Circular 82-3 on Shareholding

Bank of the Republic of Haiti
CIRCULAR
No. 82-3

I. Definitions

2. Participation in the capital of banks and cross-ownership of their capital

A natural or legal person may hold shares in one or more banks. In the event of holding shares in multiple banking institutions, the holder must designate a primary banking institution, in which their participation cannot exceed 20% of the share capital. In application of articles 52 to 54 and 163 of the law of May 14, 2012, on banks and other financial institutions, financial institutions, with the exception of currency exchange agents, are required to comply with the following provisions regarding their shareholding.

The following definitions apply to this circular:
a) Shareholder: any natural or legal person holding a participation in the capital of a company. b) Administrator: any natural person or representative of a legal person appointed to the board of directors of a company. c) Capital: the value of all categories of shares with or without voting rights making up the share capital of an entity. d) Counter-letter: a contract, between two or more natural or legal persons, aimed at simulating the transfer, in appearance only, of the ownership of shares of an entity. e) Executive: any natural person appointed by the board of directors to this title, or if not appointed, who fulfills a management function as an employee or service provider. f) Subsidiary: any legal person controlled by another legal person (parent company) either by a capital contribution of more than 50%, or by holding more than 50% of voting rights, or by a decisive interest allowing the parent company to exercise effective control over the management or policy of said subsidiary. g) Group of related shareholders: all natural persons having between them relationships of spouses, ancestors and descendants up to the degree of father, mother, son, daughter, grandson and granddaughter, as well as their collaterals up to the degree of brother and sister; all natural and legal persons constituting a group of related persons as defined by the circular on the concentration of credit risks.

The other banks in which this person is a shareholder are therefore considered secondary banking institutions in which the person concerned cannot hold a participation exceeding 5% of the share capital, both individually and collectively with a group of shareholders related to them.

The 20% ceiling does not apply in the case of holding a participation in a single bank.

A same shareholder or a group of related shareholders of a bank that they have designated as their primary banking institution cannot, in any case, hold a participation exceeding 5% in the capital of one or more secondary banking institutions. Furthermore, natural or legal persons belonging to these groups cannot be administrators or executives in secondary banking institutions.

Only shareholders and groups of related shareholders who held a participation exceeding 5% of the capital of one or more secondary banking institutions on July 9, 1997, may maintain this participation. However, they cannot acquire new shares unless their participation falls below 5% of the capital.

During new capital issuances or private transfers between two natural or legal persons, banks must ensure that investors comply with the provisions of this circular by conducting all necessary checks and obtaining a written declaration from investors regarding their ability to acquire or increase their participation (see information to be provided to the BRH upon taking a participation in Annex IV).

A same shareholder and members of the same group of related shareholders cannot, in any case, be administrators of two banks unless one directly or indirectly owns 50% or more of the capital of the other. No individual can be an administrator or executive of two or more banks unless one owns 50% or more of the capital of the other.

3. Qualified shareholding of financial institutions

Any natural or legal person holding, directly or indirectly, 10% or more of the share capital or voting rights of a financial institution covered by this circular is considered a qualified shareholder of said institution.

Financial institutions are required to inform the BRH at all times of any project having the effect of acquiring or transferring a qualified participation in their capital. The notification must be transmitted to the BRH at least three (3) months before the date scheduled for the completion of the operation.

In the event of acquiring a qualified participation in the capital of an institution, the information mentioned in Annex IV and a letter of commitment established by the purchaser in accordance with the model defined in Annex V must be attached to the notification. The BRH may, within a period of one (1) month from the date of receipt, oppose the project if it is not satisfied with the quality of the person concerned.

Financial institutions are required to send to the BRH, at the latest one hundred twenty (120) days after the end of the fiscal year, the certified financial statements of the last closed fiscal year, if applicable consolidated, of any parent company considered a qualified shareholder, as well as the report of the independent auditor certifying these statements.

4. Information on the shareholding of financial institutions

The financial institutions covered by this circular are required to establish and keep up to date a list of all their shareholders including the following information:
a) Natural persons
i. First name(s) and last name
ii. Address
iii. Nationality
iv. Country of residence
v. Number of shares, share of capital and share in voting rights
vi. Participations held in other companies (amount, share of capital and voting rights)
b) Legal persons
i. Name
ii. Legal status
iii. Address
iv. Nationality
v. Percentage of participation in capital and share of voting rights held
vi. Participations held in other companies (amount, share of capital and voting rights).

5. Counter-letter

In accordance with consistent case law of the Court of Cassation, simulation by counter-letter cannot be fraudulent, that is, it cannot hide what is not permitted. The apparent holder is then deemed the real holder.

6. Compliance reports

Banks must send to the BRH, in electronic form, the annual report on cross-ownership of capital (Annex I) at the latest thirty (30) days following the end of the fiscal year.

Banks and other financial institutions must send to the BRH, in electronic form, the following reports:
. Annual report on qualified shareholders (Annex II) Submission deadline: 30 days following the end of the fiscal year . Annual report on the shareholding of corporate shareholders (Annex III) Submission deadline: 30 days following the end of the fiscal year

7. Sanctions

Failure to submit, within the required timeframe, the compliance reports provided for in section 6 of this circular, the institutions concerned are subject to a penalty of fifty thousand gourdes (50,000.00) per day of infraction. The penalty period extends from the day of the infraction until the day the information is made available to the BRH.

Failure to notify the BRH in advance of a project to acquire or transfer a qualified participation in a financial institution, the institution concerned is subject to the administrative sanctions provided for in article 109 of the law of May 14, 2012.

If the failure to notify concerns a project to acquire a qualified participation, the operation, if carried out, is considered null and void.

A shareholder who submits a false declaration cannot be an administrator or executive of a financial institution, nor draw any salary from the budget of a financial institution, for the ten (10) years following the date of the discovery of the infraction.

8. Repeal and entry into force

The provisions of this circular replace those of Circular No. 82-2 of December 12, 1997, and enter into force on November 3, 2020.

Port-au-Prince, October 5, 2020

J. Bad

List of Annexes
Annex I:
Annex II
Annex III
Annex IV
Annex V

Report on cross-ownership of bank capital
Report on qualified shareholders
Report on the shareholding of corporate shareholders Information to be transmitted to the BRH in the event of acquiring a qualified participation in a financial institution Model letter to be established by purchasers of qualified participations in a financial institution

[Table Data]

Annex IV
INFORMATION TO BE TRANSMITTED TO THE BRH IN THE EVENT OF ACQUIRING A QUALIFIED PARTICIPATION IN A FINANCIAL INSTITUTION

To be provided for any project to acquire or increase a participation in the capital of a financial institution, or for any consequence that would confer on the purchaser 10% or more of the capital or voting rights of the institution, and all other information likely to enlighten the BRH in the assessment of the dossier.

The aforementioned information as well as the letter established by the purchaser according to the model defined in Annex V, certifying the sincerity of the information provided and containing the commitment to inform the BRH of any significant change in the situation of the shareholder and the related information, must be attached to the notification transmitted by the institution concerned to the BRH.

1. Copy of a valid identity document: National Identification Card (CIN) for Haitian nationals, passport for foreigners

2. Proof of domicile

3. Certificate of good conduct or equivalent document for foreign nationals

4. Certificate of professional status by the employer, if applicable

5. Curriculum vitae

6. List of participations held in other companies, with indication of the activity sector, the amount of the participation and the percentage of capital and voting rights held. For participations exceeding 50% of the capital or voting rights, attach the certified financial statements of the companies concerned

7. Final tax declaration

8. Income statement

9. Tax ID number

10. Certified statutes

11. Certified financial statements of the last three fiscal years

12. Tax clearance certificate

13. List of shareholders holding a share in the capital or voting rights of the legal person equal to or greater than 5%, with indication of the amount and percentage held. For the legal persons concerned, attach their certified financial statements of the last three closed fiscal years. For natural persons, attach an income statement

14. List of participations held in other companies, with indication of the activity sector, the amount, and the percentage of capital and voting rights held

15. Certified copy of the deliberation of the competent body of the legal person approving the taking of participation in the company

16. Powers of attorney and copy of an identity document of the signatory(ies) of the letter transmitting the information on the legal person

17. What are the objectives of taking the qualified participation?

18. What is the intended duration of holding the qualified participation? Indicate if an increase or decrease is planned over a 5-year horizon. If so, specify the envisaged operation and the expected date of realization.

19. Does the purchaser have family, partnership, or financial links with other shareholders of the institution? If so, specify their nature.

20. Is a shareholders' agreement established or planned? If so, outline its main provisions and attach it.

21. Does the purchaser intend to take an active part in the administration and management of the institution? If so, in what form? Specify if the purchaser will be part of or represented on the board of directors of the company.

22. Do business relations, financial operations, or service provisions exist or are they planned between the purchaser and the institution? If so, indicate their nature and amount.

23. Has the purchaser or its group companies been subject to criminal, administrative, or disciplinary sanctions during the last five years? If yes, specify the qualifications retained by the competent authorities and, if applicable, the sanctions imposed.

24. What is the origin of the funds used for taking the participation? Provide justifications.

25. If the purchaser resides abroad, is their participation subject to authorization by an authority in their country of origin? If so, specify the identity of this authority and the nature of the authorization; attach the document.

26. Questionnaire to be completed by the purchaser of the qualified participation

Annex V

Mr.
Governor
Bank of the Republic of Haiti

Mr. Governor,

In view of the realization of a project to acquire a qualified participation in one of the financial institutions concerned, I have the honor to transmit to you the information concerning me prescribed by Circular 82-3.

I certify that this information is sincere and faithful and that there is no, to my knowledge, other important facts of which the BRH must be informed.

I commit to immediately inform the BRH of any modification that would occur in my percentage of participation in the capital or in the voting rights of the institution.

I certify that my participation in the capital of [name of the financial institution concerned] is for my own account and that I do not hold other shares of it through an intermediary.

At your disposal for any additional information that you might deem useful regarding me, I beg you to accept, Mr. Governor, the expression of my high consideration.

Date
Signature

MODEL OF LETTER TO BE ESTABLISHED BY PURCHASERS OF QUALIFIED PARTICIPATIONS IN A FINANCIAL INSTITUTION