Banking Act 2015

Link to law: http://laws.gov.ag/acts/2015/a2015-1.pdf

AND BARBUDA















BANKING ACT 2015



No. of 2015

Banking Act, 2015 No. of 2015



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BANKING ACT, 2015





ARRANGEMENT





Sections



PART I
PRELIMINARY



1. Short title and Commencement
2. Interpretation


PART II
LICENCES



3. Requirement for Licence
4. Examination of books of person carrying on banking business without a licence
5. Appointment of receiver for failure to hold licence
6. Repayment of funds obtained without licence
7. Application for licence
8. Grant or denial of licence
9. Licence fees and penalty for default
10. Permissible activities
11. Conditions for licence
12. Variation of condition for licence
13. Register of licensed financial institutions
14. Revocation of licence
15. Requirement to inform Minister for Finance
16. Restricted words, names, and practices
17. Display of licence certificate
18. Offices and branches deemed one licensed financial institution
19. Authorisation of location and approval of new business premises


PART III
OWNERSHIP STRUCTURES

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20. Ownership or control of licensed financial institutions
21. Written application for approval
22. Criteria for approval for ownership or control
23. Granting of approval
24. Person with control to be fit and proper
25. Grounds for disapproval of a transfer
26. Prohibition against selling significant shareholding
27. Group holdings to be deemed holdings of single member
28. Quarterly reports on ownership and control
29. Report by foreign licensed financial institution on change of control
30. Sanctions
31. Prohibitions against transfer and acquisition of interest
32. Non applicability of this Part to government or other persons
33. Variation of supervisory thresholds
34. Approval of application for licence by financial holding company


PART IV
FINANCIAL HOLDING COMPANIES



35. Requirement for licensing of financial holding companies
36. Application for licence by financial holding companies
37. Considerations to grant licence to financial holding company
38. Grant or denial of licence to financial holding company
39. Conditions for licence to financial holding company
40. Restriction on activities of financial holding companies
41. Limitation of risk to licensed financial institution
42. Revocation of licence of financial holding companies
43. Actions of fundamental change requiring approval


PART V
FINANCIAL REQUIREMENTS AND LIMITATIONS



44. Minimum paid-up or assigned capital
45. Maintenance of reserve fund
46. Adequacy of capital
47. Additional capital in respect of special risks
48. Liquidity requirement
49. Limit on exposures
50. Restrictions on exposures to related parties
51. Restrictions on lending to employees
52. Prohibition of advances against security of own shares
53. Prohibition on engaging or investing in trade and outsourcing

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54. Financial subsidiaries permitted
55. Restrictions on investments in real property
56. Time limit for compliance with financial requirements
57. Maintenance of specified assets
58. Recordkeeping and reporting required


PART VI
AUDIT AND INFORMATION



59. Annual audit, report and publication of financial statements and results
60. Appointment of external auditor
61. Duties of external auditor
62. Remuneration of external auditors
63. Immediate reports to Central Bank
64. Resignation or removal of external auditor
65. Request for copies of reports
66. External auditor to report to Central Bank
67. No liability for breach of duty
68. Failure to comply with request
69. Audited financial statements


PART VII
SUPERVISION



70. Central Bank examination
71. Consolidated supervision
72. Prudential requirements
73. Reporting of group structures
74. Disclosure and access to books and records by Central Bank examiner for examination
75. Central Bank’s powers of remedial action
76. Additional Central Bank remedial actions
77. Remedial actions against directors, officers, employees significant shareholders.
78. Additional Central Bank powers of remedial action against directors, officers, employees or

significant shareholders
79. Supplemental powers
80. Failure to comply with remedial actions
81. Effective date of order, warning, agreement, direction
82. Suspension of persons charged with criminal offence etc..
83. Dismissal of criminal case not a bar to Central Bank action
84. Persons convicted may be prohibited from banking business
85. Appointment of observer
86. Actions required for adequately capitalized licensed financial institutions or affiliates

suffering losses

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87. Actions required for undercapitalised licensed financial institutions, or affiliates
88. Notification of removal of directors and officers
89. Submission of returns and production of information as required by the Central Bank
90. Central Bank may request further information
91. Extension of period for providing information.
92. Disclosure of basis for charges and fees
93. Restriction on advertising likely to mislead the public
94. Agreement or arrangement with foreign supervisory authority
95. Furnishing of statement or return to participating governments
96. Prohibition against providing false , misleading statements

PART VIII
CORPORATE GOVERNANCE


97. Minimum criteria for determining whether a person is fit and proper
98. Criteria for determining whether a person is fit and proper to be controlling or significant

shareholder
99. Determining whether business carried out in prudent manner
100. Requirement for fit and proper policy
101. Notification to Central Bank of appointment of officers and directors
102. Responsibility of board for corporate governance
103. Removal and disqualification of director or officer
104. Right to make representation
105. Notice of confirmed removal
106. Person to be removed from office
107. Effective date of removal
108. Failure to comply with a direction
109. Failure to comply with section 101
110. Declaration and registration of related interest and conflict of interest by Director
111. Responsibility for deceiving statements and obstruction of audit or authorised examination.
112. Management's duty of compliance with the requirements of the laws.
113. Liability of directors, officers and partners.


PART IX
OFFICIAL ADMINISTRATION


114. Grounds for appointing an official administrator
115. Notice of appointment of official administrator
116. Effective date of appointment
117. Persons qualified to be official administrator
118. Period of appointment
119. Replacement and removal of official administrator
120. Official administrator to be fit and proper

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121. Declaration of conflict of interest
122. Transactions to be approved by Central Bank
123. Failure of official administrator to disclose interest
124. General powers of the official administrator
125. Central Bank oversight of official administration
126. Suspension of dividends
127. Moratorium and effect of official administration on proceedings
128. Suspension of contractual early termination rights
129. Taking control of the licensed financial institution
130. Inventory and plan of action to resolve the licensed financial institution or licensed financial

holding company
131. Capital increase by existing shareholders
132. Recapitalization by new shareholders
133. Mergers, sales and other restructurings
134. Mandatory restructuring of liabilities
135. Misconduct by shareholders, directors, officers and others
136. Expenses of the official administration
137. Termination of official administration


PART X
RECEIVERSHIPAND COMPULSORY LIQUIDATION
138. Grounds of receivership
139. Qualifications and compensation for receiver
140. Commencement and notice of receivership
141. Central Bank oversight of receiver
142. General powers of receiver
143. Transfer of assets and liabilities
144. Effects of receivership
145. Taking control of the licensed financial institution or licensed financial holding company
146. Repudiation of contracts
147. Avoidance of pre-receivership transfers
148. Obligations of lessors of licensed financial institution or licensed financial holding company

premises and utility providers
149. Protection of payment, clearance, and settlement systems
150. Determination of claims
151. Authority to disallow claims
152. Claims relating to eligible financial contracts
153. Priorities in payment of claims
154. Unclaimed funds
155. Safe deposits and unclaimed property
156. Termination of receivership and final reporting to the Central Bank
157. Receiver to notify Central Bank of fraudulent activities


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PART XI
VOLUNTARY LIQUIDATION


158. Voluntary Liquidation
159. Cessation of business operations
160. Notice to depositors of voluntary liquidation
161. Rights of depositors and creditors in voluntary liquidation
162. Distribution of assets
163. Insufficiency of assets in discharge of obligations in voluntary liquidation.
164. Audited accounts, and conclusion of liquidation.
165. Review of bank resolutions under Parts IX or X
166. Non-application of Companies Act


PART XII
ABANDONED PROPERTY


167. Abandoned Property
168. Report, publication and disposal of abandoned property
169. Abandoned property to vest in the [Crown][State]
170. Safe deposit boxes
171. Sale of contents of a safe deposit box
172. Handling of proceeds of sale of abandoned property
173. Claims on abandoned property
174. Failure to file report or to pay property


PART XIII
TRANSFER OF BANKING BUSINESS



175. Banking business vesting order
176. Supplementary provision as to transfers
177. Transfers to be subject to stamp duty


PART XIV
MISCELLANEOUS PROVISIONS


178. Secrecy of Information
179. Administrative Penalties
180. Administrative Penalties to be placed to the Credit of Central Bank
181. Schedule III offences
182. Working days of licensed financial institutions and licensed holding companies.
183. Regulations
184. Prudential standards
185. Court’s powers in legal claims against Central Bank

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186. Bridge financial institutions and asset management vehicles
187. Participating Government financing of transfers of deposits
188. Immunity
189. Non-application of Aliens (Landholding Regulation)
190. Provisions applicable to credit institution, class of credit institution and financial group
191. Amendment of Schedules
192. Repeal and savings
193. Transitional


SCHEDULE I

SCHEDULE II

SCHEDULE III

SCHEDULE IV





















































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ANTIGUA AND BARBUDA

BANKING ACT 2015



No. of 2015





A BILL FOR







AN ACT to provide for the Regulation of Banking Business, the Establishment of a single

banking space and for incidental and related Matters and the Repeal of the Banking Act 2005.



ENACTED by the Parliament of Antigua and Barbuda as follows:



PART I

PRELIMINARY

1. Short title and commencement

This Act may be cited as the Banking Act 2015 and shall come into operation on such date as the

Minister may, by Order published in the Gazette, appoint.

2. Interpretation

(1) In this Act –

"Agreement" means the Agreement establishing the Eastern Caribbean Central Bank made on

the 5th day of July, 1983, the text of which is set out in the Schedule to [the Eastern

Caribbean Central Bank Agreement Act No. 142 of 1983] and any revisions made thereto;

"affiliate" in relation to a financial institution (“F”) means

(a) a company which is or has at any relevant time been


(i) a holding company or subsidiary of F;
(ii) a subsidiary of a holding company of F; or
(iii) a holding company of a holding company or a subsidiary of a subsidiary of F;

(b) any company over which F has control;
(c) any company over which F and any person associated with F has control;
(c) any company which has common ownership with F; or

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(d) any company which has the same beneficial owner and share common management
and interlinked businesses with F,

and “affiliation” shall be construed accordingly;

"assigned capital" means the net assets derived from the funds of a foreign financial

institution which it is required to keep during the term of its licence in accordance with

prudential standards issued by the Central Bank;

"bank" means any licensed financial institution whose operations include the acceptance of

deposits subject to the transfer by the depositor by cheque;

"banking business" means:

(a) the business of receiving funds through

(i) the acceptance of monetary deposits which are repayable on demand or after

notice or any similar operation;

(ii) the frequent sale or placement of bonds, certificates, notes or other securities,

and the use of such funds either in whole or in part for extensions of credit or investment for

the account and at the risk of the person doing such business;

(b) any other activity recognised by the Central Bank as banking practice and which a

licensed financial institution may additionally be authorised to do;

"board" means the board of directors responsible for the management of a licensed financial

institution;

"borrower group" means:

(a) a family group comprising an individual and that individual’s relative where each
member of the group is substantially dependent upon the same income sources;

(b) a company in which the family group indicated in paragraph (a) has control;
(c) a group of companies which is under a common control;
(d) a group of persons in which the credit worthiness, ability to generate funds or the

future viability of each, depends on one or other member of the group;

(e) a group of persons in which one member has power directly or indirectly to control

the other members;

(f) any other group of persons as may be determined by the Central Bank;

"business of a financial nature" means the collection of funds in the form of deposits, shares,

loans, premiums, and the investment of such funds in loans, shares and other securities and

includes the types of businesses set out in Schedule II but does not include banking business;

"capital base" means the total of paid-up share capital, statutory reserve fund, share premium

account, retained earnings and any other capital account approved by the Central Bank, in the

case of local licensed financial institutions, or such other capital account or similar measure as

approved by the Central Bank in the case of a licensed branch of a foreign financial

institution, less any amount by which that total has been impaired in either case;

"Central Bank" means the Eastern Caribbean Central Bank established under Article 3 of the

Agreement;

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"control" means the power of a person, either alone or with an affiliate or relative or

connected or other person, directly or indirectly or by an agreement or otherwise to:

(a) exercise more than twenty per cent of the voting rights at any meeting of

shareholders of a licensed financial institution, company or unincorporated body;

(b) elect a majority of the directors of a licensed financial institution, company or

unincorporated body; or

(c) exert influence over the business and affairs of a licensed financial institution,

company or unincorporated body;

and the terms “controlling interest” and “controlling shareholder” shall be construed

accordingly;

"corporate group" means a company and its affiliates;

"credit facilities" includes loans, advances, lines of credit, commitment letters, standby

facilities, letters of credit, overdrafts, and any other facilities or arrangements, whether

on or off-balance sheet;

"credit institution" means any licensed financial institution other than a bank whose business

is that of money lending or the granting of credit facilities;

"Currency Union" refers collectively to the member countries and territories of Anguilla,

Antigua and Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, Saint

Christopher and Nevis, Saint Lucia and Saint Vincent and the Grenadines which use the

Eastern Caribbean currency as their official currency;

"director" includes any person occupying the position of director of a licensed financial

institution or a company by whatever name called and a person in accordance

with whose directions or instructions the directors of a company are accustomed to act;

"exposure" means the amount at risk and includes:

(a) credit facilities, investments including equities, participations, guarantees and

acceptance;

(b) claims on a counterparty including actual and potential claims that would arise from

the drawing down in full of undrawn advised facilities, whether on or off-balance

sheet, revocable or irrevocable, conditional or unconditional, that the licensed

financial institution has committed itself to provide, arrange, purchase or underwrite;

"external auditor" means an auditor appointed under section 60 that is:

(a) a person who is a member of a professional body of accountants which the Minister

has specified by Order published in the Gazette; or

(b) any other person approved by the Central Bank;



"financial group" means a corporate group, the members of which conduct banking business

or business of a financial nature;

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"foreign financial institution" means a financial institution which is incorporated under

the laws of a country outside of the Currency Union;

"holding company" means a body corporate that controls another body corporate;

"international financial institutions" refers to the International Monetary Fund, the

International Bank for Reconstruction and Development, the Inter-American Development

Bank, and the International Finance Corporation;

"large exposure" means an exposure to a person or a borrower group, which amounts to ten

per cent or more of the capital base of a licensed financial institution;

"licensed financial holding company" means a holding company of a licensed financial

institution licensed under this Act;

"licensed financial institution" means any person or incorporated entity licensed to conduct

banking business under this Act;

"local licensed financial institution" means a licensed financial institution formed under the

laws of a member country or territory of the Currency Union;

"Minister" means the Minister responsible for Finance;

“Monetary Council” means the Monetary Council established under Article 7 of the

Agreement;

"officer" means:

(a) a chief executive officer, chief operating officer, president, vice-president, corporate
secretary, treasurer, chief financial officer, chief accountant, chief auditor, chief

investment officer, chief compliance officer or chief risk officer;

(b) any other individual designated as an officer by its articles of incorporation or
continuance, by-laws or other constituent document, or resolution of the directors or

members; or

(c) any other individual who performs functions similar to those performed by a person
referred to in paragraph (a), whether or not the individual is formally designated as

an officer;



"Participating Governments" means the governments of the member countries and territories of

the Currency Union;

"person" means an individual, a public body, company, partnership, trust, association or body of

persons whether corporate or unincorporated;

"place of business" means any office including a mobile office of a licensed financial institution,

in the Currency Union;

"principal place of business" means, in relation to:

(a) a local financial institution, its principal office in the Currency Union; and

(b) a foreign financial institution, the office designated in its licence;

"related party" includes:

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(a) any financial holding company, subsidiary or other affiliate of a licensed financial
institution,

directors, officers, and significant shareholders of a licensed financial institution,

financial holding company, subsidiary or other affiliate of a licensed financial

institution,

(b) a relative or other members of the households of persons listed in paragraph (b),
any entity that is controlled by a person described in paragraphs (a), (b) and (c), or

any other person or class of persons determined by the Central Bank to be a related

party because of its past or present interest in or relationship with the licensed

financial institution being such that it can reasonably be expected that this person can

influence the decision of the licensed financial institution regarding a transaction;



"relative" means a spouse or former spouse, son, daughter, step-son, step-daughter, brother,

sister, aunt, uncle or child of aunt or uncle or any person related by marriage, father, mother,

any lineal ascendant and descendant of the individual or spouse of the individual;

"significant shareholder" means a person who either alone or with an affiliate or connected

person, is entitled to hold more than ten per cent of the shares of the licensed financial

institution or to exercise or control more than ten per cent of the total voting rights at any

general meeting of the licensed financial institution or another company of which the licensed

financial institution is a subsidiary and the terms “significant”, “significant interest” and

significant shareholding” shall be construed accordingly;

"subsidiary" means a body corporate that is controlled by another body corporate;

"ultimate beneficial owner" means the individual that ultimately derives the benefits of

ownership or control of a body corporate;

"unsecured" in relation to advances or credit facilities, means:

(a) advances or credit facilities granted without security; or
(b) in the case of advances or credit facilities against security, any part of the advances

or credit facilities which at any given time exceeds the market value of the assets

comprising the security given, or which exceeds the valuation approved by the

Central Bank whenever it considers that no market value exists for those assets;

(2) For the purposes of this Act, a person is connected to another person:

(a) where that person is an individual, the person is:
(i) the relative of that person;
(ii) the trustee of any settlement under which that person has a life interest in

possession;

(iii) a company of which that person is a director or controlling or significant
shareholder;

(iv) an employee or partner of that person;
(b) where that person is a company, the person is:

(i) a director or controlling or significant shareholder of that company;

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(ii) a subsidiary or affiliate of that company;
(iii) a director or employee of any such subsidiary or affiliate of that company;

(c) where that person has with any other person an agreement or arrangement with
respect to the acquisition, holding or disposal of shares or other interests in a

company or under which they undertake to act together in exercising their voting

power in relation to the company, that other person.



PART II

LICENCES

3. Requirement for licence

(1) A person shall not carry on banking business or hold himself out as carrying on banking

business in the Currency Union without a licence granted by the Central Bank.

(2) A financial institution which, at the commencement of this Act, holds a valid licence

under this Act to carry on banking business in Antigua and Barbuda shall be deemed to have been

granted a licence under section 8.

(3) Notwithstanding the provisions of subsection (2), the Central Bank shall, within a set

period of the commencement of this Act, as the Central Bank may determine, issue to a financial

institution a new licence certificate under this Act.

(4) Any person intending to carry on banking business in the Currency Union shall, before

commencing such business, apply for a licence under the provisions of section 7.

(5) Any person who contravenes the provisions of subsection (1) commits an offence and is

liable on conviction:

(a) in the case of a financial institution, to a fine of one million dollars, and in the case

of a continuing offence, to a further penalty of one hundred thousand dollars for each

day on which the offence is continued after summary conviction;

(b) in the case of a director or a officer, to a fine of five hundred thousand dollars or to

imprisonment for a term not exceeding three years or to both such fine and

imprisonment and in the case of a continuing offence, to a further penalty of one

hundred thousand dollars for each day on which the offence is continued after

conviction.

4. Examination of books of person carrying on banking business without a licence

(1) In this section “relevant documents” means any books, accounts, records and other

documents, cheques and securities.

(2) Where the Central Bank has reasonable cause to suspect that:

(a) any person is carrying on banking business without a licence granted under this

Act; and

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(b) evidence of contravention of subsection(1) of section 3 is to be found on any

premises in Antigua and Barbuda,

an application without notice may be made to the High Court by the Central Bank for an

order that

a named officer or officers of the Central Bank be entitled to enter and search the

premises with a

police officer and seize the relevant documents and any cash as may be found on the

premises

relating to the conduct of banking business, to ascertain whether the person is carrying on

banking

business without a licence.

(3) Any order issued by the High Court under subsection (2) may authorise:

(a) the Central Bank to detain the relevant documents for a period not exceeding thirty

days;

(b) the officer or officers to make copies of the relevant documents; and

(c) the Central Bank to retain copies of the relevant documents.

(4) It shall be lawful for any officer or officers, in whose name an order has been granted

pursuant to subsection (2), in the case of resistance, to break open any door, and to force and

remove any other impediment or obstruction to such entry, search or seizure.

(5) A person refusing to make available for examination any relevant documents having been

so requested by the Central Bank commits an offence and is liable on summary conviction to a

fine not exceeding five th
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