Official Information of the Czech National Bank on Applications for Prior Consent in Banking Matters

OFFICIAL INFORMATION OF THE CZECH NATIONAL BANK of 20 December 2010 on applications for the granting of the consent of the Czech National Bank in matters of the disposal of the business, the winding up or the transformation of a credit institution, the reduction in the registered capital of a bank, the takeover of debts of a bank under conservatorship or the reduction in the basic membership contribution of a member of a credit union The Czech National Bank, in relation to Article 16 (1) and Article 29a of Act No. 21/1992 Coll., on Banks, as amended (hereinafter only the “Act on Banks”), and to Article 1 (7), Article 5a (3) and Article 13 (4) of Act No. 87/1995 Coll., on Credit Unions and Certain Related Measures and on the Amendment to Act No. 586/1992 Coll. of the Czech National Council, on Income Taxes, as amended, as amended (hereinafter only the “Act on Credit Unions”), hereby informs: I. Purpose of the official information

1. The purpose of this official information is to provide information about the information and documents that must be provided in connection with applications for the granting of the prior consent of the Czech National Bank in proceedings pursuant to Article 16 (1) and Article 29a of the Act on Banks and Article 1 (7), Article 5a (3) and Article 13 (4) of the Act on Credit Unions, in matters relating to a) the conclusion of a contract relating to the disposal of the business of a bank or credit union (hereinafter together a “credit institution”), b) a decision to wind up a credit institution, c) the merger or division of a credit institution, d) the transfer of assets to a bank acting as partner, e) a reduction in the registered capital of a bank unless this is a reduction in the registered capital of a bank in order to cover a loss, f) a resolution of the General Meeting that an existing bank shall cease to perform any activity for which a banking licence is required, g) the conclusion of a contract that forms the basis for the takeover of debts of a bank under conservatorship by a different bank or a branch of a foreign bank and h) a decision of a members’ meeting to reduce the basic contribution of a member of a credit union.
2. In such cases the indicated Acts do not contain authorisation to issue a statutory instrument regulating the details of the application. If, however, the Czech National Bank still does not have the required information and documents available, it will not be possible to evaluate the application materially and grant its consent. The submission of an application in the form pursuant to this official information will facilitate the processing of the application and will speed up the course of the proceedings. 1

II. Regarding the requisites of an application relating to the disposal of the of a credit institution or its part [Article 16 (1) a) of the Act on Banks and Article 1 (7) of the Act on Credit Unions]

1. In this official information, the disposal of the business of a credit institution or its part is understood to mean a) the transfer of the business or its part, b) the lease of the business or its part, c) the pledge of the business of a bank or its part, or d) other disposal of the business or its part, e.g. the use of the business of a bank as a contribution in a company1) .
2. The following must be included in an application for the granting of prior consent of the Czech National Bank in relation to the disposal of the business of a credit institution or its part, a specimen of which is given for a bank in Annex No. 1 and for a credit union in Annex No. 3 of this official information: a) information about the set of items, rights and commitments in the accounting records of the credit institution relating to the disposal of the business or its part, b) information about the entity with which the credit institution intends to conclude a contract for the disposal of the business of a credit institution or its part including, in the case of a legal entity, the name or corporate name, identification number, address of the registered offices, the amount of registered capital and the amount and scope of the payment of the registered capital or, in the case of a natural person engaged in business activities, all the names and surnames, birth ID number and, if this has not been allocated, the date of birth, corporate name, further designation or other designation, place of business and identification number, c) a document demonstrating authorisation to perform business activities for the entity pursuant to letter b) pursuant to Decree of the Czech National Bank on Applications2) , d) detailed information about the intended disposal of the business of the credit institution or its part and the consequences of this disposal, including in particular the applicant’s plan, the changes that will occur in the business plan, the time schedule, a description of the impacts on the performance of the activities of the credit institution, a description of the incorporation of the organisational units and job positions into the new organisational structure, and a description of the transfer of competencies (activities), if this information is not already included in other submitted documents, e) the anticipated impacts of the disposal of the business of the credit institution as regards the capital of the credit institution in the amount of the sum of the individual capital requirements to cover risk (hereinafter only “capital adequacy”) on an individual and consolidated basis3) and information demonstrating the assumptions for continuous compliance with capital adequacy rules on an individual and consolidated basis after the completion of the operations relating to the disposal of the business of the credit institution, f) a draft of the contract relating to the disposal of the business of the credit institution or its part.

1. Article 59 (5) of Act No. 513/1991 Coll., the Commercial Code, as amended.
2. Article 2 a) of Decree No. 233/2009 Coll., on Applications, Approval of Persons and the Manner of Proving Professional Qualifications, Trustworthiness and Experience of Persons, and on the Minimum Amount of Funds to be Provided by a Foreign Bank to its Branch.
3. Article 12a of the Act on Banks. Article 8 of the Act on Credit Unions. 2

III. Regarding the requisites of an application for the granting of prior consent to a decision of the General Meeting on the winding up of a bank [Article 16 (1) b) of the Act on Banks] or to a decision of a members’ meeting on the winding up of a credit union [Article 5a (3) of the Act on Credit Unions]

1. The following must be included in the application for the granting of prior consent of the Czech National Bank pursuant to Article 16 (1) b) of the Act on Banks and Article 5a (3) of the Act on Credit Unions, a specimen of which is given for a bank in Annex No. 1 and for a credit union in Annex No. 3 of this official information: a) information about the reasons that lead to the decision to wind up the credit institution, b) a proposal for a decision of the General Meeting of a joint-stock company or members’ meeting of a credit union on the winding up of a credit institution, c) in the event of the transfer of the business or part of the businesses of a wound up credit institution, also information pursuant to part II point 2 a) to d) and f), d) in the event of transformation with the subsequent dissolution of the wound up credit institution, also information pursuant to part IV point 1, e) in other cases than pursuant to letters c) and d) and in the event of the transfer of part of the business of a wound up credit institution, also a proposal for the envisaged method for settling the receivables and liabilities of the credit institution, or a proposal for the envisaged method for settling the receivables and liabilities of the credit institution connected with the part of the that was not transferred; the proposal for the envisaged method of settlement must always include the envisaged schedule for the settlement taking into account the liquidity of the bank’s assets.
2. The Czech National Bank, for reasons of objective coherence, shall connect the proceedings relating to the application for the granting of prior consent to a decision of the General Meeting on the winding up of a bank and the proceedings relating to the granting of prior consent to merger or division with the winding up of the bank or to the transfer of assets to a bank acting as partner, into joint proceedings4) . IV. Regarding the requisites of an application for the granting of prior consent to the merger or division of a credit institution, or the transfer of assets to a bank acting as partner [Article 16 (1) c) of the Act on Banks or Article 13 (4) in connection with Article 5a (3) of the Act on Credit Unions]
3. The following must be included in the application for the granting of prior consent of the Czech National Bank pursuant to Article 16 (1) c) of the Act on Banks and Article 13 (4) in connection with Article 5a (3) of the Act on Credit Unions, a specimen of which is given for a bank in Annex No. 1 and for a credit union in Annex No. 3 of this official information: a) information about the reasons that lead to the transformation, b) a list of the participating and successor credit institutions, which shall contain information as to whether this is a dissolving, successor, transferring or accepting credit institution, with an indication of their name or corporate name, identification number and address of the registered offices, c) the job descriptions of management employees of the bank or the management of the credit union of the participating, successor or accepting credit institution as a consequence of the transformation 5) ,

4. Article 140 of Act No. 500/2004 Coll., the Administrative Code, as amended.
5. Changes in the occupation of management positions may be subject to approval or evaluation pursuant to other provisions of the Act on Banks, of the Act on Credit Unions or other regulations; in such a case it is necessary to also proceed in accordance with the rules stipulated there. 3

d) the project for the transformation of the company or association6) , including in particular the applicant’s plan, the changes that will occur in the business plan, the schedule, a description of the impacts on the performance of the activities of the credit institution, a description of the incorporation of the departments and job positions into the new organisational structure, if it is an entity subject to supervision by the Czech National Bank, and a description of the transfer of competencies (activities), if this information is not already contained in other submitted documents, e) reports of the statutory bodies of the participating credit institutions about the transformation, or a joint report if prepared, f) the financial statements of the participating credit institutions within the scope of the Decree of the Czech National Bank on Applications7) , g) the final financial statements of the participating credit institutions and the initial balance sheet of the successor credit institution and the reports of the auditor on their verification, if required, or the interim financial statements and auditor reports on their verification, if required, h) an indication of the groups of entities with close links8) arising as a consequence of the transformation and information about entities9) which as a consequence of the transformation acquire or increase their qualifying holding in the legal successors of the participating credit institutions, or will become entities that control them, with an indication of the amount of the stake or other form of participation in the applicant (in addition to the provision of this information, pursuant to the law the consent of the Czech National Bank is required with the acquisition or increase of the qualifying holding in the successor regulated legal entity, or for the control of such entity10) , i) the envisaged amount of capital adequacy on an individual and consolidated basis11) of the participating and successor credit institutions as of the date of effect of the transformation, and information demonstrating the assumptions for the uninterrupted compliance with capital adequacy rules of the participating and successor credit institutions on an individual and consolidated basis after the completion of the transformation. 2. Pursuant to the Act on Banks, other participating joint-stock companies may be participants in proceedings for the granting of prior consent for the merger or division of a bank. The Czech National Bank, in accordance with the development of legislation on the transformation of trading companies and associations, grants the position of participant in proceedings for the granting of prior consent for the merger or division of a bank to all trading companies or corporations participating in the transformation12) . 3. The Czech National Bank, for reasons of objective coherence, will connect the proceedings relating to an application for the granting of prior consent for a decision of the members’ meeting on the winding up, merger or division of a credit union (Article 5a (3) and proceedings relating to the granting of prior consent for the merger or division of a credit union (Article 13 (4))13) .

6. Article 14 and subsequent of Act No. 125/2008 Coll., on Transformations of Commercial Companies and Cooperatives, as amended.
7. Article 2 b) of Decree No. 233/2009 Coll.
8. Article 4 (6) of the Act on Banks, Article 1 (9) of the Act on Credit Unions, Article 2 (1) f) of Act No. 256/2004 Coll., on Business Activities on the Capital Market, as amended.
9. Article 20 (16) of the Act on Banks. Article 2b (13) of the Act on Credit Unions. 10) Article 20 (3) of the Act on Banks, Article 2b (3) of the Act on Credit Unions, Article 10b (1) of Act No. 256/2004 Coll.; an application for this agreement may also be submitted at the same time as an application for agreement with transformation. 11) Article 12a of the Act on Banks. Article 8 of the Act on Credit Unions.
10. Article 154 and Article 181 of Act No. 125/2008 Coll.
11. Article 140 of the Administrative Code. 4

V. Regarding the requisites of an application for the granting of prior consent for a reduction in the registered capital of a bank [Article 16 (1) d) of the Act on Banks] The following must be included in the application for the granting of prior consent of the Czech National Bank pursuant to Article 16 (1) d) of the Act on Banks, a specimen of which is given in Annex No. 1 of this official information: a) information about the reasons that lead to the reduction in the registered capital of the bank, b) the envisaged impacts of the reduction in the registered capital of the bank on the ability of the bank to comply with the prudential rules pursuant to the Act14) taking into account the safety and stability of the bank from the perspective of the fulfilment of requirements for ba) capital adequacy on an individual and consolidated basis, bb) exposure on an individual and consolidated basis, bc) uninterrupted financial solvency, bd) the rules of liquidity and safe operation, c) information at least within the scope of information that the Commercial Code requires for a resolution of the General Meeting to reduce the registered capital of a joint-stock company15) . VI. Regarding the requisites of an application for the granting of prior consent for a resolution of the General Meeting that an existing bank shall cease to perform activities for which a banking licence is required [Article 16 (1) e) of the Act on Banks] The following must be included in the application for the granting of prior consent of the Czech National Bank pursuant to Article 16 (1) e) of the Act on Banks, a specimen of which is given in Annex No. 1 of this official information: a) the justification of the plan of the decision of the General Meeting of the bank, pursuant to which the existing bank shall cease to perform activities for which a banking licence is required, b) information about the set of items, rights and commitments in the accounting records of the bank, c) a proposal of the envisaged method of settlement of the receivables and liabilities of the bank, including the envisaged settlement date taking into account the liquidity of the bank’s assets. VII. Regarding the requisites of an application for the granting of prior consent for the conclusion of a contract on the basis of which the debts of a bank under conservatorship will be taken over by a different bank or a branch of a foreign bank (Article 29a of the Act on Banks) The following must be included in the application for the granting of prior consent of the Czech National Bank pursuant to Article 29a of the Act on Banks, a specimen of which is given in Annex No. 2 of this official information: a) information about the reasons that lead to the conclusion of a contract for the takeover of debts of a bank under conservatorship by a different bank or a branch of a foreign bank,

14. Article 12a to 15 of the Act on Banks and Decree No. 123/2007 Coll., stipulating the prudential rules for banks, credit unions and investment firms, parts four and five. 15) Article 211 (1) of the Commercial Code. 5

b) the envisaged impacts of the operation in question on the amount and uninterrupted compliance with rules of capital adequacy and exposure individually for a bank under conservatorship and the bank or branch of a foreign bank taking over the debts, c) information demonstrating the ensuring of the proper and uninterrupted continuation of client relationships connected with the takeover of debts by the entity taking over those debts, d) information (list) regarding the liabilities maintained in the accounting records of the bank under conservatorship, to which the proposed contract for the takeover of debts applies, e) information relating to the bank or branch of a foreign bank taking over those debts with an indication of the name or corporate name, identification number and address of the registered offices, f) a draft of the contract on the basis of which the debts of a bank under conservatorship will be taken over by a different bank or a branch of a foreign bank. VIII. Regarding the requisites of an application for the granting of prior consent for a decision of the members’ meeting to reduce the amount of the basic membership contribution of a member of a credit union (Article 5a (3) of the Act on Credit Unions) The following must be included in the application for the granting of prior consent of the Czech National Bank for a decision of the members’ meeting to reduce the amount of the basic membership contribution of a member of a credit union, a specimen of which is given in Annex No. 3 of this official information: a) information about the reasons that lead to the decision to reduce the basic membership contribution of a member of a credit union, b) the envisaged impacts of the reduction in the basic membership contribution of a member of a credit union on the obligation of the credit union to comply with the rules stipulated pursuant to the law16) taking into account the safety and stability of the credit union from the perspective of compliance with requirements for ba) capital adequacy on an individual and consolidated basis, bb) exposure on an individual and consolidated basis, bc) uninterrupted financial solvency, bd) the liquidity and safe operation rules. IX. Common information relating to the application

1. In the event the applicant is being represented, it must attach to the application the original of the power of attorney or a similar document demonstrating the authorisation of the representative to represent the applicant. It is recommended that the applicant’s signature on the power of attorney be officially certified in the interest of removing doubt.
2. If the nature of the matter excludes the submission of annexes to the application or the presentation of information in printed form, and if it is not sufficiently clear from the application itself, the applicant shall indicate this fact in the application together with the reasons for which it is not possible to attach an annex or present the information, and it shall sufficiently demonstrate such reasons.

16. Article 11 of the Act on Credit Unions and Decree No. 123/2007 Coll., parts four and five. 6

3. In place of the submission of an annex to the application given in this official information the applicant may refer to a precisely identified corresponding document that it submitted to the Czech National Bank within the past 3 years.
4. When submitting public documents from foreign states, the procedure adopted shall be pursuant to the law regulating administrative proceedings17) .
5. The Czech National Bank shall publish specimens of the printed applications given in this official information in a manner permitting remote access18) . X. Cancellation provisions On the date of the announcement of this official information in the Bulletin of the Czech National Bank the validity expires of official information of the Czech National Bank No. 3/1999 in the ČNB Bulletin of 18 January 1999 relating to the provisions of Article 16 (1) b) and c) of Act No. 21/1992 Coll., on Banks, as amended, in the event of the merger of banks. Vice-Governor Prof. PhDr. Ing. Vladimír Tomšík, Ph.D. duly signed Annexes Annex No. 1: Application for the granting of prior consent of the Czech National Bank pursuant to Article 16 (1) of Act No. 21/1992 Coll., on Banks, as amended. Annex No. 2: Application for the granting of prior consent of the Czech National Bank pursuant to Article 29a of Act No. 21/1992 Coll., on Banks, as amended. Annex No. 3: Application for the granting of prior consent of the Czech National Bank pursuant to Article 1 (7), Article 5a (3) or Article 13 (4) of Act No. 87/1995 Coll., on Credit Unions and Certain Related Measures and on the Amendment to Act No. 586/1992 Coll. of the Czech National Council, on Income Taxes, as amended, as amended. Financial Market Regulation and Analyses Department Responsible employee: Machač, telephone: 224 413 053

17. Article 53 (4) of the Administrative Code. 18) At the time of the announcement of this official information http://www.cnb.cz/cs/dohled_financni_trh/legislativni_zakladna/banky_a_zalozny/metodiky_vyklady.html. 7

Annex No. 1 to CNB official information No. 23/2010 CNB Bulletin SPECIMEN Application for the granting of prior consent of the Czech National Bank pursuant to Article 16 (1) of Act No. 21/1992 Coll., on Banks, as amended I. ADMINISTRATIVE BODY

1. Name of the administrative body Name of the administrative body Czech National Bank Registered offices Na Příkopě 28, Prague 1, postcode 115 03 Filing department Senovážná 3, Prague 1, postcode 115 03 II. APPLICANT
2. Identification of the applicant Corporate name or name Identification number Telephone number E-mail Address of the registered offices in the form municipality, part of municipality, street, street number, postcode, state III. APPLICATION
3. Application for the granting of prior consent pursuant to Article 16 (1) a) disposal of the business of a bank in the form of conclusion of a contract for the transfer of the business or part of the business of a bank pledging the business or part of the business of a bank lease of the business or part of the business of a bank other disposal of the business of a bank or its part, e.g. investment of the business into a trading company pursuant to Article 16 (1) b)

decision of the General Meeting on the winding up of a bank pursuant to Article 16 (1) merger in the following form 8

c) domestic merger cross-border merger by formation of a new company by acquisition division of a bank in the form of the creation of new trading companies by acquisition combination of division with the creation of new trading companies and division by acquisition split-off transfer of assets to a bank acting as partner pursuant to Article 16 (1) d) reduction in the registered capital of the bank (unless this is a reduction in the registered capital of the bank in order to cover a loss) pursuant to Article 16 (1) e) resolution of the General Meeting pursuant to Article 7a (1) c)

4. Numbered list of all annexes (also indicate the numbers on the annexes themselves) 9

IV. DECLARATION I declare that the information given in the application and its annexes is true, up-to-date and complete. This application is submitted by the applicant without representation 5. Identification of person acting on behalf of the applicant / in the name of the applicant Designation of function Name(s) and surname Date of birth Residence address in the form municipality, part of municipality, street, street number, postcode, state Correspondence address if different from the residence address, in the form municipality, part of municipality, street, street number, postcode, state This application is submitted by a representative of the applicant 6. Identification of the person representing the applicant Information about the representative3/ Name(s) and surname / corporate name or name1/ Date of birth Identification number2/ Address of residence / registered offices in the form municipality, part of municipality, street, street number, postcode, state Correspondence address if different from the address of residence / registered offices, in the form municipality, part of municipality, street, street number, postcode, state At Dated: Signature:

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1/ A legal entity shall also indicate the person acting on its behalf. 2/ Indicate this if allocated. 3/ For example a lawyer, notary, general proxy. 10

Annex No. 2 to CNB official information No. 23/2010 CNB Bulletin SPECIMEN Application for the granting of prior consent of the Czech National Bank pursuant to Article 29a of Act No. 21/1992 Coll., on Banks, as amended I. ADMINISTRATIVE BODY

1. Name of the administrative body Name of the administrative body Czech National Bank Registered offices Na Příkopě 28, Prague 1, postcode 115 03 Filing department Senovážná 3, Prague 1, postcode 115 03 II. APPLICANT

2. Identification of the applicant Corporate name or name Identification number Telephone number E-mail Address of registered offices in the form municipality, part of municipality, street, street number, postcode, state III. APPLICATION

3. Application for the granting of prior consent pursuant to Article 29a conclusion of a contract that forms the basis for the takeover of debts of a bank under conservatorship by a different bank or a branch of a foreign bank

4. Numbered list of all annexes (also indicate the numbers on the annexes themselves) 11

IV. DECLARATION I declare that the information given in the application and its annexes is true, up-to-date and complete. This application is submitted by the applicant without representation 5. Identification of person acting on behalf of the applicant / in the name of the applicant Designation of function Name(s) and surname Date of birth Address in the form municipality, part of municipality, street, street number, postcode, state Correspondence address if different from the residence address, in the form municipality, part of municipality, street, street number, postcode, state This application is submitted by a representative of the applicant 6. Identification of the person representing the applicant Information about the representative3/ Name(s) and surname / corporate name or name1/ Date of birth Identification number2/ Address of residence / registered offices in the form municipality, part of municipality, street, street number, postcode, state Correspondence address if different from the address of residence / registered offices, in the form municipality, part of municipality, street, street number, postcode, state At Dated: Signature:

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1/ A legal entity shall also indicate the person acting on its behalf. 2/ Indicate this if allocated. 3/ For example a lawyer, notary, general proxy. 12

Annex No. 3 to CNB official information No. 23/2010 CNB Bulletin SPECIMEN Application for the granting of prior consent of the Czech National Bank pursuant to Article 1 (7), Article 5a (3) or Article 13 (4) of Act No. 87/1995 Coll., on Credit Unions and Certain Related Measures and on the Amendment to Act No. 586/1992 Coll. of the Czech National Council, on Income Taxes, as amended, as amended I. ADMINISTRATIVE BODY

1. Name of the administrative body Name of the administrative body Czech National Bank Registered offices Na Příkopě 28, Prague 1, postcode 115 03 Filing department Senovážná 3, Prague 1, postcode 115 03 II. APPLICANT
2. Identification of the applicant Corporate name or name Identification number Telephone number E-mail Address of registered offices in the form municipality, part of municipality, street, street number, postcode, state III. APPLICATION
3. Application for the granting of prior consent of the pursuant to Article 1 (7) disposal of the business of a credit union in the form of conclusion of a contract for the transfer of the business or part of the business of a credit union lease of the business or part of the business of a credit union other disposal of the business of a credit union or its part

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pursuant to Article 5a (3) pursuant to Article 5a (3) pursuant to Article 5a (3) and Article 13 (4) pursuant to Article 5a (3) and Article 13 (4) a reduction in the basic contribution the winding up of a credit union merger of a credit union in the form of by formation of a new credit union by acquisition division of a credit union in the form of the creation of new credit unions by acquisition a combination of division with the creation of new credit unions and division by acquisition split-off

4. Numbered list of all annexes (also indicate the numbers on the annexes themselves) IV. DECLARATION I declare that the information given in the application and its annexes is true, up-to-date and complete. This application is submitted by the applicant without representation
5. Identification of the person acting on behalf of the applicant / in the name of the applicant Designation of function Name(s) and surname Date of birth Address in the form municipality, part of municipality, street, street number, postcode, state 14

15 Correspondence address if different from the residence address, in the form municipality, part of municipality, street, street number, postcode, state This application is submitted by a representative of the applicant 6. Identification of the person representing the applicant Information about the representative3/ Name(s) and surname / corporate name or name1/ Date of birth Identification number2/ Address of residence / registered offices in the form municipality, part of municipality, street, street number, postcode, state Correspondence address if different from the address of residence / registered offices, in the form municipality, part of municipality, street, street number, postcode, state At Dated: Signature:

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1/ A legal entity shall also indicate the person acting on its behalf. 2/ Indicate this if allocated. 3/ For example a lawyer, notary, general proxy.