Decree No. 347 / 2006 Coll.
Decree implementing certain provisions of the Financial Conglomerates Act
Valid
Order
Effective from 30.09.2006
347
DECLARATION
of 31 May 2006
implementing certain provisions of the Financial Conglomerates Act
The Czech National Bank provides pursuant to § 34 for the implementation of § 21 (5), § 22 (6), § 24 (2), § 25 (3) and § 26 (2) of Act No. 377 / 2005 Coll., on the supplementary supervision of banks, savings and credit cooperatives, insurance companies and securities dealers in financial conglomerates and on the amendment of certain other laws (Act on financial conglomerates), as amended by Act No. 57 / 2006 Coll., hereinafter referred to as "the Act":
INTRODUCTORY PROVISIONS
Subject matter
This decree implements the relevant European Union Regulation (1), following the directly applicable European Union13 regulations) and provides for
(a) criteria for the non-inclusion of persons in the calculation of the additional capital adequacy requirement and the deadline for drawing up the report on the supplementary capital adequacy requirement;
(b) supporting documents for assessing the credibility and competence of persons in charge of a mixed financial holding person;
(c) the structure and deadlines of the transmission of information for the purposes of supplementary supervision;
(d) the manner, structure and time limits for the publication of information on the financial conglomerate.
Compulsory person
For the purposes of this decree, the mandatory person shall be the person who is required to communicate to the coordinator, pursuant to Article 25 (1) and (2) of the Act, the information necessary for carrying out the supplementary supervision of compliance with the additional capital adequacy requirement, the concentration of risks, intra-group operations and compliance with the additional requirements for the internal management and control system, including the risk management system.
ADDITIONAL RULES FOR REVIEW UNDERTAKING
The obliged entity shall calculate the additional capital adequacy requirement and draw up a report on the additional capital adequacy requirement at least four times a year on 31 March, 30 June, 30 September and 31 December of the calendar year. The calculation of the additional capital adequacy requirement shall be carried out in accordance with the rules established by the directly applicable European Union Regulation governing the use of methods of calculation of capital adequacy requirements for financial conglomerates (13).
Further definition of criteria for non-inclusion in the calculation of the additional solvency requirement
(1) For the purposes of supplementary supervision, a person in a financial conglomerate shall be considered irrelevant if the balance sheet total of that person is less than the lower of:
(a) EUR 10 000 000, in the period from 31 December of the year to 30 December of the following year, the value in euro shall be converted into Czech crowns at the foreign exchange market rate declared by the Czech National Bank as last in October of that year; or
(b) 1% of the total balance sheet total of persons forming part of the financial conglomerate.
However, if the total balance sheet sum of the persons that would each individually be considered as insignificant is at least 1% of the balance sheet total of the persons that are part of the financial conglomerate, those persons shall be included in the calculation of the supplementary solvency requirement.
(2) The inclusion of a person in the calculation of the additional capital adequacy requirement is inappropriate or misleading given the purpose of the supplementary supervision where:
(a) the share of such person is held temporarily, in particular with a view to sale within 12 months; if the share is not sold within 12 months of the acquisition or the decision to sell, the person shall be included in the calculation of the supplementary solvency requirement;
(b) the person is in bankruptcy or liquidation; or
(c) there are other reasons which have been demonstrated to the coordinator.
PERSON REQUIREMENTS
(1) In order to demonstrate the credibility and competence of the person in charge of the mixed financial holding person (hereinafter referred to as "the person in charge"), the mixed financial holding person shall submit documents within the scope of paragraph 2.
(2) The documentary evidence referred to in paragraph 1 shall be:
(a) an extract from the register of punishments not earlier than 1 month of the person in charge. The person who is a national of the Czech Republic, if he has been continuously present for more than 6 months in a State other than the Czech Republic for the last 3 years, shall also submit a similar extract from the record of the Register of Penalties not earlier than 3 months. A foreign natural person shall also submit a similar document, no more than 3 months old, issued by the State of which he is a citizen, as well as the States in which he has remained continuously over the last 3 years for more than 6 months. Where the acquisition of such a document would be linked to demonstrably disproportionate time entitlements or financial costs, the person in charge may submit a declaration to replace that document;
(b) a professional biography indicating all employment, business activities, other self-employed activities, membership of professional associations and membership of other legal entities, including membership already completed. Where a person in charge has held a leading role, he shall indicate in all cases the scope of the powers and responsibilities conferred on him and the number of persons under his control;
(c) documents, or certified copies thereof, of the educational or other professional qualifications obtained; evidence of the educational attainment can be replaced by evidence of recognition of the professional qualification of the proposed person issued under the Law on the Recognition of Professional Qualification11),
(d) a brief conception of the performance of the duties of the person in charge;
(e) the questionnaire completed in accordance with Annex 1 to this Order,
(f) other documents and data relating to the person in charge, in addition to the documents referred to in points (a) to (e), which may prove his / her credibility or competence, such as references or work opinions from existing employment;
(g) a statement by the person in charge that all the particulars and documents supplied to him are up to date, complete and true.
(3) The mixed financial holding person shall also provide a description of the work capacity of the function to which the management person is to be elected or appointed, including its intended competence and competence. This document may be replaced by an internal regulation of a mixed financial holding person who regulates the content of the function to be performed by that person, including the competence and competence arising from that function.
(4) Where a person in charge is not to be a statutory authority or a member of a statutory authority of a mixed financial holding person or the proposed entity is not to be delegated to the statutory authority of a mixed financial holding person, the mixed financial holding person shall indicate on the basis of which fact the proposed person is managing the activities of the mixed financial holding person.
(5) The authentic instrument issued by an authority of another State must be accompanied by a higher verification of the documents (superlegalized) or by an apostille in accordance with the relevant international treaty (12), unless otherwise declared by the international treaty, which the Czech Republic is bound by.
CONTENTS AND PERIOD OF THE IMPLEMENTATION OF THE INFORMATION OBLIGATIONS
COMMUNICATION OF THE COORDINATOR
(1) The responsible person shall report to the coordinator on:
(a) the structure of the group and persons in the group;
(b) the supplementary solvency requirement;
(c) risk concentration;
(d) intra-group operations.
(2) The method of reporting referred to in paragraph 1 (a) and (b) shall be agreed in advance with the coordinator. The method of reporting referred to in paragraph 1 (c) and (d) shall be adapted to the directly applicable European Union regulation governing technical standards in the field of risk concentration and operations within the group (13).
Report on group structure and persons in group
(1) The obliged entity shall report to the coordinator on the structure of the group and on the persons in the group on 1 January by 31 January of the same calendar year. In addition, it shall inform the coordinator, by the 30th calendar day following the end of the first, second and third quarters, of any changes made during the previous quarter or of any changes made in the previous quarter.
(2) The report on the structure of the group and on persons in the group consists of part graphic and part text.
(3) The graphic part shows the structure of the group in terms of the ownership structure and the structure of the group in terms of management, always with the designation of persons in the financial conglomerate.
(4) The text part contains at least the information listed in Annex 2 to this Decree. Where information already communicated to supervisory authorities for the purpose of exercising supervision on an individual or consolidated basis to regulated entities is concerned, the obliged entity may only indicate the name and address of the supervisory authority to which the information has been provided and the date on which the information was provided. Information on whether a regulated entity in a financial conglomerate complies with the own funds requirements on an individual and consolidated basis laid down in specific legislation shall always be communicated by the obliged entity to the coordinator.
Reporting of the additional solvency requirement
(1) The obliged entity shall report to the coordinator on the additional capital adequacy requirement by 90 calendar days after the date on which it draws up the report, with the status report by 31 December by 30 April of the following calendar year.
(2) The report on the additional capital adequacy requirement contains at least the information set out in Annex 3 to this Regulation.
DISCLOSURE
(1) Regulators in a financial conglomerate shall publish at least the following information on the financial conglomerate of which they are part on their website in a document suitable for download
(a) the designation of the group;
(b) an overview of the persons in the financial conglomerate, indicating, in the case of a legal person of a trading firm, the identification number, the address of the registered office, in the case of a natural person, the names and surnames of the natural person and, where applicable, the person at the head of the financial conglomerate;
(c) the value of own funds at the level of the financial conglomerate;
(d) the value of the capital requirements at the level of the financial conglomerate;
(e) the value of the difference in own funds at the level of the financial conglomerate and the capital requirements at the level of the financial conglomerate, respecting technical principles;
(f) whether or not the additional solvency requirement is complied with.
(2) Regulators in a financial conglomerate shall publish the information referred to in paragraph 1 within five days of the expiry of the period referred to in Article 18 (1).
TRANSITIONAL AND FINAL PROVISIONS
Compulsory person
(a) carry out the calculation of the supplementary solvency requirement in accordance with Article 3 and report to the coordinator the supplementary solvency requirement in accordance with Article 18;
(b) compile the risk concentration report referred to in Article 12 and report the risk concentration report referred to in Article 19 to the coordinator; and
c) compile reports on intra-group operations pursuant to § 14 and report to the coordinator on intra-group operations pursuant to § 20
for the first time on 31 December 2006.
Efficacy
This Decree shall take effect on 30 September 2006.
Governor:
Doc. Ing. Tůma, CSc.
Příloha č. 1
Annex No 1 to Decree No 347 / 2006 Coll.
Questionnaire for the person in charge
1. Are you, at the date of submission of the document, a statutory body or a member thereof or a member of the supervisory body of a legal entity? In the event of a positive reply, state the business name or name of the legal entity and the function performed, including the date from which you perform this function and a statement as to whether or not you will continue to perform this function.
2. Has bankruptcy or settlement been declared in the past on your property or on the property of the legal person controlled by you, or has an application for bankruptcy been rejected for lack of property? Have you been engaged as a statutory body or as a member of a statutory, management or supervisory body of a legal person for up to three years prior to the declaration of bankruptcy in respect of that legal person's assets or by the authorisation of compensation? If yes, state the name of the legal person.
3. Have you been engaged as a statutory body or as a member of a statutory, management or supervisory body of a legal person during the three years preceding the introduction of the compulsory administration of that legal person? If yes, state the name of the legal person.
4. Have you been suspended or withdrawn from a business or other activity or refused to consent to your choice, appointment or provision if such choice, appointment or provision required such approval? If yes, briefly state the circumstances.
5. Has your permit, licence or other authorisation for business activities expired for any other reason than by withdrawal? If yes, briefly state the circumstances.
6. Have you been excluded from a professional association, chamber or association in the last 5 years, including abroad? Were you rejected at the same time? Have you been sentenced to disciplinary action within such a community in the last five years? If yes, briefly state the circumstances.
7. Have you been engaged as a statutory body, a member of a statutory, management or supervisory body of a legal person who has been excluded from a professional association, chamber or association, including abroad? Has the legal person been refused an application for admission to such a community or has been subjected to disciplinary action within such a community? If yes, briefly state the circumstances.
8. In the last 10 years, in connection with financial market activity, have you been legally sanctioned for an offence or other administrative offence? In the context of financial market activity, have you been required to make good damage to a serious or repeated breach of legal obligation, to misuse confidential information or to commit a similar administrative offence? If yes, briefly state the circumstances.
9. Were you a statutory body or a member of a statutory or supervisory body of a legal person at the time when the conduct for which the legal person has been effectively sanctioned for an administrative offence or an obligation to make good damage to a serious or repeated infringement of a legal obligation or to commit a similar administrative offence relating to the financial market was committed? If yes, briefly state the circumstances.
10. Do you have liabilities beyond due to banks or other persons or taxes due or tax arrears? Do you have arrears for public health insurance, social security or a contribution to state employment policy?
Příloha č. 2
Annex No 2 to Decree No 347 / 2006 Coll.
Report on group structure and persons in group
1. The text section of the group structure report and persons in the group shall contain at least:
(a) information on identification of the group structure report and persons in the group;
(b) information on the person headed by the financial conglomerate;
(c) information on other persons in the financial conglomerate;
(d) information on other persons in the group;
(e) further information if needed to clarify the group structure.
2. Information on the identification of the report shall include:
(a) the designation of the group;
(b) the designation of the debtor; in the case of a legal person, a commercial firm, an identification number, the address of the registered office, the name or, where applicable, the name, surname, title, residence and date of birth of the natural person;
(c) the date on which the report is drawn up;
(d) the name and, where appropriate, the name and surname of the contact person, including telephone connection and e-mail address.
3. Information about the person headed by the financial conglomerate contains
(a) business name, identification number, sectoral classification of economic activities;
(b) the address of the registered office;
(c) subscribed capital and paid-up capital;
(d) the subject matter of the business (s) recorded in the Commercial Register and the activities actually carried out;
(e) the name, surname, title, residence and date of birth of persons who are a statutory authority or members of statutory, management or supervisory bodies, indicating the companies of the legal persons in whose organs they operate, including the subject of the business of those persons;
(f) whether and to which the auditor or audit firm will be audited;
(g) whether or not he is a regulated person;
(h) if the regulated entity fulfils the own funds requirements on an individual and consolidated basis;
(i) a list of persons having qualified participation in the person headed by the financial conglomerate. Each shall indicate the amount of its direct and indirect share of the capital, its direct and indirect share of the voting rights in which the actual influence is expressed on the person. Where a significant influence is applied in another way, a brief description of that effect.
Where the financial conglomerate is headed by a natural person, its name and, where appropriate, its name, surname, title and date of birth, the particulars referred to in (c), (e) and (i) shall not be indicated in that case and the address of the place of business or residence shall be indicated in the information referred to in (b).
4. Information on other persons in a financial conglomerate shall be given for individual persons within the scope of points 3 (a) to 3 (h) and shall be given below:
(a) the name and address of the supervisory authorities and of the authorities of the third States supervising the regulated person,
(b) whether or not he is a person controlled by a person headed by a financial conglomerate;
(c) whether he is a person included in the calculation of the supplementary solvency requirement. If not included in the calculation of the additional solvency requirement, the reason for not inclusion shall be provided.
(5) Information on other persons in the group who are not persons in a financial conglomerate shall be given as individuals within the scope of point 3 (a) to (d).
Příloha č. 3
Annex No 3 to Decree No 347 / 2006 Coll.
Reporting of the additional solvency requirement
(1) The supplementary solvency requirement report shall include at least:
(a) information on the identification of the report on the additional solvency requirement;
(b) information on compliance with the additional solvency requirement.
2. Information on the identification of the report shall include:
(a) the designation of the group;
(b) the designation of the debtor; in the case of a legal person, a commercial firm, an identification number, the address of the registered office, the name or, where applicable, the name, surname, title, residence and date of birth of the natural person;
(c) the date on which the report is drawn up;
(d) the name and, where appropriate, the name and surname of the contact person, including telephone connection and e-mail address.
3. Information on compliance with the additional capital adequacy requirement shall include:
(a) an indication of the method or specification of the combination of methods used to calculate the additional solvency requirement;
(b) the value of own funds at the level of the financial conglomerate;
(c) the value of own funds requirements at the level of the financial conglomerate;
(d) the value of the difference in own funds at the level of the financial conglomerate and the capital requirements at the level of the financial conglomerate, while respecting technical principles;
(e) whether or not the additional solvency requirement is complied with. If the additional capital adequacy requirement is not met, the way in which the non-compliance will be dealt with;
(f) whether the missing capital is deducted according to the regulation of the controlled person in the financial conglomerate. If yes, the value of the deduction shall be given and whether the deduction is in full or in proportion. If the deduction is at a pro rata rate as determined by this pro rata level.
1) Articles 6 to 9 and Annexes I and II to Directive 2002 / 87 / EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73 / 239 / EEC, 79 / 267 / EEC, 92 / 49 / EEC, 92 / 96 / EEC, 93 / 6 / EEC and 93 / 22 / EEC and Directives 98 / 78 / EC and 2000 / 12 / EC of the European Parliament and of the Council, as amended by Directives 2010 / 78 / EU and 2011 / 89 / EU of the European Parliament and of the Council.
2) Article 19 of Act No. 89 / 1995 Coll., on the State Statistical Service, as amended.
3) For example, Decree No 333 / 2002 Coll., laying down rules on prudent business of controlling persons on a consolidated basis, as amended, Decree No 262 / 2004 Coll., on rules for calculating the capital adequacy of a non-bank dealer on an individual basis, as amended.
4) For example Decree No. 303 / 2004 Coll., implementing Act No. 363 / 1999 Coll., on Insurance and on the amendment of certain related laws, as amended.
5) Article 183a (1) of Act No. 513 / 1991 Coll., Commercial Code, as amended.
6) For example, Section 34 of Act No. 190 / 2004 Coll., on Bonds, Section 32 (7) of Act No. 328 / 1991 Coll., on bankruptcy and settlement, as amended.
11) Act No. 18 / 2004 Coll., on the recognition of professional qualifications and other competence of nationals of Member States of the European Union and amending certain laws (Act on the Recognition of Professional Qualifications), as amended.
12) Communication from the Ministry of Foreign Affairs No. 45 / 1999 Coll., on the access of the Czech Republic to the Convention on the abolition of the requirement to verify foreign public documents.
(13) Commission Delegated Regulation (EU) No 342 / 2014 of 21 January 2014 supplementing Directive 2002 / 87 / EC of the European Parliament and of the Council and Regulation (EU) No 575 / 2013 of the European Parliament and of the Council with regard to regulatory technical standards for the application of methods of calculation of capital adequacy requirements for financial conglomerates. Commission Delegated Regulation (EU) 2015 / 2303 of 28 July 2015 supplementing Directive 2002 / 87 / EC of the European Parliament and of the Council with regard to regulatory technical standards specifying definitions and coordinating supplementary supervision of concentrations of risks and intra-group transactions.
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Regulation Information
| Citation | Decree No. 347 / 2006 Coll., implementing certain provisions of the Financial Conglomerates Act |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 11.07.2006 |
|---|---|
| Effective from | 30.09.2006 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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