Rulebook on Conditions for Membership in the Management and Supervisory Board of a Leasing Company

RULEBOOK ON CONDITIONS FOR MEMBERSHIP IN THE MANAGEMENT AND SUPERVISORY BOARD OF A LEASING COMPANY (Unofficial Consolidated Text - NN 23/14 and 72/17)

UNOFFICIAL CONSOLIDATED TEXT
RULEBOOK ON CONDITIONS FOR MEMBERSHIP IN THE MANAGEMENT AND SUPERVISORY BOARD OF A LEASING COMPANY (Narodne novine No. 23/14 and 72/17) (The Rulebook on Amendments to the Rulebook on Conditions for Membership in the Management and Supervisory Board of a Leasing Company (NN No. 72/17) entered into force and applies from July 29, 2017.)

RULEBOOK ON CONDITIONS FOR MEMBERSHIP IN THE MANAGEMENT AND SUPERVISORY BOARD OF A LEASING COMPANY (Unofficial Consolidated Text - NN 23/14 and 72/17)

Based on the provisions of Article 35, paragraphs 6 and 8, and Article 40, paragraph 4 of the Leasing Act ("Narodne novine", No. 141/2013), the Croatian Financial Services Supervisory Agency, at the meeting of the Board of Directors held on July 14, 2017, adopts

RULEBOOK
ON CONDITIONS FOR MEMBERSHIP IN THE MANAGEMENT AND SUPERVISORY BOARD OF A LEASING COMPANY

INITIAL PROVISIONS

Article 1.
(1) This Rulebook regulates in detail:

1. the conditions for membership in the management of a leasing company, the procedure for issuing consent, and the documentation to be attached to the application for performing the function of a member of the management of a leasing company;
2. the content of the business management program, the procedure and criteria for evaluating the program and candidates for a member of the management who present the program;
3. the conditions that members of the supervisory board of a leasing company must meet.
   (2) This Rulebook shall also apply, mutatis mutandis, to the issuance of consent for persons who will be responsible for the management of branches of a leasing company from member states and third countries.

Article 2.
Terms used in this Rulebook have the following meanings:

1. Agency – Croatian Financial Services Supervisory Agency;
2. Act – Leasing Act ("Narodne novine", No. 141/2013);
3. Candidate – a person who submits an application for the issuance of consent for a member of the management of a leasing company in accordance with the Act, or a person proposed for a member of the supervisory board of a leasing company;
4. Member of the Management – a member of the management of a leasing company within the meaning of the Leasing Act;
5. Member of the Supervisory Board – a member of the supervisory board of a leasing company within the meaning of the Leasing Act;
6. Related Persons, within the meaning of this Rulebook, are persons who are related in accordance with the provisions of Articles 12 to 15 of the Act;
7. Conflict of Interest, within the meaning of this Rulebook, are circumstances where the private interests of a person are in conflict with the interests of the leasing company, particularly when the private interest of a person affects or may affect their impartiality in performing their duties.

CONDITIONS FOR MEMBERSHIP IN THE MANAGEMENT OF A LEASING COMPANY

Article 3.
(1) A member of the management of a leasing company may be a person who permanently meets the conditions prescribed by Article 34 of the Act and this Rulebook.
(2) A candidate for a member of the management of a leasing company must have appropriate professional qualifications, competence, good reputation, and experience for the management of a leasing company.
(3) When deciding on an application for the issuance of consent for performing the function of a member of the management of a leasing company, the Agency shall take into account all elements that may influence the assessment of whether the candidate meets the prescribed conditions, with the aim of ensuring the continuous operation of the leasing company.

Professional Qualifications of Members of the Management of a Leasing Company

Article 4.
(1) The professional qualifications prescribed by Article 34, paragraph 1, point 1 of the Act, necessary for performing the function of a member of the management of a leasing company, are held by a person who has completed one of the following studies:
a) undergraduate and master university studies or integrated undergraduate and master university studies or professional study and specialist master professional study, by completing which they have acquired at least 300 ECTS credits, or b) university undergraduate study, by completing which they have acquired high professional qualification, or professional undergraduate study, lasting at least four years, by completing which they have acquired high professional qualification. (2) The provisions of paragraph 1, point b) of this Article shall apply to persons who completed their studies according to regulations that were in force before the entry into force of the Act on Scientific Activity and Higher Education ("Narodne novine" No. 123/03, 198/03, 105/04, 174/04, 2/07 Decision of the Constitutional Court, 46/07, 45/09 and 63/11) and have the right to use the appropriate academic or professional title or academic degree established by the Act on Academic and Professional Titles and Academic Degree ("Narodne novine" No. 107/07 and 118/2012), in accordance with Article 120, paragraph 2 of the Act on Scientific Activity and Higher Education. (3) When assessing the professional knowledge of the candidate, in addition to the achieved level of education in accordance with paragraphs 1 and 2 of this Article, the Agency may also take into account the continuous professional development of the candidate, particularly in the following areas:
a) business of leasing companies, b) financial markets, c) accounting framework, d) regulatory framework, e) strategic planning and knowledge of business strategy, business plan, and its implementation, f) risk management, g) corporate governance, including the internal control system, and h) analysis of financial data.
(4) When assessing the competence of the candidate for a member of the management within the meaning of Article 34, paragraph 1, point 1 of the Act, the Agency may also assess the ability for strategic thinking and creating short-term and long-term business plans, assessing and managing risks, the ability to organize business and manage the company, independence of opinion, and the candidate's ability and willingness for continuous learning and professional development.

Experience of Members of the Management of a Leasing Company

Article 5.
(1) Experience in management positions in a leasing company within the meaning of the provisions of Article 34, paragraph 1, point 1 of the Act and paragraph 3 of the same Article of the Act, is considered:

1. experience in the management of a leasing company and/or managing organizational parts of a leasing company,
2. experience as a prokurist (authorized signatory) in a leasing company.

By the provision of Article 1 of the Rulebook on Amendments to the Rulebook on Conditions for Membership in the Management and Supervisory Board of a Leasing Company (NN No. 72/17), which entered into force on July 29, 2017, paragraph 2 was amended so that the words: "Experience in managing businesses that can be compared to the activities of a leasing company or managing businesses in companies that perform activities that can be compared to the activities of a leasing company within the meaning of the provision of Article 34, paragraph 3 of the Act, is considered leading or managing businesses, primarily in financial institutions or legal entities or public authority bodies whose financial activities are fundamental activities or constitute their main activity, and businesses for which the Agency considers that by performing such businesses the candidate could acquire knowledge about the operation of leasing companies and the functioning of the leasing market or another part of the financial market." were replaced by the words: "Experience in managing businesses that can be compared to the activities of a leasing company or managing businesses in companies that perform activities that can be compared to the activities of a leasing company within the meaning of the provision of Article 34, paragraph 3 of the Act, is considered leading or managing businesses, primarily in financial institutions or legal entities or public authority bodies whose financial activities are fundamental activities or constitute their main activity, and for which businesses the Agency considers that by performing such businesses the candidate could acquire knowledge about the operation of leasing companies and the functioning of the leasing market or another part of the financial market."

(2) Experience in managing businesses that can be compared to the activities of a leasing company or managing businesses in companies that perform activities that can be compared to the activities of a leasing company within the meaning of the provision of Article 34, paragraph 3 of the Act, is considered leading or managing businesses, primarily in financial institutions or legal entities or public authority bodies whose financial activities are fundamental activities or constitute their main activity, and businesses for which the Agency considers that by performing such businesses the candidate could acquire knowledge about the operation of leasing companies and the functioning of the leasing market or another part of the financial market.

(3) When assessing the duration of work experience, the Agency may take into account multiple short-term or temporary performances of duties if it establishes that together with other previous duties performed by the candidate, they have acquired at least three or five years of continuous experience in the duties from paragraphs 1 and 2 of this Article.

Good Reputation of Members of the Management of a Leasing Company

Article 6.
(1) When assessing the good reputation prescribed by Article 34, paragraph 1, point 4 of the Act, necessary for performing the function of a member of the management of a leasing company, particular attention shall be paid to:
a) whether the candidate has had appropriate consent or approval for performing certain duties withdrawn or denied due to non-compliance with relevant regulations on financial services under the jurisdiction of the Agency or another competent authority, or whether an foreign supervisory authority has withdrawn consent or imposed any measure prohibiting the performance of relevant duties in the leasing industry, banking, insurance industry, capital market, factoring industry, or another area of providing financial services; b) whether an investigation has been initiated against the candidate, whether criminal proceedings are pending, or whether they have been finally convicted for criminal offenses prescribed by the Securities Market Act ("Narodne novine", No. 84/02 and 138/06), the Act on Criminal Offenses against the Capital Market ("Narodne novine", No. 152/08), and the Companies Act ("Narodne novine", No. 111/93, 34/99, 121/99, 52/00, 118/03, 107/07, 146/08, 137/09, 152/11, 111/12, 144/12 and 68/13), or for a foreign person, whether an investigation has been initiated against them, whether proceedings are pending, or whether they have been finally convicted for acts that by their description and consequences correspond to the aforementioned criminal offenses; c) whether an investigation has been initiated against the candidate, whether criminal proceedings are pending, or whether they have been finally convicted for the following criminal offenses prescribed by the Criminal Code ("Narodne novine", No. 125/11 and 144/12):
– criminal offenses against property (except for the criminal offense of unauthorized use of another's movable property and the criminal offense of damaging another's property), in respect of which criminal proceedings are initiated ex officio, – criminal offenses against humanity and human dignity, – criminal offenses against the economy, – criminal offenses of forgery, – criminal offenses against official duty, – criminal offenses against justice, – criminal offenses against labor relations and social security, or for a foreign person, whether an investigation has been initiated against them, whether proceedings are pending, or whether they have been finally convicted for acts that by their description and consequences correspond to the aforementioned criminal offenses; d) whether an investigation has been initiated against the candidate or an indictment confirmed, whether criminal proceedings are pending, or whether they have been finally convicted for criminal offenses from the Criminal Code ("Narodne novine", No. 110/97, 27/98, 50/00, 129/00, 51/01, 111/03, 190/03 – Decision of the Constitutional Court, 105/04, 84/05, 71/06, 110/07, 152/08 and 57/11) which are in legal continuity with the aforementioned criminal offenses from point c) of this Article, or for a foreign person, whether an investigation has been initiated against them, whether proceedings are pending, or whether they have been finally convicted for acts that by their description and consequences correspond to the aforementioned criminal offenses; e) the candidate's previous professional work and personal integrity; f) whether business results and/or financial stability of a trading company endanger the candidate's reputation; g) whether there are other reasons to doubt the candidate's good reputation. (2) When assessing the conditions from paragraph 1, points a) to d) of this Article, the Agency shall take into account all available information related to the type of judgment, the stage at which the proceedings are, legal remedies declared, the imposed sanction, existing circumstances, the significance of the offense or misdemeanor, the period that has elapsed since the commission of the act, and the behavior of the person during that time. The Agency shall also take into account a larger number of minor offenses that individually do not impair, but together may impair the good reputation of the person. (3) When assessing the condition from paragraph 1, point e) of this Article, the Agency shall analyze information indicating improper behavior of the candidate in previous professional work, particularly non-transparent conduct, non-cooperation with competent authorities, or non-compliance with measures imposed by the Agency or another competent authority. (4) When assessing the condition from paragraph 1, point f) of this Article, the Agency shall take into account the financial and business results and stability of the trading company in which the candidate has a significant
share and/or holds a management position.

Procedure for Issuing Consent and Documentation Attached to the Application

Article 7.
(1) Before the decision of the competent body of the leasing company on the appointment of a member of the management is made, the applicant must obtain the consent of the Agency in accordance with the provisions of the Act and this Rulebook.

By the provision of Article 2, paragraph 1 of the Rulebook on Amendments to the Rulebook on Conditions for Membership in the Management and Supervisory Board of a Leasing Company (NN No. 72/17), which entered into force on July 29, 2017, paragraph 2 was amended so that the words: "According to the provision of Article 35, paragraph 2 of the Act, the application for the issuance of consent for performing the function of a member of the management is submitted by the candidate for a member of the management, who must obligatorily attach a written decision or consent of the body in the leasing company competent for the appointment of members of the management. The decision or written consent of the body in the leasing company competent for the appointment of members of the management must contain the essential reasons that influenced the selection of the candidate and the submission of the application, the criteria and procedures by which the leasing company guided itself when assessing the suitability of the candidate, and the goals that are intended to be achieved by appointing the candidate to the management of the leasing company. Such an explanation may be an integral part of the decision or consent itself or in the form of a separate document as an attachment to the decision or consent." were replaced by the words: "According to the provision of Article 35, paragraph 2 of the Act, the application for the issuance of consent for performing the function of a member of the management is submitted by the candidate for a member of the management, who must obligatorily attach a written decision or consent of the body in the leasing company competent for the appointment of members of the management. The decision or written consent of the body in the leasing company competent for the appointment of members of the management must contain the essential reasons that influenced the selection of the candidate and the submission of the application, the criteria and procedures by which the leasing company guided itself when assessing the suitability of the candidate, and the goals that are intended to be achieved by appointing the candidate to the management of the leasing company."

(2) According to the provision of Article 35, paragraph 2 of the Act, the application for the issuance of consent for performing the function of a member of the management is submitted by the candidate for a member of the management, who must obligatorily attach a written decision or consent of the body in the leasing company competent for the appointment of members of the management. The decision or written consent of the body in the leasing company competent for the appointment of members of the management must contain the essential reasons that influenced the selection of the candidate and the submission of the application, the criteria and procedures by which the leasing company guided itself when assessing the suitability of the candidate, and the goals that are intended to be achieved by appointing the candidate to the management of the leasing company. Such an explanation may be an integral part of the decision or consent itself or in the form of a separate document as an attachment to the decision or consent.

By the provision of Article 2, paragraph 2 of the Rulebook on Amendments to the Rulebook on Conditions for Membership in the Management and Supervisory Board of a Leasing Company (NN No. 72/17), which entered into force on July 29, 2017, paragraph 3, points 11 and 12 were amended so that the words: "11. information on whether the candidate is on the list of delinquent debtors (e.g., HROK, list of tax debtors of the Ministry of Finance, 'black list', credit register, etc., and for foreign citizens on the corresponding registers of the foreign state) and whether enforcement or open bankruptcy proceedings or consumer bankruptcy proceedings have been initiated against the candidate's property, 12. information on the financial and business results of trading companies in which the candidate is or was a significant shareholder or in which the candidate has or had significant business shares or in which the candidate performed the function of a member of the management or another management function, unless the candidate declares that this would constitute a violation of their obligation to keep business secrets, including information on whether a pre-bankruptcy agreement was conducted, open bankruptcy or pre-bankruptcy proceedings were initiated, a decision on compulsory liquidation was made, or their operating permit was revoked." were replaced by the words: "11. information on whether the candidate is on the list of delinquent debtors (e.g., HROK, list of tax debtors of the Ministry of Finance, 'black list', credit register, etc., and for foreign citizens on the corresponding registers of the foreign state) and whether enforcement or bankruptcy proceedings or personal bankruptcy proceedings have been initiated against the candidate's property, 12. information on the financial and business results of trading companies in which the candidate is or was a significant shareholder or in which the candidate has or had significant business shares or in which the candidate performed the function of a member of the management or another management function, unless the candidate declares that this would constitute a violation of their obligation to keep business secrets, including information on whether a pre-bankruptcy agreement was conducted, open bankruptcy proceedings were initiated, a decision on compulsory liquidation was made, or their operating permit was revoked."

(3) The application from paragraph 2 of this Article must contain the function and competencies for which the candidate is intended to be appointed, the duration of the mandate for which the candidate is proposed, and at least the following:

1. personal data of the person to be appointed, including name, surname, maiden name, place and date of birth, domicile or residence, citizenship, and other personal data;
2. information on education, including a chronological list of all levels of education with the year of completion, duration, and acquired academic title;
3. information on professional development, including a chronological list of all forms of professional development, specifying topics, organizers, and duration, years of passing professional exams, certificates, licenses, etc.;
4. for foreign citizens, information on the level of knowledge of the Croatian language;
5. information on work experience, including a chronological listing of all previous employers and positions, or functions performed outside of employment, with indication of the periods in which individual functions were performed;
6. for positions or functions where the candidate worked or held office in the last ten years, the following shall be specified:
   – description of the duties performed by the candidate in that position or function, – organizational structure of the employer at which the duties were performed or the function was held at the time the candidate worked in that position, unless the candidate declares that this would constitute a violation of their obligation to keep business secrets, and if available to them, – scope of competencies, decision-making powers, and responsibility, – number of subordinate employees;
7. information on whether proceedings are pending against the person or whether the candidate has been finally convicted for one or more criminal offenses listed in Article 6, paragraph 1 of this Rulebook, or for any other criminal offense;
8. information on whether the candidate has been finally convicted, whether a measure has been imposed against them, and whether competent courts or bodies are conducting proceedings against the candidate for irregularities or non-compliance with laws and subordinate regulations, or any regulations governing banking, insurance, or other financial activities, or regulating payment instruments, or providing financial services, or any other relevant regulations, which may cast doubt on the candidate's good reputation;
9. information on whether proceedings are pending against the candidate or whether the candidate has been finally convicted for misdemeanors that could negatively affect the candidate's financial stability and reputation;
10. information on whether the candidate or the company they managed became a debtor in bankruptcy or similar proceedings;
11. information on whether the candidate is on the list of delinquent debtors (e.g., HROK, list of tax debtors of the Ministry of Finance, 'black list', credit register, etc., and for foreign citizens on the corresponding registers of the foreign state) and whether enforcement or open bankruptcy proceedings or consumer bankruptcy proceedings have been initiated against the candidate's property;
12. information on the financial and business results of trading companies in which the candidate is or was a significant shareholder or in which the candidate has or had significant business shares or in which the candidate performed the function of a member of the management or another management function, unless the candidate declares that this would constitute a violation of their obligation to keep business secrets, including information on whether a pre-bankruptcy agreement was conducted, open bankruptcy or pre-bankruptcy proceedings were initiated, a decision on compulsory liquidation was made, or their operating permit was revoked;
13. information on whether the suitability assessment of the person has already been conducted by another competent authority (including data on that authority and evidence of the assessment results);
14. information on all business relationships of the person and related persons with the leasing company, members of the management, supervisory board, and qualified holders.

By the provision of Article 2, paragraph 3 of the Rulebook on Amendments to the Rulebook on Conditions for Membership in the Management and Supervisory Board of a Leasing Company (NN No. 72/17), which entered into force on July 29, 2017, point 15 in Article 7, paragraph 3 is deleted.

Article 8.
By the provision of Article 3 of the Rulebook on Amendments to the Rulebook on Conditions for Membership in the Management and Supervisory Board of a Leasing Company (NN No. 72/17), which entered into force on July 29, 2017, Article 8 was amended in its entirety and now reads:
(1) Along with the application for the issuance of consent for performing the function of a member of the management of a leasing company submitted on the form from Appendix 1 of this Rulebook, in addition to the written decision or consent from Article 7, paragraph 2 of this Rulebook, the following documentation shall be attached:

1. a copy of the personal ID card or passport, and for a foreign citizen, a copy of the travel document, residence permit, or other document proving identity in accordance with the provisions of the Act on Foreigners ("Narodne novine", No. 130/2011 and 74/2013, hereinafter: Act on Foreigners);
2. a certified copy of proof of completed appropriate level of education;
3. a document on the recognition of foreign higher education qualification issued by the competent authority in the Republic of Croatia, except for diplomas obtained from...