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The Bank
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The Bank - Column 1
- About the Banco de Portugal
- Sustainability
- Foreign exchange authority
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The Bank - Column 2
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Organisation
- Organisation chart
- Governor
- Board of Directors
- Distribution of remits and delegation of powers of the Board of Directors
- Board of Directors' Calendars
- Advisory Board
- Board of Auditors
- Internal audit
- Data protection policy
- Valora, S.A.
- Sociedade Gestora dos Fundos de Pensões
- National Council of Financial Supervisors
- Fintech +
- Recruitment
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Organisation
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The Bank - Column 3
- International activity
- Public consultations
- See more
- Media
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Media - Column 1
- Press releases
- Public speeches
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Media - Column 2
- Calendar
- Media - Column 3
- Publications and research
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Publications - Column 1
- Economic Bulletin
- Estabilidade Financeira
- Política monetária
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Publications - Column 2
- Pagamentos
- Notas e moedas
- Publications
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Outras publicações
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Publications - Column 3
- Research
- Economics in a picture
- Monographs and series
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- Mission and tasks
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Statistics
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Coluna 1 - Estatística
- Introduction
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Coluna 2 - Estatística
- Reporting obligations
- SDDS Plus
- Coluna 3 - Estatística
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Coluna 1 - Estatística
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Supervision
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Column 1 - Supervision
- Single Supervisory Mechanism
- Prudential rules
- Macroprudential
- Banking conduct supervision
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Column 2 - Supervision
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Microprudential
- Objectives and principles
- Priorities
- Supervisory Review and Evaluation Process
- Duty to report
- Reporting obligations of supervised institutions
- Authorisations
- Supervision of culture and governance
- Suitability of members of the management and supervisory bodies and key function holders
- Adequação dos titulares de funções essenciais
- Suitability of qualifying shareholders
- European Market Infrastructure Regulation (EMIR)
- Forum on Cybersecurity and Operational Resilience
- See more
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Microprudential
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Column 3 - Supervision
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Money laundering and terrorist financing
- Banco de Portugal's functions
- Financial Action Task Force
- Restrictive measures
- Registration of virtual assets service providers
- Report on the activity carried out in Portugal under the freedom to provide services
- Documents
- Legislation and rules
- Forum on the Prevention of Money Laundering and Terrorist Financing
- Illicit financial activity
- Brexit
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Money laundering and terrorist financing
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Column 1 - Supervision
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Monetary policy
- Column 1 - Monetary policy
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Column 2 - Monetary policy
- Interest rates
- Implementation
- Column 3 - Monetary policy
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Payment systems
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Column 1 - Payment systems
- Introduction
- Confirmation of Payee/Payer and SPIN
- Digital Euro
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Column 2 - Payment systems
- Payment instruments
- Payment services under the PSD2
- Virtual assets
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Column 3 - Payment systems
- Market Infrastructure
- Cooperation with the market
- See more
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Column 1 - Payment systems
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Banknotes and coins
- Column 1 - Banknotes and coins
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Column 2 - Banknotes and coins
- Current coins
- Commemorative and collector coins
- Column 3 - Banknotes and coins
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The Bank - Column 1
Suitability of members of the management and supervisory bodies
The following eligible persons are subject to the Banco de Portugal's (or the ECB’s) authorisation to exercise their functions and, as such, to the respective authorisation process:
- all members of the management and supervisory bodies of the entities subject to the Banco de Portugal's supervision, irrespective of the governance structure adopted;
- managers of branches of credit institutions having their head office in Portugal and established in European Union Member States;
- managers of branches of credit institutions having their head office in Portugal and established in third countries; managers of branches or representative offices located in Portugal of credit institutions that are not authorised in other European Union Member States, which are subject to all the suitability requirements established by law for the members of the management boards of credit institutions having their head office in Portugal.
The authorisation process to exercise functions and its subsequent special registration procedure apply to all members of the management body, including non-executive members, and of the supervisory body, as well as to the alternate members of management and supervisory bodies.
Institutions must have a policy that clearly identifies the procedures to be followed when they select and assess, initially and permanently, the suitability of the members of the management and supervisory bodies and key function holders, under the applicable legal requirements (reputation, professional qualification and experience, independence and time commitment).
The internal policy for the selection and assessment of members of the management and supervisory bodies must promote the diversity of qualifications and skills necessary to fulfil their duties, setting goals for the representation of men and women, and designing a policy intended to increase the number of people in the sub-represented group, with a view to reaching the mentioned goals.
When setting goals for the representation of men and women, as well as when selecting members, institutions should consider the results of the analysis carried out by the Banco de Portugal in June 2023 on the gender diversity of the management and supervisory bodies of Portuguese credit institutions.
The goals and policy for the representation of the under-represented gender, as well as their implementation, must be published, in accordance with Article 115-B(5) of the Legal Framework of Credit Institutions and Financial Companies.
The results of the suitability assessment of the members of the management and supervisory bodies and key function holders must be included in a report to be submitted to the Banco de Portugal under the authorisation process to exercise functions or if justified by any supervenient facts.
The performance of tasks by eligible persons is subject to the authorisation of the Banco de Portugal or the ECB.
It is the responsibility of institutions to ensure that eligible persons meet the suitability requirements envisaged by law.
There are two types of authorisation process:
- authorisation;
- prior authorisation.
In the authorisation process, the institution requests authorisation for the exercise of functions of eligible persons after these are appointed to exercise the functions in question.
In the prior authorisation process, the institution requests authorisation for the exercise of functions of eligible persons before these are appointed to that purpose. Prior authorisation expires if the corresponding special registration is not subsequently requested of the Banco de Portugal within the legally established time limit.
In any case, the taking up of the new term of office may only occur following authorisation by the Banco de Portugal or the ECB.
Start of the process
The authorisation process to exercise functions starts with a request for that purpose submitted to the Banco de Portugal by the institution in question. This request must be accompanied by the information and documentation referred to in Instruction of the Banco de Portugal No 23/2018.
The authorisation request does not have to be presented within a given time frame by persons exercising functions for the first time in supervised institutions and those who exercise a new function in a supervised institution (i.e. persons designated ex novo). However, these persons may only begin exercising functions after obtaining authorisation.
In the case of reappointments – i.e. in situations where the eligible person continues to exercise functions in the same role as before – the authorisation request to exercise functions must be presented within 15 working days of the reappointment’s decision date.
Institutions submit these requests and annexed documentation through BPnet, the Banco de Portugal’s extranet for operational communication with supervised institutions, as established in Instruction of the Banco de Portugal No 7/2016.
Analysis of the process
The request submitted by the institution to the Banco de Portugal for authorisation to exercise functions must be accompanied by the information and documentation referred to in Instructions of the Banco de Portugal No 23/2018 and No 7/2021, in the case of significant institutions.
When the application or documentation submitted contains insufficiencies or irregularities which can be remedied by the persons concerned, the latter will be given notice that they are required to do so within a reasonable time limit, failing which authorisation will be refused.
The Banco de Portugal may request all information it deems necessary to analyse the process adequately. The institution must deliver it within the time frame established for that purpose by the Banco de Portugal, failing which authorisation will be refused for lack of documentation.
The Banco de Portugal has a 90-day period from the date of receipt of the relevant request duly completed. This time limit may be extended, upon reasoned decision, for one or more periods up to a maximum of 30 working days.
When the formal analysis of the authorisation process to exercise functions is concluded, the Banco de Portugal assesses the eligible persons, considering in particular the following legal suitability requirements:
- good repute;
- professional qualification and experience;
- independence;
- time commitment.
The Banco de Portugal also verifies the formal independence of most members of the institutions’ supervisory body, including that of its chair.
The Banco de Portugal’s assessment is autonomous as regards the institution’s assessment and also comprises the collective composition of the management and supervisory bodies, with regard to professional qualification and experience, as well as time commitment.
Conclusion of the process
Once the analysis of the process is completed, the Banco de Portugal or the ECB notifies the institution of its decision to authorise or refuse the exercise of functions by eligible persons, within 90 working days of the date on which it receives a duly completed request, or from up to 120 days where the 90-working day period has been extended based on a reasoned decision.
Changes to members of the management and supervisory bodies and reappointments are deemed to be authorised if the Banco de Portugal or the ECB do not react within that time frame.
Refusal of authorisation on grounds of lack of good repute or insufficient professional qualification and experience, independence or time commitment will be communicated by the Banco de Portugal or the ECB to the persons concerned and the credit institution, in compliance with the rules established in Código do Procedimento Administrativo (the Administrative Procedure Code) regarding prior hearings of interested parties, or under the applicable EU legislation.
With regard to prior authorisation requests, the special registration request must be submitted within 60 days of the authorisation date, failing which the granted authorisation expires.
The authorisation for the exercise of functions is a prerequisite for eligible persons taking up office and for final registration of appointment of a member of the management and supervisory bodies in the commercial register.
A. Good repute
It is the responsibility of institutions to permanently ensure that the members of their management and supervisory bodies and key function holders appointed to the institution are of good repute for working in the financial system.
For these purposes, good repute may be defined as one’s good name/ good reputation, integrity or honesty: a person of good repute is trustworthy, i.e. objectively appears to adopt in their personal and professional life ethical behaviours, consistent with the institution’s sound and prudent management.
These behaviours must signal in particular any aspects which show the person’s ability to make wise and judicious decisions, or a tendency to meet obligations punctually or to behave in a manner compatible with the maintenance of market confidence.
The good repute assessment is always an individual assessment, to which the principle of proportionality does not apply.
To assess the good repute of a given person, the institution must, based on the most comprehensive information on the personal and professional behaviour of the person assessed, make a prognosis as to their ability to ensure the institution’s sound and prudent management.
The prognosis leads to a prudential risk analysis. For that purpose, the institution must collect the relevant evidence and assess the danger it presents in the event of the person assessed engaging in behaviours that do not ensure the institution’s sound and prudent management. Should the institution believe that this is a real possibility based on concrete evidence, it must consider that the good repute requirement is not met.
The Legal Framework of Credit Institutions and Financial Companies lists, non-exhaustively, relevant evidence for a good repute assessment:
- evidence that the member of the management and supervisory body has not acted in a transparent or cooperative manner in their relationships with any national or foreign supervisory or regulatory authority;
- evidence that, in connection with an institution in which the person under assessment has held a management or supervisory position or owned a qualifying holding at the relevant time, money laundering or terrorist financing within the meaning of applicable anti-money laundering and terrorist financing legislation has been committed or attempted, or where there is an increased risk thereof;
- refusal, withdrawal, cancellation or termination of the registration, authorisation, acceptance or licence for the exercise of any commercial, business or professional activity by a supervisory authority, professional body or entity with similar functions, or removal from a post in a public entity;
- the reasons behind any dismissal, termination of employment or removal from a post requiring a special bond of trust;
- prohibition, by a judicial authority, supervisory authority, professional body or entity with similar functions, from acting in the capacity of member of the board or manager of a corporation established under civil or commercial law or performing any functions therein;
- inclusion of mentions of default in the Central Credit Register, or any other similar register, by the competent authority for that purpose;
- financial or corporate results obtained by entities managed by the person in question or where the said person has been the holder of a qualifying holding, taking especially into account any recovery, winding-up or liquidation proceedings, and how the person concerned has contributed to the situation leading to such proceedings;
- personal insolvency, regardless of the respective qualification;
- civil, administrative or criminal proceedings, as well as any other circumstances that, depending on the specific case, may have a significant impact on the financial soundness of the person in question;
- the professional curriculum and potential conflicts of interest, where part of the professional career has been carried out in an entity directly or indirectly related to the financial institution concerned, whether through financial holdings or business relationships;
- insolvency, in Portugal or abroad, of the person concerned or of a firm controlled by the said person or in which they had been a member of the board, a director or a manager de jure or de facto or a member of the supervisory body;
- accusation, indictment or conviction, in Portugal or abroad, for crimes against property, falsification and forgery, crimes of obstruction of justice, crimes committed in the pursuit of public functions, tax crimes, crimes specifically related to the exercise of financial and insurance activities and the use of means of payment, as well as crimes provided for in the Portuguese Company Law;
- the indictment or conviction, in Portugal or abroad, for breach of legal rules governing the activity of credit institutions, financial companies and pension fund management companies, notably rules on the prevention of money laundering or terrorist financing, as well as rules governing the securities market and insurance or reinsurance activity, including insurance or reinsurance intermediation activity;
- failure to comply with disciplinary, ethical or professional conduct rules, within the scope of regulated professional activities;
- facts that may have led to the judicial dismissal, or judicial confirmation of dismissal for cause, of members of the management and supervisory bodies of any commercial company;
- actions undertaken as member of the board, director or manager of any commercial company that may have determined a conviction for damage caused to the company, its partners, social creditors or third parties.
In addition to the facts described and others of a similar nature, the institution must include in its judgement all and any circumstances it may legally take knowledge of, which, due to their seriousness, frequency or any other relevant characteristics, lead to a prognosis of the guarantees provided by the person in question of sound and prudent management of the credit institution.
The good repute assessment must not be mistaken for a judgment in an administrative offence proceeding or a criminal proceeding. The issue underlying the good repute assessment is not whether a person acted in a certain way, so as to establish if they must be sanctioned/punished. Given the existing evidence regarding the person’s past behaviour, what is at stake is whether there is a risk of this person not ensuring a sound and prudent management of the institution in the future.
A negative good repute assessment is not a sanction, rather a prudential measure to safeguard the institutions’ sound and prudent management and hence the integrity and stability of the financial system. The aim of this assessment is to prevent the institution from assigning functions with an impact on its management to persons at risk of not ensuring sound and prudent management, due to non-fulfilment of the following requirements: the person’s ability to make wise and judicious decisions, or a tendency to meet obligations punctually or, more generally, not to behave in a manner compatible with the maintenance of market confidence.
The existence of a criminal or administrative offence proceeding against a given person is relevant evidence for good repute assessment purposes and, as such, the institution’s assessment must include an appraisal of this evidence.
In the authorisation processes, the Banco de Portugal makes an autonomous assessment of the good repute of eligible persons. For that purpose, it takes into consideration information provided by the eligible person (by means of the questionnaire annexed to Instruction of the Banco de Portugal No 12/2015) and the information obtained or received by the Banco de Portugal, directly or through other public entities. The exchange of information between the financial supervision authorities is particularly relevant to this process.
In its good repute assessment, the Banco de Portugal takes into account the above criteria that result from the national law, interpreted in accordance with the Constitution of the Portuguese Republic and European Union law, including the applicable Guidelines of the European Banking Authority (EBA).
According to EBA Guidelines, the good repute requirement of a member of the management and supervisory body is deemed to be met if there are no reasoned doubts nor documentation suggesting otherwise. A member of the management and supervisory body is considered not to meet the good repute requirement when their personal or professional conduct raises material doubts as to their ability to guarantee the credit institution’s sound and prudent management.
B. Professional qualification and experience
With due consideration to the principle of proportionality, institutions must ensure that the members of their management and supervisory bodies and their key function holders possess adequate knowledge, skills, qualifications and experience to perform their tasks, thus guaranteeing the institution’s sound and prudent management.
The relevant knowledge, skills and qualifications may be acquired through:
- academic qualification or specialised training that is appropriate for the positions they are to hold;
- professional experience of a duration and level of responsibility compatible with the credit institution's characteristics, complexity, size and risk exposure.
Previous training and experience must be relevant to the position, so that the holders of those positions can:
- understand the functioning and activities of the institution;
- assess the (financial and non-financial) risks to which the institution is exposed, particularly the risks that are more directly related to the task performed;
- autonomously and critically analyse and decide on the issues they face.
Non-executive members of the management and supervisory bodies must possess the skills and qualifications to critically assess the decisions taken by the management body and to supervise this body's function effectively.
According to EBA Guidelines (EBA/GL/2021/16), non-executive members of the management and supervisory bodies must have sufficient experience to enable them to provide constructive challenge to the decisions and effective oversight of the management body. They must also be able to demonstrate that they have, or will be able to acquire, the technical knowledge necessary to enable them to understand sufficiently well the activities of the credit institution and the risks that it faces.
The EBA recommends that particular consideration be given to the level and profile of the education and whether it relates to banking and financial services or other relevant areas. Education in the areas of banking and finance, economics, law, administration, financial regulation, information technology and quantitative methods can be considered relevant for the financial services sector.
With regard to professional experience, the EBA considers that the members of the management and supervisory bodies must have gathered practical and professional experience in a management position over a sufficiently long period and with a high degree of responsibility.
It is good practice for the institution to set the tasks to be performed specifically by each member of its management and supervisory bodies, weighing the respective responsibilities and its integration into imposed or optional committees or commissions and, based on this definition, establish the minimum requirements of professional qualification and experience that the respective member must have.
Institutions must ensure that their management and supervisory bodies possess adequate collective knowledge, skills and experience to be able to understand the institution's activities, including the main risks to which they are exposed, and that they consist of members with an adequately broad range of experience. In application of the principle of proportionality, a possible lower individual qualification may be superseded by the collective composition of the body as a whole, without prejudice to a set of minimum skills and qualifications for the full exercise of the functions in question.
Given the principle of proportionality, institutions must place at the disposal of the members of their management and supervisory bodies internal or external training means allowing them to address any gaps in relevant knowledge or skills and/or update them, given the evolution of relevant issues for the exercise of their functions, notably as regards their knowledge of the institution where they hold a position.
C. Independence
The members of the management and supervisory bodies and key function holders must exercise their functions with independence of mind.
The independence requirement is intended to prevent the risk of subjecting the members of the management and supervisory bodies to undue influence from other persons or entities, providing favourable conditions for the impartial performance of tasks.
To ensure independence of mind – and the appearance of independence – of the members of the management and supervisory bodies and key function holders, the institution must apply a robust conflicts of interest policy that makes it possible to continuously assess:
- the existence of real or potential conflicts of interest;
- the materiality of any real or potential conflicts of interest detected;
- the possibility of applying measures to mitigate the risks underlying the real or potential conflicts of interest in question, such that a third party may not put into question the impartiality and objectivity of analysis and decision-making at the institution.
In assessing this requirement, all situations liable to affect the independence of mind of the members of the management and supervisory bodies are to be taken into account, including:
- positions the person concerned holds or has held in the credit institution in question or in another credit institution;
- consanguineous relationships or similar, or professional or economic relationships that the person concerned has with other members of the management or supervisory bodies of the credit institution, its parent undertaking or its subsidiaries;
- consanguineous relationships or similar, or professional or economic relationships that the person concerned has with a person who has a qualifying holding in the credit institution, its parent undertaking or its subsidiaries.
The performance of duties in affiliated entities does not in itself indicate that the member of the body acts without independence.
Institutions must be able to indicate to the Banco de Portugal the conflicts of interest detected and explain why they consider that a certain conflict of interest is material or non-material. They must also be able to explain the suitability of the measures used to mitigate the risks underlying real or potential conflicts of interest.
Independence of mind and appearance of independence must not be mistaken for formal independence, as envisaged, for example, for most members of the supervisory body, including its chair, of public interest entities, or for an appropriate minimum number of members of the management body of investment fund management companies.
Independence of mind and appearance of independence must not be mistaken for formal independence, as envisaged, for example, for most members of the supervisory body, including its chair, of public interest entities, or for an appropriate minimum number of members of the management body of investment fund management companies.
Majority of formally independent members in the supervisory body
Institutions’ supervisory bodies must comprise a majority of formally independent members, including their chair.
To qualify as formally independent members, the persons in question must meet a set of criteria envisaged by law for that purpose, related to the absence of a relationship between the member of the management body and a given interest group specific to the institution and the absence of a situation that hampers the respective impartiality in analysis and decision-making.
The legal provision of a formal independence requirement, associated with the internal supervisory function, aims to:
- promote impartiality in the person’s analysis and decision-making, preventing cases of risk of undue influence (i.e. the interference of third-party interests in analysis and decision-making, with prejudice to the interests that the person in question has the fiduciary duty to protect);
- promote impartiality in analysis and decision-making of the body in which the person in question intends to perform or performs tasks;
- promote third-party confidence in impartial analysis and decision-making of the person subject to the requirement and body in which they perform tasks.
The legislator has not exhaustively listed a series of criteria to gauge the formal independence of the members of the supervisory body. Rather, it provided for two open and indefinite criteria that must be gauged in the light of the specific case’s material circumstances, i.e.:
- link to a firm’s specific interest group;
- absence of situations that hamper impartiality in analysis and decision-making.
Jointly with these criteria, the law establishes that the following lack formal independence:
- holders or those acting in the name or on behalf of holders of a qualifying holding equal to or higher than 2% of the institution’s share capital;
those who have been re-elected for more than two consecutive or non-consecutive terms of office.
D. Time commitment
For that purpose, they must ascertain how much time is deemed essential for performing the tasks in question, considering the functions inherent in each position, and making sure that the persons in question actually have and devote the time needed to exercise their functions.
Institutions must take into consideration the actual time commitment of the person in question. To that end, they must consider all and any situation that occupies their time, including notably:
functions performed in corporate bodies (e.g. positions in management or supervisory bodies or in the general meeting board), as well as
other professional activities (management positions or employee in firms, carrying out activities as lawyer, advisor, auditor, teacher, etc.), regardless of these functions being exercised under an employment or service provision contract, or any other contract, and whether performed in institutions in the banking and financial sector or other sectors;
functions and positions in non-profit institutions (e.g. foundations, associations, etc.).
When applying for authorisation to hold a position, institutions must provide the Banco de Portugal with the necessary information for the supervisor to assess the time commitment of the person in question.
In particular, information should be provided on the estimated time commitment of the person in question, the full list of the cumulated positions and the time allocated to each. In both cases, the estimated time allocated or to be allocated by the person in question may be indicated in hours or days per year, provided that the same criterion is always used for all positions concerned.
Given that time commitment is indicated by applicants and institutions using different units (days/year or hours/week), the Banco de Portugal, bearing in mind the information provided in the processes for the authorisation and non-opposition to position accumulation agreed on a maximum annual time commitment of 245 days/year and 50h/week and weekly occupation, and therefore uses the following calculation rule for converting the data indicated in days/year into hours/week:
245 working days/year x [time indicated by the non-executive member in hours per week] ÷ by 50 hours/week.
Limit on the number of positions – possibility to hold additional non-executive positions
Significant institutions for the purposes of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 (CRD IV) and Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 (CRR,) must take into account, in their assessment, that the members of their management and supervisory bodies are prohibited from accumulating more than one executive directorship with two non-executive directorships, or four non-executive directorships.
For these purposes, a single directorship shall be understood as executive or non-executive directorships on the management or supervisory bodies of credit institutions or other entities which are included in the same perimeter of supervision on a consolidated basis or in which the credit institution has a qualifying holding.
The quantitative limit of directorships that can be accumulated does not apply to the members of management and supervisory bodies of institutions benefiting from extraordinary public financial support and specifically appointed in the context of such support.
The quantitative limit of directorships that can be accumulated excludes the directorships held in entities whose principal corporate object is the performance of non-commercial activities, except if, due to their nature and complexity, or the size of the respective entity, there are serious risks of conflicts of interest or lack of availability for the performance of the function in the institution.
The ECB or the Banco de Portugal may authorise the members of the management and supervisory bodies of significant institutions for the purposes of the CRD and the CRR to accumulate one additional non-executive directorship.
Time commitment of non-executive members
Non-executive members play a crucial role in overseeing and controlling the conduct of the day-to-day management of institutions. This responsibility lies with both members who are part of the supervisory body of the institution and the non-executive members of the management body, through delegation of responsibilities.
In performing these functions, non-executive members are expected to allocate sufficient time to their functions to effectively monitor the institution’s managerial decisions. However, often these members tend to underestimate the amount of time needed to perform their functions properly. This may result in an estimate of insufficient availability for the position, the combination of a high number of positions, or excessive overall time commitment, thereby undermining the availability for the position within the supervised institution.
It is therefore crucial that the institution establishes in advance the minimum time commitment in the job description and that the applicants understand from the outset the time and effort that their commitment to the position will require.
For the purpose of assessing the time commitment of non-executive members to their duties, it should be taken into account that, among other tasks, it is incumbent on non-executive members to:
supervise management choices on a regular basis and challenge executive management decisions, with their own value judgement;
regularly interact with the staff of the institution, particularly those responsible for control functions, and visit the institution’s premises;
carry out the assessments provided for by law or facilitate their implementation by third parties, while ensuring their coordination;
engage with supervisors, monitoring more closely the issues that signal them as being riskier;
interact with external auditors where appropriate.
In addition, non-executive members are expected to understand the business of the institution, the market in which it operates, the main risks and the risk management strategy adopted. They must therefore monitor the institution’s progress over time, while keeping pace on emerging risks.
They should also have an appropriate understanding of the business areas for which they are collectively responsible, as well as the relevant laws, regulations and recommendations, including the Portuguese Company Law, the Legal Framework of Credit Institutions and Financial Companies, the special frameworks applying to the institution's activity and the regulations and recommendations issued by the competent supervisory authorities, such as Notice of the Banco de Portugal No 3/2020, and the EBA (where applicable).
To this end, these non-executives should provide sufficient time for continuous learning and development, including introductory courses and other activities to keep in pace with the risks inherent in the institution’s business, by attending courses.
For more on the Banco de Portugal’s analysis of the declared time commitment of non-executive members of 21 Portuguese credit institutions, see here.
Credit institutions must permanently check for and communicate to the Banco de Portugal any supervenient facts, as soon as they learn of them, that may affect the good repute, professional qualification and experience, independence or time commitment requirements of authorised persons.
Supervenient facts must be communicated to the Banco de Portugal under the same terms as for reporting facts when presenting the authorisation request to perform tasks.
Institutions must also communicate to the Banco de Portugal the measures they intend to take, if any, given the facts presented. They must communicate, in particular, if they intend to reassess the persons’ suitability; if so, they must furthermore inform the Banco de Portugal of the result of that reassessment, by submitting the corresponding reassessment report.
The Banco de Portugal may oppose the performance by members of the management or supervisory bodies of credit institutions of management or supervisory functions in other entities if it deems that the accumulation is liable to hamper the performance of the functions already entrusted to them, in particular, where there are serious risks of conflicts of interest or because it results from lack of availability for the performance of the function.
In its assessment, the Banco de Portugal considers the specific circumstances of the case, the specific requirements of the directorship and the nature, scale and complexity of the institution’s activities.
In the case of directorships to be held in an entity subject to the Banco de Portugal’s supervision, the power of opposition is exercised within the scope of the authorisation process for the performance of the functions.
In any case, institutions must declare the intention of the persons concerned to the Banco de Portugal at least 30 days before the date foreseen for the taking up of the new functions. Should the Banco de Portugal not issue its decision within this period, it is understood that it does not oppose the accumulation of directorships.
It is the responsibility of institutions to prove that the intended accumulation does not hamper the interested person’s performance of functions in the institution. To this end, institutions must accompany the relevant application with the documents set out in Instructions of the Banco de Portugal No 23/2018 and No 7/2021 (for institutions directly supervised by the European Central Bank):
- new pages referring to Part 7 of the questionnaire annexed to Instruction No 23/2018 (Availability) or Section 6 of the questionnaire annexed to Instruction No 7/2021 of the member of the body duly updated in accordance with the new position they intend to hold;
- new pages relating to Part 8 (Independence and Conflicts of Interest), Part 9 (Independence and Incompatibilities) or Section 5 of the questionnaire annexed to Instruction No 7/2021 and Part 10 (Mutual Agricultural Credit Banks) of the member’s questionnaire duly updated whenever the new position which they intend to hold carries any amendment to the previous version of those parts of the questionnaire;
- specific national characteristics section of the questionnaire annexed to Instruction No 7/2021, in the case of a significant institution, of the member of the body duly updated when the new position which they intend to hold carries any amendment to the previous version of those parts of the questionnaire;
- statement signed by the member in question and the institution itself stating that “The information provided in the questionnaire submitted on (date) constitutes the only amendment to the previous questionnaire submitted regarding (name), with the other answers previously provided remaining unchanged”;
- where relevant, the minutes of the meeting of the management body of the entity subject to the Banco de Portugal’s supervision, in which the interested party exercises functions, proving that the above body is aware of the planned accumulation of functions;
- all the documentation needed for the assessment aiming at confirming that the accumulation will not hamper the performance of the functions already performed by the person in question, namely due to the non-existence of serious risks of conflicts of interest, or due to the fact that the intended accumulation does not establish the lack of availability to perform functions in the institution subject to the Banco de Portugal's supervision.
The members of the management and supervisory bodies of significant institutions for the purposes of the CRD IV and the CRR are prohibited from accumulating more than one executive directorship with two non-executive directorships, or four non-executive directorships. The ECB or the Banco de Portugal may authorise one additional non-executive directorship.
Once the respective authorisation to exercise functions has been granted, the special registration of eligible persons with the Banco de Portugal must be requested by the institution concerned within 30 days of the date on which the eligible person has started to exercise functions. The request must indicate the start date of the performance of functions.
Institutions submit these requests through BPnet, the Banco de Portugal’s extranet for the operational communication with the financial community.
For reappointments of all members of the management body and in the event of an authorisation request to exercise functions as an alternate of the member of the management or supervisory body, the special registration request and authorisation request must be filed at the same time, being that, in such situations, either the eligible person is already exercising their functions, or as an alternate, no start date has been defined for that effect (as provided for in Article 8(3) of Instruction of the Banco de Portugal No 12/2015).
In cases of prior authorisation to exercise functions, the aforementioned request for registration must be accompanied by a copy of the minutes of the meeting where the given person(s) has been designated to exercise the functions in question.
The authorisation process to exercise functions is undertaken as part of the supervised institutions’ authorisation process and, subsequently, over the institution’s lifetime, whenever there is a change in the holders of the positions subject to the Banco de Portugal’s authorisation process.
The supervised institutions may not begin their activity until they are authorised by the Banco de Portugal and enrolled in the Banco de Portugal’s special register; subsequent changes to the initial authorisation’s request are also subject to registration.
- Legal Framework of Credit Institutions and Financial Companies, approved by Decree-Law No 298/92, of 31 December 1992, particularly Articles 30 to 33-A and 69 to 72 and Articles 102 to 103-A;
- Instruction of the Banco de Portugal No 11/2023 (in Portuguese only), which regulates the conditions for joining and using SIRES (relevant information system on supervised entities);
- Instruction of the Banco de Portugal No 23/2018, (in Portuguese only), regarding the authorisation process for members of the management and supervisory bodies of the institutions subject to the Banco de Portugal’s supervision to exercise functions;
- Instruction of the Banco de Portugal No 7/2021 (in Portuguese only), which implemented into national law the ECB’s Information Management System Portal (IMAS portal) and amends the statement for compliance with the obligation to inform with regard to the processing of personal data.
- Instruction of the Banco de Portugal No 102/96 (in Portuguese only), regarding the establishment of branches and the carrying out of activities under the freedom to provide services;
- Notice of the Banco de Portugal No 6/2021, regarding the information and elements required to be communicated to the Banco de Portugal in the procedures for the acquisition, increase or reduction of qualifying holdings. It revokes Notice of the Banco de Portugal No 5/2010, of 3 December 2010;
- Notice of the Banco de Portugal No 1/2022, which governs conditions of application, procedures, instruments, mechanisms, enforcement measures, reporting obligations and other aspects necessary for ensuring compliance with obligations for the prevention of money laundering and terrorist financing, within the activities of financial entities subject to the Banco de Portugal’s supervision;
- Notice of the Banco de Portugal No 3/2020, which regulates the internal control and governance systems and sets the minimum standards upon which the organisational culture of entities subject to the supervision of the Banco de Portugal should be based;
- Joint Guidelines of the European Banking Authority (EBA) and the European Securities and Market Commission (ESMA) on the assessment of the suitability of members of the management body and key function holders (EBA/GL/2021/06; ESMA35-36-2319, of July 2021);
- Circular Letter of the Banco de Portugal No CC/2021/00000058 (in Portuguese only) on EBA/GL/2021/06;
- EBA Guidelineson internal governance (EBA/GL/2021/14, of November 2021);
- Joint Guidelines of the Committee of European Banking Supervisors (CEBS), Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS), and the Committee of European Securities Regulators (CESR) on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector;
- Circular Letter of the Banco de Portugal No 24/2009/DSB (in Portuguese only) on recommendations for corporate governance;
- Circular Letter of the Banco de Portugal No 2/2015/DSP (in Portuguese only) on internal selection and assessment policy of the members of management bodies and key function holders;
- Circular Letter of the Banco de Portugal No 188/92/DSB (in Portuguese only) on incompatibilities provided for in Article 23 of the Legal Framework of Mutual Agricultural Credit;
- Regulation (EU) No 1024/2013 of the Council, of 15 October 2013, conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions;
Portuguese Company Law;
- Guide to fit and proper assessments (updated in December 2021).
For any contacts with the Banco de Portugal on the suitability assessment of the members of the management and supervisory bodies, please send an email to [email protected].