National Shareholding in Banks Regulation

CBUAE Classification: Public National Shareholding in Banks Regulation

2 CBUAE Classification: Public CONTENTS Page Subject مقدمة 3 INTRODUCTION الھدف 3 OBJECTIVE SCOPE OF APPLICATION 3 التطبیق نطاق المادة (1) تعریفات 3 Definitions) 1 (Article Article (2) National Ownership of Banks 4 incorporated in the UAE Article (3) Role & Responsibility of the Board 4 الإدارة مجلس ومسئولیات دور) 3 (المادة of Directors Article (4) Informing the Central Bank 5 المركزي المصرف إبلاغ) 4 (المادة Article (5) Central Bank’s Representatives at 5 a General Assembly Meeting المادة (6) صلاحیات المصرف المركزي 5 Powers Bank Central) 6 (Article Article (7) Enforcement and Sanctions 5 والعقوبات الإنفاذ) 7 (المادة Article (8) Abuse of the Exercise of a Right 6 الحق استخدام إساءة) 8 (المادة Article (9) Interpretation of Regulation 6 النظام تفسیر) 9 (المادة المادة (10) النشر و التطبیق 6 Application and Publication) 10 (Article

3 CBUAE Classification: Public رقم الإشعار : 2021/18 18/2021 : .No Circular التاریخ : 2021/11/15 15/11/2021 : Date الـــــى : كافة البنوك الوطنیة Banks National All : To الموضوع : المساھمة الوطنیة في البنوك Banks in Shareholding National : Subject مقدمة Introduction The Central Bank Law stipulates that the Board of Directors of the Central Bank determines the conditions and controls for ownership of shares of Banks incorporated in the UAE and shareholdings contribution in their capital and, in all cases, the national shareholding must not be less than sixty percent (60%). الھدف Objective The objective of this Regulation is to ensure that national shareholding remains in compliance with the Central Bank Law at all times. Banks must take all reasonable measures to ensure compliance with the minimum national shareholding requirement as determined by the Board of Directors of the Central Bank. The measures referred to in article 3.1 of this Regulation, encompass at a minimum (if and when applicable) that Banks schedule the matter for a general assembly meeting and/or make necessary amendments in their Articles of Association, and/or provide a reasoned voting advice. Scope of Application التطبیق نطاق This Regulation applies to all Banks incorporated in the UAE. المادة (1): تعریفات Definitions :)1 (Article Bank: Any juridical person licensed in accordance with the provisions of the Central Bank Law, to primarily carry on the activity of taking deposits, and any other Licensed Financial Activities. 1. Central Bank: The Central Bank of the United Arab Emirates. 2.

4 CBUAE Classification: Public Central Bank Law: Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities and its amendments, or replacement from time to time. 3. Regulation of Significant Shareholder: .4 Transfer of Significant Shareholding Regulation 05/2020 of 15 April 2020 on the transfer of significant shareholding. 4. .5 الدولة: دولة الإمارات العربیة المتحدة. .“UAE “Emirates Arab United :State 5. Article (2): National Ownership of Banks incorporated in the UAE In all cases, the national shareholding percentage should not be less than sixty percent (60%) of the capital of the banks incorporated in the State. Natural persons owning this percentage must be citizens of the State. The percentage of ownership of the State citizens in a juridical person is calculated as per their shareholding in it. Article (3): Role & Responsibility of the Board الإدارة مجلس ومسئولیات دور :)3 (المادة of Directors The board of directors and shareholders of a Bank shall ensure that national shareholding is in accordance with the minimum requirement set out in Article 2 of this Regulation and shall take all reasonable measures to achieve compliance with this minimum requirement and the requirements of the Regulation of Significant Shareholder. 1. The board of directors of a Bank shall ensure that voting decisions of a shareholder, or shareholders, at a general assembly meeting comply fully with the Central Bank Law. 2.

5 CBUAE Classification: Public Article (4): Informing the Central Bank المركزي المصرف إبلاغ :) 4 (المادة Banks must inform the Central Bank at the time of the invitation by the Bank’s board of directors to a general assembly meeting when a proposed shareholding change is on the agenda. Article (5): Central Bank’s Representatives at a General Assembly Meeting The Central Bank may send one or more representatives to attend a general assembly meeting when a proposed shareholding change is on the agenda, without having any right to vote. The presence of such representatives shall be stated in the minutes of meeting. المادة (6) : صلاحیات المصرف المركزي Powers Bank Central :)6 (Article The Central Bank may take all measures it deems appropriate to maintain conduct of operations of Banks, within the frameworks and limits set by the Board of Directors of the Central Bank. 1. 2. The Central Bank may: : المركزي للمصرف .2 Request to hold a meeting of a general assembly of the Bank to discuss any issue the Central Bank deems important. a. Request to include any item that the Central Bank deems necessary into the agenda of a general assembly meeting of the Bank. b. Stop the implementation of any decision issued by a general assembly of the Bank in the event that it violates the laws or regulations in force. c. المادة (7) : الإنفاذ و العقوبات Sanctions and Enforcement :) 7 (Article .ً Violation of this Regulation may be subject to supervisory action and sanctions as deemed appropriate by the Central Bank.

6 CBUAE Classification: Public Without prejudice to the provisions of the Central Bank Law, supervisory action and sanctions by the Central Bank may include withdrawing, replacing or restricting the powers of the members of the board, providing for the interim management of the Bank, or barring individuals from the UAE banking sector. Article (8) : Abuse of the Exercise of a Right الحق استخدام إساءة :)8 (المادة Violation of Article 3.2 of this Regulation will render that shareholder(s)’ vote unlawful as the expected interests are not commensurate with the prejudice sustained by the Bank and/or other shareholder/s. Article (9) : Interpretation of Regulation النظام تفسیر :)9 (المادة The Regulatory Development Division of the Central Bank shall be the reference for interpretation of the provisions of this Regulation. المادة (10): النشر و التطبیق Application and Publication :) 10 (Article This Regulation shall be published in the Official Gazette in both Arabic and English and shall come into effect one (1) month from the date of its publication. Khaled Mohamed Balama Governor of the Central Bank of the UAE