Assessment criteria of the reputation of person

  • Section:

Financial and Capital Commission (FCMC), 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, 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 FCMC 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 FCMC 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 FCMC 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 FCMC 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 FCMC 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, investment management company of investment firm, that allows the FCMC to resolve any doubts as to legality of such funds as regards money laundering and terrorism financing.

  • The FCMC shall be initially aware that a person cannot exercise its influence over a credit institution, insurance company, investment management company or investment firm, 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 or investment firm.
  • Considering impeccable reputation of founders (shareholders), the FCMC 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 FCMC and are based on the Joint Guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (JC/GL/2016/01) developed by the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority, prescribing that the impeccable reputation of person shall be verified by open, transparent and cooperative communication with supervisory authority (i.e. the FCMC).

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