New Rules In Respect Of Acquisitions In The Irish Financial Sector.Introduction On 10th June 2009, the European Communities European Community: see European Union. European Community (EC) Organization formed in 1967 with the merger of the European Economic Community, European Coal and Steel Community, and European Atomic Energy Community. (Assessment of Acquisitions in the Financial Sector) Regulations 2009 (the "Regulations) came into effect in Ireland implementing Directive 2007/44/EC into domestic law. The main objectives of Directive 2007/44/EC are to: (i) harmonise across EU member states the conditions under which the proposed acquirer of a holding in a financial institution is required to provide notification of its intent to the competent authority responsible for the prudential supervision of the target financial institution; (ii) define a clear and transparent procedure for the prudential assessment of the proposed acquisition by the competent authorities, including setting the maximum period of time for completing the process; (iii) specify clear criteria of a strictly prudential nature to be applied by the competent authorities in the assessment process; and (iv) ensure that the proposed acquirer knows what information it will be required to provide to the competent authorities in order to allow them to assess the proposed acquisition in a timely manner.1 The Directive also brings into focus in the assessment of proposed acquisitions in the financial sector any suspicion of terrorist financing  The of this article or section may be compromised by "weasel words".You can help Wikipedia by removing weasel words. and money laundering The process of taking the proceeds of criminal activity and making them appear legal. Laundering allows criminals to transform illegally obtained gain into seemingly legitimate funds. and therefore adds to the existing EU legislation in place to combat terrorist financing and to facilitate the imposition The printing of pages on a single sheet of paper in a particular order so that they come out in the correct sequence when cut and folded. of financial sanctions Sanctions is the plural of sanction. Depending on context, a sanction can be either a punishment or a permission. The word is a contronym. Sanctions involving countries: The Regulations amend and supplement existing Irish laws and regulations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the acquisition and disposal of holdings in credit institutions, insurance, assurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. undertakings, investment firms and market operators of regulated markets A regulated market is the provision of goods or services that is regulated by a government appointed body. The regulation may cover the terms and conditions of supplying the goods and services and in particular the price allowed to be charged. and UCITS Undertakings for the Collective Investment of Transferable Securities - UCITS A public limited company that coordinates the distribution and management of unit trusts amongst countries within the European Union. management companies. The Irish Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Regulatory Authority Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities (the "Financial Regulator The Financial Regulator (Irish: Rialtóir Airgeadis), officially known as the Irish Financial Services Regulatory Authority (Central Bank and Financial Services Authority of Ireland Act 2003, Section 26 ") is the body designated to supervise acquiring or disposing transactions in the Irish financial sector. The Financial Regulator has issued a form to be completed to notify of a proposed acquisition of, or increase in, a direct or indirect qualifying holding in respect of any of the following categories of Irish authorised Adj. 1. authorised - endowed with authority authorized lawful - conformable to or allowed by law; "lawful methods of dissent" legitimate - of marriages and offspring; recognized as lawful entities (the "Notification Form") pursuant to the Regulations: credit institution; insurance or assurance undertaking; reinsurance undertaking; investment firm or a market operator of a regulated market; UCITS management company. The Notification Form requires, inter alia [Latin, Among other things.] A phrase used in Pleading to designate that a particular statute set out therein is only a part of the statute that is relevant to the facts of the lawsuit and not the entire statute. , information on the details of proposed acquirer(s), the rationale for a proposed acquisition, the impact of a proposed acquisition on the target entity and details as to how a proposed acquisition will be financed. The Rules for Notification and Assessment of Acquiring and Disposing Transactions in the Financial Sector pursuant to the Regulations (the "New Rules") Application The New Rules apply to: an acquisition, directly or indirectly, of a "qualifying holding" in a target entity; and/or the direct or indirect increase in a "qualifying holding" whereby the resulting holding would reach or exceed 20%, 33% or 50% ("prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). percentages") of the capital of or voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. 2 in, a target entity or a target entity would become the proposed acquirer's subsidiary. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the Regulations a "qualifying holding" means 10% or more of the capital of, or voting rights in, a target entity or a holding which makes it possible to exercise a significant influence over the management of a target entity. The proposed acquirer must, using the Notification Form, provide prior notification to the Financial Regulator of a proposed acquisition in a target entity which would constitute a qualifying holding or would increase a qualifying holding pursuant to the Regulations in the manner more particularly described above. It should also be noted that the disposal of a qualifying holding or a holding which dilutes the remaining interest to or below 20%, 33% or 50% or results in the entity ceasing to be a subsidiary of the disposer is also required to be notified in advance to the Financial Regulator. Furthermore, in accordance with the requirements of the Regulations the target entity itself, where it becomes aware of such an acquisition or disposal, must notify the Financial Regulator. Timeframe for Assessment The New Rules provide a timeframe for the assessment by the Financial Regulator of a proposed acquiring transaction. The New Rules provide that: a complete notification must be acknowledged in writing by the Financial Regulator within two working days of receipt of the Notification Form; the Financial Regulator is required to carry out the assessment of a proposed acquisition within sixty working days of the date of the written acknowledgement of the completed Notification Form; and the Financial Regulator may request additional information in respect of a proposed acquisition no later than the fiftieth working day. If such a request is made, the assessment may be interrupted in·ter·rupt v. in·ter·rupt·ed, in·ter·rupt·ing, in·ter·rupts v.tr. 1. To break the continuity or uniformity of: Rain interrupted our baseball game. 2. by a maximum of twenty working days. Prudential Assessment The Financial Regulator may, based on a prudential assessment of the proposed acquisition, decide to oppose or to approve of a proposed acquisition. The New Rules provide that in assessing a proposed acquisition, the Financial Regulator shall have regard to the following: the likely influence of the proposed acquirer concerned on the financial institution concerned; and the suitability of the proposed acquirer and the financial soundness of the proposed acquisition concerned against all of the following criteria: (i) the reputation of the proposed acquirer; (ii) the reputation and experience of the individuals who will direct the business of the financial institution as a result of the proposed acquisition; (iii) the financial soundness of the proposed acquirer, in particular in relation to the type of business pursued and envisaged in the financial institution; (iv) whether the financial institution will be able to comply and continue to comply with the prudential requirements of existing legislation; (v) whether the group of which it will become a part has a structure which makes it possible to exercise effective supervision, effectively exchange information among the competent authorities and determine the allocation of responsibilities among the competent authorities; (vi) whether there are reasonable grounds to suspect that, in connection with the proposed acquisition, money laundering or terrorist financing (within the meaning of Article 1 of Directive 2005/60/EC13) is being or has been committed or attempted, or that the proposed acquisition could increase the risk of money laundering or terrorist financing. The New Rules provide that a proposed acquisition shall not be examined in terms of the economic needs of the market and that the Financial Regulator shall cooperate with other supervisory bodies of the other EU member states as appropriate if the proposed acquirer is an insurance or re-insurance undertaking, a credit institution, UCITS management company, or the market operator of a regulated market authorised by a competent authority in another member state. The Regulations provide that a "UCITS management company" and "market operator of a regulated market" have the same meaning in the Regulations as in the European Communities (Markets in Financial Instruments) Regulations 2007 discussed in further detail below. Compromise or Arrangement The New Rules provide that if a transaction is both a proposed acquisition and a compromise or arrangement for the purposes of sections 201 and 202 of the Companies Act 1963 the court shall not make an order under section 201 of that Act in relation to the transaction until after the end of the assessment period in relation to the transaction under the New Rules. Completion Deadline The Financial Regulator may pursuant to the Regulations set a maximum period within which the proposed acquisition is to be completed. The Financial Regulator may also impose additional conditions or requirements to be met in respect of a proposed acquisition. If the Financial Regulator opposes a proposed acquisition, it must, within two working days of the decision being made and before the end of the assessment period, inform the proposed acquirer in writing and outline the reasons for its decision. A decision by the Financial Regulator to oppose a proposed acquisition may be appealed to the Irish Financial Services Appeals Tribunal A general term for a court, or the seat of a judge. In Roman Law, the term applied to an elevated seat occupied by the chief judicial magistrate when he heard causes. tribunal n. . If a proposed acquirer purports to complete a proposed acquisition for which it did not receive the prior approval of the Financial Regulator in accordance with the Regulations title to any shares or interest in the target entity will not be considered to have legally passed to the acquirer and any action based on such acquisition shall be considered void. There is no mechanism available whereby an acquisition which contravened the New Rules can seek retrospective LAW, RETROSPECTIVE. A retrospective law is one that is to take effect, in point of time, before it was passed. 2. Whenever a law of this kind impairs the obligation of contracts, it is void. 3 Dall. 391. approval by the Financial Regulator, the courts or otherwise. Amendments to existing Laws and Regulations in respect of Requirements for Notification and Assessment of Acquisitions in the Financial Sector The Regulations amend and supplement as appropriate the procedural rules and evaluation criteria for the prudential assessment of acquisitions and increases of holdings in certain entities operating in the financial sector in Ireland whose operations are governed by the following regulations: (i) European Communities (Licensing and Supervision of Credit Institutions) Regulations 1992; (ii) European Communities (Non-Life Insurance) Framework Regulations 1994; (iii) European Communities (Life Assurance) Framework Regulations 1994; (iv) European Communities (Reinsurance) Regulations 2006; and (v) European Communities (Markets in Financial Instruments) Regulations 2007. Conclusion The Regulations have amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and supplemented the existing legislation governing the operation of credit institutions, insurance, assurance and reinsurance undertakings, investment firms, market operators of regulated markets and UCITS management companies with regard to the notification procedures to be followed in respect of acquiring and disposing transactions as appropriate. Importantly the Regulations provide that credit institutions, insurance, assurance and reinsurance undertakings, investment firms, market operators of regulated markets and UCITS management companies are obliged o·blige v. o·bliged, o·blig·ing, o·blig·es v.tr. 1. To constrain by physical, legal, social, or moral means. 2. to notify the Financial Regulator of the names of shareholders or members who have qualifying holdings and the size of each holding at times specified by the Financial Regulator and at least once a year. The Regulations are intended to create greater transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. in the financial sector and to assist the Financial Regulator in fulfilling its supervisory role and aid relevant firms by providing detailed information on the notification and assessment procedures to be followed with regard to acquiring and disposing transactions in the financial sector.3 Footnotes 1 "Guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. for the Prudential Assessment of Acquisitions and increases in holdings in the financial sector required by Directive 2007/44/EC" which is available online at the following web address: http://www.c-ebs.org/getdoc/6268b37d-77db-4e29-8fbe-33b0a8984ec7/3L3-MA-Guidelines.aspx 2 The rules regarding the calculation of voting rights in Regulations 9 and 10, paragraphs (4) and (5) of Regulation 12 and Regulations 14(5), 15 to 17 and 21(6) of the Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. No. 277 of 2007) and the conditions regarding aggregation of voting rights in Regulation 18 of those Regulations shall be taken into account in accordance with the Regulations. 3 Explanatory ex·plan·a·to·ry adj. Serving or intended to explain: an explanatory paragraph. ex·plan Note in the Regulations The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Ms Edel Coughlan Dillon Eustace 33 Sir John Roberson's Quay QUAY, estates. A wharf at which to load or land goods, sometimes spelled key. 2. In its enlarged sense the word quay, means the whole space between the first row of houses of a city, and the sea or river 5 L. R. 152, 215. Dublin 2 IRELAND Tel: 1667 0022 Fax: 1667 0042 E-mail: enquiries@dilloneustace.ie URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : www.dilloneustace.ie Click Here for related articles (c) Mondaq Ltd, 2009 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion