Regulatory Alerts2022-02-04 | 13408Central Bank Circular No. 613 – Specialized Banks
The Central Bank of Lebanon issued Circular No. 613 to amend Article 1 of Basic Decision No. 5996, enabling specialized banks in Lebanon to actively participate in the stock market and execute permitted financial transactions. Banks subject to Circular No. 50 are exempt from the Central Bank’s direct supervision, whereas non-specialized banks must establish dedicated departments, open separate accounts, execute compliant client contracts, utilize electronic payment systems, and maintain approved financial ratios. These operational requirements are jointly overseen by the Financial Market Authority and the Committee for Specialized Banks to ensure market stability and regulatory compliance.
Central Bank Circular No. 613 For Banks and Financial Institutions
Regarding the application of Basic Decision No. 5996 dated 7/9/1995, which was approved for specialized banks subject to the provisions of Circular No. 50 dated 1983/7/15 regarding the participation of specialized banks in the stock market, and Basic Decision No. 19. Date: February 4, 2022 Governor of the Central Bank of Lebanon Riad Salameh
Central Bank Decision No. 13408 Regarding the application of Basic Decision No. 5996 dated 7/9/1995
Whereas the Governor of the Central Bank of Lebanon, Having regard to the Law of Banking and Credit, particularly Article 70 thereof; Having regard to Circular No. 50 dated 1983/7/15; Having regard to Basic Decision No. 5996 dated 7/9/1995, which was approved for specialized banks subject to the provisions of Circular No. 50 dated 1983/7/15 regarding the participation of specialized banks in the stock market; Having regard to the decision of the Monetary and Credit Council adopted in its meeting held on 19/1/2022; Hereby decides and orders:
Article 1: The text of Article 1 of Basic Decision No. 5996 dated 7/9/1995 is repealed and replaced by the following text: "First: Specialized banks operating in Lebanon may participate in the stock market and execute various financial transactions permitted by the laws and regulations of the said stock market, subject to the supervision of the Central Bank of Lebanon. Specialized banks subject to Circular No. 50 dated 1983/7/15 are exempt from the said supervision. Second, non-specialized banks subject to Circular No. 50 dated 1983/7/15 shall: -1 Open separate accounts for the operations mentioned above, distinct from those subject to the supervision and regulations of the relevant authorities, including the 'Financial Market Authority' and its executive regulations. -2 Conclude contracts with clients that stipulate the regulations of the relevant authorities and executive regulations of the 'Financial Market Authority', and be subject to its supervision. -3 Establish a specialized department, composed of qualified and experienced persons in financial markets and funds, operating these operations for the benefit of clients through clear and transparent mechanisms, supervised by the 'Financial Market Authority' and subject to its supervision. -4 The right to use the electronic payment system for any securities held in their financial portfolio, and the obligation to use the Central Bank's electronic system in this case. -5 Adopt the appropriate financial ratios to ensure the proper operation of specialized banks mentioned in this decision, as approved by the 'Committee for Specialized Banks' and the 'Financial Market Authority', as defined therein."
Article 2: This decision takes effect from the date of its issuance. Article 3: This decision is published in the Official Gazette.
Date: February 4, 2022 Governor of the Central Bank of Lebanon Riad Salameh