Regulatory Alerts2024-07-31
Prudential Standard on Related Party Transactions
The Eastern Caribbean Central Bank requires licensed financial institutions to execute related party transactions on non-preferential, arm’s-length terms while maintaining board-approved policies with explicit materiality and approval thresholds. Institutions must cap aggregate exposures to related parties at fifty percent of their capital base, exclude conflicted board members from approvals, and conduct annual compliance reviews. The standard repeals prior guidelines, mandates reporting of pre-existing transactions within sixty days, and enforces quarterly submissions detailing transaction categories, preferential exceptions, and director credit facility statuses.
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