Regulation (NAP) - Standard on Qualification of Administrators

R 09
N° DOC
02/2007
FL.
1/5
PROPONENT(S)
P.S.B
Banco Central de
S. T. P.
NAP
PERMANENT APPLICATION STANDARD
ENTRY INTO FORCE DATE OF
ISSUE
10/01/2007 03/01/2007
Subject: Standard on Qualification of Administrators Considering that the Central Bank, in accordance with Article 38(c) of Law 8/92 of August 3, the Organic Law of the Central Bank, published in the Official Gazette No. 16, must assess:

• the suitability of shareholders holding more than 10% of the share capital;
• the technical-professional competence of its administrators;
• the conditions preventing the exercise of this function.
  Considering that, in accordance with Article 22 of Law 9/92 of August 3, the Financial Institutions Act, published in the Official Gazette No. 16, the Central Bank must specify the qualifications, experience, personal conduct and reputation of persons appointed to administrative positions. Recognizing the importance of establishing a general framework for members of the Administrative Council, Management Bodies and Supervisory Bodies of financial institutions. The Central Bank of São Tomé and Príncipe determines:
  Article 1.
  Definition

1. An administrator is considered to be a person responsible for managing an estate, performing the acts necessary for its conservation and development, with the obligation to render accounts to shareholders.
2. For the purposes of this NAP, directors with executive and representation functions of the institution are equated to administrators.
   Article 2.
   Suitability
3. Only persons whose suitability and availability ensure good management, particularly regarding the security of funds entrusted to the institution, may be members of the administrative and supervisory bodies of a financial institution.
4. Indications of lack of suitability include the fact that the person has been:
   a) Declared bankrupt or insolvent, or judged responsible for the bankruptcy or insolvency of a company where they served as administrator, director, or manager, by national or foreign judgment; b) Administrator, director, or manager of a company whose bankruptcy or insolvency in the country or abroad was prevented, suspended, or avoided by corporate recovery measures or other preventive or suspensive means, or holder of a dominant position in such a company, provided that the competent authorities have recognized their responsibility for this situation; c) Convicted, in the country or abroad, of crimes such as fraudulent bankruptcy, negligent bankruptcy, creditor favoritism, forgery, theft, robbery, frustration of credits, extortion, breach of trust, dishonesty, usury, corruption, issuance of checks without funds, illegitimate appropriation of public or cooperative sector assets, harmful administration in a public or cooperative economic unit, false declarations, unauthorized receipt of deposits or other refundable funds, money laundering, abuse of information, or crimes provided for in the Commercial Code; d) Convicted, in the country or abroad, for violations of legal or regulatory rules governing financial institutions, when the severity or recurrence of these violations justifies it.
   Article 3.
   Professional Experience
5. Members of the administrative, management, and supervisory bodies responsible for the current administration, management, and audit of the financial institution must possess adequate experience for their respective functions.
6. Adequate experience is presumed when the person has previously competently exercised management functions in the financial sector.
7. Previous experience, the nature and degree of responsibility of previously held functions must be proportional to the characteristics and size of the financial institution in question.
8. Verification of compliance with the adequate experience requirement must be subject to a prior consultation process with the competent authority.
   Article 4.
   Qualification of Administrators
9. An administrator must satisfy the following requirements:
   a) Qualification - hold higher education, preferably in economics, management, accounting, or law; b) Experience - have exercised banking activities in managerial positions for at least 5 years, or have progressively held responsible positions over a career of at least 7 years; c) Personal Conduct - maintain ethical-professional conduct without negative references, not having caused financial or administrative problems due to fault or negligence in the exercise of their activities; d) Criminal Record - hold a record free from criminal sanctions, fines, or any participation in financial fraud; e) Legal Requirement - absence of any legal impediments; f) Institutional Requirement - not having exercised functions as inspector, director, administrative consultant for the Supervision area, or member of the Administrative Council of the Central Bank in the last 12 months;
10. To access certain positions, candidates must possess the following requirements:
    a) Management Members - at least 3 years of experience in banking activities in banks of equal level or type, with reasonable knowledge of international standards in the financial sector; b) Members of the supervisory council or audit committee - must have at least five years of experience in accounting, financial auditing, or training in related areas, with reasonable knowledge of international standards in the financial sector;
    Article 5.
    Lack of Requirements
11. If for any reason the legal or statutory requirements for the normal functioning of the administrative or supervisory body cease to be met, the Central Bank will set a deadline for altering the composition of the relevant body.
12. In case of non-compliance with the set deadline, BCSTP may revoke authorization in accordance with Article 42(d) of the Financial Institutions Act.
    Article 6.
    Partial Waiver of Requirements
13. The Administrative Council of the Central Bank may only exempt the submission of some of the required qualification and experience requirements if it possesses all relevant information about the proposed persons for the positions;
14. In the case of members of the administrative council, a waiver of some requirements may be granted when at least two of the elected members meet the necessary conditions of reputation, qualification, and experience.
15. The requirements set out in paragraphs c) to f) of Article 4 of this NAP are mandatory and cannot be waived.
    Article 7.
    Approval Procedures
16. The request must be submitted in writing to the Central Bank with the following information:
    a) An authenticated copy of the decision taken by the bank's general shareholders' meeting regarding the election or appointment of administrators. b) In the case of directors, a copy of the Administrative Council's decision. c) Name and residential address of the designated person; d) Authenticated photocopy of the identity card for nationals or passport for foreigners; e) Business and professional activities over the last ten years, included in a duly proven curriculum vitae; f) Updated criminal record; g) Information on whether the designated person is a principal shareholder or administrator of a bank located in any country; h) Holdings in companies, societies, associations, and groups of persons acting together by a common interest, organized or not as a formal business;
17. The Central Bank must decide within 30 days from the date of receiving the written request, accompanied by all required information.
18. Non-compliance with this standard, or the submission of false, misleading, or insufficient information, results in refusal or cancellation of authorization by the Central Bank.
    Article 8.
    Accumulation of Offices
19. Members of the administrative, management, and supervisory bodies of financial institutions may not cumulatively exercise management positions or perform any functions in other financial institutions.
20. The provisions of the previous paragraph do not apply to the cumulative exercise of management positions or the performance of functions in other financial institutions with which the institution in question is in a group relationship.
21. Members of the administrative bodies of financial institutions wishing to exercise management positions in non-financial companies must, at least 30 days in advance, notify the Central Bank of São Tomé and Príncipe, which may object if it considers that the accumulation is likely to prejudice the exercise of functions in the financial institution.
    Article 9.
    Entry into Force
    This standard enters into force in accordance with the law after its publication.
    Central Bank of São Tomé and Príncipe, January 03, 2007 Vistos Dados de Revogacao: