Regulation on the Registration of Non-Banking Financial Institutions

Pursuant to Article 35, paragraph 1, sub-paragraph 1.1, and Article 65, paragraph 1 of the Law No. 03/L209 on Central Bank of the Republic of Kosovo (Official Gazette of the Republic of Kosovo, No. 77/16 August 2010), Article 8, paragraph 1, sub-paragraph 1.1 of the Law No. 04/L-155 on Payment System (Official Gazette of the Republic of Kosovo, No. 12/03 May 2013), Article 92, paragraph 3 and Article 114 of the Law No. 04/L-093 on Banks, Microfinance Institutions and Non-Bank Financial Institutions (Official Gazette of the Republic of Kosovo, No. 11/11 May 2012), the Board of the Central Bank of Republic of Kosovo, at the meeting held on 30 April 2020, approved the following:
REGULATION ON THE REGISTRATION OF NON-BANK FINANCIAL INSTITUTIONS
CHAPTER I
GENERAL PROVISIONS
Article 1
Purpose and Scope

The purpose of this Regulation is to determine the conditions, requirements, procedures and time limits
to be adhered for:
1.1 registration of non-bank financial institutions (hereinafter: NBFI) to conduct financial activities;
1.2 granting preliminary approvals for transactions requiring prior approval by the CBK for
conducting NBFI activity;
1.3 obligations of NFBIs to notify the CBK while conducting their activities.
This Regulation shall apply to all persons applying for registration with CBK, all persons engaging in
NBFI’s financial activities in the Republic of Kosovo, and all other NBFI registered with CBK for operating in the Republic of Kosovo.
Article 2
Definitions
All terms used in this Regulation shall have the same meaning with the terms defined in the Law on Banks, Microfinance Institutions and Non-Bank Financial Institutions, Law on Payment System and/or as determined below, for the purpose of this Regulation:
Non-banking financial institution (NBFI) – shall mean a legal entity that is registered in accordance
with the applicable legislation for business organisations, registered with the CBK for performing the activities allowed for NBFIs defined according to the provisions of the Law on Banks, Microfinance Institutions and Non-Bank Financial Institutions and this Regulation.
Electronic money – electronically, including magnetically, stored monetary value as represented by
a claim on the issuer, which is issued on receipt of funds for the purpose of making payment transactions and which is accepted as a means of payment by persons other than the issuer;
Leasing – shall mean financial activities determined under the Law on Leasing.
Investment adviser – shall mean advising in purchasing and selling financial instruments (shares,
bonds of business organisation and national government, treasury bonds and securities issued by the central government, instruments issued by CBK, commercial receipts, shares or quotas from investments bonds and other financial instruments comparable to shares and bonds which are assessed and approved as such by the CBK) upon the request of the client and studying, preparing and supervising the implementation of the investment plan prepared for the client.
Factoring – shall mean the financial activity according to the applicable CBK’s Regulation on
Factoring.
Guarantees – shall mean any signed document, in hard copy or electronically, however named or
described, which creates an obligation for the guarantor to make the payment, regardless of the presentation of the documents required by the guarantee, for as long as they are in accordance with the terms and conditions of the guarantee and the Uniform Rules for Demand Guarantees - URDG 758.
Service of money transfer or receipt and the service of payment for payments within or outside
the country (payment service) – shall mean any financial activity, whether individual or joint, which enables the execution of payment transactions, including the issuance and management of payment instruments, those activities enabling cash deposits and withdrawals, and any other service functional thereto. The term does not include the provision of solely online or telecommunication services.
Payment account – shall mean an account opened with NBFI registered/licensed to conduct activity
of payments and/or electronic money, on behalf of one or more users of payment services, which is used to execute payment transactions;
Payment service user – a physical person or a legal entity making use of a payment service in the
capacity of either payer or payee, or both;
Payer – a person holding a payment account and allowing a payment order by debiting that account;
or, when there is no payment account, the person initiating the transfer of funds for the benefit of the payee;
Payee – a person who is intended to be the final beneficiary of the funds;
Currency exchange – shall mean a financial activity of purchasing foreign currency in cash,
constantly conducted by the NBFIs on its behalf and account, as well as for profit purposes.
Agent – shall mean a person organized as a business organisation determined according to the CBK’s
Regulation on Agents and Subcontracting of Activities of the Payment Service Providers.
Beneficial owner – a person holding shares (owned) in the NBFI, directly or indirectly, jointly or in
concert with another person;
Director - shall mean any person appointed by the shareholders or the founders to serve as a member
of a NFBI’s Board of Directors.
Independent Director – shall mean a Director who is independent from the senior management or
persons related to senior management.
Related person – shall mean any person that has at least one of the following relation with the NBFI:
14.1 any NBFI’s Senior Manager;
14.2 any person related with the NBFI's Senior Manager through marriage or blood relationship up
to the second line of blood.
Senior Manager – a chief executive officer, chief financial officer, chief operating officer, and chief
NBFI risk officer and any person who:
15.1 reports directly to the board or participates or has authority to participate in major policymaking
functions of the NBFI, and/or
15.2 is designated as a Senior Manager by the CBK.
Capital or share capital - net amount or institutions’ funds which present the difference between
assets and liabilities in accordance with the balance sheet, which reflects international accounting standards.
Person – shall mean any natural or legal person.
CHAPTER II
REGISTRATION OF NON-BANKING FINANCIAL INSTITUTIONS
Article 3
Registration and financial activities
The CBK has exclusive responsibility to:
1.1 Register NBFI for conducting one or several financial activities defined according to the provisions
of this Regulation, as follows:
1.1.1 lending;
1.1.2 leasing / concluding loan and renting agreements;
1.1.3 transferring and receiving money and payment services for payments within and outside
the country (hereinafter payment service);
1.1.4 currency exchange;
1.1.5 factoring;
1.1.6 guarantees;
1.1.7 investment adviser;
1.1.8 issuance of electronic money;
1.2 Registration of NBFI agents conducting activities of payment services and/or issuance of electronic
money.
1.2.1 NBFIs registered to conduct the activity of issuing electronic money may not issue
electronic money through agents, but may distribute and/or repay funds through one or more agents acting on its behalf.
NBFIs may accordingly engage in the following activities, without being subject to registration:
2.1 payment service related to loans granted to clients;
2.2 obtaining funds through grants, and/or loans from financial institutions offering financial loans, for
the purpose of lending or for their use;
2.3 borrowing from and placing funds in markets and institutions licensed by the CBK in order to
manage their liquidity; and
2.4 providing technical and professional services and training of their clients on financial services.
NBFIs registered for conducting the activity of issuing electronic money, with the same registration
can also conduct the activity of payment service with prior notification of the CBK.
NBFIs that conduct the activity of payment service and/or issuing electronic money, with the prior
approval of the CBK, may also conduct the following financial activities allowed for NBFIs:
4.1 lending under the following conditions:
4.1.1 lending cannot be financed from funds held in payment accounts of payment service users;
4.1.2 loan shall be granted exclusively for the purpose of execution of the payment transaction
and cannot be withdrawn in cash;
4.1.3 loan granted for payment purposes shall be repaid within a short period of time, which shall
in no case exceed twelve months;
4.1.4 the loan shall not be granted from funds received or held for the purpose of executing a
payment transaction; and
4.1.5 the total amount of loans issued by NBFI shall not in any case affect the required capital
(regulatory capital) and the fulfilment of the CBK's supervisory requirements.
4.2 currency exchange;
4.3 investment adviser;
NBFIs that conduct the activity of payment service and/or the issuance of electronic money may open
payment accounts on behalf of one or more payment services users. Payment accounts can only be opened if a payment instrument is provided.
NBFIs registered to conduct the activity of issuing electronic money shall not receive deposits from
the public or other repayable funds.
NBFIs that conduct the activity of payment service and/or the issuance of electronic money may also
be licensed as payment system operators.
NBFI, upon registered with the CBK, may start performing financial activities for which it has obtained
CBK’s approval.
Unless otherwise provided in this Regulation, NBFIs requesting to engage in other allowed financial
activities, other than those authorized by registration or pre-approved, must obtain prior approval from the CBK.
Article 4
Requirements of capital
The minimum amount of capital required for registration and maintenance of NBFI is as follows:
1.1. Lending – EUR 300,000.00 (three hundred thousand);
1.2. Leasing – EUR 150,000.00 (one hundred and fifty
thousand);
1.3. Payment services – EUR 125,000.00 (one hundred and twenty
thousand);
1.4. Currency exchange – EUR 10,000.00 (ten thousand);

1.5. Factoring – EUR 150,000.00 (one hundred and fifty
thousand);
1.6. Guarantees – EUR 150,000.00 (one hundred and fifty
thousand);
1.7. Investment Adviser – EUR 100,000.00 (one hundred thousand);
1.8. Issuance of electronic money; – EUR 350,000.00 (three hundred and fifty
thousand).
2. NBFIs requesting to enter into more than one activity, the minimum required capital shall be in
accordance with the amount determined for each activity in accordance with paragraph 1. The provisions of this paragraph shall not apply to NBFIs registered for conducting the activity of issuing electronic money, which also conduct payment services, as well as to NBFIs registered for conducting payment services activity and/or the issuance of electronic money, which are also engaged in the activity of lending according to the provisions of Article 3, paragraph 4, subparagraph 4.1 of this Regulation.
3. In addition to the capital specified in paragraphs 1 and 2 of this Article, NBFIs must also have an
additional fund for initial expenses, to cover the costs of establishment, operation and administration, which in any case should not be less than ten percent (10%) of the capital specified in paragraphs 1 and 2 of this Article. The additional funding requirement under this paragraph applies only to initial applications for registration as NBFI.
4. The CBK, based on the assessment of risk management systems, data on risk of losses and internal
control systems of the institution, may in any case require additional capital levels of up to 20% (twenty percent) above the level of initial required minimum capital.
5. Total capital in relation to the total NBFI assets should not be less than 10% (ten percent). This
paragraph shall not apply to NBFIs registered solely for the purpose of providing foreign exchange activity.
6. NBFI registered for conducting payment service activity and/or for the issuance of electronic money,
which requires the activity to be performed through one or more agents, the minimum amount of capital paid according to paragraph 1 of this Article should be continuously supplemented with EUR 2,000 (two thousand), per each agent.
7. Electromechanical equipment for the realization of automatic transactions (ATMs, payment terminals,
etc.), for the purposes of this Regulation shall not be considered as NBFI offices and/or NBFI agent office.
8. Capital required pursuant to paragraph 6 of this Article may be ensured also through bank guarantee
and/or irrevocable credit letter, referred to in this paragraph as “securities”.
8.1. NBFI should ensure securities in the amount of two thousand Euros (EUR 2,000) for each
additional agent.
8.2. The securities must be added for each new office or agent according to the abovementioned
amount;
8.3. Securities should be in a form which is acceptable to CBK and should determine CBK as the
beneficiary in case of a complaint against the NBFI to ensure fulfilment of obligations by the NBFI with regard to receipt, treatment, transmission and payment of money regarding the money transfer;
8.4. Every request toward the insurance instrument may be subject to administrative review;
8.5. Securities must continue to be kept valid for a period of not less than one year.

The payment of minimum capital and any subsequent addition should be made in cash and be
accompanied with the presentation of information to CBK with regard to the source of this capital, respectively a banking document which proves the payment of capital (if applicable), as it is provided for in Article 5, paragraph 3, sub-paragraphs 3.3 and 3.4 of this Regulation.
CBK is entitled to request clarification and conduct further verifications regarding the source(s) which
will serve as paid-in capital or as any other subsequent addition.
The sources of capital funds must be legal and must not derive from public borrowed funds, credit
and/or other funds, the origin of which is unlawful.
Article 5
General registration requirement
Entities interested to register the NBFI’s should meet all requirements pursuant to the Law on Banks,
Microfinance Institutions and Non Bank Financial Institutions which are necessary for the application process according to CBK's internal acts. The applicant may request from the CBK necessary forms of applying and the instructions for completing them, only after holding informative meeting with the CBK’s representatives.
The application shall be signed by the founding shareholder(s) or their legal representative and shall
be submitted to the CBK, with the physical presence of the founding shareholder(s) or proposed representative of the founding shareholder(s) of the NBFI. The application must be submitted together with the complete legislation required by the Law on Banks, Microfinance Institutions and Non Bank Financial Institutions and with this Regulation.
NBFI registration requirements should be in writing, accompanied by completed forms as per the
CBK’s format and shall include the following documentations/information:
3.1. applicant's documents (founding act and/or statute);
3.2. business registration certificate, which stipulates activity(s) for with the entity applies for
registration with CBK;
3.3. list of shareholders and beneficial owners of the applicant for registration as NBFI, stating the
name, nationality, residence, business and professional background for the last ten (10) years and the respective possession of shares along with the following documentation (for major shareholders):
3.3.1. For shareholders organized as a business organisation (legal entities and/or natural
persons) according to the Law on Business Organizations:
3.3.1.1. the statute and documentation of business registration (for foreign legal entities -
equivalent acts/legally equivalent according to foreign legislation/jurisdiction);
3.3.1.2. the decision of the decision-making body of the legal entity and/or natural persons
organized as a business organisation for participation in the NBFI capital;
3.3.2. For natural persons not organized as business organisations:
3.3.2.1. the identification document issued by the state, the citizen of which is the
proposed shareholder, and the exact address of the residence; and
3.3.2.2. the list of businesses in which he/she has shares, business registration certificates
for each case, as well as data on any case of insolvency and/or bankruptcy;
3.3.3. the following certificates issued by the competent bodies according to the jurisdiction
where the shareholder resides:

3.3.3.1. that the person is not under criminal prosecution;
3.3.3.2. that the person is not being tried for criminal offenses;
3.3.3.3. that the person is not criminally convicted;
3.3.3.4. by the Chamber of Private Enforcement Agents, that the person is not in the
process of compulsory execution for outstanding property liabilities;
3.3.3.5. that the person does not have personal bankruptcy files, disqualification from the
exercise of profession or previous or current involvement in a managerial position of a corporate or other entrepreneur body which has undergone insolvency proceedings;
3.3.3.6. consent/authorization that allows the CBK to check the criminal background and
obtain other information regarding the information provided;
3.3.3.7. documents required under this paragraph must be issued no earlier than 3 (three)
months from the date of application for registration with CBK.
3.4. the amount of capital committed by the applicant for registration as NBFI, including proof of
payment and documentation for its source:
3.4.1. notary statement of shareholders for the source of paid capital and that the source of this
capital is not a public borrowed fund, credit and/or other funds, the origin of which is illegal.
3.4.2. for shareholders organized as business organisation, notary statement of shareholders on
the source of the initial capital paid and for any additional ones during the performance of the activity, must be accompanied by the following documentation:
3.4.2.1. proof on the source of capital made, such as the independent external auditor's
report, annual financial statements, gifts or other resources intended to be used in the purchase of the applicant's shares;
3.4.2.2. certificate issued by the competent authorities, which provides data on the balance
of the legal entity and on the payment of tax obligations.
3.4.3. for shareholders natural persons, notarial declaration of shareholders on the source of the
initial capital paid and for any additional ones during the development of the activity, must be accompanied by the following documentation:
3.4.3.1. proof on the source of capital creation such as buying and selling, gifts, wages,
bank deposits or other certificates for the source of capital creation;
3.4.3.2. certificates proving payment of tax obligations;
3.4.3.3. contributions to the applicant's capital shall not derive from public borrowed
funds, bank loans and other funds, the origin of which is illegal.
3.5. the name, nationality, place of residence, qualifications and experience of the director and/or
senior manager of NBFI, which must be accompanied by the following documentation:
3.5.1. the decision of the decision-making body for appointment;
3.5.2. identification document;
3.5.3. proof of university education background;
3.5.4. the following certificates issued by the competent authorities according to the jurisdiction
where directors, senior managers and (if applicable) the legal representative reside:
3.5.4.1. that the person is not under criminal prosecution;
3.5.4.2. that the person is not being tried for criminal offenses;
3.5.4.3. that the person is not criminally convicted; and
3.5.4.4. by the Chamber of Private Enforcement Agents, that the person is not in the
process of compulsory execution for outstanding property liabilities.

3.5.4.5. that the person does not have personal bankruptcy files, disqualification from the
exercise of profession and previous or current involvement in a managerial position of a corporate or other entrepreneur body which has undergone insolvency proceedings;
3.5.4.6. certificates proving the payment of tax obligations;
3.5.4.7. consent/authorization that allows the CBK to check the criminal background and
obtain other information regarding the information provided;
3.5.4.8. documents required under this paragraph must be issued no earlier than 3 (three)
months from the date of application for registration with CBK.
3.6. The business plan which includes:
3.6.1. the organizational structure of the applicant to be registered as NBFI and the level of
responsibility(s);
3.6.2. planed financial activities, market assessment, market characteristics and its development
trends;
3.6.3. business activity implementation scheme and description of measures for
safeguarding/securing clients funds (applies only to applicants for registration as NBFI conducting the activity of issuing electronic money and/or payment service);
3.6.4. identification of risks to which the applicant for registration as NBFI is exposed,
including offices/agents;
3.6.5. projected financial state of the applicant for registration as NBFI for the first three (3)
years of exercising its activity after registration (projected financial statements);
3.6.6. sources of funding and the structure of assets for the first 3 (three) years of exercising the
activity after registration;
3.6.7. principles on the basis of which the business plan has been prepared;
3.6.8. an information about the offices where the applicant requesting to register as NBFI plans
to perform the activity; and
3.6.9. a forecast regarding the implementation of the regulatory and supervisory framework for
the first 3 (three) years of activity;
3.6.10. a description of the technical equipment and resources needed to perform the activity,
including appropriate computer systems, computers, accounting and registration;
3.7. internal regulatory acts (internal regulations and/or guidelines), approved by decision-making
bodies for:
3.7.1. operational activity of the applicant for registration as NBFI;
3.7.2. internal control system, including effective internal control procedures, and in particular,
the procedures to be used by agents (in cases where the applicant requests registration for the issuance of electronic money and/or payment service), for insurance compliance with legal and regulatory requirements for the prevention of money laundering and terrorist financing;
3.7.3. consumer protection;
3.7.4. risk management;
3.7.5. prevention of money laundering and terrorist financing, including a program of measures
in accordance with applicable law;
3.7.6. a description of the work continuity plan that includes a clear identification of critical
operations, an effective emergency plan, and a procedure for testing and ongoing review of these plans;
3.7.7. organizing, operating and managing information and communication technology
systems, including how to protect / secure information and customer data.

3.8. in all cases when the applicant is a foreign financial institution which applies to establish a NBFI
in Kosovo, a statement of the supervisor from the home country is needed, if applicable, stating that there is no objection for the establishment of operation in Kosovo and that it exercises consolidated supervision on the NBFI;
3.9. list of planned tariffs for provision of products and services;
3.10. proof of NBFI’s application fee payment;
3.11. additional information if CBK considers it reasonable.
4. Institutions for provision of payment services abroad should have an agreement with international
system authorized for electronic transfers.
5. The requirements of this article shall apply accordingly for the registration of the applicant as NBFI to
conduct currency exchange activity as the sole activity;
6. According to this Article, the documentation submitted should be in one of the two official languages
of the Republic of Kosovo, either in original or in a notarised copy. In the case of documentation issued by the relevant official authorities in foreign countries, other than the Republic of Kosovo, the documentation must be legalised by the responsible authorities of the respective states.
Article 6
Registration procedures and conditions

CBK reviews the documentation presented in accordance with the requirements of this Regulation.
CBK shall, in accordance with Article 92 of the Law on Banking, issue a decision approving or denying
the registration as a non-banking financial institution within 90 days (3 months) from the day of informing the applicant that the registration application is complete. CBK shall immediately inform the applicant with regard to the decision reached. The Executive Board shall assess the need to address the deadline in accordance with Article 92, paragraph 4 of the Law on Banks.
Within the period of 90 days (3 months) for decision-making regarding the registration as a financial
institution as defined in paragraph 2 of this Article, is included the period used for procedural issues for decision making by the Executive Board.
For the purposes of paragraph 2 of this Article, the date of receipt of the request/application for
registration as a financial institution shall be deemed as the notification date to the applicant that the application for registration is complete. Notification according to this paragraph shall be confirmed in writing to the applicant.
During the period of reviewing the application, the CBK may request additional information or certain
changes/corrections, if reasonable.
If the CBK considers that the information provided in the notice is incomplete or inaccurate, the CBK
may take further action to verify the information.
Conditions for approving or rejecting the registration:
7.1. The CBK shall decide to approve registration if the following conditions are fulfilled:
7.1.1. shareholders have a good reputation, legal source of capital funds, financial capabilities for
investing planned funds and financial capabilities for conducting the necessary financing for the sustainable continuation of this institution’s activity;
7.1.2. the shareholding capital committed is paid;

7.1.3. qualifications, experience and reputation of members of the board of directors and senior
managers, are adequate for implementing the business plan, as provided for in Article 12 of this Regulation;
7.1.4. the business plan submitted should be real and competitive in the market, and the expected
financial state of the NBFI proposed should be satisfactory.
7.2. The CBK rejects the approval of the application for registration in the following cases:
7.2.1. the conditions determined above under sub-paragraph 7.1, paragraph 7 of this Article are
not met;
7.2.2. one of the shareholders has been subject to insolvency filing procedures, including official
administration or bankruptcy;
7.2.3. if the origin of the invested share capital is not clear to the CBK;
7.2.4. false information is provided in the application.
7.3. The CBK, in order to carry out the assessments set out in this Article, in addition to reviewing the
documentation submitted, shall cooperate and may request information from peer supervisory authorities and institutions specialized in combating economic crime, prevention of money laundering; the tax authorities; Kosovo Competition Authority or any other relevant local or international institution.
7.4. The reasons based on which the approval of registration is rejected shall be clarified in the notice
on rejection of registration.
Article 7
Registration characteristics

Registration shall be granted for an indefinite period of time and shall be non-transferable.
After registration, the NBFI shall commence operations within (6) six months from the date of
notification for registration. For NBFIs registered to exercise the activity of payments service and/or electronic money issuance, the deadline for commencing operation is 12 (twelve) months from the date of notification for registration.
If NBFIs do not commence operation within the deadlines under paragraph 2 of this Article, the
registration approved by the CBK shall be revoked. The institution may re-apply for registration.
The NFBI registration certificate shall be issued in accordance with the Regulation on Issuance of
Licensing or Registration Certificates of financial institutions.
The NBFI shall, before the commencement of financial activity, notify the CBK for the preparations
made and its readiness to start the activity, for creating space and adequate infrastructure to carry out activities, including installing the information technology operating system.
Article 8
Fees
The NBFI applying for registration shall pay the application fee, according to the amount determined
by the CBK. The fee paid shall be non-refundable in case of refusal of registration.
After registration, the NBFI shall pay other fees according to the amounts determined by the CB.

Article 9
Revocation or suspension of registration

The NBFI registration could be revoked only upon the CBK’s decision if one or more of the following
reasons are present:
1.1. If the NBFI does not commence functioning within the period defined in paragraph 2 of Article 7
of this Regulation or:
1.1.1. the NBFI has discontinued the activities for which it has been registered with the CBK for
more than 6 (six) months without interruption;
1.1.2. the NBFI registered to exercise the activity of payment services and/or electronic money
issuance has ceased to provide payment services and/or electronic money issuance activities for a period of more than one (1) month without interruption;
1.2. there are reliable data that shareholders, directors and/or senior managers are involved in money
laundering or terrorist financing activities;
1.3. the CBK has approved the plan for the NBFI to terminate its operations in Kosovo and has
complied with that plan;
1.4. the NBFI has violated any legal provision, any CBK ordinance or regulation or any condition or
limitation relating to the authorization issued by the CBK after being notified by the CBK;
1.5. the NBFI has engaged in unsafe or unhealthy practices according to the CBK;
1.6. the NBFI no longer fulfils the conditions under which it was registered;
1.7. the registration was obtained on the basis of false information submitted by or related to the
claimant.
The NBFI registration shall be revoked by a CBK decision if the NBFI is deemed insolvent or it is
reasonably expected to become insolvent.
For the purposes of this Article, “insolvent” shall mean that the NBFI is not paying its obligations or
the value of the NBFI's obligations exceeds the value of its assets. The value of the NBFI's assets, liabilities and regulative capital is determined in accordance with the assessment standards and procedures set by the CBK.
The CBK may, when it deems it appropriate, decide to suspend the registration of the NBFI. In such
cases the periods and other conditions relating to the suspension shall be determined by decision of the CBK.
CHAPTER III
TRANSACTIONS REQUIRING PRIOR APPROVAL
Article 10
Prior approvals
NBFI’s transactions which require prior approval are as follows:
1.1. change of name;

1.2. changes to the founding document and/or statute;
1.3. increase of share capital;
1.4. reduction of share capital;
1.5. all transactions and actions related to the share capital that result in the change of the list of
shareholders, who hold ten per cent (10%) or more of the share capital, and/or voting rights in the NBFI;
1.6. appointment of directors and senior managers;
1.7. expansion of activity;
1.8. opening and relocation of NBFI’s offices inside the country;
1.8. 1.for the purposes of this Regulation, relocation of the NBFI’s offices inside the country means
the change of location of the respective office within the territory of the same municipality;
1.9. closure of offices inside the country;
1.10. sale or transfer (complete or partial) of the NBFI’s business (portfolio) to another entity;
1.11. merger and/or amalgamation;
1.12. dividend distribution.
2. The CBK shall approve or reject the transaction under paragraph 1 of this Article within 30 days (1
month) of the date of completion of the request, based on the documentation specified in paragraphs 4 and 5 of this Article.
3. For the purposes of paragraph 2 of this Article, date of receipt of the request shall be deemed as the
date of receipt of the completed request.
4. For approving transactions under paragraph 1 of this Article, the NBFI shall present a written request
accompanied by the following documentation:
4.1. change of the name:
4.1.1. decision by the decision-making body; and
4.1.2. written reasoning for such change.
4.2. amendments to the founding act and/or statute:
4.2.1. decision by the decision-making body;
4.2.2. amended founding act and/or statute;
4.2.3. written reasoning for such amendment to the founding act and/or statute.
4.3. increase of share capital:
4.3.1. if the NBFI’s share capital is increased from internal sources:
4.3.1.1. statement on source of capital increase;
4.3.1.2. the NBFI’s external audit report for previous year;
4.3.1.3. financial statements of last period reported by the CBK, which prove the
sufficiency of these sources within the NBFI’s capital structure.
4.3.2. if the NBFI’s share capital is increased from external sources, requirements of Article 5,
paragraphs 3.3 and 3.4 of this Regulation shall apply.
4.4. reduction of share capital:
4.4.1. decision by the decision-making body;
4.4.2. description of the impact of such change on capital requirements under this Regulation;
4.4.3. written reasoning for the decrease of share capital.

4.5. changes to ownership by shareholders who hold ten per cent (10%) or more of the share capital
and/or voting rights in the company:
4.5.1. report of the joint stock company in the case of shareholders organized as a business
organization or CVs of individual shareholders according to the form provided by the CBK;
4.5.2. name, nationality, place of residence and business and professional history for the last
ten (10) years of the applicant and any beneficial owner of the applicant who, as a result of the transaction, would indirectly benefit five percent (5%) or more of the NBFI's capital interests, as well as the information/documentation required by Article 5, paragraph 3, sub-paragraph 3.3, of this Regulation;
4.5.3. list of business organizations wherein the proposed owners, including the beneficial
owners (as described above), hold shares, specifying the level of such shareholding and the registered addresses of those business organizations;
4.5.4. for each legal entity, the audited financial statements (audited if applicable) for the last
three (3) years;
4.5.5. the source and amount of funds used in the exercise of amalgamation as set forth in
Article 5, paragraph 3, subparagraph 3.4, of this Regulation; and
4.5.6. in any case where the amalgamation of the shares would cause the NBFI to become a
subsidiary of a foreign financial institution, a statement from the responsible supervisory authority of the home country that there are no objections to the commencement of operations in Kosovo and that it exercises global consolidated oversight on the NBFI established in Kosovo, if applicable;
4.5.7. signed notarised agreement for change of share ownership.
4.6. appointment of directors and senior managers:
4.6.1. documentation specified in Article 5, paragraph 3, subparagraph 3.5, of this Regulation.
4.7. expansion of activity:
4.7.1. decision by decision-making body on exercise of additional activity;
4.7.2. document verifying payment of additional amount of minimum capital (if applicable);
4.7.3. policy and procedures necessary for performing additional activity;
4.7.4. business plan as specified in Article 5, paragraph 3, subparagraph 3.6, of this Regulation
and impact on the entity’s general financial standing.
4.8. opening and relocation of offices:
4.8.1. decision by decision-making body;
4.8.2. justification for office opening or relocation;
4.8.3. written notification on fulfilment of technical and safety conditions. Such notice shall
specify the steps taken to fulfil these conditions and the photographs proving this.
4.9. closing of offices:
4.9.1. identification of office to be closed and proposed closing date;
4.9.2. decision by decision-making body;
4.9.3. report with reasons for deciding to close the office;
4.10. sale or transfer (complete or partial) of the NBFI’s business (portfolio) to another entity;
4.10.1. decision by decision-making body on such transactions;

4.10.2. signed agreement or draft agreement between the NBFI and the other entity.
4.11. merger and/or amalgamation:
4.11.1. decision by the decision-making body of the NBFI and the other financial institution
involved in the action for approval of their reorganization through merger;
4.11.2. agreement or draft agreement and detailed report of the merger process, signed by the
legal representatives of institutions involved in the merger process. The agreement or draft agreement and the report shall be in writing and in accordance with the applicable legislation;
4.11.3. NBFI’s draft statute after implementation of the merger process;
4.11.4. strategic and operational plans for implementing the merger, including required
amalgamation analyses and financial statement projections for the merged NBFI;
4.11.5. in case of change of directors and senior managers of the merged NBFI, documentation
shall be submitted in accordance with the requirements for directors under the Law on Banks, Microfinance Institutions and Non-Bank Financial Institutions, and this Regulation;
4.11.6. new structure of the NBFI shareholders.
4.12. dividend distribution:
4.12.1. decision by shareholders’ assembly and board of directors on dividend distribution;
4.12.2. projections related to balance, income statement and initial capital on monthly basis for
the 12 upcoming months, reflecting the potential dividend payment;
4.12.3. audited financial statements for previous year.
5. The CBK may request additional documents other than those specified in paragraph 3 of this Article.
6. The application for approval of the above transactions and the documentation attached to the
application shall be filed by the NBFI and shall be in one of the two official languages of the Republic of Kosovo, either in original or in a certified copy. In the case of documentation issued by relevant official authorities in foreign countries other than the Republic of Kosovo, the documentation shall also be certified by the responsible authorities of the respective states.
7. The CBK shall approve the applications submitted by NBFIs for transactions under paragraph 1 of this
Article only if the following criteria are met:
7.1. change of name:
7.1.1. the proposed new name of the NBFI shall be in accordance with the Law on Banks,
Microfinance Institutions and Non Bank Financial Institutions, the Law on Business Organizations and the Law on the Use of Languages.
7.2. changes to the founding act and/or statute:
7.2.1. changes shall not stand in violation with the applicable legislation, depending on the type
of change concerned.
7.3. increase of share capital:
7.3.1. legitimate source of capital funds
7.4. reduction of share capital:

7.4.1. the impact of such decrease on the NBFI, including but not limited to the impact that the
decrease may have on the NBFI's financial viability, ownership structure and shareholder suitability.
7.5. transactions and activities related to the share capital that changes the list of shareholders, who
hold ten per cent (10%) or more of the share capital, and/or voting rights in the company;
7.5.1. the proposed amalgamation is evaluated according to the same criteria that apply to the
approval of a NBFI registration request with regard to shareholders, including but not limited to, the expected effects of the proposed amalgamation on the NBFI's financial viability and ownership structure and the impact of such amalgamation may have on the NBFI’s oversight by the CBK.
7.6. appointment of directors and senior managers:
7.6.1. the criteria under Article 12 of this Regulation shall apply;
7.7. expansion of activity:
7.7.1. the criteria for registration of the NBFI shall apply accordingly when assessing the
application for approval of NBFI's additional activity, depending on the additional activity for which approval is required.
7.8. opening and relocation of offices inside the country:
7.8.1. the impact of opening or relocation on the community in which the office is or will be
located; 6.8.2.the NBFI shall provide the CBK with sufficient information and facts that the office is ready to conduct its business in terms of technical and security conditions including computer system, staffing, security, etc.; 6.8.3.the CBK shall have the right to order the suspension of the activity in the relevant office even after approval if it finds that the technical and security conditions for the exercise of financial activity have not been met.
7.9. closing of offices inside the country:
7.9.1. the CBK recognizes that expanding or reducing the office network is a business decision
of the NBFI itself. However, the CBK may temporarily postpone the NBFI for up to 30 calendar days upon the closure of the office if, in the judgment of the CBK, the closure of the office would have a significant adverse effect on access to financial services in the community served from that office.
7.10. sale or transfer (complete or partial) of the NBFI’s business (portfolio) to another entity:
7.10.1. the impact of the sale or transfer of business (portfolio) on NBFI clients;
7.10.2. the impact of the sale or transfer of the business (portfolio) on the NBFI’s financial
standing;
7.10.3. the sale or transfer of the business (portfolio) shall not give rise to an anti-competitive
effect;
7.11. merger and/or amalgamation:
7.11.1. the merger or amalgamation does not jeopardize the financial standing of the merged
NBFI;

7.11.2. the NBFI has a system of organization, management, decision-making and information
technology that enables the full integration of the merged or amalgamated NBFI in a way that does not jeopardize its operation;
7.11.3. the merger or amalgamation is economically viable;
7.11.4. the merger and/or amalgamation does not give rise to an anti-competitive effect;
7.11.5. it is the responsibility of the NBFI to obtain approval from other authorities that may be
necessary before the transaction is completed.
7.12. dividend distribution.
7.12.1. the impact of the dividend distribution on the NBFI, including but not limited to, the
expected effects on the NBFI's financial viability.
8. When deciding whether to approve such transactions, the CBK shall also consider other criteria for the
purpose of achieving its goals as set forth in the applicable legislation.
CHAPTER IV
TRANSACTIONS REQUIRING NOTIFICATION TO CBK
Article 11
Requirements for notifying NBFI changes

NBFIs shall notify the CBK within 30 days (1 months) of occurrence of changes for the following
transactions:
1.1. any change in ownership of shareholders who possess less than ten per cent (10%) of the capital;
1.2. resignation of directors and senior managers;
1.3. reappointment of directors and senior managers;
1.4. changes to the organizational structure if such changes are not reflected in the NBFI’s statute, the
director or senior managers.
NBFIs shall notify the CBK without delay of operational risk events if one of the following cases
occur:
2.1. financial losses resulting from theft, financial fraud or other similar cases, which represent a loss
to the NBFI in an amount exceeding € 1,000 (one thousand Euros);
2.2. events that result in serious damage or loss of NBFI’s important data or books, interruption of
operations for more than three hours in two or more offices, or interruption of operations for more than five hours in a single office, affecting the normal operations of the NBFI;
2.3. in case NBFI's exclusive information is stolen, sold or published without NBFI's permission or if
information is lost that could damage NBFI's financial stability; 2.4.frequent breach of applicable rules by the senior management.
CHAPTER V
ORGANIZATION, MANAGEMENT AND ADMINISTRATION OF NON-BANK FINANCIAL INSTITUTIONS

Article12
Governance of NBFI

The NBFI shall act in accordance with the recognized principles of good governance to ensure that the
business of the institution is realized in a safe and sound manner. NBFI’s governance should be in accordance with the Law on Banks, Microfinance Institutions and Non Bank Financial Institutions and this Regulation.
As set forth in Article 97, paragraph 1, of the Law on Banks, Microfinance Institutions and Non-Bank
Financial Institutions, NBFIs shall have a board of directors consisting of not less than 3 (three) members, of which the majority shall be independent and non-executive directors.
Directors and senior managers should fulfil the “fit and proper” criteria as requested by the CBK.
Directors and senior managers of the non-banking financial institution should at least meet the
following criteria:
4.1. have a university degree in the field of economy, jurisprudence or another relevant field;
4.2. have three (3) years of experience in the banking and/or financial sector or any other field
considered appropriate by the CBK;
4.3. have a high ethical and professional reputation;
4.4. have not been removed by the CBK from a position in a financial institution;
4.5. have not been convicted by a criminal court for a criminal offense with imprisonment of one
year or more, concerning which the option of fine has not been ruled;
4.6. have not been convicted of economic crimes or found guilty of economic offences under the
Criminal Code;
4.7. have not been denied, by court decision, the exercise of activities within the powers prescribed
for directors and senior managers;
4.8. have not been excluded or suspended by the competent authority from practicing the profession
on grounds of personal misconduct;
4.9. have not caused or been responsible for the bankruptcy of any entity that conducts economic
activity;
4.10. have not been subject to insolvency filing procedures including official administration or
bankruptcy, and are free from paying past due liabilities.
In exceptional circumstances, after being satisfied with the qualifications, professional experience and
conduct of the person, the CBK may exempt a director or senior manager from the provisions of subparagraph 4.10 of paragraph 4 of this Article.
NBFIs conducting solely currency exchange activity may have the governance organized in
accordance with the statute of the institution.
Managers of institutions conducting solely currency exchange activity should at minimum have
finished secondary education and have knowledge on the activity of currency exchange.
The NBFI Board of Directors committees shall be composed of members of the Board of Directors
only, with the exception of the Audit Committee in which at least one member shall be an external accounting or auditing expert.
The CBK may require NBFIs to have additional committees other than those provided for in the Law
on Banks, Microfinance Institutions and Non Bank Financial Institutions.
NBFIs may establish additional committees other than those specified in the Law on Banks,
Microfinance Institutions and Non Bank Financial Institutions and other committees within senior management.
CHAPTER VI
FINAL PROVISIONS
Article 13
Other
NBFIs or their agents are not allowed to make identifying advertisements for the institutions before
registration/approval by the CBK.
The CBK may carry out on-site inspection of the NBFI or their agents prior to commencing the activity
for which they are registered. The purpose of such examination is to assess if the office in question has established the conditions to meet the obligations determined under technical and security conditions of premises in which the subject will conduct its activities.
The CBK may at any time inspect offices/agents which conduct financial activities with the purpose
of fulfilling the conditions and requirements determined by the law and this Regulation.
NBFIs shall place their registration certificate by the CBK in a visible place within their office/offices.
In case of requests for other NBFI activities foreseen by the Law on Banks, Microfinance Institutions
and Non-Bank Financial Institutions, the provisions of this Regulation shall apply accordingly.
Article 14
Applicable Regulations
The following CBK regulations are applied accordingly (with necessary changes) to NBFIs, until
otherwise provided by the CBK:
1.1. Regulation on Letter of Credit and Bank Guarantee;
1.2. Regulation on Standard Bank Account Numbering System.
1.3. Regulation on Electronic Payment Instruments
1.4. Regulation on Minimum Safety Requirements;
Article 15
Implementation, remedial measures and civil penalties Any violation of provisions of this Regulation shall be subject to remedial and punitive measures as defined by the Law on Central Bank of the Republic of Kosovo, the Law on Banks, Microfinance Institutions and Non Bank Financial Institutions, and the Law on Payment System.

Article16
Abrogation
Upon entry into force of this Regulation, the Regulation on Registration of Non-Bank Financial Institutions, approved by the board of CBK on 29 November 2019, shall be abrogated.
Article 17
Entry into force
This Regulation shall enter into force15 days from its approval and applies to applications received following its entry into force. Flamur Mrasori Chairman of the Board of the Central Bank of the Republic of Kosovo

Regulation on the Registration of Non-Banking Financial Institutions

Lineage: In force