Assessment criteria of the reputation of person

  • Section:

Financial and Capital Commission (hereinafter – the Commission), taking into account the findings in the course of considering an application submitted by a person for obtaining an operating licence for credit institution, insurance company, licensed alternative investment fund manager provision of investment management and investment services or investment non-core services or notification of an acquisition or increase in a qualifying holding in a financial and capital market participant, hereby points out that:

• A person shall independently prepare (compile) all the documentation and information, which is relevant to provide evidence for legal origin of financial assets and adequacy of free capital. Please note that ”all the documentation and information” means that the submitted information shall be complete and prepared correctly so that prevent a situation that initially only part of documents is submitted to the Commission for the assessment and during the assessment process of applications (notifications) extra time is required to submit additional evidence (notifications) for verifying compliance with regulatory requirements.
• The Commission draws attention that when considering an application for issuing an operating licence to a financial and capital market participant or notification of acquisition or increase in a qualifying holding in a financial and capital market participant the Commission shall not be obliged to prove legal origin of financial assets held by a certain person or free capital adequacy in order to issue an administrative act to the benefit of the person. The Commission points out that evidence of legal origin of financial assets and free capital adequacy shall be known to the person when submitting all underlying documents as well as dates of certain transactions and their presentation in the financial statements have been known only to the person; in case they might be material in a certain administrative case the person itself shall submit them to the Commission to facilitate issuing favourable administrative act.

Also, a founder (shareholder) of the financial and capital market participant shall verify the origin of the funds that are invested in the share capital of credit institution, insurance company, alternative investment fund manager, investment management company of investment firm, that allows the Commission to resolve any doubts as to legality of such funds as regards money laundering and terrorism financing.

• The Commission shall be initially aware that a person cannot exercise its influence over a credit institution, insurance company, investment management company or investment firm, alternative investment fund manager, performing via them transactions of unclear and doubtful legal purposes, which are therefore incompatible with the rights of the acquisition or increase of qualifying holding in a licensed credit institution, insurance company, investment management company, alternative investment fund manager or investment firm.

• Considering impeccable reputation of founders (shareholders), the Commission shall take into account the person’s integrity and strict adherence to obligations set in the regulatory enactments, namely, voluntary, comprehensible and timely action and provision of information that is not misleading.

Above criteria are binding on the Commission and are based on the “Guidelines for the prudential assessment of acquisitions and increase of holdings in the financial sector required by Directive 2007/44/EC” issued by the European Banking Authority, prescribing that the impeccable reputation of person shall be verified by open, transparent and cooperative communication with supervisory authority (i.e. the Commission). 


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