Committee Reports::Report No. 09 - Proposal for a Second Banking Directive::26 January, 1989::Appendix


Article 9

1.Member States shall require any physical or legal person, who is considering the direct or indirect acquisition of a qualified participation in a credit institution, to first inform the competent authorities, telling them of the size of the intended participation. The above-mentioned persons must similarly inform the competent authorities if they propose to increase their qualified participation such that the credit institution would become a subsidiary. The competent authorities shall assess the suitability of the above-mentioned persons.

2.Credit institutions shall each year furnish the competent authorities with the names of major shareholders and members as referred to in paragraph 1 and the size of their qualified participations, in accordance with the names registered at the annual general meeting of shareholders and members or in accordance with information received as a result of compliance with the regulations relating to companies quoted on stock exchanges.

3.Member States shall require that in cases where the persons referred to in paragraph 1 exercise their influence in a way which is likely to be to the detriment of the prudent and sound management of the banking activities of the institution, the competent authorities shall take appropriate measures to bring such a situation to an end. Such measures may consist in particular in injunctions, sanctions against directors and managers, or the suspension of voting rights in respect of the shares held by the shareholders or members in question.

Article 10

1.A credit institution shall not hold a qualified participation of an amount greater than 10% of its own funds in an undertaking which is neither a credit institution, nor a financial institution, nor an undertaking pursuing an activity as defined in Article 43 (2) (f) of Directive 86/635/EEC.

2.The total amount of qualified participations in undertakings other than credit institutions, financial institutions or undertakings pursuing an activity as defined in Article 43 (2) (f) of Directive 86/635/EEC shall not exceed 50 % of the own funds of the credit institution.

3.Shares held temporarily during a financial rescue or restructuring operation or during the normal course of the underwriting process or in an institution’s own name on behalf of others shall not be included among qualified participations for the purposes of calculating the limits laid down in paragraphs 1 and 2. Shares not having the character of financial fixed assets as defined in Article 35(2) of Directive 86/635/EEC shall never be included.

4.The limits laid down in paragraphs 1 and 2 may be exceeded in exceptional circumstances. However, in such cases, the competent authorities shall require the credit institution either to increase the volume of own funds or take other remedial measures.

5.Compliance with the limits laid down in paragraphs 1 and 2 shall be ensured by means of supervision on a consolidated basis in accordance with the provisions of Directive 83/350/EEC.

6.Member States need not apply the limits laid down in paragraphs 1 and 2 if they provide that the qualified participations in question are to be deducted when calculating the own funds of a credit institution.