Acquisition or increase of qualifying holdings: Electronic money institution

1. Notification to Banco de Portugal

Any natural or legal person who has taken a decision to acquire, directly or indirectly, a qualifying holding in an electronic money institution must inform Banco de Portugal of their intention in advance (Article 33-G (1) of the Legal Framework of Payment Services and Electronic Money).

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 20%, 30% or 50% or whenever the institution becomes a subsidiary of the acquiring entity.

In turn, any natural or legal person who has taken a decision 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%, 30% or 50%, or so that the institution would cease to be its subsidiary, must inform Banco de Portugal of such intention in advance, indicating the new proportion of the holding.

Banco de Portugal may determine 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 acquisition of or increase in the said holding, provided that it 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 2007/64/EC of the European Parliament and of the Council of 13 November 2007;
Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009.

National law:

Legal Framework of Payment Services and Electronic Money (Articles 33-G and 33-H);
Legal Framework of Credit Institutions and Financial Companies, approved by Decree-Law No 298/92 of 31 December 1992 (Articles 102-A; 103 (1) and (2); 105 and 106, applicable with reference to the Legal Framework of Payment Services and Electronic Money);
Notice of Banco de Portugal No 5/2010.

3. Application procedure

The acquisition of a qualifying holding must be notified together with the data and information referred to in Notice of Banco de Portugal No 5/2010 (Notice) and respective annexes (Article 33-G (8) of the Legal Framework of Payment Services and Electronic Money).

Data and information referred to in the Notice

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 qualifying holdings, the data and information provided for in Annexes I, II and III must be submitted 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 provided for in Annexes I, II and III to intermediate shareholders, 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).

Supplementary data and information

Banco de Portugal may, at any time, request additional data and information from the proposed acquirer(s) and make the inquiries deemed necessary (Article 7 of the Notice and Article 33-H (3) of the Legal Framework of Payment Services and Electronic Money).

4. Assessment

Banco de Portugal assesses whether the proposed acquisition fulfils all the conditions set out in national and EU law. In 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 electronic money institution;
the financial soundness of the project.

Assessment criteria

(Article 103 (2) of the Legal Framework, applicable by virtue of Article 33-H (1) of the Legal Framework of Payment Services and Electronic Money):

the suitability of the proposed acquirer, especially taking into account the provisions of Article 30-D of the Legal Framework in the case of a natural person;
the reputation, professional qualification, independence and availability of the members of the management body of the electronic money institution, to be appointed as a result of the proposed acquisition, as per 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 electronic money institution;
whether the electronic money institution 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 (i) exercise effective supervision, (ii) effectively exchange information with the competent authorities and (iii) 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.

Procedures and deadlines

Receipt of the notification

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.
Banco de Portugal may, at any time, request additional data and information from the proposed acquirer and make the inquiries deemed necessary.

Assessment of the notification

Banco de Portugal assesses the notification of acquisition of a qualifying holding within 60 working days.

The deadline referred to above starts with the date of receipt of the initial notification or the date of the reply to the request for additional data or information, but no later than four months after the date of the initial notification.

5. Decision

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 four months of receipt of the initial notification.

Before taking a decision that may adversely affect the rights of the proposed acquirer, Banco de Portugal shall grant the proposed acquirer the right to be heard, in accordance with the Administrative Procedures Code (Código do Procedimento Administrativo).

Opposition

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 electronic money institution, based on the above-mentioned assessment criteria;
if the information provided by the proposed acquirer is incomplete.

If Banco de Portugal decides to oppose, it:

notifies 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.

Non-opposition

If Banco de Portugal does not oppose the proposed acquisition within the assessment period, it shall be deemed to be approved.

Banco de Portugal notifies the proposed acquirer of its decision on the acquisition of a qualifying holding.