from the proposed acquirer, in writing and make the inquiries deemed necessary to complete the assessment. Thus:
- the assessment period is suspended between the date of the request of the additional data and/or information and the receipt of the reply by the proposed acquirer;
- the proposed acquirer is informed, in writing, of the receipt of the data and/or additional information and of the new deadline for the assessment of the project.
The suspension must not exceed:
- 20 working days or;
- 30 working days, if the proposed acquirer:
- has its residence or head office in a third country or is subject to non-EU regulations;
- is not subject to supervision under Directive 2013/36/EU, or of Directives 2009/65/EC of the European Parliament and of the Council of 13 July 2009, 2009/138/EC of the European Parliament and of the Council of 25 November 2009, and 2004/39/EC of the European Parliament and of the Council of 21 April 2004.
Banco de Portugal takes a decision to oppose or not to oppose the acquisition, based on its evaluation of the proposed acquisition, according to the requirements set out in national law.
The decision must be taken within the assessment period defined in national law, i.e. within 60 working days of receipt of all data and information required, without prejudice to any suspension of such period, as mentioned above.
Before taking a decision that may adversely affect the rights of the proposed acquirer, it shall grant the proposed acquirer the right to be heard.
Banco de Portugal may oppose the proposed acquisition in the following situations:
- if it deems that it has not been demonstrated that the proposed acquirer fulfils the conditions to ensure the sound and prudent management of the financial company, based on the above-mentioned assessment criteria;
- if the information provided by the proposed acquirer is incomplete.
If Banco de Portugal decides to oppose the proposed acquisition, it:
- informs the proposed acquirer, in writing, of its decision and of the reasons thereof, within two working days of that decision and prior to the expiry of the assessment period;
- may make accessible to the public the decision and the reasons thereof, on its own initiative or upon request of the proposed acquirer.
If Banco de Portugal does not oppose the proposed acquisition within the assessment period, it is deemed to be approved.
If Banco de Portugal decides not to oppose, it may set a reasonable time limit for the completion of the proposed acquisition, which is of one year except where otherwise provided for.
Banco de Portugal informs the proposed acquirer of its decision on the acquisition of a qualifying holding.