Additional Notes to Circular 116

Bank of the Republic of Haiti
To Financial Institutions
Additional Notes
Circular 116

In the context of the application of Circular 116 regarding participation limits in non-financial companies, particularly concerning Section 3 dealing with "Limits on taking participations in existing or newly created non-financial companies," the Bank of the Republic of Haiti (BRH) wishes to clarify the following:

• The participation of a financial institution in a non-financial company may not exceed 25% of the latter's capital. This level is established at the time of taking the participation. The threshold for this ratio may not be exceeded unless, at the time Circular 116 entered into force, the participation was already above the aforementioned 25%. In this case, the financial institution may maintain its level of participation and may in no case increase it. Furthermore, it must prove to the satisfaction of the BRH that, prior to the entry into force of Circular 117, its level of participation was in excess of the prescribed 25%.

• The participation of a financial institution in a non-financial company may not exceed 15% of its basic regulatory capital. This ratio is established at the time of taking the participation. It may not be exceeded subsequently unless the value of the non-financial enterprise, during its operations, grows at a more pronounced rate than the capital of the financial institution. In this case, the latter must provide proof to the satisfaction of the BRH.

• The cumulative participations of a financial institution in non-financial companies may not exceed 45% of its basic regulatory capital, except under the conditions outlined in the preceding paragraph.

This additional note forms an integral part of Circular 116.

Port-au-Prince, March 19, 2021
Jean Baden Dubois
Governor