Palestine Monetary Authority

Instructions No. (2) of 2021

Regarding the Merger and Acquisition of Assets and Liabilities of Money Changers

Based on the provisions of Decision No. (41) of 2016 regarding the licensing and regulation of the money changing profession, particularly Article (21) thereof,

In accordance with the powers vested in us,

And in pursuit of the public interest,

We have issued the following Instructions:

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Article (1)

Definitions

The words and phrases appearing in these Instructions shall have the meanings assigned to them below, unless the context indicates otherwise:

• Individual Money Changer: A natural person licensed by the Palestine Monetary Authority to conduct money changing activities.
• Money Changer Company: A legal entity licensed by the Palestine Monetary Authority to conduct money changing activities, which is permitted to merge with another money changer company or acquire the assets and liabilities of an individual money changer.
• Merger: The joining of one money changer company to another, whereby the first merges into the second to form a single company, resulting in the dissolution and termination of the merged company and the survival of the legal personality of the acquiring company.
• Acquisition: The act of a money changer company purchasing the assets and liabilities of an individual money changer.

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Article (2)

Objective and Scope of Application

1. These Instructions aim to regulate the merger operations of money changer companies and the acquisition of assets and liabilities of individual money changers.
2. The provisions of these Instructions apply to money changers licensed by the Palestine Monetary Authority.

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Article (3)

Conditions for Merger

A money changer company wishing to merge with another money changer company must comply with the following:

1. Obtain prior written approval from the Palestine Monetary Authority for the merger.
2. Complete all legal procedures with the Ministry of National Economy and all other relevant authorities in accordance with prevailing laws.
3. There must be no fundamental supervisory observations or violations against the acquiring company.
4. Increase the capital of the acquiring company by the value of the net assets of the merged company, ensuring it does not fall below the minimum capital limit according to prevailing Instructions.
5. Provide general management to manage the business and branches, in case the number of branches of the company, including its headquarters, exceeds four branches.
6. Provide a clear organizational structure, job descriptions, policies, and work procedures that comply with prevailing laws and Instructions.
7. Provide internal control functions for the headquarters and branch operations (e.g., internal audit) in accordance with relevant prevailing Instructions and the Palestine Monetary Authority's estimates regarding the number of branches, business volume, activities, nature of services and operations provided, and their risks.
8. Provide a qualified financial and accounting program suitable for the requirements of the Palestine Monetary Authority, including the operations center and branches, and meeting all requirements of the Authority regarding supervision, anti-money laundering, and counter-terrorism financing.
9. Increase the minimum capital limit specified in prevailing Instructions by fifty thousand US dollars for each new branch, in case the number of branches of the ordinary company exceeds two branches and the private joint-stock company exceeds five branches.

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Article (4)

Merger Application

1. The acquiring money changer company must submit a written application according to Annex No. (1) to obtain preliminary approval and attach relevant documents, provided that the application is duly signed.
2. The Palestine Monetary Authority shall respond in writing to the applying money changer company within (30) days from the date of receiving the application regarding its completeness, and the response must specify any deficiencies that need to be provided.
3. The applying company must complete any deficiencies within (60) days from the date of the response; otherwise, the merger application shall be considered void.
4. The Palestine Monetary Authority shall issue a written decision within (30) days from the date of the application's completeness, either granting preliminary approval or rejecting it. The decision must be reasoned in case of rejection.

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Article (5)

Conditions for Acquisition

A money changer company purchasing the assets and liabilities of an individual money changer must comply with the following:

1. Obtain prior written approval from the Palestine Monetary Authority for the acquisition.
2. Complete all legal procedures with the Ministry of National Economy and all other relevant authorities in accordance with prevailing laws, if required.
3. There must be no fundamental supervisory observations or violations against the purchasing company.
4. Increase the capital of the purchasing company by the value of the net assets of the individual money changer purchased, ensuring it does not fall below the minimum capital limits specified in prevailing Instructions.

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Article (6)

Acquisition Application

1. The purchasing money changer company must submit a written application according to Annex No. (2) to obtain preliminary approval and attach relevant documents, provided that the application is duly signed.
2. The Palestine Monetary Authority shall respond in writing to the applying money changer company within (30) days from the date of receiving the application regarding its completeness, and the response must specify any deficiencies that need to be provided.
3. The applying company must complete any deficiencies within (60) days from the date of the response; otherwise, the acquisition application shall be considered void.
4. The Palestine Monetary Authority shall issue a written decision within (30) days from the date of the application's completeness, either granting preliminary approval or rejecting it. The decision must be reasoned in case of rejection.

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Article (7)

Historical Data

The acquiring or purchasing company must retain the historical financial data of the merged company or individual money changer in accordance with the law.

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Article (8)

Cash Securities

1. A money changer company must deposit cash securities for each branch according to prevailing Instructions, with the maximum total amount of bank guarantees, cash deposits, and cash securities held with the Palestine Monetary Authority not exceeding fifty thousand US dollars.
2. Notwithstanding the provision in paragraph (1) of this Article, the Palestine Monetary Authority may request the money changer company to increase the value of cash securities to a maximum of one hundred thousand US dollars, based on its estimates.

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Article (9)

Merger Incentives

The Palestine Monetary Authority must grant incentives related to branches to the acquiring or purchasing money changer company, subject to the following:

1. The total number of ordinary branches of the company must not exceed six branches.
2. The total number of branches of the private joint-stock company must not exceed fifteen branches.
3. Branch requests must align with the Palestine Monetary Authority's policy for purchasing money changing business and services in unserved areas.
4. The provisions of this Article shall apply for a period of six months, renewable from the date of issuance of these Instructions.

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Article (10)

Headquarters and Branches

As an exception to what was stated in Instructions No. (2011/01) regarding the licensing of money changers, and for the purpose of applying the provisions of these Instructions, the Palestine Monetary Authority may permit an ordinary money changer company to own branches in governorates other than the one where the company's headquarters is located.

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Article (11)

Penalties

Anyone who violates the provisions of these Instructions shall be punished in accordance with the provisions of Decision No. (41) of 2016 regarding the system for licensing and regulating the money changing profession.

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Article (12)

Repeal of Contradictory Provisions

All provisions contradictory to the provisions of these Instructions are repealed.

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Article (13)

Implementation and Enforcement

All competent authorities shall implement the provisions of these Instructions, each within their respective jurisdiction. These Instructions shall apply from the date of their issuance.

Issued in Ramallah on: 23/06/2021 AD.

Dr. Firas Malham Governor

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Annex No. (2)

Acquisition Application Form

Date of Application Submission: / /

1. Name of the Money Changer Company submitting the acquisition request:
2. Address of the Headquarters of the Applying Money Changer Company and number of branches.
City: ________
Mobile Phone: ________

3. Name of the Individual Money Changer to be acquired:
4. Address of the Current Headquarters of the Individual Money Changer to be acquired.
City: ________
Mobile Phone: ________

If there is more than one individual money changer the company wishes to acquire, a separate statement with their details should be attached.

5. Shareholders/Partners Data of the Applying Company:
Number
1
2
3
4
• A detailed list of partners/shareholders must be attached if their number exceeds 4.

6. Proposed Shareholders/Partners Data after Acquisition:
Number
1
2
3
4
• A detailed list of partners/shareholders must be attached if their number exceeds 4.

7. Proposed New Capital after completing the acquisition:
……………………………………………………

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Attach the following documents and papers with the application:

1. Written approval of all partners/shareholders for the acquisition in accordance with the law.
2. Names of banks and account numbers of the purchasing company and the individual money changer, and names of banks dealt with by the proposed partners/shareholders.
3. Copy of personal identification and copy of passport (if available) for all nationalities held by the proposed partners/shareholders of the purchasing company.
4. Identification of authorized signatories for the company resulting from the acquisition.
5. Organizational structure and job descriptions for all positions in the company after completing the acquisition process.
6. Draft acquisition agreement.
7. Economic feasibility study and estimated budgets for the next three years for the applying company.
8. Certificate/document proving life in case of acquiring individual money changers.
9. Supporting documents for capital.
10. Any documents or requirements deemed necessary by the Palestine Monetary Authority to rule on the application.

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Declaration and Acknowledgment

We, the undersigned, acknowledge the accuracy of the data and information provided to the Palestine Monetary Authority for the purpose of the acquisition request, and we undertake to provide you with all necessary papers, documents, and files to proceed with the acquisition procedures within the specified period. We also undertake to comply with the laws, decisions, and instructions regulating money changing activities in Palestine and to provide any data or information requested by the Palestine Monetary Authority. Our undertaking includes the accuracy of the statement regarding the availability of other nationalities or passports for shareholders; otherwise, we agree to the application of the penalty provisions stipulated in Decision No. (41) of 2016 regarding the system for licensing and regulating the money changing profession and the systems and instructions issued by the Palestine Monetary Authority.

Signatures of Authorized Representatives of the Company:

• Name: ……………………………………………
  Signature: ……………………………………………
• Name: ……………………………………………
  Signature: ……………………………………………
• Name: ……………………………………………
  Signature: ……………………………………………
• Name: ……………………………………………
  Signature: ……………………………………………

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Annex No. (1)

Merger Application Form

Date of Application Submission: / /

1. Name of the Money Changer Company submitting the merger request:
2. Address of the Headquarters of the Applying Money Changer Company and number of branches.
City: ________
Mobile Phone: ________

3. Name of the Money Changer Company to be merged:
4. Address of the Headquarters of the Money Changer Company to be merged and number of its branches.
City: ________
Mobile Phone: ________

5. Shareholders/Partners Data of the Applying Company:
Number
1
2
3
4
• A detailed list of partners/shareholders must be attached if their number exceeds 4.

6. Proposed Shareholders/Partners Data after Merger:
Number
1
2
3
4
• A detailed list of partners/shareholders must be attached if their number exceeds 4.

7. Proposed New Capital after completing the merger:
……………………………………………………