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The 38Th Amendment To The General Scheme Of Credit Institutions And Financial Corporations, Approved By Decree-Law No. 298/92 Of 31 December, The Eighth Amendment To Law No. 25/2008, June 5, And The Third Amendment To Decree-Law

Original Language Title: Procede à trigésima oitava alteração ao Regime Geral das Instituições de Crédito e Sociedades Financeiras, aprovado pelo Decreto-Lei n.º 298/92, de 31 de dezembro, à oitava alteração à Lei n.º 25/2008, de 5 de junho, e à terceira alteração ao Decreto-Lei

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BILL OF LAW NO. 963 /XII/4.

" Changes the General Regime of Credit Institutions and Financial Societies and the framework

legal from the National Council of Financial Supervisors, predicting specific measures with a view

to the strengthening of the stability of the Portuguese financial system "

Exhibition of Motives

The evolution of the Portuguese financial system and its legal framework must accompany the

social imperative to ensure growing trust, ethics, transparency, rigor and efficiency in the

caption of the savings of the Portuguese and in the granting of credit, activities that are situated in the

core banking and financial system of the country.

The instability of the last few years and the collapse of some financial institutions of relevance

unquestionable left rank the indispensability of the reinforcement of prudential supervision and

Behaviouran for the sake of the financial system but, above all, for the benefit of the customers and the main

harmed in crisis situations.

It is therefore necessary to strengthen a coherent vision for the operation of the financial system, by

form to implement practices capable of preventing similar events in the near future and by

form to foster the confidence resumption of the Portuguese.

It is precisely the defence of this public interest that underlies the presentation of the set of

legislative initiatives that the Socialist Party brings to debate and which, in a systemic view, intends to

debelch problems patent of the financial system.

The Socialist Party presents a set of proposals that essentially settlement in seven

pillars:

 Strengthening the protection of non-professional customers;

 Safeguarding the principles of exemption, transparency, integrity and professional honesty of

external auditors, holders of boards of directors, leaders and collaborators of the

credit institutions;

 Definition of preventive measures of any conflicts of interest;

 Strengthening the role of Parliament in the monitoring of the financial system;

 Improvement in access, clarity, transparency and sharing of information;

 Promotion of a joint acting of the supervisors and the Government;

 Guarantee of a public follow-up of the processes of divesting the activity of a

institution of credit object of resolution and cessation of the activity of the transitional institution.

The protection of customers necessarily passes by the definition of a set of policies that,

framed in a greater exemption and transparency from the financial institutions themselves and their

administrators, leaders and collaborators and in the increment of the duty of information, allow

to accredit their investment on a forcibly existing minimum risk basis.

The Socialist Party, aware of the existence of legal, national and community provisions, which already

define reporting duties and conflict prevention measures and by situating themselves in the special plan

of the actuation of credit institutions in the exercise of financial intermediation activities,

considers that the safeguarding of customers goes through the enhancement of the standardization of pre-

contractual connected to the provision of financial instruments to non-professional customers, by the imposition of

limitations on the sale of financial products whenever such a set of injury to the customer and

by the application of penalties for the verification of bad trade practices by the institutions

financial.

In the same senda, we reinforce the transparency and integrity of the mandates assumed in the

financial institutions, demarcating the requirements for their assumption and defining a set of

obligations underlying their exercise.

Of highlighting the importance of focusing financial intermediation activity in the exclusive interest

of the client, to print greater public scrutiny in the activity of the financial system and of

foster a policy of demand and thoroughness.

The Socialist Party introduces by this a set of amendments that validate this thinking, be it

through the imposition of the disclosure of all the transactions with a view to granting credit to

members of the social bodies or holders of qualified stakes, of the rigorous and transparent

monitoring of the constitution of the organs of administration and surveillance of the controlled institutions, of the

identification of the economic beneficiaries of qualifying stakes or the limitation of the

mandates of the external auditors.

Concomitantly, we reinforce the role and responsibility of non-executive trustees,

enforcing the constitution in the credit institutions of a risk committee and a committee of

integrity and transparency, consisting of independent members, with a view to the

follow-up of their acting and with a view to the prevention and sanction of possible conflicts of

interest that will come up.

But the safeguarding of an acting as per, deontological and ethically, must still be

accompanied by the increment of the regulatory role of the Bank of Portugal, the competence of which should not

cinges at the time of the assumption of the mandates in financial institutions, assuming a

regular and rigorous follow-up. The Socialist Party considers why it is paramount to strengthen the

powers of the Bank of Portugal in ascertaining compliance with the requirements of suitability

of those who occupy positions in the social organs, incrementing the motives that determine the

revocation of the authorization and enabling the suspension of such authorization for reasons of

proportionality, when the occurrence of evidence of the practice of facts especially occurs

serious attributable to the members of the organs concerned and by this susceptible to affect the suitability and

the trust in abstract chargeable and underlying the exercise of the authorized functions.

In the cross-sectional approach of the financial system should be strengthened the role of the Assembly of

Republic, as the body of sovereignty elected by all and main guarantor of the public interest,

being that the Socialist Party presents a set of premises that promote a

more regular follow-up, essentially in concert with the National Council of

Financial Supervisors.

Still in the field of acting of this Council, a Standing Technical Secretariat is set up that

ensure the effectiveness of the competencies of this organ, essentially with respect to the guarantee of

a regular and permanent functioning and to the effective joint realization of supervisory actions

next to the supervised entities.

Finally, to emphasize that the special nature of financial institutions and the public interest

underlying its operation imply a necessary reinforcement of the public monitoring of the

processes want to divest from rights and obligations of credit institutions object of measure of

resolution either of the very cessation of the activity of the transitional institution. To the resemblance of what already

happens in other national strategic sectors, the Socialist Party imprints new mechanisms

that allow to scrutinise compliance with the applicable legal standards, as well as to check the

transparency of the process, the balance and the soundness of the financial system and the safeguarding of the erarium

publico.

This legislative initiative, to which the Resolution Project associates that " We recommend to the Government to

adoption of a set of representations with a view to enhancing the stability of the financial system

portuguese " and which, depending on the need for greater consultation between organs of sovereignty

with deliberative and executive competences, must be analyzed and treated in another headquarters, aim to give

response to the weaknesses that became patents in the course of the work of the Commission of Inquiry

MP for the management of the BES and the Holy Spirit Group and aim to materialize the main

recommendations emanating from this parliamentary work, having as its main objective a reinforcement of the

stability of the Portuguese financial system.

So, in the applicable constitutional, legal and regimental terms, the Party Members

Socialist, present the following bill:

Article 1.

Object

This Law proceeds to the thirty-seventh amendment of the Decree-Law No 298/92 of December 31,

approving the General Regime of Credit Institutions and Financial Societies, and the third

amendment of the Decree-Law No. 228/2000 of September 23 establishing the National Council of

Financial Supervisors, predicting specific measures with a view to enhancing the stability of the

Portuguese financial system.

Article 2.

Amendment to the General Regime of Credit Institutions and Financial Societies

Articles 30-C, 77, 101, 102, 121, 145, 145-M, 145-R and 201 of the Decree-Law No 145 are amended.

298/92, of December 31, which go on to have the following essay:

" Article 30-C

Refusal, revocation or suspension of authorisation

1-[...].

2-[...].

3-[...].

4-[...].

5-A The authorisation is revoked in the following cases:

a) When it occurs that it has been obtained by means of false statements or other

illicit expedients, without prejudice to the sanctions that the case coubernary;

b) When the Bank of Portugal concludes, as a result of a re-evaluation

motivated by facts that have occurred or known superveniously, which

have ceased to be fulfilled the requirements of which is dependent on the authorisation.

6-[...].

7-Without prejudice to the provisions of the preceding paragraph, the participation of the Bank of Portugal

to the Public Prosecutor's Office, in the performance of its supervisory, fact-finding or

statement of counterordinational processes, of evidence of punishable facts with a penalty of

imprisonment, relating to the crimes set out in Articles 200 and 200-A or other crimes

practiced in the exercise of their duties, with a view to or determining achievement

of own benefits, they determine the suspension of the members of the organs of

administration or surveillance.

8-The provisions of the preceding paragraph shall also apply in the case of evidence of the practice

of illicit from merely especially serious social ordering, dealing with facts

susceptible to affect the suitability of the members of the organs concerned, without prejudice to the

provisions of Article 30 (4) and (b) of Article 216 (216).

9-[Previous n. 7].

Article 77.

[...]

1-[...].

2-When acting in the exercise of instrument intermediation activity

financial, credit institutions must inform, in writing, customers not

professionals, in the acetation of point 11, of Article 4 (1) of the Directive 2014 /65/UE,

on the proposed financial instruments and investment strategies, explaining,

in a pre-contractual information document to be approved by instruction of the Bank of

Portugal, specifically:

a) Whether the financial instrument is intended for professional customers or not

professionals;

b) its suitability for the interests, needs and knowledge of the client;

c) All the risks involved;

d) the existence or non-existence of guarantees of recovery of the invested capital;

e) All costs and charges associated with the recommended financial instrument

or sold to the customer.

3-[Previous n. 2]

4-[Previous n. 3]

5-[Previous n. 4]

6-[Previous n. 5]

7-[Previous n. 6]

8-[Previous n. 7]

Article 101.

[...]

1-[...].

2-[...].

3-[...].

4-[...].

5-In the cases provided for in paragraph 3, if the stakes held confirm to the institution of

credit participating credit for more than 50% of the voting rights corresponding to the capital of

society participating, proceeding this to the receiving of orders from the public or to the

marketing to this, directly or indirectly, of the financial instruments by

si issued or managed, owe the respective bodies of administration and supervisory authorities

be majority-owned by independent members vis-à-vis the institution

participant.

Article 102.

[...]

1-[...]

2-[...]

3-[...]

4-[...]

5-For the purposes of the provisions of this Article, they shall inform the Bank of the

of Portugal on the identity of the last economic beneficiaries of the participation

qualified as well as of any subsequent changes to it.

6-Without prejudice to the provisions of Article 93, any holders of shareholdings

qualified, direct or indirect, in particular by treating themselves from entities not subject to

supervision, they provide the Bank of Portugal with all the related requested information

with the entity supervised by you authorized, under penalty of inhibition of the rights of

vote pursuant to the provisions of Article 105.

7-[previous n. 5]

8-[previous n. 6]

Article 121.

[...]

1-[...].

2-[...].

3-[...].

4-[...].

5-The mandate, including renovations, of the official reviewers of accounts and auditors

external at a credit institution has the maximum duration of six years.

6-After the term of the mandate the official auditors of accounts and external auditors do not

can go back to providing the same type of services to the credit institution during the

subsequent period of three years.

Article 145-M

[...]

1-[...].

2-[...].

3-[...].

4-[...].

5-[...].

6-[...].

7-[...].

8-[...].

9-[...].

10-A special monitoring commission of the process of

divestance of rights and obligations of the credit institution object of the measure of

resolution, when the said credit institution has size and importance

significant in the national financial system.

11-To the committee referred to in the preceding paragraph shall compete:

a) to Fiscalize compliance with the applicable legal standards, as well as to check the

transparency of the process;

b) Assess the process of alienation in function of the goals set by the

resolution measure;

(c) to appreciate and submit to competent bodies and entities any

complaints that are directed to them;

(d) to draw up a reasoned final report on the process of divesting.

12-A The committee constituted under paragraph 10 shall consist of three members

appointed by order of the Prime Minister, on a proposal from the Minister of Finance.

13-The reasoned final report of the divestance process provided for in point (d) of the

n. 11 is sent to the Assembly of the Republic and to the Government and advertised on the site of the

internet of the Bank of Portugal.

Article 145-R

[...]

1-[...].

2-[...].

3-[...].

4-[...].

5-[...].

6-[...].

7-[...].

8-[...].

9-To the process of divestments to the third of the entirety of rights, obligations, shares or

other securities representative of the social capital of the institution of credit object of

resolution that have been transferred to the transitional institution applies the

provisions of paragraphs 10 a to 13 of Article 145.-M.

Article 201.

[...]

[...]

a) [...]

b) [...]

c) Factuses practiced by holders of qualified shareholdings, direct or

indirect, in an institution of credit or financial society authorized in

Portugal, even if not subject to supervision of the Bank of Portugal;

d) [Previous point (c)]. "

Article 3.

Addition to the General Regime of Credit Institutions and Financial Societies

1. They are deferred to Decree-Law No. 298/92 of December 31 the following articles:

" Article 77.

Special duties in relation to conflicts of interest in financial intermediation

1-The holders of the administration body, as well as the leaders and collaborators of the

credit institutions, agents or subcontracted entities, that act in the exercise of

intermediation activity of financial instruments, are especially

linked to pautar their acting in an honest, equitable and professional manner,

exclusively in function of the interest of the customers.

2-When acting in the exercise of instrument intermediation activity

financial, credit institutions must ensure that their staff is not

remunerated nor is its performance assessed in a way to conflict with the

interests of its non-professional customers.

3-It is vetted to credit institutions the adoption of measures regarding remuneration,

to sales goals or any other type susceptible to creating an incentive to the

your staff to recommend a given financial instrument to a customer not

professional, incompatible with your risk profile.

4-Credit institutions are obliged to indemnify customers in the case of violation

of the duties stipulated in paragraphs 2 and 3.

Article 77-B

Limitation on the sale of financial instruments

It is vetted the placement, together of non-professional customers, of financial instruments

issued by companies whose accounts are not audited and Certified by Reviewer

Officer of Accounts.

Article 86-The

Transparency

The operations carried out under Articles 85 and 86, as well as the respects

amounts and beneficiaries, are discriminated against in the annual report of the credit institution

in cause.

Article 109-The

Disclosure of operations

The provisions of Article 86-A is still applicable to any operations carried out with:

a) Titular of qualifying, direct or indirect participations, including the simple

placement of financial instruments by these issued to the customers of the

credit institution, or the public at large, directly or indirectly;

b) Entities participated by the credit institution in more than 10% of the rights

of voting corresponding to your capital, or whose operations with those

carried out are of more than 10% of the institution's own funds

of participating credit.

Article 115-B

Risk and Integrity Committees and Transparency

1-Credit institutions proceed to the constitution of the Risk Committee, constituted

by members of the independent board of directors and who do not perform

executive functions, with a view to the monitoring and control of the implementation of the

risk management strategy by reference to the selected risk indicators.

2-Credit institutions further proceed to the constitution of the Committee of Integrity and

Transparency, made up of members of the independent governing body and

that do not perform executive functions, with a view to monitoring and

control of operations carried out with any relevant related parties in

matter of conflicts of interest, ensuring transparency of the same. "

2-For the purposes of the provisions of the preceding paragraph, the current Articles 77 to 77 are renumbered.

115.-B to 115.-W of the General Regime of Credit Institutions and Financial Societies.

Article 4.

Amendment to Decree-Law No 228/2000 of September 23

Articles 2, 3, 4, 8 and 10 of the Decree-Law No. 228/2000 of September 23, which creates the

National Council of Financial Supervisors, go on to have the following essay:

" Article 2.

[...]

1-[...].

2-[...]:

a) [...];

b) [...];

c) Determine the joint realization of presential supervisory actions along the

supervised entities;

d) [...];

e) [...];

f) [...];

(g) Pronount on any legislative initiatives relating to the regulation of the

financial sector that have been inspired by the scope of the respective competences and provide

information pursuant to paragraph 8;

h) [previous point (g)];

i) Follow up and evaluate the developments in stability

financial, ensure the exchange of relevant information in this field between the

supervisory authorities, establishing the appropriate mechanisms for the

effect, and decide coordinated performances within the framework of the respective competences,

including when the Bank of Portugal attests as a national authority of

resolution;

j) [previous Article (i)];

k) Assess the legislation in force in light of the need to ensure an effective

coordination of the acting of the entities responsible for regulation and supervision

of the Portuguese financial system;

l) [previous Article (j)].

3-[...].

4-[...].

5-[...].

6-[...].

7-[...]

8-The Council draws up an annual report of activities, which is sent to the Assembly of the

Republic and the member of the Government responsible for the area of finance and published until

to the March 13 of each year.

9-Where this is requested by them, the members of the Council or the Secretary-General

may provide information or exercise technical support functions and consultation, in scope

of the respective competences, to the Assembly of the Republic.

Article 3.

[...]

[...]:

a) supervisory authorities of the financial system, the national authorities a

who competes, in Portugal, for prudential and behavioural supervision:

i) [...];

ii) [...];

iii) [...].

b) [...];

c) [...].

Article 4.

[...]

1-[...]:

a) [...];

b) The member of the board of directors of the Bank of Portugal with the pelouro

of the supervision;

c) The Chairman of the Insurance Supervisory Authority and Pension Funds;

d) [...].

2-[...].

3-[...].

4-[...]...

5-[...].

6-[...].

7-[...].

Article 8.

[...]

1-The sessions have a minimum monthly periodicity, and they are due to be held separately,

in accordance with a specific work order, the sessions that have as an object

the exercise of their assignments provided for in Article 2 (2) and (3).

2-A The date of the sessions is marked by the President of the Board in advance

minimum of 10 days.

3-[...].

Article 10.

[...]

The members of the Council, the Secretary-General, the remaining members of the secretariat

permanent technician and the observers referred to in Article 4 (2), as well as all

the other people who with them collaborate, become subject to the duty of secrecy,

concerning all subjects to take notice of in the exercise of

functions provided for in this Decree-law, under the terms provided for in the law that is

applicable. "

Article 5.

Addition to the Decree-Law No. 228/2000, of September 23

They are deferred to the Decree-Law No. 228/2000 of September 23, which creates the National Council of

Financial Supervisors, the following articles:

" Article 9.

Permanent Technical Secretariat

1-In view of ensuring an effective performance of its competences, the Council

designates a Standing Technical Secretariat, composed of a Secretary General and three

members.

2-The Secretary-General shall be designated by unanimous deliberation of the Council and shall have a

high experience in the field of regulation and financial supervision.

3-Each of the institutions represented in the Council designates a member for the

Permanent Technical Secretariat.

4-A remuneration of the Secretary-General and the remaining members of the Secretariat

Permanent Technical is fixed by the Council, with all costs being borne, in

equal parts, by the Bank of Portugal, by the Insurance Supervision Authority and

Pension Funds and by the Securities Market Commission.

5-The Council shall define the rules of operation of the Standing Technical Secretariat.

Article 9-B

Functions of the Permanent Technical Secretariat

1-Compete to the Secretary-General to exercise the powers delegated to him by the

Advice, inter alia:

a) The coordination of joint supervisory actions of presential supervision to the entities

supervised;

b) The coordination of joint performances together with national entities, entities

foreign or international organizations; and

c) The realization of actions deemed appropriate to the purposes of the Council and

understood in the sphere of competence of any of the authorities of

supervision.

2-Compete still to the Secretary-General, on his initiative, to submit proposals to the

Advice within the framework of your competences. "

Article 6.

Transient standard

For the purposes of the provisions of Article 145-M of Decree-Law No. 298/92 of December 31 that

approves the General Regime of Credit Institutions and Financial Societies, in the processes of

disposal of the activity or cessation of the activity of the ongoing transition institution, it is up to the

Bank of Portugal to draw up the respective reasoned final report.

Article 7.

Entry into force

This Law shall come into force on the day following that of its publication.

Assembly of the Republic, May 22, 2015

The Members,

Pedro Nuno Santos

Vieira da Silva

Joao Galamba

Filipe Neto Brandão

Eduardo Cabrita