Zákon č. 483/2001 Z. z. o bankách a o zmene a doplnení niektorých zákonov (Act No. 483/2001 Coll. on Banks and on Amendments to Certain Laws)

English translation of the Slovak text from slov-lex.sk, historical version in force 1 July 2017 - 31 December 2017 (the Slovak text is the official one). Retrieved 2026-10-26.

COLLECTION OF LAWS OF THE SLOVAK REPUBLIC Volume 2001 Announced: 29. 11. 2001 Time version of the regulation effective from: 1. 7.2017 to: 31.12.2017 The content of the document is legally binding.

483 A C T of 5 October 2001 on banks and on the amendment and supplementation of certain laws The National Council of the Slovak Republic has resolved on this Act:

Art. I PART ONE BASIC PROVISIONS § 1 This Act regulates certain relationships related to the establishment, organization, management, business and termination of banks with their registered office in the territory of the Slovak Republic and certain relationships related to the activities of foreign banks in the territory of the Slovak Republic for the purpose of regulation and supervision of banks, branches of foreign banks and other entities with the aim of the safe functioning of the banking system.

§ 2

(1) A bank is a legal entity with its registered office in the territory of the Slovak Republic established as a joint-stock company, 1 ) which is a credit institution under a special regulation 1ab) and which has a banking licence. Another legal form of a bank is prohibited.

(2) In addition to accepting deposits and providing loans, a bank may, if they are listed in its banking licence, perform the following further banking activities:

a) provision of payment services 1aa) and settlement,

b) provision of investment services, investment activities and ancillary services under a special law 1a) and investing in securities on its own account,

c) trading on its own account

1. with financial instruments of the money market in euros and in foreign currency, with gold, including exchange office activities,

2. with financial instruments of the capital market in euros and in foreign currency,

3. with coins of precious metals, commemorative banknotes and commemorative coins, collector coins, sheets of banknotes and sets of circulation coins,

d) administration of a client's receivables on his account, including related advice,

e) financial leasing,

f) provision of guarantees, 2 ) opening and confirming letters of credit, 3 )

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g) provision of advisory services in the field of business,

h) issuing securities, participating in the issuance of securities and providing related services,

i) financial intermediation,

j) safekeeping of items,

k) rental of safe deposit boxes,

l) provision of banking information,

m) special mortgage transactions (hereinafter referred to as "mortgage transaction") under § 67 para. 1,

n) the function of a depositary under a special regulation, 5 )

o) processing of banknotes and coins,

p) issuance and administration of electronic money.

(3) A banking licence is a licence under a special regulation 5a) issued for the performance of banking activities listed in paragraph 2 to the extent and under the conditions imposed by this licence or laid down by this Act and special regulations. 5b)

(4) If a special licence under a special regulation 6 ) is also required for the performance of certain activities listed in paragraph 2, the proceedings on an application for the granting of a banking licence for the performance of such activity shall be joined with the proceedings on an application for the granting of a special licence under a special regulation; 6 ) this shall not apply to a foreign bank to which § 11 to 20 apply.

(5) The banking activities listed in paragraph 2 may also be performed in the territory of the Slovak Republic in accordance with its legal order through their branches by foreign banks that have a banking licence for this under § 8 or that are authorized to perform banking activities under § 11 to 20.

(6) A bank may issue shares only as book-entered securities in registered form; a change of their form or type is prohibited.

(7) A foreign bank is a credit institution under a special regulation, 1ab) which is a legal entity with its registered office outside the territory of the Slovak Republic, which performs banking activities and which has an authorization to perform these activities granted in the state in which it has its registered office.

(8) A branch of a foreign bank is a branch under a special regulation, 6a) which is an organizational unit of a foreign bank located in the territory of the Slovak Republic, 7 ) which directly performs in particular the acceptance of deposits and the provision of loans; all branches of a foreign bank established in the Slovak Republic by this foreign bank with its registered office in a member state of the European Union or another contracting state of the European Economic Area (hereinafter referred to as "member state") are considered, from the point of view of the authorization to perform banking activities, to be one of its branches.

(9) A bank and a branch of a foreign bank may not, with the exception stated in paragraph 10, perform business activities other than banking activities.

(10) A bank and a branch of a foreign bank may perform activities other than banking activities for another only if they are related to its operation. The consent of the National Bank of Slovakia is required for such activities.

Such activities are not entered in the commercial register.

(11) A bank and a branch of a foreign bank are also obliged, in connection with the performance of banking activities, to fulfil tasks imposed by the National Bank of Slovakia in the field of monetary policy and payment services under special regulations. 8 )

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(12) The provisions of a special law 1 ) apply to a bank and a branch of a foreign bank, unless this Act provides otherwise.

(13) The provision of payment services is governed by a special law. 9 )

(14) A bank and a branch of a foreign bank may perform financial intermediation in accordance with a special regulation. 9a)

(15) A bank and a branch of a foreign bank provide preferential export loans under a special regulation. 9b)

§ 3

(1) Without a banking licence, no one may accept deposits, unless a special regulation provides otherwise. 5 ) Without a banking licence, no one may provide interest or other remuneration from deposits that is a tax expense under a special regulation. 10)

(2) Without a banking licence, no one may provide credits and loans within the scope of its business or the scope of its other activity, from repayable funds obtained from other persons on the basis of a public call, unless a special regulation provides otherwise. 11)

(3) Without a banking licence, no one may provide payment services for another within the scope of its business or the scope of its other activity, unless a special regulation provides otherwise. 12)

§ 4

(1) The words "banka" or "sporiteľňa", their foreign-language translations or words in whose stem these words or their foreign-language translations occur, may be used in a business name only by a legal entity that has been granted a banking licence. If confusion could arise, Národná banka Slovenska may require the name of a bank or a branch of a foreign bank, or another legal entity, to be specified; the bank, branch of a foreign bank or other legal entity is obliged to comply with this request.

(2) The provision of paragraph 1 does not apply to legal entities whose business name or name is established or recognised by law or by an international treaty by which the Slovak Republic is bound, or if it is clear from the business name that the person in whose name the word "banka" or "sporiteľňa" is used does not engage in the activity referred to in § 2 ods. 1.

§ 5 For the purposes of this Act, the following shall be understood

a) deposit: funds or other repayable funds entrusted by the public which represent an obligation towards the depositor for their payment,

b) credit: the temporary provision of funds on own account or the temporary provision of funds in any form, including factoring and forfaiting,

c) branch of a bank: a branch under a special regulation 6a) located in the territory of the Slovak Republic or outside the territory of the Slovak Republic, which directly carries out in particular the acceptance of deposits and the provision of credits,

d) investing in securities on own account: the acquisition of securities for the purpose of exercising a long-term influence on the activities of a commercial company and obtaining property or other benefits, but for at least one year, or the purchase of bonds 13) and their holding until the end of the maturity period from their acquisition,

e) money market financial instruments: interbank deposits, securities maturing within one year, term transactions within one year with securities maturing within one

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year and securities maturing in more than one year, other derivatives 13a) and their yields, funds in a foreign currency,

f) capital market financial instruments: shares, temporary certificates, unit certificates and other securities admitted to the market 13b) of a stock exchange with a maturity of more than one year and their yields,

g) financial leasing: the lease of things for an agreed rent for a fixed period, paid as a rule in regular instalments, with the aim of transferring the thing into the ownership of the lessee,

h) client of a bank or branch of a foreign bank: a person with whom the bank or branch of a foreign bank has concluded a transaction in the course of performing banking activities,

i) banking transaction (hereinafter referred to as "transaction"): the creation, change or termination of obligations between a bank or branch of a foreign bank and its client and any operations related to banking activities, including the handling of deposits,

j) banking information: information concerning a bank's client which the bank holds about him and obtained in the performance of or in connection with the performance of banking activities and which is provided on the basis of the client's consent,

k) public solicitation: any notification, offer or recommendation made by any person for the collection of funds for his own benefit or for the benefit of a third person, carried out by any means of publication, including personal contact with several persons, either successively with individual persons or simultaneously with several persons; for the purposes of this Act, a notification, offer or recommendation carried out exclusively in the form of personal contact and intended for a total of not more than ten persons shall not be considered a public solicitation,

l) payment card: a payment instrument that enables the user of payment services to access funds drawn up to the limit authorised by the payment service provider,

m) person: a legal entity and a natural person, unless individual provisions of this Act state only a natural person or only a legal entity,

n) handling of a deposit: any establishment, placement, transfer, withdrawal or cancellation of a deposit, its assignment or pledging, tying its payment, enabling another person to use the deposit, as well as any change in the conditions of the deposit,

o) remuneration principles: a special method of motivating persons under § 23a ods. 1, through the variable component of total remuneration, the amount and provision of which is tied to the results of promoting the long-term interests of the bank,

p) voluntary pension security payments: for the purposes of introducing and applying remuneration principles, voluntary payments under a special regulation, 13ba)

r) financial intermediation: intermediation of money market financial instruments on the interbank market, the performance of activities in relation to own financial services not covered by a special act, 13c)

s) basic banking product: a banking product containing the following banking services related to a payment account: 13d)

1. the establishment, maintenance and cancellation of a payment account maintained in euro,

2. the execution of the following payment operations:

2a. deposit of funds in cash in euro to a payment account, 2b. withdrawal of funds in cash in euro from a payment account, 2c. cashless transfers of funds from a payment account or to a payment account in euro 2ca. by payment order including a standing payment order, 2cb. by direct debit including a standing direct debit order, 2cc. by payment card,

3. the issuance of an international debit payment card,

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t) financial sector entity: a financial sector entity under a special regulation, 13e)

u) regulated market: a regulated market under a special regulation, 13f)

v) financial leverage: financial leverage under a special regulation, 13g)

w) competent supervisory authority: a competent authority under a special regulation, 13h)

x) external credit rating agency: an external credit rating agency under a special regulation, 13i)

y) central bank: a central bank under a special regulation, 13j)

z) institution: an institution under a special regulation, 13k)

aa) securitisation: securitisation under a special regulation, 13l)

ab) financial institution a financial institution under a special regulation, 13m)

ac) small or medium-sized legal entity a legal entity whose annual turnover does not exceed 50 000 000 euros,

ad) person with residence in the European Union means a natural person who has residence in a Member State of the European Union, or a natural person who has the right of residence under special regulations, 13ma)

ae) payment account with basic functions (hereinafter referred to as "standard account") a payment account which contains the following banking services related to the payment account: 13mb)

1. establishment, maintenance and cancellation of a payment account,

2. execution of payment operations 2a. deposit of funds in cash in the currency euro to a payment account, 2b. withdrawal of funds in cash in the currency euro from a payment account, 2c. cashless transfers of funds from a payment account or to a payment account 2ca. by direct debit including a standing order for direct debit, 2cb. by payment order including a standing order for payment, 2cc. by payment card,

3. issuance of a payment card,

af) group for the purposes of § 33o to 33z and 62a parent company and subsidiary company, PART TWO GENERAL PROVISIONS ON SUPERVISION § 6

(1) The activity of banks and branches of foreign banks is subject to supervision exercised by the National Bank of Slovakia; 8 ) to the extent provided by this Act, the activity of other persons and entities related to the activity or management of banks or branches of foreign banks is also subject to supervision.

Supervision is exercised to the extent provided by this Act over individual banks, branches of foreign banks or other entities and also over consolidated groups of which banks are also part, and over financial conglomerates under § 49c.

(2) The National Bank of Slovakia, in the exercise of supervision over a bank or a branch of a foreign bank, in particular examines and evaluates the management organization, the allocation of responsibilities, the adopted strategies, the established systems and procedures in the performance of permitted banking activities, information flows and the risks to which the bank or branch of a foreign bank is or may be exposed, while at the same time verifying their sufficient coverage by own resources under § 29 para. 3. The National Bank of Slovakia shall carry out a review and evaluation at least once per calendar year in proportion to the nature and scope of the banking activities performed. On the basis of the supervision performed, the National Bank of Slovakia shall assess whether the management organization of the bank or branch of a foreign bank, the adopted strategies, the established systems and procedures in the performance of permitted banking activities and own resources

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correspond to the prudent management of the bank or branch of a foreign bank, and at the same time shall assess the sufficiency of coverage of risks by own resources. The National Bank of Slovakia shall, on the basis of this assessment, notify the bank whether its own resources are sufficient to cover risks; if the own resources are not sufficient to cover risks, the National Bank of Slovakia shall state in the notification the amount of own resources needed to cover risks. The National Bank of Slovakia, in the exercise of supervision, takes into account the possible impact of its decisions on the stability of the financial system, in particular in critical situations under § 48 para. 8 letter c). If the National Bank of Slovakia finds on the basis of the review carried out that a bank or branch of a foreign bank may pose a systemic risk, it shall immediately inform the European Supervisory Authority (European Banking Authority) of the results of this review. 13o)

(3) The subject of supervision is not the resolution of disputes from contractual relationships between banks or branches of foreign banks and their clients, for the hearing and decision of which courts or other authorities are competent under special regulations. 14)

(4) Supervision on a consolidated basis does not replace supervision over individual persons included in a consolidated group and does not replace the exercise of supervision over individual banks and branches of foreign banks under this Act or supervision under special regulations. 15)

(5) Supplementary supervision over financial conglomerates does not replace supervision on a consolidated basis, supervision over individual persons included in a consolidated group, supervision over individual persons included in a financial conglomerate, supervision over individual banks and branches of foreign banks under this Act or supervision under special regulations. 15)

(6) The exercise of supervision on a consolidated basis or the exercise of supplementary supervision over financial conglomerates does not establish an obligation of the National Bank of Slovakia to exercise supervision over individual persons included in a consolidated group or financial conglomerate which are not subject to supervision exercised by the National Bank of Slovakia.

(7) A bank and a branch of a foreign bank are obliged to allow persons entrusted with the exercise of supervision to participate in the meeting of the general meeting of the bank, the supervisory board of the bank, the statutory body of the bank or the management of the branch of a foreign bank.

(8) The National Bank of Slovakia is responsible for the exercise of supervision. Persons who exercise supervision on behalf of the National Bank of Slovakia are not responsible to third parties for consequences caused by the exercise of supervision; this does not affect their responsibility under criminal law provisions or their responsibility towards the National Bank of Slovakia under labour law provisions.

(9) If the National Bank of Slovakia, in the exercise of supervision, finds facts indicating that a criminal offence has been committed, it shall immediately report this to the competent authority active in criminal proceedings.

(10) A supervisory authority of another state may exercise supervision on the territory of the Slovak Republic over the activity of a branch of a foreign bank and over a subsidiary of a foreign bank which is a bank, only on the basis of an agreement concluded between the National Bank of Slovakia and the supervisory authority of another state or in accordance with this Act; the National Bank of Slovakia may conclude such an agreement only on the basis of reciprocity. The supervisory authority of another state is obliged to notify the National Bank of Slovakia in advance of the performance of an on-site supervision on the territory of the Slovak Republic. Authorised persons of the supervisory authority of another state have, in carrying out this supervision, the same powers, duties and responsibilities as employees of the National Bank of Slovakia authorised to carry out on-site supervision under a special regulation; 15a) however, they do not have the duty to draw up a written record of the supervision they have carried out, nor the duty to determine and notify in writing to the supervised entity the time limits for adopting and fulfilling measures to remedy the deficiencies identified during supervision.

(11) The National Bank of Slovakia may carry out supervision over branches of banks operating in the territory of another state and over a subsidiary of a bank that is a bank in the territory of another state, if

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 7 the legal regulations of that state and the agreement concluded between the National Bank of Slovakia and the supervisory authorities of that state permit so. The provisions of § 23, 23a, 23b, 23e, 24, 25 and 27 shall not apply to a subsidiary of a bank referred to in the first sentence if the parent bank in the European Union or a bank controlled by a parent financial holding company in the European Union or a parent mixed financial holding company in the European Union demonstrates that the legal regulations of another state do not permit so.

(12) The Central Securities Depository and a member of the central securities depository 16) are obliged to provide to the National Bank of Slovakia, from the records they keep, the information requested by it for the purpose of carrying out supervision.

(13) In carrying out supervision over individual banks and branches of foreign banks and supervision on a consolidated basis, the National Bank of Slovakia cooperates with the competent supervisory authorities of another member state, with the Slovak Chamber of Auditors, with auditors or audit companies 17) (hereinafter referred to as "auditor"), with operators of payment systems 9 ) and has the right to exchange information with them and to draw their attention to deficiencies identified in the exercise of supervision. The provision of information under this paragraph is not subject to the duty of confidentiality under this Act and special regulations. 18) For the purposes of supervision over a branch of a bank established in another member state, the National Bank of Slovakia shall provide to the competent supervisory authority of another member state, in particular, information on the management and ownership structure of the bank, information concerning compliance with liquidity rules, the maintenance of its own funds and limits on the bank's exposure, other facts that may affect the systemic risk posed by the bank, and information on the deposit protection system, administrative and accounting procedures and the bank's internal control procedures. The National Bank of Slovakia may alert the European Supervisory Authority (European Banking Authority) if its request for cooperation, in particular for the exchange of information, has been refused or has not been dealt with within a reasonable time limit. The National Bank of Slovakia shall provide to the competent supervisory authority of a member state any information and findings concerning the supervision of the bank's liquidity to the extent that they are important for the protection of depositors or investors in the member state in which the bank has a branch; if a liquidity problem occurs or can reasonably be expected to occur, such information shall also include data on the planning and implementation of the recovery plan and on measures taken within the framework of supervision. In the case of a branch of a foreign bank established in the Slovak Republic, the National Bank of Slovakia shall inform the competent supervisory authority of another member state about the deposit protection system applied in the Slovak Republic. Confidential information from the competent supervisory authorities of other member states may be disclosed by the National Bank of Slovakia only with the consent of those supervisory authorities which provided such information. Confidential information provided by supervisory authorities of other Member States may be used by the National Bank of Slovakia only in the exercise of its duties and for the purposes of

a) supervision over supervised entities in checking and monitoring compliance with conditions relating to the commencement of business by supervised entities and the business of supervised entities on an individual basis or a consolidated basis, in particular where it is a matter of monitoring their liquidity, capital adequacy, large exposures, administrative and accounting procedures and internal control mechanisms,

b) the application of sanctions under this Act or special legislation, 15)

c) remedial proceedings against decisions of the National Bank of Slovakia,

d) judicial proceedings for review of decisions of the National Bank of Slovakia or other judicial proceedings relating to supervised entities or to the supervision of supervised entities.

(14) If the National Bank of Slovakia concludes that a branch of a foreign bank is significant, it shall submit an application together with a justification to the supervisory authority of another Member State responsible for the exercise of consolidated supervision over the foreign bank or to the supervisory authority in another Member State which exercises supervision over the foreign bank that established the branch of the foreign bank, in order for it to determine that the branch of that foreign bank is significant; the National Bank

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Slovakia in particular takes into account

a) whether the share of this branch of a foreign bank exceeds 2 % of all deposits received in the Slovak Republic,

b) the probable impact of the suspension or termination of the activities of a foreign bank on the liquidity of the market and on the payment system, settlement system and clearing system in the Slovak Republic and

c) the size and significance of this branch of a foreign bank in terms of the number of clients within the financial system in the Slovak Republic.

(15) The National Bank of Slovakia, for the purpose of determining that a branch of a foreign bank is significant, cooperates with the supervisory authorities pursuant to paragraph 14. If the National Bank of Slovakia and the supervisory authority pursuant to paragraph 14 do not agree within two calendar months of the delivery of the request pursuant to paragraph 14 on the determination that a branch of a foreign bank is significant, the National Bank of Slovakia shall, within two calendar months after the expiry of this period, determine whether this branch of a foreign bank is significant. Národná banka Slovenska shall take into account the opinions and reservations of the supervisory authority under paragraph 14. If, within two months of delivery of the request under paragraph 14, the supervisory authority under paragraph 14 requests the European Supervisory Authority (European Banking Authority) for assistance in reaching an agreement in accordance with a special regulation, 19) Národná banka Slovenska shall determine whether the branch of a foreign bank is significant in accordance with the decision of the European Supervisory Authority (European Banking Authority). If the European Supervisory Authority (European Banking Authority) does not issue such a decision no later than one month after delivery of the request for assistance, Národná banka Slovenska shall determine independently whether the branch of a foreign bank is significant. Národná banka Slovenska shall forward the information that the branch of a foreign bank is significant, together with the complete reasoning of the supervisory authority under paragraph 14. The determination that the branch of a foreign bank is significant shall not affect the rights and obligations of Národná banka Slovenska under this Act and other related generally binding legal regulations.

(16) Národná banka Slovenska shall notify the competent supervisory authority of the member state in which the branch of a bank designated as significant is located of the information under § 48 para. 9 letter

c) and d) and in cooperation with this competent supervisory authority shall proceed in accordance with § 48 para. 7 letter c).

If Národná banka Slovenska learns of a critical situation under § 48 para. 1 in a bank whose branch is designated as significant, it shall immediately alert the competent supervisory authority of the member state in which the significant branch of the bank is located and another public authority in that member state that has information about this branch of the bank. Národná banka Slovenska shall notify the competent supervisory authority of the member state in which the significant branch of the bank is located of the result of the risk assessment under paragraph 2, as well as its decisions under § 50 to the extent relevant for this branch of the bank. Národná banka Slovenska shall also consult with the competent supervisory authority on corrective measures if relevant for liquidity risks.

(17) If Národná banka Slovenska is not the supervisory authority responsible for performing supervision on a consolidated basis and does not proceed under § 48 paras. 9 and 10, and if Národná banka Slovenska performs supervision over a bank with a branch in another member state that is designated as significant, Národná banka Slovenska

a) shall establish and chair a working group of supervisory authorities (hereinafter referred to as the "working group") in order to facilitate cooperation under paragraphs 13 and 16,

b) shall determine which competent supervisory authority participates in the meeting and activities of the working group,

c) shall take into account the importance of the supervisory authority's activity to be planned or coordinated, and in particular the possible consequences for the stability of the financial system under paragraph 2 and the obligations set out in paragraph 16,

d) shall fully inform each member of the working group in advance of the date, place and agenda of the working group meeting,

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 9

e) shall inform each member of the working group in a timely and complete manner of the decisions adopted at the working group meeting and of the measures taken.

(18) Information provided under paragraph 12 may be used only for the purposes of supervision, audit and for the purposes of auditor control. The authorities and persons referred to in paragraph 12 are obliged to ensure the confidentiality of this information and to maintain confidentiality about it under this Act and special regulations; 18) these information may be provided by the authorities and persons referred to in paragraph 12 to each other only with the consent of Národná banka Slovenska.

(19) Národná banka Slovenska shall publish methodological guidelines and recommendations related to supervision in the Bulletin of Národná banka Slovenska.

(20) Národná banka Slovenska shall publish on its website

a) generally binding legal regulations, methodological guidelines and recommendations related to supervision of the financial market,

b) the manner of exercising national discretion in connection with the transposition of European Union legal acts and the options available to banks under this Act,

c) general evaluation criteria and methodology that Národná banka Slovenska uses in performing supervision over banks and branches of foreign banks,

d) summary statistical data on key indicators related to changes in the regulation of the banking sector,

e) a list of recognized rating agencies, 20)

f) a list of higher territorial units or municipalities to which, for the purposes of calculating risk-weighted exposures using the standardized approach for credit risk, the same risk weight as to states is assigned.

(21) Based on findings resulting from the review under paragraph 2, Národná banka Slovenska may increase the number and frequency of on-site inspections, require the submission of additional reports, more frequent review of strategic plans or business plans, or carry out thematic focus of inspections.

(22) Národná banka Slovenska shall annually prepare a plan of on-site inspections and a plan of remote inspections. These inspection plans shall contain information in particular on

a) the performance of supervision,

b) entities that are subject to supervision under paragraph 1,

c) the plan of inspections under § 47 para. 9 and § 48 para. 9.

(23) When preparing inspection plans under paragraph 22, in the case of banks, Národná banka Slovenska shall take into account in particular

a) the results of stress testing of banks,

b) information and findings from the competent supervisory authority of another member state in which the branch of the bank carries out its activities,

c) systemic risk,

d) those banks for which Národná banka Slovenska considers it necessary.

(24) The conditions under § 30 to 32, under which prior consent was granted to the bank under § 30 to 32, the bank is obliged to comply with throughout the entire period of validity of the prior consent.

Národná banka Slovenska shall reassess at least every three calendar years the fulfilment of the conditions under which prior consent was granted to the bank under § 30 to 32, taking into account in particular

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new types of transactions.

(25) If a bank ceases to meet the conditions under § 30 to 32 under which its previous consent was granted, Národná banka Slovenska may withdraw the granted previous consent from the bank or impose the necessary measures to improve the internal approach under § 30 to 32. Such measures may include, in addition to the measures under § 50, a measure in the form of submitting a recovery plan in accordance with the conditions under which its previous consent was granted, with a specified deadline for its submission and implementation. If the bank is unable to submit and implement the recovery plan within the specified deadline, Národná banka Slovenska shall withdraw the granted previous consent under § 30 to 32 or restrict it only to the part that is in accordance with the required conditions for the internal approach under § 30 to 32. If the said non-compliance with the conditions under which its previous consent under § 30 to 32 was granted could lead to inadequate own resources, Národná banka Slovenska is entitled to require the bank to demonstrate compliance with the conditions for own resources under a special regulation. 20a)

(26) Národná banka Slovenska shall notify the European Supervisory Authority (European Banking Authority) of information on

a) findings from the reviews and evaluations under paragraph 2,

b) the methodology on which the decisions under paragraphs 2, 22 to 25 and § 50 are based.

(27) Národná banka Slovenska shall carry out stress testing at least once a year and may publish the results of the carried-out stress tests 20b) or provide them to the European Supervisory Authority (European Banking Authority) for the purposes of publishing the results of stress tests from the European Union.

(28) If the competent supervisory authority of a Member State provides information and findings to Národná banka Slovenska concerning a branch of a bank in the performance of banking activities or a bank in the performance of banking activities in the territory of that Member State, on the basis of which corrective measures need to be taken, Národná banka Slovenska shall notify and, upon request, explain to the competent supervisory authority of the Member State what corrective measures it has taken. If the competent supervisory authority of a Member State, due to disagreement with the procedure of Národná banka Slovenska, adopts its own corrective measures and Národná banka Slovenska disagrees with these corrective measures, it may submit the matter for an opinion to the European Supervisory Authority (European Banking Authority) under a special regulation. 19)

(29) If Národná banka Slovenska provides information and findings to the competent supervisory authority of a Member State concerning a branch of a foreign bank under § 11 para. 1 in the performance of banking activities or a foreign bank in the performance of banking activities under § 11 para. 2 in the territory of the Slovak Republic, on the basis of which corrective measures need to be taken, and this Member State does not adopt adequate measures, Národná banka Slovenska may, after informing this competent supervisory authority and the European Supervisory Authority (European Banking Authority), adopt appropriate measures to prevent further breaches in order to protect the interests of depositors, investors and other entities to which services are provided, or to protect the stability of the financial system.

(30) In addition to credit risk, market risk and operational risk, Národná banka Slovenska shall also review and evaluate in the performance of supervision

a) the results of stress tests carried out by a bank that uses the internal ratings approach under a special regulation, 20c)

b) exposures to concentration risk and the management of this risk by the bank, including their compliance with a special regulation, 20d)

c) the suitability and manner of applying procedures for managing the risk associated with the mitigation of

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 11 credit risk,

d) the extent of the adequacy of the bank's own resources in relation to assets that are the subject of securitisation, taking into account their economic substance and the degree of risk transfer,

e) exposures to liquidity risk, the measurement and management of liquidity risk by the bank, including analyses of alternative scenarios, the management of risk-mitigating factors,

f) the effects of risk distribution and the manner in which these effects are incorporated into the risk measurement system, the results of stress testing carried out by a bank that uses its own model for calculating market risk under a special regulation, 20e)

g) the geographical distribution of the bank's exposures,

h) the bank's business model,

i) systemic risk.

(31) For the purposes of paragraph 30 letter e), Národná banka Slovenska shall also review and evaluate in the performance of supervision

a) the overall management of the bank's liquidity risk, taking into account the bank's position on the financial market,

b) whether the bank has provided implicit support for securitisation; if it is found that the bank has provided implicit support for securitisation more than once, it shall adopt a measure that will take into account the risk that the bank will provide implicit support for securitisation in the future,

c) whether the adjustments to the valuation of positions or portfolios in the trading book under a special regulation 20f)

enable the bank under normal market conditions to sell or hedge its positions in a short time without incurring a significant loss,

d) the bank's exposures to interest rate risk arising from non-trading activities; if, as a result of a sudden and unexpected change in interest rates by more than 200 basis points or by a value determined by the European Supervisory Authority (European Banking Authority)

the economic value of the bank decreased by more than 20 % of the value of own resources, Národná banka Slovenska shall impose a corrective measure,

e) the bank's exposures to excessive use of financial leverage,

f) the bank's management and control system, the competence of the members of the statutory body and the members of the supervisory board performing their duties.

§ 6a

(1) A bank that uses the internal ratings approach for credit risk under § 30 or its own model for calculating market risk under § 31 is obliged to submit to Národná banka Slovenska annually a report on the results of calculations within their internal approaches for their exposures or positions that are part of the reference portfolios in accordance with a special regulation.

(2) On the basis of banks' reports on the results of calculations within their internal approaches under § 30 and 31 for their exposures or positions that are part of reference portfolios, Národná banka Slovenska monitors, for exposures or transactions in the reference portfolio resulting from the bank's internal approaches, the range of risk-weighted exposure amounts or own funds requirements excluding operational risk. Národná banka Slovenska shall at least once a year assess the quality of these internal approaches, in particular with regard to

a) approaches that show significant differences in own funds requirements for the same exposure,

b) approaches where the dispersion is inappropriately high or inappropriately low and where there is also significant and systematic underestimation of own funds requirements.

Page 12 Collection of Laws of the Slovak Republic 483/2001 Z. z.

(3) If a bank differs significantly in its internal approaches from the majority of comparable banks or if the bank's internal approaches have few common characteristics with the approaches of the majority of comparable banks, leading to large differences in results, Národná banka Slovenska shall examine the causes of this fact. If a bank's internal approaches lead to underestimation of own funds requirements that is not related to differences in the associated risks of exposures or positions, Národná banka Slovenska shall impose a measure on the bank under § 50.

(4) Measures imposed under paragraph 3 must not

a) lead to standardisation or to favouring certain methods used within banks' internal approaches under paragraphs 2 and 3,

b) create incorrect incentives for banks,

c) cause herd behaviour of banks.

PART THREE BANKING LICENCE § 7

(1) Národná banka Slovenska decides on the granting of a banking licence. Národná banka Slovenska decides on the granting of a banking licence for banks under a special regulation 21) and on the granting of a banking licence to carry out mortgage transactions after consultation with the Ministry of Finance of the Slovak Republic (hereinafter referred to as the "ministry"). An application for the granting of a banking licence shall be submitted to Národná banka Slovenska.

(2) The following conditions must be met for the granting of a banking licence under paragraph 1:

a) a monetary deposit into the bank's share capital of at least 16 600 000 euros and a monetary deposit into the share capital of a bank that carries out mortgage transactions of at least 33 200 000 euros,

b) a transparent and credible origin 21a) of the monetary deposit into the share capital and other financial resources of the bank,

c) the fitness and propriety of persons who will be shareholders with a qualifying holding in the bank, and the transparency of the relationships of these persons with other persons, in particular the transparency of holdings in the share capital and voting rights,

d) the proposal of members of the statutory body under § 24 para. 1,

e) the professional competence and credibility of natural persons proposed as members of the statutory body, as proxy, as members of the supervisory board, as senior employees and as head of the internal control and internal audit unit,

f) the draft articles of association of the bank,

g) a business plan based on the proposed strategy of the bank's activities supported by realistic economic calculations,

h) the transparency of the group with close links to which a shareholder with a qualifying holding in the bank also belongs,

i) close links within the group under letter h) do not prevent the performance of supervision,

j) the legal order and the manner of its application in the state in whose territory the group under letter h) has close links do not prevent the performance of supervision,

k) the registered office of the future bank, its central administration and the performance of its banking activities must be in the territory of the Slovak Republic; a bank may also carry out banking activities outside the territory of the Slovak Republic through its branch or without establishing a branch under the conditions laid down by this Act,

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 13

l) demonstrate the financial ability of the shareholders founding the bank to overcome any adverse financial situation of the bank,

m) the conditions are adequately met as for the granting of a licence to provide investment services 22a) in relation to the required scope of investment services, investment activities and ancillary services,

n) the conditions are adequately met as for the granting of a licence to provide payment services 22b) in relation to the required scope of providing payment services,

o) the conditions are adequately met as for the granting of a licence to issue electronic money 22c) in relation to the required issuance of electronic money,

p) suitable and adequate technical systems, resources and procedures for the proper performance of banking activities and material and technical support for the performance of banking activities,

q) suitable and adequate organisational and personnel prerequisites for the performance of banking activities, a functional management and control system including an internal control and internal audit unit, a risk management system and rules of prudent business conduct,

r) the applicant has not been finally convicted of a criminal offence; this fact is demonstrated and documented by an extract from the criminal register not older than three months.

(3) Národná banka Slovenska shall reject an application under paragraph 1 if the applicant fails to meet any of the conditions set out in paragraph 2. Economic needs of the financial market cannot be a reason for rejecting an application under paragraph 1.

(4) Before commencing the performance of authorised banking activities, a bank is obliged to demonstrate to Národná banka Slovenska

a) the payment of the monetary deposit into the share capital in full,

b) technical, organisational and personnel readiness for the performance of the bank's authorised banking activities, the existence of the bank's management and control system including an internal control and internal audit unit and a risk management system,

c) compliance with the obligation under § 27 para. 13.

(5) A bank may commence the performance of banking activities listed in the banking licence on the basis of a written notification from Národná banka Slovenska on the fulfilment of the conditions under paragraph 4.

(6) A bank is obliged to comply with the conditions under paragraphs 2 and 4 throughout the entire period of validity of the banking licence.

(7) An applicant whose shareholder with a qualifying holding is a foreign bank shall submit, together with the application for the granting of a banking licence, a binding written statement of the supervisory authority of the state in which that foreign bank has its registered office, on the establishment of a bank in the territory of the Slovak Republic, as well as a binding written undertaking of that supervisory authority to provide timely written information to the National Bank of Slovakia on changes in the maintenance of its own funds in relation to the own funds and liquidity requirements of the foreign bank and on other facts that could have a negative impact on the ability of the foreign bank to meet its obligations.

(8) The National Bank of Slovakia shall discuss the application for the granting of a banking licence with the relevant supervisory authorities of the member state pursuant to § 7a para. 1, if a banking licence is to be granted pursuant to paragraph 1 to an applicant,

a) which is to be a subsidiary of a foreign bank with its registered office in the territory of a member state,

b) which is to be a subsidiary of the parent company of a foreign bank with its registered office in the territory of a member state,

Page 14 Collection of Laws of the Slovak Republic 483/2001 Z. z.

c) which is controlled by the same persons who control a foreign bank with its registered office in the territory of a member state,

d) which is to be a subsidiary of an insurance company or a securities dealer with its registered office in the territory of a member state,

e) which is to be a subsidiary of the parent company of an insurance company or a securities dealer with its registered office in the territory of a member state,

f) which is controlled by the same persons who control an insurance company or a securities dealer with its registered office in the territory of a member state.

(9) The measure, 23) which is issued by the National Bank of Slovakia and which is announced in the Collection of Laws of the Slovak Republic (hereinafter referred to as the "Collection of Laws"), shall lay down

a) the requirements of the application for the granting of a banking licence pursuant to paragraph 1, including the requirements of the application of a bank which is to carry out activities pursuant to a special regulation, 21) and the application of a bank which is to carry out mortgage transactions and the documents attached to the application,

b) details of the conditions pursuant to paragraph 2 and the manner of demonstrating compliance with these conditions,

c) the manner of demonstrating compliance with the obligations pursuant to paragraph 4.

(10) A fit person for the purposes of this Act shall be a person who credibly demonstrates compliance with the conditions pursuant to paragraph 2 letter b) and from all circumstances it is clear that he will ensure the proper and safe performance of banking activities in the interest of the stability of the banking sector.

(11) A qualifying holding for the purposes of this Act shall mean a qualifying holding pursuant to a special regulation. 23a)

(12) An indirect share for the purposes of this Act shall mean a share held indirectly, through one or more legal entities over which the person exercises control.

(13) A group with close links for the purposes of this Act shall mean a close link pursuant to a special regulation. 23b)

(14) A member of the statutory body of a bank, a member of the supervisory board of a bank, the head of a branch of a foreign bank, the deputy head of a branch of a foreign bank, a procurator, a senior employee and the head of the internal control and internal audit department of a bank or a branch of a foreign bank may be appointed and may perform such functions only if he is a person with appropriate professional competence. Professional competence for the purposes of this Act in the case of natural persons proposed as members of the statutory body of a bank, as a procurator, as the head of a branch of a foreign bank or his deputy, as senior employees and as the head of the internal control and internal audit department shall mean completed university education and at least three years' experience in the field of banking or in another financial field and three years' management experience in the field of banking or in another financial field. The National Bank of Slovakia may also recognise as a professionally competent person a person who has complete secondary education, complete secondary vocational education or other equivalent foreign education and at least seven years' experience in the field of banking or in another financial field, of which at least three years in a management position. In the case of persons proposed as members of the supervisory board of a bank, professional competence shall mean adequate knowledge and experience in the field of banking or in another financial field. The measure which may be issued by the National Bank of Slovakia and which is announced in the Collection of Laws shall lay down details of what is understood as professional competence for the performance of the function of a member of the supervisory board of a bank, what is understood as professional competence for the performance of the function of a member of the statutory body of a bank, the head of a branch of a foreign bank, the deputy head of a branch of a foreign bank, a procurator, a senior employee or the head of the internal control and internal audit department of a bank

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 15 or a branch of a foreign bank and how this professional competence is demonstrated.

(15) A trustworthy person for the purposes of this Act shall be a natural person who

a) has not been finally convicted of a crime of a property nature, of a crime committed in connection with the performance of a management function or of an intentional crime; these facts are demonstrated and documented by an extract from the criminal register 24) not older than three months; in the case of a foreigner, these facts are demonstrated and documented by an equivalent certificate issued by the competent authority of the state of his habitual residence,

b) has not acted in the last ten years in a function referred to in paragraph 2 letter e) in a bank, in a foreign bank, in a financial institution 13m) or in the function of the head of a branch of a foreign bank, a senior employee of a branch of a foreign bank, whose banking licence or other licence to carry out activities was withdrawn, at any time during the period of one year before the withdrawal of such licence,

c) has not acted in the last ten years in a function referred to in paragraph 2 letter e) in a bank, in a foreign bank or in a financial institution 13m) over which forced administration or a foreign reorganisation measure was introduced, at any time during the period of one year before the introduction of forced administration or a foreign reorganisation measure pursuant to § 53 para. 9,

d) has not held in the last ten years the position referred to in paragraph 2 letter e) in a bank, a foreign bank or a financial institution, 13m) which entered into liquidation or which became insolvent, 24aa) whose assets were declared bankrupt, restructuring was permitted, forced settlement was confirmed or settlement was permitted, whose petition for bankruptcy was dismissed for lack of assets, against which bankruptcy proceedings were stopped for lack of assets or whose bankruptcy was cancelled for lack of assets, at any time in the period of one year before the occurrence of such fact,

e) has not had in the last ten years a final fine imposed higher than 50 % of the amount that could have been imposed on it under § 50 paragraph 2,

f) is not considered an untrustworthy person under special regulations 24a) in the area of the financial market,

g) has performed in the last ten years its functions or conducted business reliably, honestly and without violating generally binding legal regulations and, with regard to these facts, provides a guarantee that it will perform the proposed function reliably, honestly and without violating generally binding legal regulations, including the fulfilment of obligations arising from generally binding legal regulations, from the articles of association of the bank or foreign bank, or from their internal legal regulations and management acts.

(16) A person referred to in paragraph 15 letters b) to d) and f) may be recognised by Národná banka Slovenska as trustworthy if it follows from the nature of the matter that, from the point of view of the time of holding the position referred to in paragraph 2 letter e) in a financial market entity 89), this person could not by its activity cause the consequences referred to in paragraph 15 letters b) to d); this applies equally to a person assessed under paragraph 15 letter g) if, with regard to the nature of the whole matter and from the point of view of the time of holding the position when a violation covered by paragraph 15 letter g) is found, it provides a guarantee that it will perform the proposed function reliably, honestly and without violating generally binding legal regulations, including the fulfilment of obligations referred to in paragraph 15 letter g). When assessing the trustworthiness of a natural person, Národná banka Slovenska takes into account the reasons for the entry of a bank, foreign bank, securities dealer, foreign securities dealer or financial institution into liquidation and the reasons for the withdrawal of a banking licence or another licence to carry out activities.

(17) For the purposes of this Act, a subsidiary means a subsidiary under a special regulation. 24aaa)

(18) For the purposes of this Act, a parent company means a parent company under

Page 16 Collection of Laws of the Slovak Republic 483/2001 Z. z.

osobitného predpisu. 24aab)

(19) For the purposes of this Act, control means control under a special regulation. 24aac)

(20) For the purposes of this Act, a senior employee means a person directly subordinate to the statutory body of a bank or to the head of a branch of a foreign bank, or to a deputy of the head of a branch of a foreign bank, who manages the activities or part of the activities of the bank or branch of a foreign bank.

(21) For the purposes of this Act, significant influence means the possibility of exercising influence over the management of a legal person comparable to the influence corresponding to a share of 10 % or more in the registered capital or voting rights of a legal person.

§ 7a

(1) Národná banka Slovenska shall discuss an application for the granting of a banking licence with the competent authority

a) of supervision of the member state in which the foreign bank has its registered office, if it concerns the granting of a banking licence under § 7 paragraph 8 letters a) to c),

b) supervision of the member state responsible for the supervision of insurance companies or securities dealers and in which the foreign insurance company or foreign securities dealer has its registered office, in the case of the granting of a banking licence under § 7(8)(d) to (f).

(2) Národná banka Slovenska shall discuss with the competent supervisory authority of the member state under paragraph 1 in particular the suitability and appropriateness of persons who are shareholders with a qualifying holding in the foreign bank, and the professional competence and trustworthiness of natural persons who are members of the statutory body of the persons referred to in paragraph 1(b).

(3) If, by the granting of a banking licence, the bank would become part of a consolidated group under § 44 to 49, which also includes a financial holding company, or if it would become part of a financial conglomerate under § 49a to 49o, which also includes a mixed financial holding company, a condition for the granting of a banking licence is also the demonstration of the professional competence and trustworthiness of the natural persons who are members of the statutory body of that financial holding company or that mixed financial holding company.

(4) Professional competence of the persons referred to in paragraph 3 shall mean adequate knowledge of the financial sector and experience in the field of the financial sector. The assessment of the trustworthiness of the persons referred to in paragraph 3 shall likewise be governed by § 7(15).

§ 8

(1) Národná banka Slovenska shall decide on the granting of a banking licence to a foreign bank to carry out banking activities through its branch on the territory of the Slovak Republic.

The application for the granting of a banking licence shall be submitted by the foreign bank to Národná banka Slovenska.

(2) For the granting of a banking licence under paragraph 1, the following conditions must be met:

a) sufficient volume and transparency of the origin of financial resources provided by the foreign bank to its branch, with regard to the scope and riskiness of the branch's business,

b) trustworthiness of the foreign bank and its financial capacity adequate to the scope of the branch's business,

c) professional competence and trustworthiness of the persons proposed by the foreign bank for the head of the foreign bank's branch and his deputy and for the head of the internal control and internal audit department,

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 17

d) the foreign bank's business plan based on the proposed strategy of the branch's activities, supported by realistic economic calculations,

e) transparency of the group with close links to which the foreign bank belongs,

f) close links within the group pursuant to letter e) do not prevent the performance of supervision,

g) the legal order and the manner of its application in the state on whose territory the group pursuant to letter e) has close links do not prevent the performance of supervision,

h) a foreign bank which wishes to operate through a branch on the territory of the Slovak Republic has its registered office, headquarters and carries out its activities in the same state,

i) the conditions are adequately met as for the granting of a licence to provide investment services 22a) in relation to the requested scope of investment services and investment activities and ancillary services,

j) the conditions are adequately met as for the granting of a licence to provide payment services 22b) in relation to the requested scope of providing payment services,

k) the conditions are adequately met as for the granting of a licence to issue electronic money 22c) in relation to the requested issuance of electronic money,

l) suitable and adequate technical systems, resources and procedures for the proper performance of banking activities and material and technical provision for the performance of banking activities,

m) suitable and adequate organisational and personnel prerequisites for the performance of banking activities, a functional management and control system including an internal control and internal audit unit, a risk management system and rules of prudent business conduct.

(3) Národná banka Slovenska shall reject an application pursuant to paragraph 1 if the applicant fails to meet any of the conditions set out in paragraph 2. Economic needs of the market cannot be a reason for rejecting an application pursuant to paragraph 1.

(4) A branch of a foreign bank is obliged, before commencing the performance of authorised banking activities, to demonstrate to Národná banka Slovenska

a) the technical, organisational and personnel readiness for the performance of authorised banking activities of the branch of the foreign bank, the existence of the management and control system of the branch of the foreign bank including an internal control and internal audit unit and a risk management system,

b) the fulfilment of the obligation pursuant to § 27 par. 13.

(5) A branch of a foreign bank may commence the performance of authorised banking activities on the basis of a written notification by Národná banka Slovenska on the fulfilment of the conditions pursuant to paragraph 4.

(6) A branch of a foreign bank is obliged to comply with the conditions pursuant to paragraphs 2, 4 and 9 throughout the entire period of validity of the banking licence.

(7) A foreign bank shall submit, simultaneously with the application for the granting of a banking licence, a binding written statement of the supervisory authority of the state in which the foreign bank has its registered office, on the establishment of its branch on the territory of the Slovak Republic, as well as a binding written undertaking of this supervisory authority on the timely written informing of Národná banka Slovenska about changes in the maintenance of its own funds in relation to the requirements for own funds and liquidity of the foreign bank and about other facts which could have a negative impact on the ability of the foreign bank and its branch to meet their obligations.

(8) A branch of a foreign bank must always state the designation "branch of a foreign bank" in its name in the designation of its registered office and in written contact.

(9) In the banking licence pursuant to paragraph 1, the performance of mortgage

Page 18 Collection of Laws of the Slovak Republic 483/2001 Z. z.

transactions may be authorised only if the foreign bank which applies for a banking licence pursuant to paragraph 1 has authorised the performance of mortgage transactions in the state in which it has its registered office, and if the legal order of this state guarantees the same rights for debtors from mortgage loans or municipal loans and for holders of mortgage bonds or municipal bonds issued in the Slovak Republic in the performance of mortgage transactions pursuant to this Act and special regulations 24ab) including the same status in bankruptcy proceedings 24ac) as for debtors from mortgage loans or municipal loans and for holders of mortgage bonds or municipal bonds in the state in which it has its registered office, but at least to the extent of the rights secured to debtors from mortgage loans or municipal loans and to holders of mortgage bonds or municipal bonds by the legal order of the Slovak Republic.

(10) The measure, 23) which is issued by Národná banka Slovenska and which is announced in the collection of laws, shall lay down

a) the requirements of the application for the granting of a banking licence pursuant to paragraph 1 including the requirements of the application pursuant to paragraph 1 for a branch which is to perform mortgage transactions, and the documents attached to the application,

b) details of the conditions pursuant to paragraph 2 and the manner of demonstrating the fulfilment of these conditions,

c) the manner of demonstrating the fulfilment of obligations pursuant to paragraph 4.

(11) The fact that the legal form of a foreign bank does not correspond to the form of a joint-stock company cannot be a reason for rejecting an application for a banking licence pursuant to paragraph 1.

§ 9

(1) A banking licence is granted for an indefinite period and is not transferable to another person nor does it pass to a legal successor.

(2) A banking licence contains a precise definition of the authorised banking activities and may also contain conditions which the bank or branch of a foreign bank must fulfil before commencing the authorised activity, or which it must comply with in the performance of the authorised banking activity.

(3) In a banking licence, the scope or manner of performance of certain banking activities may be restricted. At the request of a bank or a branch of a foreign bank, the banking licence may be extended by a decision to include further banking activities; the same applies to the extension of a restricted scope or manner of performing banking activities.

(4) A bank is obliged to inform Národná banka Slovenska in advance in writing about changes in the conditions which were the basis for the granting of the banking licence pursuant to § 7; the election or appointment of persons proposed as members of the statutory body, members of the supervisory board, the appointment of a procurator, the appointment of a senior employee and the head of the internal control and internal audit unit and a change in the registered office of the bank require the prior consent of Národná banka Slovenska, otherwise this election, appointment, nomination or change is invalid. The bank is obliged, without delay after such a fact occurs, to inform the National Bank of Slovakia in writing of the day on which the function of a member of the statutory body and a member of the supervisory board begins and the day on which it ends.

The condition 24b) for the validity and effectiveness of an amendment to the bank's articles of association or a new bank's articles of association (hereinafter referred to as "amendment to the articles of association") is the granting of the consent of the National Bank of Slovakia. The bank is obliged, no later than on the third working day after receiving the decision on the amendment to the articles of association, to deliver to the National Bank of Slovakia a written application for the granting of the consent of the National Bank of Slovakia to the relevant amendment to the articles of association, with the attached text of this amendment to the articles of association and with the full text of the articles of association before their amendment and after their amendment. If the National Bank of Slovakia does not grant consent to the amendment to the articles of association, this amendment is invalid. If, however, the National Bank of Slovakia does not decide on the application within 30 days from the day of delivery of the complete

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 19 application, consent to the relevant amendment to the articles of association is considered to be granted.

(5) A foreign bank and a branch of a foreign bank are obliged to inform the National Bank of Slovakia in writing in advance of changes to the conditions that were the basis for the granting of a banking licence under § 8; the appointment of the head of a branch of a foreign bank, the appointment of senior employees, the appointment of the head of the internal control and internal audit department, and a change in the registered office of a branch of a foreign bank require the prior consent of the National Bank of Slovakia, otherwise this appointment and change are invalid.

(6) A bank and a branch of a foreign bank are obliged to submit to the competent court a proposal for the registration of the permitted banking activities in the commercial register on the basis of the banking licence within ten days from the day on which the banking licence became final, and are obliged to deposit with the National Bank of Slovakia an extract from the commercial register within ten days from the day on which the court decision on the performance of the registration in the commercial register or of a change to the registration in the commercial register became final.

§ 10 A banking licence cannot be granted if this would be contrary to an international treaty by which the Slovak Republic is bound.

§ 11

(1) A foreign bank with its registered office in the territory of a member state may perform banking activities under § 2 para. 2 in the territory of the Slovak Republic through its branch, with the exception of banking activities under § 2 para. 2 letters m) and n), without a banking licence, if the authorisation for their performance was granted to this foreign bank in the member state, and on the basis of a written statement of the competent supervisory authority of the member state delivered to the National Bank of Slovakia.

(2) A foreign bank under paragraph 1 is further authorised to perform banking activities under § 2 para. 2, with the exception of banking activities under § 2 para. 2 letters m) and n), also without establishing a branch, and on the basis of a written notification of the competent supervisory authority of the member state about the anticipated banking activities delivered to the National Bank of Slovakia before the first execution of a banking transaction.

(3) The activities listed in § 2 para. 2, except for accepting deposits, may also be performed in the territory of the Slovak Republic in accordance with paragraphs 1 and 2 by a foreign financial institution with its registered office in the territory of a member state, which is a subsidiary of a bank or of a foreign bank under paragraph 1;

such a foreign financial institution may perform these activities if its articles of association or articles of partnership permit it, and under the following conditions:

a) the foreign bank or foreign banks have authorisation to perform banking activities in the territory of the member state by whose legal order the foreign financial institution is governed,

b) the foreign financial institution actually performs banking activities in the territory of the same member state,

c) the foreign bank or foreign banks own at least 90 % of the voting rights of the foreign financial institution,

d) the foreign bank or foreign banks ensure the prudent management of the foreign financial institution and ensure irrevocable joint and several liability for the obligations that the foreign financial institution has assumed; the competent supervisory authority of the member state must agree with the manner of the liability, and

e) the foreign financial institution is subject to consolidated supervision over the consolidated whole of the foreign bank or foreign banks.

Page 20 Collection of Laws of the Slovak Republic 483/2001 Z. z.

(4) The facts stated in paragraph 3 are proven by the foreign financial institution to the National Bank of Slovakia by a written confirmation of the competent supervisory authority of the member state. The provisions of § 16 to 18 and § 20 apply mutatis mutandis to this foreign financial institution.

(5) A foreign bank that does not enjoy the benefits of a single banking licence under European Union law, or a foreign bank with its registered office in a state that does not enjoy the benefits of a single banking licence under European Union law, cannot perform banking activities in the territory of the Slovak Republic through its branch without a banking licence.

(6) The banking activities listed in § 2 para. 2 letters m) and n) may be performed by a foreign bank under paragraph 1 only on the basis of a banking licence under § 8.

(7) The provisions of § 2 para. 10, § 3, § 4 para. 1, § 6 para. 8 first sentence and para. 9, § 7 para. 8, § 9 para. 5, § 22, § 28 para. 1 letter d) in the case of the sale of a branch of a foreign bank or a part thereof, and § 64 shall not apply to a foreign bank under paragraph 1; nor shall the provisions of § 8 apply to a foreign bank under paragraph 1, except in the cases stated in paragraph 6.

§ 12

(1) The National Bank of Slovakia shall, within two months of the delivery of the statement of the competent supervisory authority of the member state that it has no reason to doubt the organisational structure and financial situation of the foreign bank under § 11 para. 1, prepare for supervision over the branch of this foreign bank, and if necessary, notify it within this period of the conditions under which the planned activities may or must be performed in the public interest in the territory of the Slovak Republic, and shall likewise notify it of the provisions of generally binding legal regulations of the Slovak Republic that will apply to its activity.

(2) After the delivery of the statement under paragraph 1 or after the futile expiry of two months, a foreign bank and a branch of a foreign bank under § 11 para. 1 may carry out banking activities in the territory of the Slovak Republic.

§ 13

(1) A bank that wishes to establish its branch in the territory of a member state shall apply in writing to Národná banka Slovenska for the granting of consent to establish a branch in the territory of a member state.

The bank shall state in the application

a) the member state in whose territory it wishes to establish a branch,

b) the seat of the branch in the member state,

c) the names and surnames of the persons responsible for the management of the branch,

d) a business plan containing in particular a calculation of the anticipated activities and the proposed strategy of the branch's activities supported by realistic economic calculations and

e) the organisational structure of the branch.

(2) If Národná banka Slovenska has no grounds to doubt the organisational structure and financial situation of the bank in relation to the authorised banking activities, it shall notify its decision on the granting of consent within three months of the delivery of the complete application under paragraph 1 to the competent supervisory authority of the member state and to the bank; at the same time, it shall also notify the competent authority of the other member state of the amount and composition of the bank's own funds, the amount and method of calculating the value corresponding to the bank's own funds requirement and details of the deposit protection system in the Slovak Republic.

(3) If there are doubts about the facts referred to in paragraph 2, Národná banka Slovenska

483/2001 Z. z. Zbierka zákonov Slovenskej republiky Strana 21 shall notify its decision on the refusal to grant consent within three months of the delivery of the complete application under paragraph 1 to the competent supervisory authority of the member state and to the bank.

(4) Changes in the data referred to in paragraphs 1 and 2 shall be notified in writing by the bank at least 30 days before the implementation of the planned changes to Národná banka Slovenska and to the competent supervisory authority of the member state.

(5) If a bank wishes to carry out banking activities in the territory of a member state under § 2 para. 2 with the exception of banking activities under § 2 para. 2 letters m) and n) without establishing a branch, it shall notify in writing the anticipated banking activities before the first execution of a banking transaction to Národná banka Slovenska, which shall send this notification within one month to the competent supervisory authority of the member state.

(6) If a bank wishes to establish or acquire a financial institution in the territory of a member state, it shall notify in advance in writing to Národná banka Slovenska the intention to establish or acquire this financial institution and shall also notify in writing its activities.

(7) If a financial institution with its seat in the territory of the Slovak Republic, which is a subsidiary of a bank or a subsidiary of two or more banks, carries out the activities referred to in § 2 para. 2 except for accepting deposits in a member state and does not meet the equivalent conditions referred to in § 11 para. 3 letters a) to e), Národná banka Slovenska shall immediately notify these facts to the competent supervisory authority of the member state.

§ 14

(1) Supervision over a branch of a bank established in the territory of a member state shall be carried out by Národná banka Slovenska. Supervision over the liquidity of this branch shall be carried out by the competent supervisory authority of the member state in cooperation with Národná banka Slovenska, unless they agree otherwise. This branch shall also be subject to measures adopted by the relevant member state within the framework of its monetary policy; in the case of states that have adopted the euro as their currency, this branch shall be subject to measures adopted by the European Central Bank.

(2) If the competent supervisory authority of a member state alerts Národná banka Slovenska that a branch of a bank, in the exercise of banking activities in the territory of that member state, is violating legal regulations, Národná banka Slovenska shall take the necessary measures to end the unlawful state.

(3) If a branch of a bank, in the exercise of banking activities in the territory of a member state, violates the legal regulations of the member state, it is obliged to carry out or tolerate the measures adopted by the competent supervisory authority of the member state.

§ 15 In the exercise of supervision under § 14 in the area of monitoring risks arising from activities on the financial market in the territory of the relevant member state, the relevant member state may require from a branch of a bank the same information as from banks with their seat in its territory. The relevant member state may require from a bank that has a branch in its territory regular reporting on its banking activities in its territory for statistical purposes. The bank is obliged to comply with this request.

§ 16 Supervision over a branch of a foreign bank under § 11 para. 1 in the territory of the Slovak Republic shall be carried out by the competent supervisory authority of the member state. Supervision over the liquidity of this branch shall be carried out by Národná banka Slovenska in cooperation with the competent supervisory authority of the member state, unless they agree otherwise. Supervision over the fulfilment of obligations in the area of protection against money laundering and protection against terrorist financing in this branch shall be carried out by Národná

Page 22 Collection of Laws of the Slovak Republic 483/2001 Coll.

banka Slovenska. 24d) The organisational structure of a branch of a foreign bank must include an employee responsible for protection against money laundering and against terrorist financing, whereby the head of the branch of the foreign bank shall be responsible for the proper performance of his or her activities. This branch shall also be subject to measures of Národná banka Slovenska adopted within the framework of its monetary policy; if the Slovak Republic adopts the euro as its currency, this branch shall be subject to measures adopted by the European Central Bank. Measures of Národná banka Slovenska must not be discriminatory and restrictive. If Národná banka Slovenska considers it necessary due to financial stability in the Slovak Republic, it may, after consultation with the competent supervisory authority of the member state, carry out on-site supervision in the branch of the foreign bank and require information for supervisory purposes. After such supervision, Národná banka Slovenska shall notify the obtained information and findings to the competent supervisory authority of the member state for the purposes of the supervision it carries out in the foreign bank.

§ 17

(1) If Národná banka Slovenska finds that a branch of a foreign bank under § 11 para. 1, in the performance of banking activities, or a foreign bank in the performance of banking activities under § 11 para. 2, on the territory of the Slovak Republic violates legal regulations or there is a justified risk of non-compliance with legal regulations, it shall immediately inform the competent supervisory authority of the member state in which this foreign bank has its registered office. If Národná banka Slovenska finds that the competent supervisory authority of the member state has not adopted measures to eliminate the violation of legal regulations or to avert the justified risk of non-compliance with legal regulations, it may request the European Supervisory Authority (European Banking Authority) to resolve this situation.

(2) Národná banka Slovenska, on the basis of information from the competent supervisory authority of another member state about a violation of legal regulations or about the existence of a justified risk of non-compliance with legal regulations by a branch of a bank or a bank that performs banking activities on the territory of that member state, shall adopt measures to eliminate the violation of legal regulations or to avert the justified risk of non-compliance with legal regulations by that bank or branch of a bank. It shall inform the competent supervisory authority of that member state about these measures.

(3) If the matter cannot be delayed and the competent supervisory authority of the member state does not adopt measures under paragraph 1 or reorganization measures under § 53 para. 9, Národná banka Slovenska may adopt preventive measures to protect the clients of the branch of the foreign bank under paragraph 1 or the clients of the foreign bank under paragraph 1, which may also consist in the suspension of payment operations 24e) with deposits. These preventive measures may not give preference to the creditors of the branch of the foreign bank under paragraph 1 or of the foreign bank under paragraph 1. Národná banka Slovenska shall immediately inform the European Commission (hereinafter referred to as the "Commission"), the European Supervisory Authority (European Banking Authority) and the competent supervisory authority of the member state in which this foreign bank has its registered office about the adoption of such measures. If the competent supervisory authority of another member state adopts preventive measures and Národná banka Slovenska has objections to these measures, Národná banka Slovenska may request the assistance of the European Supervisory Authority (European Banking Authority) under a special regulation. 19)

(4) If the competent authority of a member state adopts reorganization measures under § 53 para. 9, then the preventive measures adopted by Národná banka Slovenska under paragraph 3 are invalid and Národná banka Slovenska shall repeal them. If the competent authority of a member state does not adopt reorganization measures under § 53 para. 9 and the preventive measures adopted by Národná banka Slovenska under paragraph 3 become unjustified, Národná banka Slovenska shall repeal them.

§ 18

(1) Národná banka Slovenska is authorized for statistical purposes and information purposes to require,

483/2001 Z. z. Zbierka zákonov Slovenskej republiky Page 23 that a foreign bank under § 11 para. 1, which performs banking activities through a branch or without establishing a branch on the territory of the Slovak Republic, submit a regular report on its activities on the territory of the Slovak Republic.

(2) For the purposes of determining that a branch of a foreign bank is significant under § 6 para. 14 and for the purposes of supervision under § 16, Národná banka Slovenska is authorized to require that a branch of a foreign bank under § 11 para. 1 submit statements, reports and other reports under § 42 paras. 2 and 3.

§ 19

(1) Národná banka Slovenska shall immediately inform the competent supervisory authority of the member state in which the bank has established a branch about the withdrawal of the banking license from the bank.

(2) Národná banka Slovenska shall inform the Commission, the European Supervisory Authority (European Banking Authority) and the European Banking Committee about the number and nature of cases where it refused to forward to the competent supervisory authority of a member state information about the establishment of a branch of a bank on the territory of a member state.

(3) Národná banka Slovenska shall notify the Commission, the European Supervisory Authority (European Banking Authority) and the European Banking Committee of the issuance or withdrawal of a banking license for a bank to establish its branch outside the territory of a member state or the issuance or withdrawal of a banking license for a foreign bank with its registered office outside the territory of a member state to establish its branch on the territory of the Slovak Republic.

(4) Národná banka Slovenska shall notify the Commission, the European Supervisory Authority (European Banking Authority) and the European Banking Committee that the bank is or is to become a subsidiary of a foreign bank that is governed by the legal order of a country that is not a member state. At the same time, it shall notify the structure of the consolidated group to which this bank belongs or will belong.

(5) Národná banka Slovenska shall notify the Commission of problems that occurred during the establishment of a bank or a branch of a bank in a country that is not a member state, or during the performance of their activities.

(6) Národná banka Slovenska shall notify the Commission and the European Supervisory Authority (European Banking Authority) of the conditions for granting a banking license under §§ 7 and 8.

(7) Národná banka Slovenska shall notify the European Supervisory Authority (European Banking Authority) of every granting of a banking license under §§ 7 and 8 and withdrawal of a banking license under § 50 para. 1 letter k).

§ 20 Foreign banks with their registered office in a member state may freely provide advertising for banking activities provided in the Slovak Republic in accordance with the legal order of the Slovak Republic.

PART FOUR REPRESENTATION OF A BANK OR A FOREIGN BANK § 21

(1) A bank is obliged to notify Národná banka Slovenska in writing in advance of the establishment of each of its representations abroad. In the notification of the establishment of a representation it shall state

a) the designation of the seat of the representation,

b) the name and surname of the head of the representation and the address of his permanent residence.

Page 24 Zbierka zákonov Slovenskej republiky 483/2001 Z. z.

(2) For the purposes of this Act, a representation of a bank means an organizational unit of the bank that promotes the bank's activities abroad or obtains information about possibilities for economic cooperation abroad.

(3) The bank's representation may not carry out banking activities or otherwise conduct business.

§ 22

(1) A foreign bank or a comparable foreign financial institution that carries out banking activities may establish its representation on the territory of the Slovak Republic on the basis of registration.

Národná banka Slovenska decides on the registration on the basis of an application for registration.

(2) For the purposes of this Act, the representation of a foreign bank or a comparable foreign financial institution that carries out banking activities (hereinafter referred to as "foreign representation") means its organizational unit that promotes the activities of the foreign bank or comparable foreign financial institution or obtains information on the possibilities of economic cooperation with the Slovak Republic. The foreign representation must always state the designation "representation" in its name in the designation of its registered office and in written communication.

(3) The foreign representation may not carry out banking activities or otherwise conduct business. It is not entered in the commercial register.

(4) A foreign bank or a comparable foreign financial institution that carries out banking activities is obliged to notify Národná banka Slovenska in writing in advance of a change in the location of the foreign representation, a change of the head and the closure of the foreign representation. In the event of a change of the head of the foreign representation, it is obliged to submit all documents that the foreign bank or comparable foreign financial institution submits with an application for registration of a representation.

(5) The head of the foreign representation may perform on behalf of the foreign bank or comparable foreign financial institution only employment-law acts in relation to the other employees of the foreign representation.

(6) By a measure, 23) which is issued by Národná banka Slovenska and which is announced in the collection of laws, the requirements of the application for registration of a foreign representation, including the documents attached to the application, shall be laid down.

(7) The foreign representation is obliged to notify Národná banka Slovenska in writing within 30 days of registration in which bank or branch of a foreign bank it has accounts maintained.

(8) The foreign representation is obliged to notify Národná banka Slovenska in writing within 30 days of any change that has occurred compared to the facts forming the basis for its registration.

(9) Národná banka Slovenska is authorized to carry out supervision of compliance with the conditions specified in the decision on registration and laid down in the laws or in other generally binding legal regulations of the Slovak Republic. The foreign representation is obliged to provide Národná banka Slovenska with the cooperation required by it in the performance of this supervision.

(10) If the foreign representation fails to comply with the conditions specified in the decision on registration or violates the laws or other generally binding legal regulations of the Slovak Republic, Národná banka Slovenska may decide to cancel the registration.

(11) The registration expires on the day stated in the written notification of the foreign bank or comparable foreign financial institution that carries out banking activities about the closure of the foreign representation or on the day of the dissolution of the foreign bank or comparable foreign

483/2001 Z. z. Zbierka zákonov Slovenskej republiky Page 25 financial institution that carries out banking activities.

PART FIVE ORGANIZATION AND MANAGEMENT OF A BANK AND A BRANCH OF A FOREIGN BANK § 23

(1) In addition to the requirements laid down in a special regulation, 25) the bank is obliged in its articles of association

to adjust the organizational structure and the management system of the bank so that they ensure the proper and safe performance of permitted banking activities and prevent the emergence of a conflict of interest within the bank, and to adjust the relations and cooperation between the statutory body, the supervisory board, the senior employees of the bank, the internal control and internal audit unit. The bank is further obliged, in accordance with this Act, to include in its articles of association the remuneration principles that are taken into account within the bank's risk management system and support it, as well as to adjust the activity of the remuneration committee in the bank, if established, or the activity of the designated person responsible for the remuneration system in the bank.

The bank is also obliged in its articles of association to divide and adjust the powers and responsibilities in the bank for

a) the creation, implementation, monitoring and control of the bank's business plans,

b) the bank's management system while complying with the rule under § 27 para. 1 letter d),

c) the internal control system including a separate and independent internal control and internal audit unit corresponding to the complexity and risks of banking activities,

d) the separate management of risks from banking activities including the risk management system to which the bank is exposed and for the activity of the risk management committee,

e) the separate execution of credit transactions and investment transactions under § 34,

f) the separate monitoring of risks to which the bank is exposed in the performance of banking activities with persons with a special relationship to the bank,

g) the information system,

h) the protection against money laundering and the protection against terrorist financing,

i) the activity of the remuneration committee in the bank.

(2) The bank is obliged in its internal regulations to adjust the details of

a) the bank's organizational structure under paragraph 1 with emphasis on the identification of persons responsible for the performance of banking activities within the bank,

b) the internal control system, which also includes the internal control and internal audit unit,

c) the preparation, implementation and updating of the bank's recovery plan (hereinafter referred to as the "recovery plan").

(3) Within the internal control system, the bank is obliged, in the interest of preventing the emergence of losses and damages as a result of insufficient management of the bank, to ensure the performance of

a) control activities that are part of operational work procedures, and the drawing of remedial measures from the performance of control activities and the implementation of these measures in the individual organizational units of the bank, while these activities and measures are performed by

1. employees or organizational units of the bank that participate in the individual operational work procedures,

2. senior employees of the individual organizational units of the bank responsible for the controlled processes and for the results of their control or employees authorized by them,

b) controls independent of operational working procedures, performed by the internal control and internal audit unit, while in exceptional and predetermined cases it may be performed as part of the bank's operational working procedure, namely when it is ensured

Page 26 Collection of Laws of the Slovak Republic 483/2001 Coll.

preservation of independence and exclusion of any conflict of interest.

(4) The bank's internal control and internal audit unit shall monitor compliance with laws and other generally binding legal regulations, the bank's internal regulations and procedures in the bank; it shall examine and evaluate in particular the functionality and effectiveness of the bank's management and control system, the risk management system and the system for assessing the adequacy of internal capital and maintaining the bank's own funds in relation to its own funds requirements, liquidity and compliance with limits on property exposure; it shall examine and evaluate the bank's readiness to carry out new types of transactions from the point of view of risk management, the remuneration principles that are taken into account within the risk management system, and shall examine and evaluate the information pursuant to § 37. The internal control and internal audit unit shall be responsible for monitoring the elimination of identified deficiencies and for monitoring the implementation of approved proposals and recommendations for remedying deficiencies. The statutory body of the bank shall be responsible for the establishment and functioning of the internal control and internal audit unit;

it may not transfer this responsibility to another person. The internal control and internal audit unit shall be directly subordinate to the bank's statutory body, the bank's supervisory board or one of the members of the bank's statutory body or the bank's supervisory board.

(5) The bank shall be obliged to comply with an organisational structure meeting the requirements pursuant to this Act and other generally binding legal regulations.

(6) For the purposes of this Act, the following shall mean

a) risk means a possible loss including damage caused by the bank's own activity or caused to the bank by other facts; for the purposes of this Act, in particular the following types of risk shall be distinguished:

1. credit risk arising from the fact that a debtor or other contractual party fails to fulfil its obligations; credit risk also includes country risk, concentration risk, settlement risk and counterparty risk,

2. market risk arising from the bank's positions and caused by changes in the values of risk factors, while these values are usually determined on the market; the main components of market risk are interest rate risk, equity risk, foreign exchange risk and commodity risk, by means of which market risk is measured,

3. operational risk pursuant to a special regulation, 25aa)

4. liquidity risk arising from the bank's inability to meet its obligations at the time of their maturity,

5. systemic risk arising from a possible impact on the stability of the financial system with possible serious negative consequences for the financial system and the national economy of the Slovak Republic,

6. model risk arising from a possible loss that may arise for the bank as a result of decisions based in particular on the results of internal approaches, namely due to errors in their development, application or use,

7. risk of excessive use of financial leverage pursuant to a special regulation, 25ab)

b) risk management means preventing possible losses including damage through timely and adequate identification of risks, measurement of the size of risks, monitoring of risks and their size and mitigation of the size of risks,

c) risk management system means a system ensuring timely and adequate identification of risks, measurement of the size of risks, monitoring of risks, mitigation of the size of risks and adequate reporting of all significant risks; the risk management system includes the strategy and organisation of risk management, information flows and an information system for risk management, a system for concluding transactions, a system for introducing new types of transactions and a system for assessing the adequacy of internal capital,

d) internal capital means such sources of financing of the bank which the bank, on the basis of its own determination and assessment of risk, maintains and allocates internally to cover risk,

483/2001 Coll. Collection of Laws of the Slovak Republic Page 27

e) central counterparty means a central counterparty pursuant to a special regulation, 25ac)

f) credit risk mitigation means credit risk mitigation pursuant to a special regulation, 25ad)

g) internal approach means an approach pursuant to a special regulation. 25ae)

(7) The bank shall deliver a copy of the valid wording of the articles of association to the National Bank of Slovakia without delay after each change to the bank's articles of association.

(8) The bank may establish a branch abroad only after prior consent of the National Bank of Slovakia, which the National Bank of Slovakia grants on the basis of the bank's application.

(9) By a measure, 23) which the National Bank of Slovakia may issue and which is announced in the collection of laws, the following shall be laid down:

a) details of the organisational structure and management system of the bank pursuant to paragraph 1,

b) details of the bank's internal control system pursuant to paragraph 3, details of the activity and responsibility of the internal control and internal audit unit, as well as the scope, number and deadlines of controls performed by this unit,

c) what is understood as significant risk for the purposes of the risk management system,

d) the extent to which branches of foreign banks are subject to the requirements laid down pursuant to letters a) and b),

e) the requirements of the application for prior consent pursuant to paragraph 8, including documents attached to the application,

f) details concerning remuneration principles in banks pursuant to § 23a to 23c, namely

1. criteria for determining the ratio between the fixed component of total remuneration and the variable component of total remuneration of a bank employee,

2. the method of including the values of variable remuneration provided in the form of securities and other financial instruments in the total value of variable remuneration,

g) criteria for establishing a remuneration committee in a bank pursuant to § 23d.

§ 23a

(1) The bank shall be obliged to apply the remuneration principles pursuant to this Act to

a) all members of the bank's statutory body,

b) senior employees responsible for the management of the bank's risks,

c) senior employees responsible for carrying out transactions in the bank,

d) employees responsible for managing the bank's risks, including employees authorised to set limits or exceed limits within the bank's risk management,

e) all members of the bank's supervisory board,

f) the head of the internal control and internal audit department,

g) other employees not listed in points (a) to (d) who are responsible for taking on risk and whose professional activities have a significant impact on the bank's risk profile under a special regulation. 25aea)

(2) Within the remuneration principles for persons under paragraph 1, the bank applies

a) a guaranteed fixed component of total remuneration as

1. the basic wage component, in the case of an employee,

2. a fixed remuneration component, in the case of a member of the bank's statutory body and a member of the supervisory board

Page 28 Collection of Laws of the Slovak Republic 483/2001 Z. z.

of the bank,

b) a variable component of total remuneration.

(3) The guaranteed fixed component of the total remuneration of a person under paragraph 1 must be appropriately balanced with the variable component of total remuneration; the variable component of total remuneration must never exceed the guaranteed fixed component of total remuneration. The guaranteed fixed component of total remuneration shall constitute a sufficiently high proportion of remuneration to allow a flexible policy on variable remuneration components, including the possibility of paying no variable components of total remuneration.

The guaranteed fixed component of total remuneration shall take into account the professional competence and responsibility of the person under paragraph 1 within the organisation and management of the bank.

(4) The remuneration principles under paragraph 1 also apply to the provision of severance pay, retirement benefits and other compensation in connection with the previous employment of persons under paragraph 1.

(5) The bank's remuneration principles under paragraph 1 must be consistent with the effective risk management system, business strategy and long-term objectives of the bank and shall also include measures to prevent conflicts of interest.

(6) If the bank has been provided with a state stabilisation measure aimed at mitigating the effects of the global financial crisis, it is also obliged to apply remuneration principles to

a) the variable components of total remuneration of a person under paragraph 1 that do not exceed 1% of net income, if they are not consistent with the bank's business strategy, its interests and the termination of the provided stabilisation assistance,

b) on the basis of a request by the National Bank of Slovakia, to adjust their structure and, if necessary, also to set limits on the remuneration of members of the statutory body and members of the supervisory board, in such a way as to be consistent with sound risk management,

c) the variable components of total remuneration of members of the statutory body and members of the supervisory board that are not awarded for the assessment period if they are unjustified.

§ 23b

(1) The variable component of total remuneration consists of

a) an incentive remuneration component, the amount of which depends on the performance assessment of the person under § 23a para. 1, the bank, or a combination of these assessments, for a period of at most one year,

b) an incentive remuneration component determined in the form of a share in the bank's profit,

c) an incentive remuneration component, the amount of which depends on the achievement of the results of the long-term business strategy and the interests of the bank,

d) securities whose tradability on the securities market will be deferred for at least three years from their issuance to the person under § 23a para. 1,

e) other financial instruments that appropriately reflect the credit quality of the bank on a going concern basis, including instruments under special regulation 25af) and

f) voluntary pension security payments.

(2) The bank shall determine the conditions for the provision of the variable component of total remuneration so that at least 40% of the variable component of total remuneration is awarded to the person under § 23a para. 1 no earlier than after a period of three years and no later than five years from the determination of the expected amount of the variable component of total remuneration. If the total expected variable component of total remuneration averages more than 200% of the guaranteed fixed component of total remuneration per month, the share of payments deferred over a period of three years and at most five years must not be less than 60% of the variable component of total

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 29 remuneration.

(3) The conditions for awarding the variable component of total remuneration under paragraph 1 point (c) shall be determined by the bank in relation to its long-term business strategy, interests and objectives it wishes to achieve. The person under § 23a para. 1 shall be awarded this variable component of total remuneration in the amount determined based on the evaluation of the bank's actually achieved results no earlier than after a period of three years and at most five years of achieving results.

(4) In accordance with the long-term business strategy and the interests of the bank, the bank shall determine specific objectives taken into account within the risk management system, so that they correspond to current and future risks arising from the bank's activities, and the criteria for assessing the individual performance of the person under § 23a para. 1, which the bank will apply to determine the amount of the variable component of total remuneration.

The bank shall determine these objectives and criteria so that in the event of failure to meet the specified objectives or criteria for assessing individual performance, the variable component of total remuneration of the person under § 23a para. 1 is reduced proportionally to the failure, up to the possibility of not awarding the variable component of total remuneration for the assessment period.

(5) The share of the variable component of total remuneration provided to the person under § 23a para. 1 in the form of securities and other financial instruments under paragraph 1 points (d) and (e) must constitute at least 50% of the amount of the variable component of total remuneration.

(6) A person under § 23a para. 1 who is preparing for independent work may, exceptionally, in the period from the conclusion of the employment relationship with the bank until the expiry of one year at the latest, be provided with a variable component of total remuneration in a guaranteed amount regardless of the assessment of the performance of tasks by this person.

(7) When determining the variable component of total remuneration, the bank's ability to fulfil obligations under § 29 shall also be taken into account.

(8) Within the remuneration principles, the bank shall determine criteria for deductions from the variable component of total remuneration and for the clawback of paid variable components of total remuneration. Up to 100 % of the variable component of total remuneration is subject to deferral of the variable component of total remuneration and clawback of the variable component of total remuneration. The criteria include a situation where a person under § 23a(1) participated in conduct that led to significant financial losses of the bank or was responsible for such conduct.

(9) The bank, within its remuneration policy, determines the criteria for discretionary pension benefits.

(10) Employees under § 23a(1)(b) to (d) cannot ensure the non-payment of their variable component of total remuneration by concluding insurance against its non-payment.

§ 23c The provisions of § 23b(1) are without prejudice to the provisions of § 118 of the Labour Code. The provisions of the Labour Code on the maturity of wages, payment of wages and the execution of deductions from wages apply mutatis mutandis to the variable components of total remuneration under § 23b(1)(d) to (f).

§ 23d

(1) The bank is obliged to establish a remuneration committee in the bank if it meets the criteria under § 23(9)(g), or to designate a person responsible for the remuneration system in the bank. The remuneration committee in the bank or the person responsible for the remuneration system in the bank

a) independently assesses the remuneration policies and their impact on risk management, own funds and liquidity,

Page 30 Collection of Laws of the Slovak Republic 483/2001 Z. z.

b) is responsible for preparing decisions concerning remuneration, including those with consequences for the risks and risk management of the bank, to be adopted by the statutory body,

c) takes into account the long-term interests of shareholders, investors and other stakeholders of the bank when preparing its decisions, and

d) oversees the remuneration of persons under § 23a(1)(a) and (b).

(2) The remuneration committee in the bank consists of at least three members. A member of the remuneration committee may only be a member of the supervisory board, including a member of the supervisory board who was elected by the bank's employees.

§ 23e

(1) The bank is obliged to inform the National Bank of Slovakia in writing annually by 30 June about the persons and the number of persons whose total remuneration in the bank is at least 1 000 000 euros for the relevant accounting period. If a fiscal year is used as the accounting period, which is shifted from the accounting period that is a calendar year by a certain period of time, the deadline for written information under the first sentence is extended by this period of time.

(2) The National Bank of Slovakia, in the exercise of supervision for the purposes of comparing trends and practices in the field of remuneration in banks, uses the information published under § 37(9)(h).

(3) The information under paragraph 1 and the information published under § 37(9)(h) shall be communicated by the National Bank of Slovakia to the European Supervisory Authority (European Banking Authority). 25a)

§ 24

(1) The bank has a statutory body and a supervisory board. The statutory body is the board of directors.

The statutory body and the supervisory board must have at least three members.

(2) The members of the statutory body are responsible for drawing up, approving and complying with the organisational structure, for establishing and complying with the bank's management system and for carrying out banking activities in accordance with the bank's internal regulations.

(3) The members of the statutory body of the bank are obliged to know, manage and control the performance of authorised banking activities, to ensure the safety and soundness of the bank and to adopt and regularly review the general principles of remuneration and to manage and ensure an effective risk management system.

For the purposes of this Act, the safety and soundness of the bank means the performance of banking activities in a manner that does not jeopardise the maintenance of the bank's own funds in relation to its own funds requirements, liquidity, limits on exposure and the legitimate interests of depositors and other creditors or the banking system.

(4) The members of the supervisory board of the bank are obliged to know and supervise the performance of authorised banking activities, the exercise of the powers of the bank's statutory body and the carrying out of other activities of the bank. The members of the supervisory board of the bank are obliged to monitor compliance with the remuneration principles adopted by the statutory body and to monitor the safety and effectiveness of the risk management system. The bank is obliged to submit a report on the monitoring of compliance with the remuneration principles to the National Bank of Slovakia by 30 June of the year following the calendar year for which the report is drawn up.

(5) The members of the statutory body of the bank, the members of the supervisory board of the bank and the senior employees of the bank are obliged to exercise their rights and obligations in accordance with the legal order of the Slovak Republic with the aim of achieving an increase in the value of the bank's shares or a sustained profit of the bank. This is without prejudice to the obligation under paragraphs 3 and 4.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 31 § 25

(1) A member of the statutory body of a bank may not be a statutory body or a member of the statutory body, or a proxy, or a member of the supervisory board of another legal person that is an entrepreneur, 26a) and a proxy of a bank and an employee of a bank may not be a statutory body or a member of the statutory body, or a proxy, or a member of the supervisory board of another legal person that is a client of the same bank, unless otherwise provided in paragraphs 14 and 15.

(2) A member of the supervisory board of a bank may not be a member of the statutory body or an employee of the same bank, nor a member of the supervisory board or statutory body of another bank, and at the same time may not be a proxy or a person authorised under an entry in the commercial register to act on behalf of the same or another bank or another legal person that is a client of the same bank; this does not apply if such client of the bank is another bank or a foreign bank that has control over the same bank.

A member of the supervisory board of a bank may be an employee of the same bank only if he or she is elected to the office by its employees.

(3) A member of the statutory body, a member of the supervisory board of a bank and an employee of a bank must not use information that has not been previously published and that they acquired in connection with the performance of their function or employment, and on the basis of such information directly or indirectly attempt to carry out or carry out a transaction on their own account or on the account of another person. A member of the statutory body,

a member of the supervisory board of a bank and an employee of a bank must not misuse information acquired in connection with the performance of their function or employment for the unauthorised obtaining of benefits for themselves or for another.

(4) The head of the internal control and internal audit unit of a bank shall be appointed and removed by the statutory body of the bank after the prior consent of the supervisory board of the bank or on the proposal of the supervisory board of the bank. Under the same conditions, the statutory body of the bank shall determine the remuneration of the head of the internal control and internal audit unit of the bank. The supervisory board of a bank is entitled to request the head of the internal control and internal audit unit of the bank to carry out an audit of the bank within the scope defined by it.

(5) The head of the internal control and internal audit unit of a bank is obliged to immediately inform the supervisory board of the bank and the National Bank of Slovakia of any deficiencies identified in the performance of activities under § 23(4).

(6) The head of the internal control and internal audit unit may not be a member of the statutory body or a member of the supervisory board of the same bank, nor a member of the statutory body or a member of the supervisory board of another legal entity.

(7) An auxiliary banking services undertaking means an undertaking providing auxiliary services under a special regulation. 26c)

(8) The prohibitions and restrictions laid down under paragraphs 1 and 2 for members of the statutory body of a bank and for employees of a bank shall not apply to their membership in the statutory body or supervisory board of a legal entity that is not established for business purposes. 26d)

(9) Members of the statutory body and members of the supervisory board of a bank shall, throughout the entire period of their function, perform their duties properly, honestly and independently and devote sufficient time to the performance thereof.

(10) A bank shall ensure personnel and financial resources for the continuous professional education of members of the statutory body and members of the supervisory board of the bank.

(11) When selecting members of the statutory body and members of the supervisory board, a bank shall apply the rules under a special regulation. 26e)

Page 32 Collection of Laws of the Slovak Republic 483/2001 Z. z.

(12) A bank is obliged, immediately after publishing information under a special regulation 26f), to send the published information to the National Bank of Slovakia.

(13) The information under paragraph 12 shall be immediately notified by the National Bank of Slovakia to the European Supervisory Authority (European Banking Authority).

(14) A member of the statutory body of a bank or a member of the supervisory board of a bank may at the same time be either a member of no more than one statutory body and three supervisory boards, or a member of no more than five supervisory boards without being at the same time a member of the statutory body of a bank, provided that it concerns membership in

a) a bank that is part of the same institutional protection system under a special regulation, 26g)

b) another legal entity that is an entrepreneur 26a) within the same group,

c) a stock exchange, 26b)

d) a central securities depository 16) or

e) another legal entity in which this bank has a qualifying holding.

(15) For the purposes of paragraph 14, one or more functions of a member of the statutory body or functions of a member of the supervisory board in the entities under paragraph 14 letters a), b) and e) shall be considered as one function.

(16) When granting prior consent under § 9(4), the National Bank of Slovakia shall also take into account the individual circumstances, the nature, scope and complexity of the bank's activities and the time devoted to the performance of the function of a member of the statutory body of the bank and a member of the supervisory board of the bank.

§ 26

(1) The provisions of § 24 and 25 shall not affect the provisions of a special regulation. 1 )

(2) The provisions of § 23 to 25 shall apply mutatis mutandis also to a branch of a foreign bank, to the head of a branch of a foreign bank and to the employees of a branch of a foreign bank, except for the provisions governing remuneration.

PART SIX REQUIREMENTS FOR THE BUSINESS OF A BANK AND A BRANCH OF A FOREIGN BANK § 27

(1) A bank and a branch of a foreign bank shall carry out transactions with their clients on a contractual basis. A bank and a branch of a foreign bank are obliged to act prudently in the performance of their activities, in particular they are obliged to carry out transactions

a) in a manner that takes into account and mitigates risks,

b) in a manner that does not harm the interests of their depositors with regard to the return of their deposits and that does not endanger the safety and economic situation of the bank and the branch of a foreign bank or the safe functioning of the banking system by violating laws or other generally binding legal regulations,

c) under advantageous economic and legal conditions for the bank or branch of a foreign bank and for their clients in transactions carried out by them on the client's account and with the exercise of professional care; the bank and the branch of a foreign bank are obliged to credibly demonstrate the exercise of professional care,

d) in such a way that at least two persons act for the bank or branch of a foreign bank in each transaction; if this is not possible for operational reasons, they are obliged to immediately ensure

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 33 control of the executed transaction by persons who did not participate in its execution.

(2) A bank and a branch of a foreign bank are obliged, in order to prevent the occurrence of losses including damages as a result of the incorrect performance of their banking activities, to comply with the procedures for the performance of their banking activities and to establish and maintain an effective risk management system. A bank and a branch of a foreign bank are obliged to adjust the risk management system on the basis of regular verification of its effectiveness and adequacy so that it takes into account the ability of the bank or branch of a foreign bank to expose itself to risk and the changing economic environment for the bank or branch of a foreign bank. A bank and a branch of a foreign bank are obliged to regulate the risk management system and the manner of its updating by an internal regulation, in accordance with which the bank and the branch of a foreign bank are obliged to proceed.

(3) For the purposes of paragraphs 2 and 4, a bank may establish a risk management committee; if a bank does not establish a risk management committee, it is obliged to perform risk management through an audit committee under a special regulation, 26g) which performs the activities under paragraphs 2 and 4.

(4) The bank's organisational structure must include a senior employee and other employees responsible for performing the risk management function, which for the purposes of this Act means

a) monitoring and applying the risk management strategy and procedures under paragraph 1,

b) submitting a written report on the performance of their activities at least once a year to the members of the bank's statutory body and the members of the bank's supervisory board,

c) creating support and providing information to the bank's statutory body and the bank's supervisory board in connection with the overall identification, analysis, monitoring, reporting and management of risks,

d) reviewing whether the values of assets and liabilities offered to clients take into account the business intention and investment intention and the risk management strategy.

(5) The employees under paragraph 4 shall perform the risk management function independently of other units of the bank and shall immediately inform the supervisory board of any deficiency that could have an impact on a breach of the obligation under paragraph 1.

(6) The senior employee under paragraph 4 may be removed only on the basis of the prior consent of the supervisory board.

(7) A bank is obliged to have its own internal capital adequacy assessment system, which it considers adequate to cover the risks to which it is or may be exposed. The internal capital adequacy assessment system must correspond to the nature, scope and complexity of the banking activities it performs and includes

a) a strategy for managing the volume of internal capital,

b) a procedure for determining the adequate amount of internal capital, the components of internal capital and the allocation of internal capital to risks,

c) a system for maintaining internal capital at the required level.

(8) A bank's internal capital must be adequate to the actual market risks that are not subject to the own funds requirement. A bank which, when calculating own funds requirements for position risk under special regulation 26h), has offset its positions in one share or in several shares constituting a stock index against one position or several positions in stock index futures or in another stock index product, must have adequate internal capital to cover the basis risk of loss caused by the fact that the value of the futures or other product does not move entirely in line with the value of its underlying shares. A bank must also have adequate internal capital if it holds opposite positions in stock index futures that are not identical in terms of their maturity or composition. When using the procedure under special

Page 34 Collection of Laws of the Slovak Republic 483/2001 Z. z.

regulation 26i), the bank must hold sufficient internal capital against the risk of loss that exists from the time of accepting the commitment until the next business day.

(9) A bank and a branch of a foreign bank are obliged to

a) maintain their solvency on a permanent basis,

b) manage assets and liabilities so as to ensure continuous liquidity and to comply with liquidity indicators,

c) immediately inform Národná banka Slovenska of the non-fulfilment or anticipated non-fulfilment of the obligations under point b) and subsequently submit to Národná banka Slovenska a plan for the timely restoration of compliance with the liquidity indicators.

(10) For the purposes of this Act, the following shall be understood

a) by exercising professional care, in particular, that a bank or a branch of a foreign bank

1. for individual transactions compares price offers or documents the inappropriateness or impossibility of assessing multiple offers,

2. documents the manner in which the transaction was carried out, checks the objectivity of the recorded data and prevents its own losses including damages,

3. carries out an analysis of the economic advantageousness of transactions from the available information,

4. prepares business intentions and investment intentions that are the basis for carrying out individual operations,

b) by solvency, the ability to fulfil monetary obligations properly and on time,

c) by liquidity, the ability to convert assets into monetary funds without unnecessary losses for the purpose of proper and timely fulfilment of monetary obligations.

(11) A bank and a branch of a foreign bank that has made an error in carrying out settlement or payment services is obliged to ensure remediation at its own cost and without delay.

(12) A bank and a branch of a foreign bank must not conclude contracts under conspicuously disadvantageous conditions for them, in particular such contracts that commit them to economically unjustified performance or to performance clearly not corresponding to the consideration provided or by which their claims are clearly insufficiently secured.

(13) A bank is obliged to regulate its legal relations with the members of its statutory body, and a branch of a foreign bank with the head of the branch of the foreign bank, by a written contract that is not subject to special regulation 27) and that is in accordance with this Act.

(14) By a measure 23) issued by Národná banka Slovenska and announced in the Collection of Laws, the following shall be laid down

a) details of the risk management system and other rules under paragraph 2, as well as other types of risks,

b) liquidity indicators and details on liquidity under paragraph 9 and the method of determining it,

c) the percentage ratios under paragraph 19, what is understood by a foreign exchange position in a foreign currency and the total foreign exchange position, as well as details on the calculation of foreign exchange positions and the calculation of the total foreign exchange position,

d) the extent to which branches of foreign banks are subject to the rules under points a) to c).

(15) The head of a branch of a foreign bank shall be fully liable for damage caused in the performance of their function as a result of a breach of the obligation of the head of a branch of a foreign bank arising for them from laws, from other generally binding legal regulations or

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 35 from the internal regulations of the branch of the foreign bank.

(16) A bank and a branch of a foreign bank must not carry out legal acts at their own cost in favour of a member of the bank's statutory body, a member of the bank's supervisory board or the head of a branch of a foreign bank in connection with insurance of their liability for damage in the performance of their function or in connection with their insurance for the event of their removal from office. If a bank or a branch of a foreign bank revokes these persons from office due to untrustworthiness pursuant to Section 50 (2), it may not pay them any agreed remuneration or remuneration granted by internal regulations;

the right to such remuneration lapses.

(17) The Supervisory Board of the bank is obliged to ensure the recovery of damage incurred by the bank for which a member of the statutory body is responsible pursuant to paragraph 18.

(18) A member of the statutory body is fully liable for damage caused in the performance of their function as a result of a breach of the duty of a member of the statutory body of the bank arising for them from laws, from other generally binding legal regulations, from the articles of association of the bank or from the internal regulations of the bank.

(19) The bank is obliged to carry out its activities so that it does not exceed pursuant to paragraph 14 (c)

the percentage ratio

a) of foreign exchange positions in individual foreign currencies to its own funds,

b) of total foreign exchange positions to its own funds.

§ 27a

(1) A bank and a branch of a foreign bank may use independent financial agents and tied financial agents pursuant to a special act for financial intermediation in the deposit-taking and lending sector. 27a) A bank, a foreign bank and a branch of a foreign bank are entitled to use the persons referred to in the first sentence only if these persons are entered in the register of financial agents, financial advisers, financial intermediaries from another Member State in the insurance or reinsurance sector and tied investment agents. 27b)

(2) A bank and a branch of a foreign bank may use for financial intermediation in the deposit-taking and lending sector only persons who are authorised to carry out this activity.

§ 27b

(1) A bank and a branch of a foreign bank are obliged to ensure the professional competence of employees who come into contact with a non-professional client. 27c)

(2) The professional competence of employees under paragraph 1 is the basic level of professional competence under the special act. 27d)

(3) A bank and a branch of a foreign bank are obliged to ensure the verification of the professional competence of employees under paragraph 1 by the procedure under the special act. 27e)

(4) A bank, a foreign bank and a branch of a foreign bank are obliged to keep a list of employees under paragraph 1.

§ 27c Provision of the basic banking product

(1) A bank and a branch of a foreign bank are obliged to provide a client who is a consumer 27f)

(hereinafter referred to as a “consumer”), banking services within the scope of the basic banking product, if

Page 36 Collection of Laws of the Slovak Republic 483/2001 Z. z.

a) the consumer has reached 18 years of age,

b) the consumer submits to the bank or a branch of a foreign bank a written application for the provision of a basic banking product,

c) as of the date of submitting the application for the provision of a basic banking product, the consumer does not have a payment account with the bank and a branch of a foreign bank, except for a deposit account, 27fa)

a monetary deposit confirmed by a passbook or except for accepting deposits in the form of a savings program, namely saving by payment card, saving by a one-off or regular transfer of funds,

d) as of the date of submitting the application for the provision of a basic banking product, the consumer does not have a net monthly income higher than 400 euros,

e) the bank and a branch of a foreign bank provide these banking services to the consumer within the scope of their business and

f) the bank and a branch of a foreign bank already provide the consumer with at least two banking services related to a payment account within a single transaction.

(2) The consumer confirms the facts under paragraph 1 letters c) and d) by an affidavit.

(3) If the consumer asks the payment service provider with which he has a payment account to change the payment account to a basic banking product, the payment service provider is obliged to make this change without delay and free of charge.

(4) During the period in which the bank or a branch of a foreign bank provides the consumer with a basic banking product, the consumer must not establish any other payment account except for a deposit account, a monetary deposit confirmed by a passbook with the bank and a branch of a foreign bank, or except for accepting deposits in the form of a savings program, namely saving by payment card or saving by a one-off or regular transfer of funds.

(5) If the bank and a branch of a foreign bank find that the affidavit under paragraph 2 is untrue or that the provision of paragraph 3 has not been complied with, the bank and a branch of a foreign bank shall cancel the provision of the basic banking product to the consumer, unless the bank or a branch of a foreign bank agrees otherwise with the consumer.

(6) If the sum of the amounts of payment transactions credited to the consumer's payment account in a calendar year within the provision of a basic banking product is higher than 5 600 euros, the bank and a branch of a foreign bank shall cancel the provision of the basic banking product to the consumer, unless the bank or a branch of a foreign bank agrees otherwise with the consumer.

(7) The particulars of the application for the provision of a basic banking product are the name, surname, birth number and address of permanent residence of the applicant for the provision of a basic banking product.

(8) If the bank or a branch of a foreign bank rejects the consumer's application for the provision of a basic banking product, it shall without delay inform the consumer in writing and free of charge of the reasons for this rejection.

(9) The consumer may carry out payment transactions under § 5 letter s) second point through

a) platobnej karty,

b) a place where the bank or a branch of a foreign bank carries out its activity,

c) technical devices enabling remote access to the payment account.

(10) The bank and a branch of a foreign bank are obliged, within the framework of the basic banking product, to provide banking services in the currency euro to the extent and in the manner laid down by a generally binding

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 37 legal regulation issued by the ministry; this generally binding legal regulation shall also lay down the maximum amount of the fee for the basic banking product.

(11) In connection with the provision of a basic banking product when carrying out payment operations under § 5 letter s) second point, a bank and a branch of a foreign bank must not provide a consumer with credit in the form of an authorised overdraft.

(12) A bank and a branch of a foreign bank must not make the provision of a basic banking product conditional on the provision of another product or service.

(13) A bank and a branch of a foreign bank are obliged to keep records of basic banking products at least to the extent of the data set out in paragraph 6, including information on the commencement and termination of the provision of a basic banking product to a consumer.

(14) A bank and a branch of a foreign bank are obliged, annually by 25 January of the relevant calendar year, to submit to the ministry information for the previous calendar year on

a) the number of newly provided and cancelled basic banking products,

b) the number of rejected applications for the establishment of a basic banking product, including the reason for rejection, and

c) the amount of the fee for a basic banking product.

(15) The ministry shall inform the European Commission regularly, once a year, about basic banking products to the extent of the information under paragraph 13.

(16) A bank and a branch of a foreign bank are obliged to make the information under paragraph 16 available free of charge on the website of the bank and the branch of a foreign bank and in the operating premises of the bank and the branch of a foreign bank; at the request of a consumer, they are obliged to provide the information under paragraph 17 free of charge in paper form or on a durable medium. 72d)

(17) Information about a basic banking product must include

a) the conditions for the provision of a basic banking product,

b) the banking services included in the basic banking product,

c) information on the amount of the fee,

d) information on out-of-court dispute resolution.

§ 27d Establishment of a payment account with basic features

(1) A bank and a branch of a foreign bank are obliged to provide banking services to an eligible person to the extent of a standard account if, within the scope of their business, they provide all banking services of a standard account. They shall provide a standard account to an eligible person on the basis of an application for the establishment of a standard account if the conditions for its rejection under paragraph 7 are not met.

(2) For the purposes of this Act, an eligible person is a client who is a consumer, 27f) and is a person residing in the European Union, including a consumer without residence in the territory of the Slovak Republic, an asylum seeker and a consumer who has not been granted a residence permit but whose expulsion is not possible for legal reasons or factual reasons. 27fba)

(3) The particulars of the application under paragraph 1 are the name, surname, birth number, address of residence of the eligible person, and the number and type of identity document. 73) An annex to the application under paragraph 1 is a solemn declaration by the eligible person that they do not have any other payment account 13mb) established with a bank or a branch of a foreign bank, except for a deposit account, a monetary deposit confirmed by a deposit

Page 38 Collection of Laws of the Slovak Republic 483/2001 Z. z.

book or the acceptance of deposits in the form of a savings programme, namely saving by payment card, saving by a one-off or regular transfer of funds in a bank and a branch of a foreign bank.

(4) An eligible person with a provided standard account must not establish any other payment account except for a deposit account, a monetary deposit confirmed by a deposit book and the acceptance of deposits in the form of a savings programme, namely saving by payment card, saving by a one-off or regular transfer of funds in a bank and a branch of a foreign bank.

(5) A bank and a branch of a foreign bank are obliged to establish a standard account or reject an application under paragraph 1 no later than within ten working days from the day following receipt of a complete application.

(6) If an application under paragraph 1 is not complete or properly completed, the bank or branch of a foreign bank shall call upon the eligible person to supplement it within 30 calendar days from delivery of the call to the eligible person and shall instruct the eligible person on the consequences of failure to supplement it.

(7) A bank and a branch of a foreign bank shall reject an application under paragraph 1 if

a) the establishment of a standard account is contrary to a special regulation, 21a)

b) the eligible person has a payment account established with a bank or a branch of a foreign bank which contains all the banking services of a standard account,

c) the time limit under paragraph 6 expires in vain.

(8) If a bank or a branch of a foreign bank rejects an application under paragraph 1, it shall inform the eligible person free of charge and without delay in writing, if the provision of the justification for rejection of the application under paragraph 1 is not prevented by public order, state security or a special regulation, 21a) about

a) the reasons for such rejection,

b) the procedure for submitting a complaint against the rejection,

c) the right to submit a complaint to the National Bank of Slovakia,

d) the bodies for out-of-court dispute resolution,

e) the contact details of those bodies.

(9) A bank and a branch of a foreign bank are obliged to establish a standard account for an eligible person who has a payment account with a bank or a branch of a foreign bank which contains the banking services of a standard account, if they submit a confirmation of the cancellation of that payment account as of the day preceding the day on which the standard account is to be established by the bank or branch of a foreign bank. The confirmation of the cancellation of the payment account shall be issued by the bank and the branch of a foreign bank free of charge.

(10) If a consumer cancels a payment account which is linked to a mortgage loan and applies for the establishment of a standard account with the same bank or branch of a foreign bank, that bank or branch of a foreign bank must not provide such a mortgage loan under less favourable conditions than before the cancellation of the payment account which was linked to the mortgage loan.

(11) If a consumer asks a payment service provider with which they have a payment account to change the payment account to a standard account, the payment service provider is obliged to carry out this change without delay and free of charge.

(12) If an authorised person has a payment account that includes the same banking services as a standard account, the bank or branch of a foreign bank with which the authorised person has a payment account is obliged to demonstrably inform the authorised person once a year about the possibility of opening a standard account.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 39

(13) A bank and a branch of a foreign bank may agree with an authorised person on the provision of services or products in addition to a standard account beyond the scope of payment services under § 5 letter ae), for which they may charge fees.

(14) A bank and a branch of a foreign bank may not make the opening of a standard account conditional upon the provision of additional services or the offering of shares 27fbb) of the bank and the branch of a foreign bank, if this condition applies to all its clients.

(15) A bank and a branch of a foreign bank are obliged, within the framework of a standard account, to provide banking services in the currency euro to the extent and in the manner laid down by a generally binding legal regulation issued by the ministry; this generally binding legal regulation shall also lay down the maximum amount of the fee for a standard account.

(16) A bank and a branch of a foreign bank shall cancel the provision of a standard account if they demonstrably establish that the authorised person

a) used the payment account in conflict with a special regulation, 21a)

b) did not carry out a payment transaction on the payment account for more than 24 consecutive months,

c) provided false information for the purpose of opening a standard account,

d) does not have residence in the European Union, or

e) has a payment account that includes the banking services of a standard account.

(17) If a bank or a branch of a foreign bank cancels the provision of a standard account on the basis of the reasons set out in paragraph 16 letters b), d) and e), it shall without delay inform the authorised person in writing and free of charge of the reasons for this cancellation no later than two months before the notice of termination takes effect; this shall not apply if the provision of this justification is prevented by public order or state security. Cancellation of a standard account on the basis of the reasons set out in paragraph 16 letter

a) and c) takes effect on the date of drawing up the notice of termination of the framework contract for the provision of a standard account.

(18) A bank and a branch of a foreign bank, together with the notice of termination of the contract for the provision of a standard account, shall inform the authorised person in writing and free of charge about the body competent to handle submissions concerning the termination of a standard account regarding out-of-court dispute resolution and about the contact details for the said bodies.

(19) An authorised person may carry out payment transactions under § 5 letter ae) second point within the member states through

a) a payment card,

b) a place where the bank or branch of a foreign bank carries out its activity,

c) technical devices enabling remote access to the payment account, if the bank and the branch of a foreign bank provide them.

(20) A bank and a branch of a foreign bank are obliged, annually by 10 September of the relevant calendar year, to submit to the ministry information for the previous calendar year on

a) the number of newly opened and cancelled standard accounts,

b) the number of rejected applications under paragraph 1 and the reason for their rejection,

c) the amount of the fee for a standard account with basic functions.

(21) The ministry shall inform the Commission regularly, every two years, about the standard account to the extent of the information under paragraph 20.

Page 40 Collection of Laws of the Slovak Republic 483/2001 Z. z.

(22) Národná banka Slovenska shall inform the Commission regularly, every two years, about the number of banks and branches of foreign banks that provide a standard account.

(23) A bank and a branch of a foreign bank are obliged to make the information under paragraph 24 available free of charge on the website of the bank and the branch of a foreign bank and in the operating premises of the bank and the foreign bank; upon the request of a consumer, the bank and the branch of a foreign bank are obliged to provide the information free of charge in paper form or on a durable medium. 72d)

(24) Information about a standard account with basic functions must include

a) the banking services of the standard account,

b) information on the amount of the fee,

c) the reasons for rejecting an application under paragraph 1,

d) information on the prohibition under paragraph 14,

e) information on out-of-court dispute resolution.

§ 27e A bank and a branch of a foreign bank are obliged to treat a consumer who is a person with residence in the European Union, when applying for a payment account or when accessing a payment account, in accordance with the principle of equal treatment laid down by a special regulation. 27fbc) In accordance with the principle of equal treatment, discrimination on the grounds of nationality or place of residence of a consumer who is a person with residence in the European Union is also prohibited.

§ 28

(1) The prior consent of Národná banka Slovenska is required

a) for the acquisition of a qualifying holding in a bank or for such a further increase of a qualifying holding in a bank by which the share in the bank's registered capital or in the voting rights in the bank would reach or exceed 20 %, 30 % or 50 % or by which this bank would become a subsidiary of a person acquiring such a share in one or several operations directly or by acting in concert; when calculating these shares, the voting rights or shares held by an investment firm, a foreign investment firm, another bank or a foreign bank as a result of underwriting financial instruments or placing financial instruments on the basis of a firm commitment shall not be taken into account, 27g)

if these rights are not exercised or otherwise used to interfere with the management of the bank and if the investment firm, foreign investment firm, another bank or foreign bank transfers them to another person within one year after their acquisition,

b) for the merger, amalgamation or division of a bank, including the merger or amalgamation of another legal person with a bank, or for the withdrawal of a banking licence, as well as for a reduction of the bank's registered capital, unless it is a reduction due to its settlement with a loss,

c) for the dissolution of a bank on a ground other than under letter b) or for a change of its legal form;

in that case the bank is obliged to return the banking licence as of the date stated in the decision on the prior consent,

d) for the sale of the bank's undertaking, the branch of a foreign bank or parts thereof, 28)

e) for the use of shares issued by the bank as the subject of securing the obligations of the owner of those shares or another person, with the exception where the subject of securing are shares in a total amount lower than 5 % of the share in the bank's registered capital in one or in certain transactions directly or by acting in concert,

483/2001 Coll. Collection of Laws of the Slovak Republic Page 41

(2) For the issuance of the prior consent pursuant to paragraph 1, the conditions set out in § 7 paragraphs 2 and 4 must be adequately met; for the issuance of the consent, a transparent and credible origin 21a) and a sufficient volume and satisfactory composition of financial resources for the performance of the act for which the granting of the prior consent is sought must also be demonstrated. The prior consent pursuant to paragraph 1 letter a) may be issued only if it has not been demonstrated that the acquisition or exceeding of the share by the acquirer will negatively affect the bank's ability to continue to fulfil the obligations laid down by this Act. The division, merger, amalgamation or dissolution of a bank, including the merger of another legal person with a bank, nor the sale of a bank or part thereof 28) may not be to the detriment of the bank's creditors;

this applies mutatis mutandis also to the sale of a branch of a foreign bank or part thereof. 28)

(3) The provisions of paragraph 1 are without prejudice to the provisions of a special regulation. 29)

(4) The prior consent granted pursuant to paragraph 1 may be acted upon for a maximum of one year, unless a shorter period follows from the decision on its granting or unless Národná banka Slovenska sets a different period.

(5) Without the prior consent of Národná banka Slovenska pursuant to paragraph 1, any legal act for which prior consent is required is invalid. Also invalid is any legal act performed on the basis of a prior consent granted on the basis of false data. This does not apply in the case of the acquisition or increase of a qualifying holding in a bank pursuant to paragraph 1 letter a) indirectly as a result of a foreign state stabilisation measure aimed at mitigating the effects of the global financial crisis, and the sale of a branch of a foreign bank or part thereof pursuant to paragraph 1 letter d), by which a foreign state stabilisation measure aims to mitigate the effects of the global financial crisis.

(6) The application pursuant to paragraph 1 letter a) is submitted by persons who have decided to acquire or increase a qualifying holding in a bank or by a person who has decided to become the parent company of a bank.

The application pursuant to paragraph 1 letters b) and c) is submitted by the bank, and in the case of a merger or amalgamation, jointly by the bank and the legal person with which the bank is merging or with which the bank is amalgamating. The application pursuant to paragraph 1 letter d) is submitted jointly by the bank or foreign bank and the person acquiring the bank, the branch of a foreign bank or part thereof. The application pursuant to paragraph 1 letter e) is submitted by the owner of the shares who wishes to use them as the subject of securing obligations. The persons referred to in this paragraph are obliged to inform Národná banka Slovenska in writing without delay of the intention to perform an act pursuant to paragraph 1.

(7) A measure 23) issued by Národná banka Slovenska and promulgated in the collection of laws shall lay down the requirements for the application for prior consent pursuant to paragraph 1, including the documents attached to the application.

(8) Everyone is obliged, upon written request by Národná banka Slovenska within a period determined by it, to provide the information requested by it for the purpose of determining whether there has been conduct for which prior consent pursuant to paragraph 1 is required, in particular information on the owners of shares in commercial companies or cooperatives and information on agreements on the exercise of voting rights.

(9) A person who wishes to terminate a qualifying holding in a bank or to reduce its share in the bank's registered capital or in voting rights to such an extent that its share falls below 20 %, 30 % or 50 % or such that the bank would cease to be its subsidiary, is obliged to notify this fact in advance in writing to Národná banka Slovenska.

(10) The bank is obliged to inform Národná banka Slovenska in writing without delay of the facts referred to in paragraph 1 letters a) to e) and in paragraph 9.

(11) A bank that trades on a regulated market is obliged at least once a year or upon request without delay to inform Národná banka Slovenska in writing of its shareholders

Page 42 Collection of Laws of the Slovak Republic 483/2001 Coll.

and of other persons who exercised voting rights at the bank's general meeting; the bank is also obliged, upon request, to inform the ministry in writing of its shareholders.

(12) For the purposes of this Act, acting in concert means

a) conduct aimed at achieving a share in the bank's registered capital or in voting rights, carried out between

1. a legal person and its partners or members, statutory bodies, members of statutory bodies or supervisory bodies, employees of the legal person who are under the direct management authority of the statutory body or its member, heads of an organisational unit entered in the commercial register, authorised signatories, liquidators, administrators of the bankruptcy estate or settlement administrators of that legal person and persons close to them 30)

or between any of these persons,

2. persons who have concluded an agreement on the identical exercise of voting rights in one bank in matters concerning its management, regardless of the form of the agreement or whether it is valid or invalid,

3. a controlling and a controlled person or between controlled persons directly or indirectly by the same controlling person,

4. persons close to each other, 30)

b) the conduct of two or more legal entities aimed at achieving a share in the bank's registered capital or voting rights, in which the same natural person is a statutory body, a member of a statutory body, a member of a supervisory body, a proxy holder, or has a share in the registered capital of the legal entity or voting rights of at least 5%, or has the possibility to exercise influence over the management of these legal entities on other grounds comparable to the influence associated with such a share,

(13) For the purposes of acting in concert under paragraph 12, a controlling person means a person who has a majority share of voting rights in a legal entity because they hold a share in the legal entity to which a majority of voting rights is attached, or because, based on an agreement with other persons, they may exercise a majority of voting rights.

(14) For the purposes of acting in concert under paragraph 12, a controlled person means a legal entity in which the controlling person has the status under paragraph 13.

(15) If, by acquiring a share under paragraph 1(a), the bank would become part of a consolidated group under Sections 44 to 49, which also includes a financial holding company, or if it would become part of a financial conglomerate under Sections 49a to 49o, which also includes a mixed financial holding company, a condition for granting the prior consent of the National Bank of Slovakia is also the demonstration of professional competence and trustworthiness of the natural persons who are members of the statutory body of that financial holding company or mixed financial holding company.

(16) Professional competence of the persons referred to in paragraph 15 means adequate knowledge of the financial sector and experience in the financial sector. The assessment of the trustworthiness of the persons referred to in paragraph 15 shall also be governed by Section 7(15).

(17) When assessing the fulfilment of the conditions under paragraph 2, the National Bank of Slovakia is obliged to consult with the competent authorities of other Member States if the acquirer under paragraph 1(a) is

a) a foreign bank, foreign securities dealer or foreign management company with an authorisation granted in another Member State, an insurance undertaking from another Member State, a reinsurance undertaking from another Member State,

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 43

b) the parent company of the person referred to in point (a), or

c) a natural person or legal entity controlling the person referred to in point (a).

(18) The National Bank of Slovakia is obliged to consult with the competent supervisory authority of a Member State under Section 7a(1)(a) on the fulfilment of the conditions for acquiring shares in a foreign bank with its registered office in the territory of a Member State under the legal regulations of the Member State, if the acquirer of a share in a foreign bank from a Member State is a bank, insurance undertaking, reinsurance undertaking, securities dealer or management company with its registered office in the territory of the Slovak Republic.

(19) The subject of the consultation under paragraphs 17 and 18 is the timely provision of substantial information or necessary information when assessing the fulfilment of the conditions for acquiring the relevant shares in a bank or a foreign bank. The National Bank of Slovakia shall provide the competent supervisory authority of a Member State, at its request, with all necessary information and, on its own initiative, with all substantial information. The National Bank of Slovakia shall request from the competent supervisory authority of a Member State all necessary information.

(20) In the decision granting prior consent under paragraph 1(a), the opinions or reservations communicated to the National Bank of Slovakia by the competent authority of another Member State whose supervision the person acquiring a share in the bank under paragraph 1(a) is subject to shall be stated.

(21) The National Bank of Slovakia is obliged, within two working days from the date of delivery of the application for granting prior consent under paragraph 1(a), to confirm in writing to the acquirer its delivery; this also applies to the subsequent delivery of the particulars of the application that were not submitted simultaneously with the application. The National Bank of Slovakia may, no later than on the 50th working day of the period for assessing the application under paragraph 2, request in writing additional information necessary for assessing the application under paragraph 1(a). For the period from the date of sending the National Bank of Slovakia's request for additional information until the delivery of the response, the proceedings for granting prior consent shall be suspended, but for no more than 20 working days. If the National Bank of Slovakia requests further supplementation or specification of information, the period for deciding on the granting of prior consent shall not be suspended. The National Bank of Slovakia is entitled to extend the period for suspension of the proceedings under the third sentence to 30 working days if the acquirer has its registered office or is governed by the legal regulations of a state that is not a Member State, or if the acquirer is not a securities dealer, management company, bank, insurance undertaking, reinsurance undertaking or a similar institution from a Member State.

(22) The National Bank of Slovakia shall decide on the application for granting prior consent under paragraph 1(a) within 60 working days from the date of written confirmation of delivery of this application and after delivery of all particulars of the application for granting prior consent. If the National Bank of Slovakia does not decide within this period, prior consent shall be deemed to have been granted.

The National Bank of Slovakia shall inform the acquirer of the date of expiry of the period for issuing the decision in the confirmation of delivery under paragraph 1. If the National Bank of Slovakia decides to reject the application for granting prior consent under paragraph 1(a), it shall send this decision in writing to the acquirer within two working days of drawing up the decision, but no later than before the expiry of the period under the first sentence.

(23) The National Bank of Slovakia shall not grant prior consent under paragraph 1 if the applicant fails to meet any of the conditions set out in paragraphs 2, 6, 8 to 11 or if the required data under paragraphs 2, 6, 8 to 11 are incomplete. Economic needs of the financial market cannot be a reason for rejecting prior consent under paragraph 1.

§ 29

(1) The bank is obliged to calculate and continuously monitor the value of its own funds.

Page 44 Collection of Laws of the Slovak Republic 483/2001 Coll.

(2) The parent bank pursuant to § 44 para. 2 letter a) is obliged to calculate and continuously monitor the value of own funds also for the consolidated group.

(3) The bank's own funds are own funds pursuant to a special regulation. 30a)

(4) The bank is obliged to maintain its own funds at least at the level of its registered capital pursuant to § 7 para. 2 letter a). This is without prejudice to the provisions of a special regulation. 30b)

§ 30

(1) The use of the internal ratings approach for credit risk and its change require the prior consent of the National Bank of Slovakia. The bank, the parent company which is a bank, and its subsidiaries which are banks, are obliged, after the granting of prior consent by the National Bank of Slovakia pursuant to special regulation 30c), to apply the internal ratings approach for credit risk to all their exposures.

(2) If a bank intends to introduce the internal ratings approach for credit risk gradually, it requires the prior consent of the National Bank of Slovakia; gradual introduction may occur in relation to individual classes pursuant to special regulation, 30d) individual organisational units of the bank, or in relation to the application of own estimates of loss given default or own estimates of conversion factors in the calculation of risk weights of exposures assigned to classes pursuant to a special regulation. 30e)

(3) When granting prior consent pursuant to paragraph 2, the National Bank of Slovakia shall determine an acceptable period and conditions for the gradual use of the internal ratings approach for credit risk. The conditions shall be determined so as to prevent that, in the case of classes pursuant to special regulation 30d) or within the organisational units of the bank, the reason for postponing the use of the internal ratings approach pursuant to special regulation 30f) would be a lower value of own funds requirements determined under the standardised approach for credit risk for these exposure classes or within these organisational units. In the case of gradual use of own estimates of loss given default or own estimates of conversion factors 30g) in the calculation of risk weights of exposures assigned to classes pursuant to special regulation 30e), the National Bank of Slovakia shall proceed analogously as in the previous sentence.

(4) The National Bank of Slovakia shall issue prior consent pursuant to paragraph 1 if the bank consistently applies a system for managing and assigning ratings to exposures which is in accordance with technical requirements and meets the conditions pursuant to a special regulation. 30h) The National Bank of Slovakia monitors the application of the bank's system for managing and assigning ratings to exposures.

(5) A bank applying for the prior consent of the National Bank of Slovakia for the use of own estimates of loss given default or own estimates of conversion factors is obliged to demonstrate that it has used own estimates of loss given default or own estimates of conversion factors in the manner pursuant to a special regulation. 30h)

§ 31

(1) To determine the value of market risk, a bank may, instead of the simplified approach pursuant to special regulation 30i) or in combination with this approach, use its own model for calculating market risk, if the calculation is based on the conditions pursuant to a special regulation. 30j) The use or change of this own model requires the prior consent of the National Bank of Slovakia.

(2) The National Bank of Slovakia shall issue prior consent pursuant to paragraph 1 if the bank fulfils

483/2001 Coll. Collection of Laws of the Slovak Republic Page 45 the conditions pursuant to a special regulation. 30j)

(3) For the issuance of prior consent pursuant to paragraph 1, the National Bank of Slovakia may additionally request from the bank a report prepared by an auditor or another person who has long been engaged in the development or assessment of risk calculation models, if, from the submitted documents for verifying compliance with the requirements pursuant to special regulation 30j), the National Bank of Slovakia cannot sufficiently assess the calculation accuracy of the bank's own model for calculating market risk.

(4) If a short position matures earlier than a long position, the bank shall take measures against the risk of insufficient liquidity.

(5) A measure, 23) which is issued by the National Bank of Slovakia and which is announced in the collection of laws, shall lay down the requirements of the application for prior consent pursuant to paragraph 1 and the documents attached to the application.

(6) If a bank exceeds several values of the multiplication factor 30k) or does not meet the conditions necessary for the granting of prior consent pursuant to paragraph 1, the National Bank of Slovakia may withdraw the granted prior consent from the bank or impose the necessary measures to improve this approach. Such measures may include, in addition to measures pursuant to § 50, the submission of a plan for restoration in accordance with the conditions under which prior consent was granted to it, with a specified deadline for its submission and implementation. If the bank is unable to submit and implement the restoration plan within the specified deadline, the granted prior consent pursuant to paragraph 1 shall be withdrawn.

§ 32

(1) In addition to using the standardised approach for operational risk, a bank may also use other approaches and relevant indicators for operational risk pursuant to a special regulation; 30l)

the use of other approaches and relevant indicators for operational risk is possible only on the basis of the prior consent of the National Bank of Slovakia.

(2) The National Bank of Slovakia shall issue prior consent pursuant to paragraph 1 if the bank fulfils the conditions pursuant to a special regulation. 30l)

§ 33

(1) The economic value of a bank must not fall by more than 20 % of the value of the bank's own funds as a result of a sudden and unexpected change in interest rates on the market. If a sudden and unexpected change in interest rates on the market, the consequence of which is calculated from positions recorded in the bank's banking book, causes a decline in the economic value of the bank by more than 20 % of the value of the bank's own funds, the National Bank of Slovakia shall impose a remedial measure on the bank pursuant to § 50 para. 1.

(2) For the purposes of this Act, the economic value of a bank means the difference between the fair value of interest rate sensitive assets recorded in the banking book and the fair value of interest rate sensitive liabilities recorded in the banking book; an interest rate sensitive asset and an interest rate sensitive liability is an asset and a liability whose fair value is variable depending on changes in market interest rates.

(3) A measure, 23) which is issued by the National Bank of Slovakia and which is announced in the collection of laws, shall lay down what is understood as a sudden and unexpected change in market interest rates.

§ 33a For the purposes of this Act, the following is understood

a) a systemically important bank is a parent bank in the European Union, a parent financial holding company in the European Union, a parent mixed financial holding company

Page 46 Collection of Laws of the Slovak Republic 483/2001 Z. z.

in the European Union or a bank whose failure or inadequate functioning could lead to systemic risk,

b) G-SII is a globally systemically important bank, which is a systemically important bank designated by the National Bank of Slovakia pursuant to § 33d paragraphs 1 and 2, whereby a G-SII is not a bank that is a subsidiary of a parent bank in the European Union, a parent financial holding company in the European Union or a parent mixed financial holding company in the European Union,

c) O-SII is a locally systemically important bank, which is a systemically important bank designated by the National Bank of Slovakia pursuant to § 33d paragraphs 1 and 3,

d) a capital conservation buffer (hereinafter referred to as "buffer") means own funds which a bank maintains pursuant to § 33b,

e) a bank-specific countercyclical capital buffer means own funds maintained pursuant to § 33c,

f) a G-SII buffer means own funds maintained pursuant to § 33d paragraph 4,

g) an O-SII buffer means own funds maintained pursuant to § 33d paragraph 5,

h) a systemic risk buffer means own funds which a bank maintains pursuant to § 33e,

i) the combined buffer requirement means total Tier 1 own capital pursuant to a special regulation 30m) required to meet the capital conservation buffer requirement, extended in accordance with § 33d paragraphs 15 to 17 and § 33e paragraphs 4 and 5, and if the buffers in the first to fourth points apply, of

1. the bank-specific countercyclical buffer,

2. the G-SII buffer,

3. the O-SII buffer,

4. the systemic risk buffer,

j) the countercyclical capital buffer rate means the rate which a bank applies to calculate its bank-specific countercyclical capital buffer and which is determined pursuant to § 33g and 33h or by the designated authority of a state which is not a member state,

k) a financial holding company means a financial holding company pursuant to a special regulation, 30n)

l) a mixed-activity holding company means a mixed-activity holding company pursuant to a special regulation, 30o)

m) a parent bank means a bank pursuant to a special regulation, 30p)

n) a parent financial holding company means a parent financial holding company pursuant to a special regulation, 30r)

o) a parent bank in the European Union means a parent bank pursuant to a special regulation, 30s)

p) a parent financial holding company in the European Union means a parent financial holding company pursuant to a special regulation, 30t)

r) a designated authority of a member state means an authority of a member state responsible for determining the countercyclical capital buffer rate for that member state or for determining the systemic risk buffer,

s) a mixed financial holding company 30ta) means a parent company other than a regulated entity which, together with its subsidiaries, at least one of which is a regulated entity with its registered office in a member state, and together with other controlled entities, forms a financial conglomerate,

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 47

t) a parent mixed financial holding company means a parent mixed financial holding company pursuant to a special regulation, 30tb)

u) a parent mixed financial holding company in the European Union means a parent mixed financial holding company pursuant to a special regulation. 30tc)

§ 33b

(1) In addition to maintaining Tier 1 own capital 30m) to meet own funds requirements pursuant to a special regulation 30u), a bank shall also maintain a capital conservation buffer in the form of Tier 1 own capital, 30m) in the amount of 2.5 % of its total risk exposure calculated pursuant to a special regulation 30v) on an individual basis and a consolidated basis.

(2) For the purposes of meeting the requirements pursuant to § 6, the requirements imposed by a remedial measure pursuant to § 50 and the own funds requirements pursuant to a special regulation 30u), a bank shall not use Tier 1 own capital which it maintains to meet the requirement pursuant to paragraph 1.

(3) If a bank fails to meet the requirement pursuant to paragraph 1, it shall be subject to restrictions on distributions set out in § 33k paragraphs 2 and 3.

§ 33c

(1) In addition to the requirement pursuant to § 33b paragraph 1, a bank shall also maintain a bank-specific countercyclical capital buffer in the form of Tier 1 own capital, 30m) in the amount of its total risk exposure calculated pursuant to a special regulation 30v) multiplied by the weighted average of the countercyclical capital buffer rates calculated pursuant to § 33j on an individual basis and a consolidated basis pursuant to a special regulation. 30w)

(2) For the purposes of meeting the requirements pursuant to § 6, the requirements imposed by a remedial measure pursuant to § 50, the own funds requirements pursuant to a special regulation 30u) and the requirement pursuant to § 33b paragraph 1, a bank shall not use Tier 1 own capital which it maintains to meet the requirement pursuant to paragraph 1.

(3) If a bank fails to meet the requirement pursuant to paragraph 1, it shall be subject to restrictions on distributions pursuant to § 33k paragraphs 2 and 3.

§ 33d

(1) The National Bank of Slovakia shall decide on the designation of a G-SII pursuant to paragraph 2 on a consolidated basis and shall decide on the designation of an O-SII pursuant to paragraph 3 on an individual basis, a consolidated basis or a sub-consolidated basis.

(2) The National Bank of Slovakia shall designate G-SIIs and assign G-SIIs to the relevant subcategory pursuant to paragraph 11 on the basis of criteria and the total score calculated according to these criteria. The criteria have equal weight and consist of quantifiable indicators. The criteria for identifying and classifying a G-SII are as follows:

a) the size of the group,

b) the group's interconnectedness with the financial system,

c) the substitutability of the banking activities provided by the group,

d) the complexity of the group,

e) the group's cross-border activity, including cross-border activity between Member States and between a Member State and a State that is not a Member State.

Page 48 Collection of Laws of the Slovak Republic 483/2001 Z. z.

(3) The criterion for identifying an O-SII by Národná banka Slovenska is at least one of the following criteria:

a) size,

b) importance for the economy of the European Union as a whole or the economy of the Slovak Republic,

c) the significance of cross-border activities,

d) the bank's or group's interconnectedness with the financial system.

(4) In addition to the requirements under § 33b(1) and § 33c(1), a bank shall also maintain a G-SII buffer on a consolidated basis in the form of Tier 1 own funds corresponding to the subcategory under paragraph 11 into which the G-SII is classified.

(5) In addition to the requirements under § 33b(1) and § 33c(1), a bank shall also maintain an O-SII buffer on an individual basis, consolidated basis, or sub-consolidated basis in the form of Tier 1 own funds, which Národná banka Slovenska may decide to be up to 2 % of the total risk exposure calculated in accordance with a special regulation, 30v) taking into account the criteria for identification under paragraph 3.

(6) For the purposes of meeting the requirements under § 6, the requirements imposed by a remedial measure under § 50, the own funds requirements under a special regulation, 30u) the requirement under § 33b(1) and § 33c(1), a G-SII shall not use Tier 1 own funds that it maintains to meet the requirement under paragraph 4, and an O-SII shall not use Tier 1 own funds that it maintains to meet the requirement under paragraph 5.

(7) Národná banka Slovenska shall determine the O-SII buffer so that the O-SII buffer does not create disproportionate negative effects on the entire financial system or parts of the financial system of other Member States or the European Union as a whole and does not constitute an obstacle to the functioning of the internal market.

Národná banka Slovenska shall review the O-SII buffer at least once per calendar year.

(8) Before deciding on the identification or change of the O-SII buffer, Národná banka Slovenska shall notify the Commission, the European Systemic Risk Board, the European Supervisory Authority (European Banking Authority), the competent supervisory authorities concerned and the designated authorities of the Member States of this intention, within one month before the publication of the decision under paragraph 5. The notification shall contain

a) the reasons why the O-SII buffer is considered an effective and appropriate means by which the risk can be reduced,

b) an assessment of the likely positive or negative impact of the O-SII buffer on the internal market of the Slovak Republic,

c) the O-SII buffer whose application Národná banka Slovenska will require.

(9) If an O-SII is a subsidiary of a G-SII or a subsidiary of an O-SII that is a parent bank in the European Union and is subject to an O-SII buffer on a consolidated basis, the O-SII buffer that applies to the O-SII on an individual basis or sub-consolidated basis shall not exceed the higher of the following values:

a) 1 % of the total risk exposure calculated in accordance with a special regulation, 30v)

b) the higher of the G-SII or O-SII buffer rate that applies to the group on a consolidated basis.

(10) Paragraph 9 is without prejudice to the provisions of paragraph 5 and § 33k.

(11) A G-SII shall be classified into one of six subcategories. The lowest threshold level and the threshold levels between the individual subcategories shall be determined by Národná banka Slovenska on the basis of the score.

The G-SII buffer shall be assigned at the level of a percentage of the total risk exposure calculated in accordance with

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 49 special regulation 30v) as follows:

a) subcategory 1 at 1 %,

b) subcategory 2 at 1,5 %,

c) subcategory 3 at 2 %,

d) subcategory 4 at 2,5 %,

e) subcategory 5 at 3 % ,

f) subcategory 6 at 3,5 %.

(12) Národná banka Slovenska may, without prejudice to paragraphs 1 to 11

a) reclassify a G-SII from a lower subcategory to a higher subcategory,

b) identify a bank whose total score is lower than the score of subcategory 1 as a G-SII and classify it in subcategory 1 or in a higher subcategory.

(13) If Národná banka Slovenska decides under paragraph 12 letter b), it shall notify this decision with justification to the European Supervisory Authority (European Banking Authority).

(14) Národná banka Slovenska shall notify the Commission, the European Systemic Risk Board and the European Supervisory Authority (European Banking Authority) of the list and names of G-SIIs, O-SIIs and the subcategories into which it has classified G-SIIs, and shall also publish this information on its website. Národná banka Slovenska shall review the identification of G-SIIs, O-SIIs and the classification of G-SIIs into the relevant subcategories at least once per calendar year. It shall notify the result of the review to the relevant G-SII or O-SII, the Commission and the European Supervisory Authority (European Banking Authority), and shall publish the updated list of G-SIIs and O-SIIs and the subcategories into which it has classified G-SIIs on its website.

(15) If a bank on a consolidated basis is subject to

a) a G-SII buffer and an O-SII buffer simultaneously, the higher of them shall apply, or

b) a G-SII buffer, an O-SII buffer and a systemic risk buffer under § 33e, the higher of them shall apply.

(16) If a bank on an individual basis or sub-consolidated basis is subject to an O-SII buffer and a systemic risk buffer under § 33e, the higher of them shall apply.

(17) If the systemic risk buffer applies only to all exposures located in the Slovak Republic, this systemic risk buffer shall be supplemented by the O-SII buffer or the G-SII buffer, while paragraph 15 letter b) and paragraph 16 shall not apply.

(18) If paragraph 16 applies, the fact that a bank is part of a group or subgroup to which a G-SII or O-SII belongs is not a reason for a lower combined buffer requirement on an individual basis than the sum of the capital conservation buffer, the countercyclical capital buffer and the higher of the O-SII buffers and the systemic risk buffer, applicable to the bank on an individual basis.

(19) If paragraph 17 applies, the fact that a bank is part of a group or subgroup to which a G-SII or O-SII belongs is not a reason for a lower combined buffer requirement on an individual basis than the sum of the capital conservation buffer, the countercyclical capital buffer, the O-SII buffer and the systemic risk buffer, applicable to the bank on an individual basis.

Page 50 Collection of Laws of the Slovak Republic 483/2001 Z. z.

§ 33e

(1) Národná banka Slovenska may decide to set a systemic risk buffer of own Tier 1 capital for banks with the aim of preventing and mitigating long-term non-cyclical systemic or macroprudential risks not covered by a special regulation, 30x) in the sense of the risk of disruption to the financial system with potentially serious negative consequences for the financial sector and the national economy in the Slovak Republic.

(2) If, in addition to the own Tier 1 capital which it maintains for the purposes of meeting own funds requirements under a special regulation, 30u) a bank also maintains a systemic risk buffer, the level of this buffer shall be at least 1 % of risk exposures calculated under a special regulation 30v) on the basis of exposures to which the systemic risk buffer under paragraph 8 applies on an individual basis, consolidated basis or sub-consolidated basis, in accordance with a special regulation. 30y)

(3) For the purposes of meeting the requirements under § 6, requirements imposed by a remedial measure under § 50, own funds requirements under a special regulation, 30u) requirements under § 33b(1) and § 33c(1), a bank may not use the own Tier 1 capital which it maintains to meet the requirement under paragraph 2.

(4) If, on an individual basis, sub-consolidated basis or consolidated basis, a bank is subject to an O-SII buffer under § 33d and a systemic risk buffer, the higher of them shall apply. If, on a consolidated basis, a bank is subject to

a) a G-SII buffer and a systemic risk buffer at the same time, the higher of them shall apply, or

b) a G-SII buffer, an O-SII buffer under § 33d and a systemic risk buffer, the higher of them shall apply.

(5) If the systemic risk buffer applies only to all exposures located in the Slovak Republic, this systemic risk buffer shall supplement the O-SII buffer or the G-SII buffer applied under § 33d, and paragraph 4 shall not apply.

(6) If paragraph 4 applies, the fact that a bank is part of a group or subgroup to which a G-SII or O-SII belongs is not a reason for a lower combined buffer requirement on an individual basis than the sum of the capital conservation buffer, the countercyclical capital buffer and the higher of the O-SII buffers and the systemic risk buffer, applicable to the bank on an individual basis.

(7) If paragraph 5 applies, the fact that a bank is part of a group or subgroup to which a G-SII or O-SII belongs is not a reason for a lower combined buffer requirement on an individual basis than the sum of the capital conservation buffer, the countercyclical capital buffer, the O-SII buffer and the systemic risk buffer, applicable to the bank on an individual basis.

(8) The systemic risk buffer may be applied to exposures located in the Slovak Republic and to exposures in states which are not member states. The systemic risk buffer may be applied to exposures located in another member state in accordance with paragraph 19.

(9) Národná banka Slovenska may set the systemic risk buffer in increments of 0.5 percentage point. Národná banka Slovenska may set the systemic risk buffer for banks individually.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 51

(10) When setting the systemic risk buffer, Národná banka Slovenska shall ensure that the systemic risk buffer does not cause disproportionate negative effects on the entire financial system or parts thereof in other member states or in the European Union as a whole and does not represent or create an obstacle to the functioning of the internal market of the European Union.

Národná banka Slovenska shall review the systemic risk buffer at least once every two calendar years.

(11) Before setting or changing the rate of the systemic risk buffer to a level of 3 %, Národná banka Slovenska shall notify the Commission, the European Systemic Risk Board and the European Supervisory Authority (European Banking Authority) and the competent supervisory authorities and designated authorities of the member states concerned of this intention, within one month before publication of the decision under paragraph 16. If the systemic risk buffer relates to exposures located in a state which is not a member state, Národná banka Slovenska shall also inform the competent authority or designated authority of that state. The notification shall contain

a) a description of the systemic risk or macroprudential risk in the Slovak Republic,

b) the reasons why the extent of the systemic risk or macroprudential risk threatens the stability of the financial system in the Slovak Republic and which justify the rate of the systemic risk buffer,

c) the reasons why the systemic risk buffer is considered an effective and appropriate means by which the risk can be reduced,

d) an assessment of the likely positive or negative impact of the systemic risk buffer on the internal market of the European Union,

e) the reasons why none of the measures under this Act other than the measures under § 33m(f) to

h) or under special regulation 30z) is not sufficient to address the identified macroprudential risk or systemic risk,

f) the rate of the systemic risk buffer that Národná banka Slovenska will require.

(12) National Bank of Slovakia

a) before determining or changing the rate of the systemic risk buffer above the level of 3 %, shall notify this intention to the Commission, the European Systemic Risk Board and the European Supervisory Authority (European Banking Authority), the competent supervisory authorities concerned and the designated authorities of the Member States; if the systemic risk buffer applies to exposures located in a state that is not a Member State, Národná banka Slovenska shall also inform the competent authority or designated authority of that state; the notification under the first sentence shall contain

1. a description of the systemic risk or macroprudential risk in the Slovak Republic,

2. the reasons why the extent of the systemic risk or macroprudential risk threatens the stability of the financial system in the Slovak Republic and which justify the rate of the systemic risk buffer,

3. the reasons why the systemic risk buffer is considered an effective and appropriate means by which the risk can be reduced,

4. an assessment of the likely positive impact or negative impact of the systemic risk buffer on the internal market of the European Union,

5. the reasons why none of the measures under this Act other than the measures under § 33m letter f)

to h), or under special regulation 30z) is not sufficient to address the identified macroprudential risk or systemic risk,

6. the rate of the systemic risk buffer that Národná banka Slovenska will

Page 52 Collection of Laws of the Slovak Republic 483/2001 Z. z.

require,

b) shall determine or change the rate of the systemic risk buffer under letter a) only after approval by the Commission.

(13) Národná banka Slovenska may from 1 January 2015 determine or change the rate of the systemic risk buffer, which applies to risk exposures located in the Slovak Republic and also to risk exposures in states that are not Member States, up to the level of 5 % or above 5 %. When determining or changing the rate of the systemic risk buffer up to the level of 5 %, Národná banka Slovenska shall proceed under paragraph 11, and when determining or changing the rate of the systemic risk buffer above the level of 5 %, Národná banka Slovenska shall proceed under paragraph 12.

(14) Before determining the rate of the systemic risk buffer from the level of 3 % to 5 % under paragraph 13, Národná banka Slovenska shall notify this intention to the Commission and wait for its opinion. If the Commission's opinion is negative, Národná banka Slovenska shall proceed in accordance with that opinion or state the reasons why it will not do so.

(15) If the bank is a subsidiary whose parent company is established in another Member State, Národná banka Slovenska shall notify the facts under paragraph 14 to the competent supervisory authorities of that Member State, the Commission and the European Systemic Risk Board and wait for the recommendation of the Commission and the European Systemic Risk Board concerning the measures adopted under paragraph 14. If the opinion of the competent supervisory authorities, the Commission or the European Systemic Risk Board is negative, Národná banka Slovenska may request the European Supervisory Authority (European Banking Authority) for assistance under special regulation 19)

and shall determine the rate of the systemic risk buffer in accordance with the decision of the European Supervisory Authority (European Banking Authority).

(16) Národná banka Slovenska shall publish on its website a notification of the determination of the systemic risk buffer. The notification shall contain

a) the rate of the systemic risk buffer,

b) the banks to which the systemic risk buffer applies,

c) the justification of the systemic risk buffer,

d) the date from which banks must apply the determined or changed systemic risk buffer,

e) the names of the states in which the risk exposures to which the systemic risk buffer applies are located.

(17) If the publication of the information under paragraph 16 letter c) could threaten the stability of the financial system, the information under paragraph 16 letter c) shall not be stated in the notification.

(18) If a bank does not comply in full with the requirement under paragraph 1, it shall be subject to restrictions on distributions under § 33k paragraphs 2 and 3. If the application of these restrictions on distributions does not lead, with respect to the systemic risk, to a satisfactory improvement of the bank's own Tier 1 capital, Národná banka Slovenska may, in accordance with § 50 and 63, adopt additional measures.

(19) Národná banka Slovenska may, on the basis of the notification under paragraph 11, apply the systemic risk buffer to all exposures. If Národná banka Slovenska decides to determine the systemic risk buffer up to the level of 3 % on the basis of exposures in other Member States, it shall determine the systemic risk buffer equally for all exposures located within the European Union as a whole.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 53 § 33f

(1) Národná banka Slovenska may decide to recognise the rate of the systemic risk buffer determined under § 33e in a Member State and for exposures located in that Member State, whose competent supervisory authority or designated authority determined this rate of the systemic risk buffer, and may apply this rate of the systemic risk buffer to banks.

(2) If Národná banka Slovenska recognises the rate of the systemic risk buffer under paragraph 1 for banks, it shall notify the Commission, the European Systemic Risk Board and the European Supervisory Authority (European Banking Authority), the competent supervisory authority or designated authority under paragraph 1.

(3) When deciding on the recognition of the rate of the systemic risk buffer, Národná banka Slovenska shall take into account the information provided by the Member State that determines the rate of the systemic risk buffer under § 33e paragraphs 11, 12 or 13.

(4) If Národná banka Slovenska has set the systemic risk buffer rate pursuant to § 33e, it may request the European Systemic Risk Board to issue a recommendation pursuant to a special regulation, 30za) to one or more Member States that may recognise the systemic risk buffer rate, to recognise that systemic risk buffer rate.

§ 33g

(1) Národná banka Slovenska shall decide on the setting of the countercyclical capital buffer rate quarterly, taking into account

a) the reference value for the countercyclical capital buffer calculated pursuant to paragraph 2,

b) all relevant guidance issued by the European Systemic Risk Board,

c) other indicators that Národná banka Slovenska considers important.

(2) Národná banka Slovenska shall calculate the reference value for the countercyclical capital buffer quarterly. When determining the reference value for the countercyclical capital buffer, Národná banka Slovenska shall take into account the specifics of the national economy of the Slovak Republic, with regard to

a) the indicator of credit growth and the risks arising therefrom, in particular the deviation of the ratio of the volume of loans granted to gross domestic product from its long-term trend,

b) all relevant guidance issued by the European Systemic Risk Board.

(3) Národná banka Slovenska shall set the countercyclical capital buffer rate expressed as a percentage of total risk exposure calculated pursuant to a special regulation, 30v) from 0 % to 2,5 %, in multiples of 0,25 percentage points. After taking into account the factors referred to in paragraph 2, Národná banka Slovenska may set a countercyclical capital buffer rate higher than 2,5 % of total risk exposure calculated pursuant to a special regulation 30v) for the purposes referred to in § 33j(2).

(4) If Národná banka Slovenska sets a countercyclical capital buffer rate higher than zero for the first time, or if Národná banka Slovenska increases an existing countercyclical capital buffer rate, Národná banka Slovenska shall also set the date from which banks will be required to apply the increased countercyclical capital buffer rate for the purposes of calculating the institution-specific countercyclical capital buffer. The date from which banks will be required to apply the increased countercyclical capital buffer rate may be set earlier than 12 calendar months from the date of notification of the setting of the increased countercyclical capital buffer rate only in

Page 54 Collection of Laws of the Slovak Republic 483/2001 Z. z.

exceptional cases.

(5) If Národná banka Slovenska reduces an existing countercyclical capital buffer rate, it shall also set the expected period during which an increase in the countercyclical capital buffer rate is not expected.

(6) Národná banka Slovenska shall notify the quarterly setting of the countercyclical capital buffer rate to the European Systemic Risk Board and on its website. The notification shall contain

a) the applicable countercyclical capital buffer rate,

b) the relevant ratio of loans to gross domestic product and its deviation from the long-term trend,

c) the reference value for the countercyclical capital buffer calculated pursuant to paragraph 2,

d) the justification for the set countercyclical capital buffer rate,

e) the date from which banks will be required to apply the increased countercyclical capital buffer rate for the purposes of calculating the institution-specific countercyclical capital buffer, if the countercyclical capital buffer rate is increased,

f) the justification for shortening the period, if the date referred to in point e) is within a period shorter than 12 calendar months after the date of notification,

g) the period during which an increase in the countercyclical capital buffer rate is not expected and the justification therefor, if the countercyclical capital buffer rate is reduced.

§ 33h

(1) If the designated authority of a Member State or such authority of a state that is not a Member State has set a countercyclical capital buffer rate higher than 2,5 % of total risk exposure calculated pursuant to a special regulation, 30v) Národná banka Slovenska may decide to recognise the set countercyclical capital buffer rate for the purposes of calculating the institution-specific countercyclical capital buffer.

(2) If Národná banka Slovenska pursuant to paragraph 1 recognises a countercyclical capital buffer rate higher than 2,5 % of total risk exposure calculated pursuant to a special regulation, 30v)

it shall notify this fact on its website. The notification shall contain

a) the applicable countercyclical capital buffer rate,

b) the Member State or the state that is not a Member State to which it applies,

c) the date from which banks will be required to apply the increased countercyclical capital buffer rate for the purposes of calculating their institution-specific countercyclical capital buffer, if the countercyclical capital buffer rate is increased,

d) the justification for shortening the period, if the date referred to in point c) is within a period shorter than 12 calendar months after the date of notification.

§ 33i

(1) If the designated authority of a state that is not a Member State has not set a countercyclical capital buffer rate for that state, Národná banka Slovenska may set the countercyclical capital buffer rate applied by a bank for the purposes of calculating the institution-specific countercyclical capital buffer.

(2) If the designated authority of a state that is not a Member State has set a countercyclical capital buffer rate for that state, and at the same time Národná banka Slovenska has reasonable

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 55 doubts that the countercyclical capital buffer rate set by the designated authority is not sufficient with regard to the adequate protection of banks against the risks of excessive growth in the volume of loans in that state, Národná banka Slovenska may set a different countercyclical capital buffer rate for that state for the purposes of calculating the institution-specific countercyclical capital buffer. The rate of the countercyclical capital buffer determined by the National Bank of Slovakia must not be below the level determined by the designated authority of this state, except where the rate of the countercyclical capital buffer is higher than 2,5 % of the total risk exposure calculated in accordance with the special regulation 30v) for banks that have credit exposures in this state.

(3) The determination of the rate of the countercyclical capital buffer under paragraph 1 or paragraph 2, by which the existing applicable rate of the countercyclical capital buffer is increased, by the designated authority of this state, shall also include the date from which banks will be obliged to apply the rate of the countercyclical capital buffer for the purposes of calculating the bank-specific countercyclical capital buffer. The date from which banks will be obliged to apply the increased rate of the countercyclical capital buffer shall be no more than 12 calendar months from the date of notification of the determination of the increased rate of the countercyclical capital buffer under paragraph 4.

(4) The National Bank of Slovakia shall notify every determination of the rate of the countercyclical capital buffer under paragraph 1 or paragraph 2 on its website. The notification shall contain

a) the rate of the countercyclical capital buffer,

b) the state that is not a member state to which it applies,

c) the justification for the determined rate of the countercyclical capital buffer,

d) the date from which banks will be obliged to apply the increased rate of the countercyclical capital buffer for the purposes of calculating the bank-specific countercyclical capital buffer, if the rate of the countercyclical capital buffer was determined for the first time at a level higher than zero or is being increased,

e) the justification for shortening the period, if the date stated in point d) is within a period shorter than 12 calendar months after the date of notification.

§ 33j

(1) The bank-specific countercyclical capital buffer rate shall be calculated as the weighted average of the countercyclical capital buffer rates that apply in the states in which the relevant credit risk exposures of the bank are located, or that apply under § 33i paragraph 1 or paragraph 2. For the calculation of the weighted average under the first sentence, the bank shall apply to each relevant countercyclical capital buffer rate the ratio of its total own funds requirements for credit risk determined in accordance with the special regulation, 30zb) which relate to the relevant credit risk exposures in the territory concerned, to its total own funds requirements for credit risk which relate to all its credit risk exposures.

(2) If the rate of the countercyclical capital buffer determined by the competent supervisory authority of a member state for that member state was higher than 2,5 % of the total risk exposure calculated in accordance with the special regulation, 30v) for the relevant credit risk exposures located in that member state, the following countercyclical capital buffer rates shall apply for the purposes of calculating the countercyclical capital buffer rate under paragraph 1:

a) at the level of 2,5 % of the total risk exposure, if the National Bank of Slovakia has not recognised a countercyclical capital buffer rate higher than 2,5 % under § 33h paragraph 1,

b) determined by the competent supervisory authority of the member state, if the National Bank of Slovakia has recognised a countercyclical capital buffer rate higher than 2,5 % under § 33h.

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(3) If the rate of the countercyclical capital buffer determined by the competent authority of a state that is not a member state for that state was higher than 2,5 % of the total risk exposure calculated in accordance with the special regulation, 30v) for the relevant credit risk exposures located in that state, the following countercyclical capital buffer rates shall apply for the purposes of the calculation under paragraph 1:

a) at the level of 2,5 % of the total risk exposure, if the National Bank of Slovakia has not recognised a countercyclical capital buffer rate higher than 2,5 % under § 33h paragraph 1,

b) determined by the designated authority of that state, if the National Bank of Slovakia has recognised a countercyclical capital buffer rate higher than 2,5 % under § 33h.

(4) Credit risk exposures include all exposure classes other than those referred to in the special regulation, 30zc) which are subject to

a) own funds requirements for credit risk under the special regulation, 30zb)

b) own funds requirements for specific risk under the special regulation 30zd) or own funds requirements for additional default and migration risk under the special regulation, 30ze) if the exposure is held in the trading book,

c) own funds requirements under the special regulation, 30zf) if the exposure is a securitisation.

(5) The bank shall identify the geographical location of the credit risk exposure in accordance with the relevant delegated regulations of the Commission on the issuance of regulatory technical standards. 30zg)

(6) For the purposes of the calculation under paragraph 1, the countercyclical capital buffer rate shall be applied

a) for a member state from the date stated in the notifications published under § 33g paragraph 6 point e)

or under § 33h paragraph 2 point c), if the consequence of the decision is an increase in the countercyclical capital buffer rate,

b) for a state that is not a member state, 12 calendar months after the date of notification of the change in the countercyclical capital buffer rate, determined by the authority of that state, regardless of whether the competent authority of that state requires foreign banks established in that state to apply this change within a shorter period, if the consequence of the decision of the designated authority of that state is an increase in the countercyclical capital buffer rate, except in the case referred to in point c),

c) from the date stated in the notifications published under § 33i paragraph 4 point d) or under § 33h paragraph 2 point c), if the National Bank of Slovakia by decision determined the countercyclical capital buffer rate for a state that is not a member state under § 33i paragraph 1 or paragraph 2 or recognised the countercyclical capital buffer rate for that state under § 33h, and if the consequence of the decision is an increase in the countercyclical capital buffer rate,

d) without delay, if the consequence of a decision of the National Bank of Slovakia is a reduction in the rate of the countercyclical capital buffer.

(7) For the purposes of paragraph 6 letter b), a change in the rate of the countercyclical capital buffer for a state that is not a member state shall be considered notified on the date of its publication designated by the authority of that state in accordance with the relevant legal regulations of that state.

§ 33k

(1) A bank that meets the combined buffer requirement shall not carry out a distribution of own Tier 1 capital if such distribution would result in a reduction of its own Tier 1 capital to a level at which the combined buffer requirement would no longer be met.

(2) A bank that does not meet the combined buffer requirement shall calculate the maximum distributable amount pursuant to paragraph 4 and shall notify the calculated maximum distributable amount to the National Bank

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 57 Slovakia. Until the calculation of the maximum distributable amount and its notification to the National Bank of Slovakia are carried out, the bank shall not

a) carry out a distribution of own Tier 1 capital,

b) impose an obligation to pay a variable component of remuneration or discretionary pension benefit payments or pay a variable component of remuneration, if the obligation to pay arose at a time when the bank did not meet the combined buffer requirement,

c) make a payment in connection with instruments of additional Tier 1 capital.

(3) During the period in which a bank does not meet or exceed the combined buffer requirement, the bank may act pursuant to paragraph 2 only up to the amount of the maximum distributable amount calculated pursuant to paragraph 4. If the bank carries out any measure pursuant to paragraph 2 letter a), b) or c), this shall result in a reduction of the maximum distributable amount.

(4) The bank shall calculate the maximum distributable amount as the product of the amount calculated pursuant to paragraph 5 and the coefficient determined pursuant to paragraph 6.

(5) The amount pursuant to paragraph 4 is the sum of the interim profit not included in own Tier 1 capital pursuant to a special regulation, 30zh) which was created since the last decision on profit distribution or since the last execution of an activity pursuant to paragraph 2, whichever occurred later, and the year-end profit not included in own Tier 1 capital pursuant to a special regulation, 30zh)

which was created since the last decision on profit distribution or since the last execution of an activity pursuant to paragraph 2, whichever occurred later, reduced by the amount that would be payable in the form of tax if the interim profit and year-end profit were not distributed.

(6) The coefficient is

a) 0, if the own Tier 1 capital held by the bank, which is not used to meet the own funds requirement pursuant to a special regulation, 30zi) expressed as a percentage of the total risk exposure calculated pursuant to a special regulation, 30v) is in the first quartile of the combined buffer requirement,

b) 0.2, if the own Tier 1 capital held by the bank, which is not used to meet the own funds requirement pursuant to a special regulation, 30zi) expressed as a percentage of the total risk exposure pursuant to a special regulation, 30v) is in the second quartile of the combined buffer requirement,

c) 0.4, if the own Tier 1 capital held by the bank, which is not used to meet the own funds requirement pursuant to a special regulation, 30zi) expressed as a percentage of the total risk exposure pursuant to a special regulation, 30v) is in the third quartile of the combined buffer requirement,

d) 0.6, if the own Tier 1 capital held by the bank, which is not used to meet the own funds requirement pursuant to a special regulation, 30zi) expressed as a percentage of the total risk exposure pursuant to a special regulation, 30v) is in the fourth quartile of the combined buffer requirement, or is higher than the upper bound of the fourth quartile.

(7) To calculate the lower bound of the quartile of the combined buffer requirement, the following formula shall be used:

where Qn is the ordinal number of the relevant quartile.

(8) To calculate the upper bound of the quartile of the combined buffer requirement, the following formula shall be used:

Page 58 Collection of Laws of the Slovak Republic 483/2001 Z. z.

where Qn is the ordinal number of the relevant quartile.

(9) For the purposes of paragraphs 1 and 2, distribution of own Tier 1 capital includes

a) payment of cash dividends,

b) distribution of fully paid or partly paid bonus shares or other capital instruments referred to in a special regulation, 30zj)

c) redemption or purchase of its own shares or other capital instruments referred to in a special regulation 30zj) by the bank,

d) repayment of amounts paid in connection with capital instruments referred to in a special regulation, 30zj)

e) distribution of items referred to in a special regulation. 30zk)

(10) If a bank does not meet the combined buffer requirement and plans to distribute its distributable profit or proceed pursuant to paragraph 2, it shall notify the National Bank of Slovakia.

The notification shall contain

a) the amount of capital held by the bank, broken down into

1. own Tier 1 capital,

2. additional Tier 1 capital,

3. Tier 2 capital,

b) the amount of the bank's interim profit and year-end profit,

c) the maximum distributable amount calculated pursuant to paragraph 4,

d) the amount of distributable profit that the bank plans to allocate to

1. dividend payments,

2. share buybacks,

3. payments in connection with instruments within additional Tier 1 capital,

4. payments of the variable component of remuneration, or discretionary pension benefit payments due to the emergence of a new payment obligation or a payment based on a payment obligation that arose at a time when the bank did not meet the combined buffer requirements.

(11) The bank is obliged to take measures to ensure the accurate calculation of the amount of distributable profit and the maximum distributable amount and shall demonstrate the accuracy of the calculation to the National Bank of Slovakia upon request.

(12) The restrictions pursuant to paragraphs 1 to 11 apply only to payments that result in a reduction of own Tier 1 capital or a reduction of profits, whereby the suspension of payments or non-execution of payments does not constitute a failure or a condition for initiating proceedings in the insolvency regime.

§ 33l

(1) If a bank does not meet the combined buffer requirement, the bank shall draw up a capital conservation plan and submit it to Národná banka Slovenska no later than five working days after establishing that it does not meet that requirement. Národná banka Slovenska is entitled to extend the period referred to in the first sentence by no more than five working days.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 59

(2) The capital conservation plan contains

a) estimates of income and expenditure and a balance sheet forecast,

b) measures to increase the bank's capital ratios,

c) a plan and timetable for increasing own funds with the aim of meeting the combined buffer requirement,

d) other information that Národná banka Slovenska considers necessary for carrying out the assessment under paragraph 3.

(3) Národná banka Slovenska shall assess the capital conservation plan and may approve it only if the implementation of that plan will lead to maintaining or obtaining sufficient capital for the bank to meet the combined buffer requirement within the period that Národná banka Slovenska considers appropriate.

(4) If Národná banka Slovenska does not approve the capital conservation plan under paragraph 3, it shall impose on the bank

a) a requirement to increase own funds within a specified period,

b) restrictions on distributions greater than under § 33k or

c) the requirement under point a) and the restriction under point b).

§ 33m Národná banka Slovenska shall decide on

a) setting a preferential risk weight of between 35 % and 150 % for loans fully secured by residential property under a special regulation, 30zl)

b) setting a preferential risk weight of between 50 % and 150 % for the part of the exposure secured by mortgages on commercial property that does not exceed 50 % of the market value of the property or 60 % of the value for mortgage financing of the relevant property under a special regulation, 30zl)

c) setting stricter criteria for the part of the exposure that is considered secured by residential property under a special regulation, 30zm)

d) setting stricter criteria for the part of the exposure that is considered secured by commercial property under a special regulation, 30zn)

e) setting a minimum value for the exposure-weighted average loss given default under the internal ratings-based approach for loans secured by residential property and for loans secured by commercial property under a special regulation, 30zo)

f) setting stricter requirements for own funds, large exposures, disclosure, the capital conservation buffer referred to in § 33b, liquidity, risk weights for residential or commercial property and exposures within the financial sector under a special regulation, 30zp)

g) recognising measures of another Member State under a special regulation, 30zr)

h) setting stricter requirements for large exposures, risk weights for residential or commercial property and exposures within the financial sector under a special regulation. 30zs)

§ 33n The provisions on proceedings before Národná banka Slovenska under this Act and a special act 89) shall not apply to decision-making by Národná banka Slovenska under § 33d to 33j and 33m

nor the general regulations on administrative proceedings. 30zt) A decision of Národná banka Slovenska becomes

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final and enforceable on the day of its publication in the bulletin issued by Národná banka Slovenska, 30zu) no remedy may be lodged against this decision and this decision is not subject to review by an administrative court. 30zv)

§ 33o

(1) A bank that is not subject to supervision on a consolidated basis or a bank that has a significant share in the financial system is obliged to draw up, regularly update and comply with a recovery plan, which is part of the bank's management system. A bank has a significant share in the financial system if

a) the total value of its assets is higher than 30 000 euros or

b) the ratio of its total assets to the gross domestic product of the Slovak Republic is higher than 20 %; this shall not apply if the total value of its assets is lower than 5 000 euros.

(2) The particulars of the recovery plan are in particular

a) a summary of the main parts of the recovery plan and a summary of the overall recovery capacity; for the purposes of this Act, recovery capacity means the bank's ability to restore its financial situation after its significant deterioration,

b) a summary of substantial changes made in the bank since the last recovery plan submitted to Národná banka Slovenska,

c) a communication and information provision plan, which shall state what measures the bank will take to manage possible adverse market reactions,

d) the extent of capital and liquidity measures required to maintain or restore the bank's financial situation and its ability to continue operating,

e) an estimate of the timeframe for implementing the substantial aspects of the recovery plan,

f) a detailed description of any substantial obstacles to the effective and timely implementation of the recovery plan, including an assessment of the impact on other members of the group, clients and contractual counterparties,

g) identification of the bank's critical functions,

h) a detailed description of the procedures for determining the value and possibilities of selling or transferring the main areas of the bank's business activities and assets,

i) a detailed description of how recovery planning is integrated into the bank's management system, the procedures for approving the recovery plan and the designation of persons responsible for drawing up and implementing the recovery plan,

j) measures to maintain or restore the bank's own funds,

k) measures to ensure the bank's sufficient access to emergency funding sources that will enable the bank to continue its activities and meet the bank's obligations in a timely manner, in particular an assessment of

1. possible sources of liquidity,

2. available collateral,

3. the possibility of transferring liquidity between members of the group and areas of business activity,

l) measures to reduce risk and financial leverage,

m) measures to restructure liabilities,

n) measures to restructure areas of business activity,

o) measures necessary to maintain continuous access to financial market infrastructures,

p) measures necessary to maintain the continuous functioning of the bank's operational processes

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 61 including infrastructure and information technologies,

q) preparatory measures to facilitate the sale of assets or business areas so that the bank's financial stability is restored in a timely manner,

r) other activities or management strategies aimed at restoring financial stability and the anticipated financial effect of these measures or strategies,

s) preparatory measures that the bank has taken and is to take to facilitate the implementation of the recovery plan, including measures necessary to enable the timely recapitalisation of the bank,

t) a set of indicators on the basis of which the moments are determined at which the bank may take the measures set out in the recovery plan; these indicators shall be of a qualitative or quantitative nature relating to the financial situation of the bank and must be easily monitorable by the bank,

u) measures that the bank is prepared to take if the conditions under § 65a are met,

v) an analysis of how and when the bank may, on the basis of the circumstances set out in the recovery plan, request the use of central bank liquidity operations, and a determination of the assets that the bank could use as collateral.

(3) The bank is obliged to regularly monitor the indicators under paragraph 2 letter t). If the statutory body of the bank considers it appropriate, it may decide on

a) the adoption of a measure set out in the recovery plan despite the fact that the relevant indicator was not met,

b) the non-adoption of a measure set out in the recovery plan despite the fact that the relevant indicator was met.

(4) The bank shall notify the National Bank of Slovakia without delay of the decision under paragraph 3 together with the reasons.

(5) The recovery plan may not contain measures consisting in the possibility of obtaining access to extraordinary public financial support.

(6) The recovery plan must contain adequate procedures to ensure the timely application of individual measures and the identification of all possible ways of recovering the bank. The measures must take into account as many possible scenarios of macroeconomic stress situations and financial stress situations to which the bank may be exposed in view of the nature of the banking activities carried out, including systemic stress situations, stress situations concerning a specific legal entity and a group of legal entities.

(7) The recovery plan is approved by the statutory body of the bank and the bank shall subsequently submit it for assessment to the National Bank of Slovakia.

(8) The bank is obliged to update its recovery plan at least once a year and after each change in the organisational structure, business activity or financial situation that could have a significant impact on the measures set out in the recovery plan; when updating, it shall proceed in accordance with paragraph 7.

The National Bank of Slovakia may require the bank to update the recovery plan more frequently than once a year.

§ 33p

(1) The bank shall submit the recovery plan to the National Bank of Slovakia for assessment within five working days of its approval pursuant to § 33o paragraph 7. The National Bank of Slovakia shall assess whether

a) the recovery plan contains the particulars pursuant to § 33o paragraphs 2 and 6,

b) it can reasonably be expected that the implementation of the measures set out in the recovery plan, taking into account the preparatory steps that the bank has taken or plans to take to

Page 62 Collection of Laws of the Slovak Republic 483/2001 Coll.

facilitate the implementation of the recovery plan, will lead to the preservation or restoration of the financial stability of the bank or the group of which it is a part and the ability to continue its activities,

c) it can reasonably be expected that the recovery plan can be implemented quickly and efficiently when the bank is under financial stress, and with minimal significant adverse impacts on the financial system, even if other banks were to implement their recovery plans at the same time.

(2) When assessing the recovery plan, the National Bank of Slovakia shall also take into account the adequacy of the bank's capital and funding structure in relation to the complexity of the bank's organisational structure and the bank's risk profile.

(3) The National Bank of Slovakia shall express its opinion on the recovery plan in the form of a statement within six months of its submission pursuant to paragraph 1. If the bank has a significant branch established in another Member State and the recovery plan contains measures concerning that branch, the National Bank of Slovakia shall express its opinion on the recovery plan after consulting the competent supervisory authority of the Member State in which the significant branch is located.

(4) The National Bank of Slovakia shall, within five working days from the day of submission of the recovery plan pursuant to paragraph 1, send the recovery plan to the Crisis Resolution Council 30zx) (hereinafter "resolution council"), which may examine it. If the resolution council finds that the recovery plan contains measures that may negatively affect the resolvability of the bank's crisis situation, it shall notify the National Bank of Slovakia of this fact. The notification of the resolution council is in the nature of a recommendation.

(5) If the National Bank of Slovakia finds that the recovery plan does not meet the conditions pursuant to paragraph 1, it shall inform the bank thereof and request the bank to comment on the shortcomings of the recovery plan within the period set by the National Bank of Slovakia. Upon receipt of the bank's statement, the National Bank of Slovakia shall call upon the bank to remedy the shortcomings of the recovery plan within a period of two months. The National Bank of Slovakia may extend the period for remedying the shortcomings of the recovery plan at the bank's request by no more than one month.

(6) If the bank does not remedy the shortcomings pursuant to paragraph 5, the National Bank of Slovakia may call upon the bank to make specific changes to the recovery plan.

(7) If the bank does not submit the recovery plan to the National Bank of Slovakia within the period pursuant to paragraph 5 or submits a recovery plan in which the shortcomings have not been remedied even on the basis of a call pursuant to paragraph 6, the National Bank of Slovakia shall call upon the bank to propose changes in the conduct of its activities within a specified period for the purpose of remedying the shortcomings of the recovery plan.

(8) If the bank does not propose changes pursuant to paragraph 7 within the specified period or if the National Bank of Slovakia assesses that the proposed changes do not lead to the remedying of the shortcomings of the recovery plan, it may impose a measure pursuant to § 50 on the bank and the obligation

a) to reduce the bank's risk profile and liquidity risk,

b) to create the preconditions for the timely adoption of recapitalisation measures,

c) to make changes to the bank's strategy and structure,

d) to make changes to the bank's funding strategy with the aim of improving the resilience of the main areas of business activity and critical functions of the bank, whereby for the purposes of this Act, the main areas of business activity are understood to mean banking activities that represent material sources of income, profit or intellectual property value for the bank or the group of which the bank is a part; critical functions are understood to mean activities, services or operations performed or provided by the bank, the disruption of which, in view of the size of the bank or group, its market share, external and internal interconnectedness, complexity or extent of cross-border activities, the irreplaceability of these activities, services or operations, would probably lead to a disruption of the functioning of the real economy or a disruption of financial stability,

483/2001 Coll. Collection of Laws of the Slovak Republic Page 63

e) to make changes to the bank's management system.

(9) The provisions of the special regulation apply to the imposition of a measure and an obligation pursuant to paragraph 8. 89)

§ 33q

(1) If the bank is a parent undertaking at group level, 30zy) it shall draw up and submit to the National Bank of Slovakia a recovery plan for the group (hereinafter referred to as the "group recovery plan").

The group recovery plan shall be approved by the bank's statutory body. The bank shall submit the group recovery plan to the National Bank of Slovakia for assessment within the period under § 33p(1).

(2) The National Bank of Slovakia shall submit the group recovery plan

a) to the competent supervisory authority of another Member State which supervises the subsidiary that is a foreign bank, and to the college,

b) to the competent supervisory authority of the Member State in which the bank's significant branch is located, if the group recovery plan contains measures concerning the bank's significant branch,

c) to the resolution council,

d) to the competent resolution authorities of the subsidiaries under special legislation. 30zz)

(3) The group recovery plan shall set out the measures to be implemented by the bank that is the parent undertaking and by the members of the group. The purpose of the group recovery plan is to achieve the stabilisation of the group as a whole or of a subsidiary if it is in a stress situation, to resolve or eliminate the reasons for the stress situation and to restore the financial stability of the group as a whole or of its members, while simultaneously taking into account the financial situation of the members of the group.

(4) The group recovery plan shall contain the particulars under § 33o(2) and (6) in relation to the group as well as to individual subsidiaries, and it shall also include a group support agreement if such an agreement has been concluded.

(5) For each macroeconomic stress scenario and financial stress scenario, the group recovery plan shall state whether there are obstacles preventing the implementation of measures within the group, including at the level of individual members to which the group recovery plan applies, and whether there are material practical or legal obstacles preventing the rapid transfer of own funds or the repayment of liabilities or claims within the group.

§ 33r

(1) If the National Bank of Slovakia is the competent authority responsible for consolidated supervision, it shall, together with the competent supervisory authorities of subsidiaries that are foreign banks and with the competent supervisory authority of the Member State in which the bank's significant branch is located, make every effort to reach a joint decision within four months of the submission of the group recovery plan under § 33q(2) on

a) the approval of the group recovery plan,

b) the imposition of an obligation on a subsidiary to draw up an individual recovery plan,

c) the procedure under § 33p(5),

d) the procedure under § 33p(6),

e) the procedure under § 33p(7),

Page 64 Collection of Laws of the Slovak Republic 483/2001 Coll.

f) the imposition of a measure under § 33p(8).

(2) The provisions of § 33p shall apply equally to the assessment of the group recovery plan, with the National Bank of Slovakia, together with the competent supervisory authorities of subsidiaries that are foreign banks, assessing the impact of the recovery measures in the group recovery plan on financial stability in the Member States in which the bank and its subsidiaries have their registered offices.

(3) If, within the period under paragraph 1, any of the supervisory authorities under paragraph 1 requests the European Supervisory Authority (European Banking Authority) to assist in reaching an agreement on the matters under paragraph 1(a) and under § 33p(8)(a), (b) and (d) in accordance with a special regulation, 30zza)

Národná banka Slovenska shall wait until the European Supervisory Authority (European Banking Authority) issues a decision by which Národná banka Slovenska is bound. If the European Supervisory Authority (European Banking Authority) does not issue such a decision at the latest within one month after receipt of the request for assistance or if none of the supervisory authorities under paragraph 1 has requested the European Supervisory Authority (European Banking Authority) to assist in reaching an agreement and Národná banka Slovenska has failed to reach a joint decision of the supervisory authorities under paragraph 1, Národná banka Slovenska shall issue a separate decision taking into account the opinions of the supervisory authorities under paragraph 1. Národná banka Slovenska shall deliver its decision to the supervisory authorities under paragraph 1 and to the bank.

(4) If, within the period under paragraph 1, Národná banka Slovenska fails to reach a joint decision of the supervisory authorities under paragraph 1 on the matters under paragraph 1(b) to (f), Národná banka Slovenska shall adopt a decision on these matters only in relation to the bank as a parent company. Before the expiry of the period under paragraph 1, Národná banka Slovenska may request the European Supervisory Authority (European Banking Authority) to assist in reaching a joint decision in matters under paragraph 1 letter a) and Section 33p(8) letters a), b) and d) in accordance with a special regulation. 19) If Národná banka Slovenska proceeds under the second sentence, it shall wait until the European Supervisory Authority (European Banking Authority) issues a decision. If the European Supervisory Authority (European Banking Authority) does not issue such a decision within one month of receiving the request for assistance, Národná banka Slovenska shall issue the decision independently.

(5) If Národná banka Slovenska is the supervisory authority over a bank that is a subsidiary within a group, the provisions of paragraphs 1 and 2 shall apply to it equally. Národná banka Slovenska, as the supervisory authority over a bank that is a subsidiary within a group, when reviewing the group recovery plan, shall assess compliance with the requirements proportionately under Section 33o(2) and (6) to the extent included in the group recovery plan, taking into account the possible impact of the recovery measures set out in the group recovery plan on financial stability.

(6) Národná banka Slovenska may, in matters under paragraph 1 letter a) and Section 33p(8) letter a),

b) and d), request assistance from the European Supervisory Authority (European Banking Authority) in accordance with a special regulation, 19) and if the European Supervisory Authority (European Banking Authority)

in accordance with a special regulation 19) decides, Národná banka Slovenska shall be bound by that decision. If no joint decision is reached within the period under paragraph 1, Národná banka Slovenska may issue a separate decision under paragraph 1 letters b), e) and f) in respect of the bank over which it exercises supervision.

(7) A joint decision reached between Národná banka Slovenska and the authorities under paragraph 1 shall be binding on the bank that is included in supervision on a consolidated basis.

483/2001 Coll. Collection of Laws of the Slovak Republic Page 65 Section 33s Provisions on proportionality

(1) Národná banka Slovenska may also without a proposal, taking into account the possible impact of a bank's failure on the financial system, including the impact of a bank's failure on other institutions and financial institutions and the conditions of their financing and on the economy as a whole, proportionately limit the scope of application of the requirements set out in Sections 33o and 33q and determine differently the period for drawing up the recovery plan and the frequency of its updating. Národná banka Slovenska shall thereby take into account the nature and complexity of the bank's activities, its shareholder structure, risk profile, size, legal status, interconnectedness with other participants in the financial system, membership in an institutional protection scheme or another similar scheme under a special regulation 26g) and the investment services provided by that bank. If circumstances change, Národná banka Slovenska may require a bank to draw up and submit a recovery plan to the extent set out in § 33o and 33q and to update it in accordance with § 33o(8).

(2) Národná banka Slovenska shall inform the European Supervisory Authority (European Banking Authority) whether it has used the procedure under paragraph 1 and of the details of its procedure.

§ 33t Intra-group financial support agreement

(1) A parent bank, a parent bank in the European Union, a financial holding company, a mixed financial holding company and a holding company with mixed activity having its registered office in the Slovak Republic, a parent financial holding company, a parent financial holding company in the European Union, a parent mixed financial holding company, a parent mixed financial holding company in the European Union and their subsidiary that is an institution or a financial institution subject to supervision on a consolidated basis under this Act (hereinafter referred to as the "subgroup"), may conclude with one or more members of the subgroup an agreement containing a commitment to provide financial support where the conditions for imposing an early intervention measure under § 65a(1) or a comparable measure under the legal order of the Member State in which the contracting party concerned has its registered office have been met (hereinafter referred to as the "group support agreement"), under the conditions set out in paragraphs 2 to 7 and in § 33u to 33z. The subject of financial support may be the provision of a loan, a guarantee or assets to be used for the purposes of collateral (hereinafter referred to as "group support").

The recipient of group support shall have the right to use the subject of the group support also in transactions with persons who are not parties to the group support agreement.

(2) The provisions of paragraphs 3 to 7 and § 33o to 33z shall not apply to a financing mechanism between members of the subgroup if none of the members of that financing mechanism meets the conditions for imposing an early intervention measure under § 65a(1) or a comparable measure under the legal order of the Member State in which the member of the subgroup concerned has its registered office.

(3) Without prejudice to the other conditions laid down in paragraphs 2, 4 to 7 and in § 33s to 33y, group support may also be provided without the prior conclusion of a group support agreement if such a procedure is in accordance with the internal rules of the group concerned and the member of the subgroup intending to provide group support assesses that the provision of group support is necessary and does not pose a risk to the group concerned. The member of the subgroup shall inform Národná banka Slovenska without delay of the provision of group support if it supervises it under this Act or if it supervises the group concerned on a consolidated basis.

(4) The group support agreement may contain an agreement by which the member of the subgroup receiving group support undertakes to provide group support to the member of the subgroup which

Page 66 Collection of Laws of the Slovak Republic 483/2001 Z. z.

poskytuje podporu.

(5) A group support agreement may be concluded only if

a) the conclusion of the group support agreement must be an expression of the free will of the contracting parties,

b) the group support agreement contains the principles for determining the value of the consideration for the provision of group support,

c) the value of the consideration for the provision of group support shall not be determined earlier than at the time of the adoption of the decision on the provision of group support,

d) when adopting the decision to conclude the group support agreement and determining the value of the consideration for the provision of group support, each of the contracting parties acts in its own interest, while it may take into account all direct or indirect advantages that may arise for it as a result of the provision of group support,

e) before determining the consideration for the provision of group support and before adopting each decision on the provision of group support, the contracting party that is to be the recipient of the group support is obliged to make available to the contracting party that is to be the provider of the group support all information relevant for determining the consideration or adopting the decision on the provision of group support,

f) the conditions for the provision of group support are set in accordance with the requirements under § 33w,

g) when determining the value of the consideration for the provision of group support, information that is not publicly available and that the contracting party providing the group support has at its disposal on the basis that it belongs to the same group as the contracting party receiving the financial support may be taken into account,

h) when determining the value of the consideration for the provision of group support, the anticipated temporary effect on market prices that originates from circumstances outside the group concerned need not be taken into account.

(6) A group support agreement may be concluded only if, at the time of its conclusion, the supervisory authorities that supervise the persons that are to conclude the group support agreement do not find that any of the contracting parties meets the conditions for imposing a measure under § 65a(1) or a comparable measure under the legal order of the Member State in which the contracting party concerned has its registered office.

(7) The rights under the group support agreement shall be exercised by the contracting parties separately; agreements on the rights of other persons shall not be taken into account.

(8) The group support agreement may relate to the provision of group support to one or more subsidiaries within the group, or the group support agreement may designate the provision of group support from a parent company to a subsidiary or from a subsidiary to a parent company that are contracting parties.

§ 33u

(1) If an agreement is reached among the persons of a group to conclude a group support agreement, the parent bank 30zzaa) shall submit an application for approval of the draft group support agreement to Národná banka Slovenska, which supervises this bank on a consolidated basis. In addition to the requirements under a special regulation 89), the application must contain a description and justification of each of the conditions for concluding the group support agreement and the relevant documents confirming compliance with the conditions.

The application shall also be accompanied by the draft group support agreement, indicating the members of the group that are to become contracting parties.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 67

(2) If an application under paragraph 1 is delivered to Národná banka Slovenska as the supervisory authority responsible for performing supervision on a consolidated basis, Národná banka Slovenska shall send a copy of this application to the supervisory authorities that supervise the persons that are to be contracting parties.

(3) Národná banka Slovenska, as the supervisory authority responsible for performing supervision on a consolidated basis, shall endeavour to reach a joint decision with the supervisory authorities under paragraph 2 on the compliance of the draft group support agreement with the conditions under § 33t and 33w, taking into account the possible consequences of this decision, including the fiscal consequences of providing performance under the group support agreement in the Member States in which the group concerned operates. Národná banka Slovenska shall decide on the application under paragraph 1 within four months from the date of delivery of the application. If the draft group support agreement is in compliance with the conditions under § 33t and 33w, Národná banka Slovenska shall approve the draft group support agreement; otherwise, it shall reject the application. If a joint decision cannot be reached within the period under the second sentence, Národná banka Slovenska shall decide on the application under paragraph 1 independently, taking into account the opinions and comments of the supervisory authorities under paragraph 2. Národná banka Slovenska shall deliver its decision to the supervisory authorities under paragraph 2 and to the parent bank.

(4) Before the expiry of the period under paragraph 3 for reaching a joint decision under paragraph 3, Národná banka Slovenska, as the supervisory authority responsible for performing supervision on a consolidated basis, is entitled to request assistance from the European Supervisory Authority (European Banking Authority) in accordance with a special regulation.

(5) If, within the period before reaching a joint decision under paragraph 3, Národná banka Slovenska as the supervisory authority on a consolidated basis or any of the supervisory authorities under paragraph 3 requests the European Supervisory Authority (European Banking Authority) for assistance in reaching an agreement in accordance with a special regulation, Národná banka Slovenska shall wait until the decision of the European Supervisory Authority (European Banking Authority) is delivered to it, by which Národná banka Slovenska is bound.

(6) The obligation under paragraph 3 to make maximum efforts to reach a joint decision under paragraph 3 shall apply mutatis mutandis also if a copy of an application for approval of a draft group support agreement has been submitted to Národná banka Slovenska by a supervisory authority of a Member State that performs supervision on a consolidated basis. Národná banka Slovenska is entitled to request the European Supervisory Authority (European Banking Authority) for assistance in reaching an agreement under a special regulation.

(7) A joint decision reached between Národná banka Slovenska and the supervisory authorities under paragraph 3 shall be binding on the contracting parties to the group support agreement.

(8) Národná banka Slovenska shall submit to the council the group support agreement it has approved, as well as its amendments.

§ 33v Approval of the group support agreement by shareholders

(1) After approval of the draft group support agreement pursuant to § 33u, the future contracting party shall submit the draft group support agreement for approval to the general meeting. The group support agreement is valid only if it is approved by the general meeting, which shall at the same time grant the statutory body the right to decide on the acceptance or provision of group support in accordance with the conditions set out in the group support agreement and the provisions of § 33t to 33z.

By revocation of the right granted to the statutory body to decide on the acceptance or provision of group support, the agreement becomes invalid.

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(2) The statutory body of each person that is a contracting party to a group support agreement shall each year submit to the general meeting a report on the performance of the group support agreement and on any decision taken on its basis.

§ 33w Conditions for the provision of group support

A member of the subgroup may provide group support only if the following conditions are simultaneously met:

a) there is a reasonable presumption that the support provided will significantly remedy the financial difficulties of the person receiving the group support,

b) the provision of group support has as its aim to preserve or restore the financial stability of the group concerned as a whole or of any member of that group and is in the interest of the member of the subgroup providing it,

c) the group support is provided for consideration and in accordance with the further conditions pursuant to § 33t par. 5,

d) on the basis of information available to the statutory body of the subgroup member providing the group support at the time of adopting the decision to provide group support, there is a reasonable presumption that the subgroup member receiving that support will pay the consideration for the support to be provided, and if the group support is to be provided in the form of

1. a loan, if that loan is repaid on time,

2. the issuance of a guarantee, if the provider of the group support obtains, within the agreed period after the exercise of rights under the guarantee, reimbursement corresponding to the amount of the performance provided under the guarantee and the agreed interest,

3. the provision of another form of security, if the provider of the group support obtains, within the agreed period after the realisation of the security, reimbursement corresponding to the amount of the property damage suffered as a result of the realisation of the security and the agreed interest,

e) the provision of group support does not jeopardise the liquidity or solvency of the subgroup member that is to provide the support,

f) the provision of group support does not jeopardise the financial stability in particular of the Member State in which the subgroup member that is to provide the support has its registered office,

g) at the time of providing the group support, the subgroup member that is to provide the support complies with the requirements relating to capital and liquidity under this Act and the provision of group support will not lead to a breach of those requirements, except where Národná banka Slovenska as the supervisory authority over the subgroup member concerned grants consent to non-compliance with those requirements,

h) at the time of providing the group support, the subgroup member complies with the requirements on large exposures under this Act and the provision of group support will not lead to a breach of those requirements, except where Národná banka Slovenska as the supervisory authority over the subgroup member concerned grants consent to non-compliance with those requirements,

i) the provision of group support does not impair the resolvability of crisis situations of the subgroup member that is to provide the group support.

§ 33x Decision on the provision of group support

(1) The provision of group support shall be decided by the statutory body of the subgroup member that intends to provide the support. The decision must be drawn up in written form and contain

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 69 a statement of reasons including a description of how compliance with the requirements of this Act is ensured, in particular with the conditions set out in § 33t and 33w, and state the aim of providing the group support.

(2) The acceptance of group support shall be decided by the statutory body of the subgroup member that intends to accept the support.

(3) The subgroup member pursuant to paragraph 1 is obliged to deliver the decision pursuant to paragraph 1 to

a) Národná banka Slovenska,

b) the supervisory authority of the Member State that exercises supervision on an individual basis over the subgroup member to which the group support is to be provided,

c) the supervisory authority that exercises supervision on a consolidated basis over the group concerned, if it is different from the supervisory authorities referred to in points a) and b),

d) the European Supervisory Authority (European Banking Authority).

(4) If Národná banka Slovenska is the supervisory authority responsible for exercising supervision on a consolidated basis over the group among whose members the group support is to be provided, it shall without delay inform the other members of the college, the resolution board and the members of the resolution college of the decision pursuant to paragraph 1. 30zzb)

(5) Before providing or accepting group support, the subgroup member shall verify whether the condition pursuant to paragraph 1 or paragraph 2 has been met. If the counterparty has its registered office in another Member State, it shall verify whether a similar condition laid down by the legal order of that Member State has been met.

§ 33y Prior consent for the provision of group support

(1) The statutory body of the subgroup member that intends to provide group support shall notify this intention before providing the support to

a) Národná banka Slovenska,

b) the supervisory authority that exercises supervision over the subgroup member to which the group support is to be provided,

c) the supervisory authority that exercises supervision on a consolidated basis over the group concerned, if it is different from the supervisory authorities referred to in points a) and b),

d) the European Supervisory Authority (European Banking Authority).

(2) The notification under paragraph 1 contains the reasoned decision of the statutory body under § 33x and a detailed description of all other relevant aspects of the proposed group support that are not part of the decision of the statutory body together with a copy of the group support agreement and confirmation of its validity in relation to the proposed parties to the group support agreement, if such an agreement was concluded.

(3) If the National Bank of Slovakia receives a notification under paragraph 2 from a bank over which it exercises supervision, this notification is considered a request for the granting of prior consent for the provision of group support; such a request is subject to the requirements under a special regulation. 30zzc) The National Bank of Slovakia shall decide on the granting of prior consent for the provision of group support only if the conditions for its provision laid down by this Act are met. Otherwise, it shall prohibit or restrict the provision of group support by decision.

The National Bank of Slovakia shall issue a decision within five working days of receipt of a complete request.

(4) The National Bank of Slovakia shall inform the supervisory authorities under paragraph 1 letters b) to c) of its decision under paragraph 3.

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(5) If the National Bank of Slovakia is the supervisory authority responsible for the exercise of supervision on a consolidated basis, it shall immediately inform the other members of the college, the resolution board and the members of the resolution college of the granting of prior consent, of a decision to prohibit or restrict the provision of group support, which it issued or which was notified to it by another supervisory authority. 30zzb)

(6) If the National Bank of Slovakia, as the supervisory authority over a bank that is to be the recipient of group support or as the supervisory authority responsible for the exercise of supervision on a consolidated basis, disagrees with a decision of the supervisory authority of another Member State by which the provision of group support to the bank concerned was restricted or prohibited, within two days from the day it learns of the issuance of such a decision, it may request the assistance of the European Supervisory Authority (European Banking Authority) in accordance with a special regulation.

(7) If the National Bank of Slovakia grants prior consent under paragraph 3 or does not issue any decision within the period under paragraph 3, group support may be provided in accordance with the conditions stated in the request and its annexes under paragraphs 2 and 3.

(8) If the National Bank of Slovakia is the supervisory authority responsible for the exercise of supervision on a consolidated basis over a group whose group recovery plan includes the possibility of using group support, and the supervisory authority over a member of this group has decided to prohibit or restrict the provision of group support between the members of this group, the National Bank of Slovakia

a) may review the group recovery plan in accordance with the procedure under § 33r,

b) may call upon a member of the group concerned that is subject to supervision by the National Bank of Slovakia on an individual basis and that has been prevented from receiving group support or whose provision of group support has been restricted, to update its recovery plan,

c) is obliged to review the group recovery plan in accordance with the procedure under § 33r if requested to do so by the supervisory authority over a member of the group that has been prohibited from receiving group support or whose provision of group support has been restricted.

(9) If the supervisory authority that exercises supervision on a consolidated basis over a group whose group recovery plan includes the possibility of using group support, and one of the supervisory authorities over the members of this group has decided to prohibit or restrict the provision of group support to a member of the group over which the National Bank of Slovakia exercises supervision on an individual basis, the National Bank of Slovakia may

a) request the supervisory authority that exercises supervision on a consolidated basis over the group concerned to review the group recovery plan, or

b) call upon the member of the group concerned that has been prohibited from receiving group support or whose provision of group support has been restricted, to update its recovery plan.

§ 33z Information obligation

A member of a subgroup is obliged to inform on its website whether it has concluded a group support agreement and a description of the general terms of this agreement, including the identification of all contracting parties. A member of a subgroup is obliged to update this information at least once a year.

§ 34

(1) If it is not publicly accessible information, a bank or a branch of a foreign bank must not, when carrying out investment transactions

a) use information obtained in connection with its credit transactions and vice versa,

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 71

b) use for its own account information obtained in connection with its investment transactions carried out for a client's account and vice versa.

(2) For the purposes of paragraph 1, a bank and a branch of a foreign bank are obliged, in particular, to make in their organisational, management and control system measures ensuring the separation of credit transactions and investment transactions.

(3) Credit transactions under paragraph 1 shall mean activities relating to the provision of loans, including the provision of guarantees.

(4) Investment transactions under paragraph 1 shall mean activities relating to

a) investing in securities,

b) trading in securities,

c) trading in rights connected with securities or derived from securities,

d) participation in the issuance of securities and the provision of related services,

e) management of securities, including advisory activities.

(5) Investment transactions for a client's account may be carried out by a bank and a branch of a foreign bank only under conditions advantageous for the client, in particular at a price advantageous for the client, with the exercise of professional care, unless otherwise follows from the client's instruction; the provision of § 27 paragraph 14 is not affected thereby.

(6) A bank or a branch of a foreign bank shall keep separate records of investment transactions carried out for a client's account and for its own account.

§ 35

(1) A bank and a branch of a foreign bank must not carry out with persons who have a special relationship to them transactions which, given their nature, purpose or risk, would not be carried out with other clients. The bank and the branch of a foreign bank are obliged, before concluding and executing such a transaction, to verify whether the person with whom they carry out such a transaction does not have a special relationship with them; this person is obliged to provide the bank and the branch of a foreign bank with true information that the bank and the branch of a foreign bank need for the purpose of this verification. The bank and the branch of a foreign bank are obliged to ensure the truthfulness of the provided data in writing in the contract on the guarantee provided by them or on the deposit pursuant to § 5 letter a) with the sanction of invalidity of the conclusion of this contract and in the loan contract pursuant to § 5 letter b) with the sanction of immediate maturity of the entire debt amount as of the day when the bank or the branch of a foreign bank learned of the untruthfulness of this data, including the maturity of interest for the entire agreed loan period.

(2) The bank and the branch of a foreign bank provide loans or guarantees to persons pursuant to paragraph 1 only if the statutory body of the bank or the head of the branch of a foreign bank unanimously decides on it based on a written analysis of the relevant transaction and the financial situation of the applicant.

A person to whom the decision relates is excluded from the decision-making.

(3) Within 30 days after the end of the calendar year, every person listed in paragraph 4 letters a), b), c)

and f) and paragraph 5 letters a), b), c) and f) is obliged to notify the bank or the branch of a foreign bank in writing of all information necessary to identify other persons who, based on a relationship to the notifier, have a special relationship to the bank or to the branch of a foreign bank. The bank and the branch of a foreign bank are obliged to process the information thus obtained into a list of persons with a special relationship to it and, upon request, to hand it over to the National Bank of Slovakia and the Deposit Protection Fund for the purposes pursuant to a special regulation. 32) The measure, 23) which is issued by the National Bank of Slovakia and which is announced in the collection of laws, shall lay down the requirements of this notification.

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(4) For the purposes of this Act, persons who have a special relationship to the bank are considered to be

a) members of the statutory body of the bank, senior employees of the bank, other employees of the bank designated by the bank's articles of association, and the bank's proxy,

b) members of the supervisory board of the bank,

c) persons who have control over the bank, members of the statutory bodies of such legal entities, and senior employees of such legal entities,

d) persons close 30) to members of the statutory body of the bank, the supervisory board of the bank, senior employees of the bank, or natural persons who have control over the bank,

e) legal entities in which some of the persons listed in letters a), b), c) or d) have a qualifying holding,

f) shareholders who have a qualifying holding in the bank, and any legal entity that is under their control or that has control over them,

g) legal entities under the control of the bank,

h) members of the Bank Board of the National Bank of Slovakia,

i) an auditor or a natural person who performs audit activity in the bank on behalf of an audit company,

j) a member of the statutory body of another bank and the head of a branch of a foreign bank,

k) its mortgage administrator and the deputy of its mortgage administrator,

l) persons who have entered into a legal relationship with the bank that may lead to the emergence of a qualifying holding in the bank.

(5) For the purposes of this Act, persons who have a special relationship to a branch of a foreign bank are considered to be

a) the head of the branch of a foreign bank,

b) members of the statutory body or supervisory board of the foreign bank,

c) persons who have control over the foreign bank, members of the statutory bodies of such legal entities,

d) persons close 30) to persons listed in letter a) or b) or natural persons who have control over the foreign bank,

e) legal entities in which some of the persons listed in letters a), b), c) or d) have a qualifying holding,

f) shareholders who have a qualifying holding in the foreign bank, and any legal entity that is under their control or that has control over them,

g) legal entities under the control of the foreign bank,

h) members of the Bank Board of the National Bank of Slovakia,

i) an auditor or a natural person who performs audit activity in the branch of a foreign bank on behalf of an audit company,

j) the head of another branch of a foreign bank and a member of the statutory body of a bank.

k) its mortgage administrator and the deputy of its mortgage administrator.

§ 36

(1) The amount of loans not secured by a lien on real estate, provided by the bank to its employee or another person who has a special relationship to the bank pursuant to § 35 paragraph 4 letters a), b), c),

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 73

d) and f), may not exceed the total gross income of this person for the immediately preceding 24 months. The total amount of loans provided by the bank to its employees under preferential conditions may not exceed 20% of the bank's own funds.

(2) The bank must not provide a loan or secure obligations from a loan for any

a) acquisition of shares issued by it,

b) acquisition of shares issued by a person who has a qualifying holding in the bank,

c) acquisition of shares issued by legal entities that have control over persons or that are under the control of persons who have a qualifying holding in the bank,

d) acquisition of shares issued by legal entities that are under the control of the bank,

e) repayment of another loan provided for any acquisition of shares pursuant to letters a) to d)

or for securing obligations from such a loan.

(3) The bank or a branch of a foreign bank must not acquire from a person with a special relationship to it a receivable for which it is reasonably assumed that it will not be satisfied duly and on time, nor take over an obligation from such a person.

(4) Any legal act pursuant to paragraphs 2 and 3 is invalid.

(5) The bank must not provide a loan or secure obligations from a provided loan to an employee or a person who has a special relationship to the bank if the bank does not fulfill the obligation pursuant to § 30 paragraph 1 or if the person with a special relationship to the bank does not fulfill the obligation pursuant to § 35 paragraph 3.

§ 36b

(1) A bank, a foreign bank and a branch of a foreign bank shall provide consumer loans under a special regulation 32b) on the basis of a banking licence granted under § 7 to 9 or on the basis of an authorisation to carry out banking activities under § 11 to 20.

(2) The provisions on authorisation to provide consumer loans under a special regulation shall not apply to a bank, a foreign bank and a branch of a foreign bank under paragraph 1. 32c)

§ 37

(1) A bank and a branch of a foreign bank shall, on their website and in their business premises, provide comprehensible information in written form in the Slovak language about the conditions for accepting deposits, providing loans and carrying out all other transactions and about their prices, including examples. A bank or a branch of a foreign bank shall inform about any change to its business conditions for carrying out transactions and about a change in the prices of transactions in the manner set out in the preceding sentence, at least 15 days before the relevant change takes effect, unless a special regulation provides otherwise or unless the bank or the branch of a foreign bank has agreed otherwise with its client. A bank shall also be obliged, without delay, demonstrably and comprehensibly, to inform clients about the intention and the consequences of the intention to terminate the bank's activity or part of its activity in accordance with the procedure under § 28(1)(b), (c) or (d), and the bank shall also be obliged to publish information about the relevant intention without delay on its website and in its business premises, ensuring its continuous publication until the termination of the bank's activity or the relevant part of its activity. The information obligations under this Act shall not affect the provisions of § 265 and § 273(1) of the Commercial Code and special regulations. 33)

(2) A bank and a branch of a foreign bank shall, when concluding any written contract for a transaction, except for a transaction related to the provision of services tied to a payment account, 33a)

inform the client of the annual percentage rate of interest of the transaction, if an

Page 74 Collection of Laws of the Slovak Republic 483/2001 Z. z.

interest rate has been agreed, of the fees required by the bank and the branch of a foreign bank from the client or of the fees in favour of the client that are related to the contract for the transaction; this obligation shall not apply to payments connected with the non-performance of obligations under the contract for the transaction. If it concerns a transaction related to the provision of services tied to a payment account, the bank and the branch of a foreign bank shall be obliged to inform the client under a special regulation. 33b)

(3) A bank and a branch of a foreign bank shall be obliged to provide the ministry and the National Bank of Slovakia with data on the fees required from the client for selected types of transactions, except for data on fees for services tied to a payment account. 33a) The National Bank of Slovakia shall publish the data under the first sentence on its website. Data on fees for services tied to a payment account shall be provided by a bank and a branch of a foreign bank under a special regulation. 33c)

(4) A bank and a branch of a foreign bank shall also be obliged to publish on their website and in their business premises written information on deposit protection and to provide clients with information to the extent and in the manner laid down by a special Act; 32) this also applies to a foreign bank that carries out banking activities in the territory of the Slovak Republic through its branch or without establishing a branch, while not participating in the deposit protection system in the Slovak Republic.

(5) A bank shall be obliged to file its annual report within 30 days after its approval by the general meeting in the public part of the register of financial statements. 34) The provision of a special regulation 35) shall not be affected thereby. A bank shall be obliged to state in its annual report the return on assets, determined as the ratio of net profit to the balance sheet total.

(6) A bank shall state in its annual report under a special regulation 35)

a) the designation of the nature of the activity and the geographical location,

b) revenues,

c) the number of employees in an employment relationship with unreduced working time as at the date of the financial statements,

d) profit or loss before taxation,

e) income tax,

f) subsidies received from public funds,

g) the return on assets determined as the ratio of net profit to the balance sheet total.

(7) A foreign bank that does business in the territory of the Slovak Republic shall be obliged to publish its annual report in the Slovak language, stating the differences between the rules applicable to the preparation of financial statements in the Slovak Republic and in the state where the foreign bank has its registered office, within 60 days after its approval. The annual report shall be published on the website of the foreign bank that does business in the territory of the Slovak Republic and shall remain published at least until the publication of the annual report for the following accounting period.

(8) A bank and a foreign bank that do business in the territory of the Slovak Republic shall be obliged to provide an interested person, upon request, with a copy of the annual report or part thereof; the price for such a copy may not be higher than the costs of its production.

(9) A bank shall be obliged to publish information about

a) itself and its activity,

b) remedial measures and fines imposed on it,

c) its financial indicators,

d) the total income for the performance of the function of all members of the bank's supervisory board, including income for

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 75 the performance of functions for the bank that are paid by an entity other than the bank,

e) selected shareholders of the bank, at most to the extent of the data defined in § 93a(1)(a)

points 1 and 2,

f) the size of the shareholders' shares in the bank's registered capital and in the voting rights in the bank,

g) the financial indicators of the consolidated group and the structure of the consolidated group of which the bank is part, from the point of view of mutual relations and from the point of view of the composition of this group under § 44,

h) facts concerning remuneration in the bank and arising from the remuneration principles in the bank,

(10) A branch of a foreign bank shall be obliged to publish information about itself and its activity, information about remedial measures and fines imposed on it, and information about financial indicators.

(11) A bank and a branch of a foreign bank are not obliged to publish immaterial information, inside information or confidential information under a special regulation. 35aa)

(12) A bank and a branch of a foreign bank are obliged to notify Národná banka Slovenska in writing which information, among that which they are obliged to publish, they will not publish because they consider it immaterial, inside or confidential, and to do so within the deadlines in which they were obliged to publish the relevant information.

(13) If the published information under paragraphs 9 and 10 is incomplete or materially deviates from reality, the bank and the branch of a foreign bank are obliged to publish a correction without delay.

(14) By a measure, 23) which Národná banka Slovenska issues and which is announced in the collection of laws, the following shall be laid down

a) the scope and manner of informing the client under paragraph 2,

b) the type of transaction and the scope, manner and deadline for submitting data under paragraph 3,

c) the scope of information under paragraphs 9 and 10 which the bank and the branch of a foreign bank are obliged to publish,

d) the periodicity, manner and deadline for publishing information under paragraphs 9 and 10,

e) the manner of publishing the correction, as well as what is understood as a material deviation of the published information from reality under paragraph 13.

(15) Advertising 35a) or any offer of a transaction in which an interest rate or any numerical data relating to the transaction is stated must contain, in an understandable and clear manner, information on the amount of the annual percentage rate of charge of the transaction.

(16) The provision of paragraph 15 is without prejudice to the provisions of a special regulation. 35b)

(17) A bank, a foreign bank and a branch of a foreign bank are prohibited from requiring from a consumer, 27f) from a community of owners of apartments and non-residential premises 35ba) or from an administrator, 35bb)

if they conclude a credit agreement on behalf of the owners of apartments and non-residential premises in an apartment building, 35bc)

payment of fees, reimbursement of costs or other remuneration for the keeping, recording or administration of a credit or account or the cancellation of an account on which a credit is kept and the establishment or keeping of which is a condition of the credit relationship; this shall not apply if it concerns an account under § 708 to 715 of the Commercial Code, a special act 35c) or a special service which is not a condition of the credit relationship and the condition for the provision of which is the written consent of the consumer, the community of owners of apartments and non-residential premises 35ba) or the administrator, 35bb) if they conclude the credit agreement on behalf of the owners of apartments and non-residential premises in an apartment building. 35bc)

(18) A bank and a branch of a foreign bank are obliged to submit to the ministry in summary form

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data on individual fees listed in the price lists for natural persons-non-entrepreneurs. A bank and a branch of a foreign bank are obliged to submit the data under the first sentence in the calendar year following the calendar year in which, as at 31 December, their share of deposits from the population represents at least 2 % of the total volume of population deposits reported on the basis of this Act and special regulations. 35d) The scope of data on fees listed in the price lists for natural persons-non-entrepreneurs and their structure, the manner, deadline and place of submitting these data shall be laid down by a generally binding legal regulation issued by the ministry.

§ 38

(1) A bank and a branch of a foreign bank are obliged, even without the client's consent, to provide without delay in writing to the register of bank credits and guarantees maintained by Národná banka Slovenska 36) (hereinafter referred to as the "register") under paragraph 2 data on credits they have provided to entrepreneurs or legal persons, on applications for the provision of a credit to entrepreneurs or legal persons, on the securing of their claims from credits provided to entrepreneurs or legal persons and on liabilities accepted by the bank or branch of a foreign bank towards entrepreneurs or legal persons in euros or in a foreign currency. A bank and a branch of a foreign bank are responsible for the correctness, completeness and up-to-dateness of the data they have provided to the register. A bank and a branch of a foreign bank are obliged, even without the client's consent, to make corrections in the register of provided data that are not correct, complete or up-to-date, and to send notification of the corrections made to Národná banka Slovenska.

(2) The register contains data on credits and collateral provided to the register by banks and branches of foreign banks under paragraph 1 and by Exportno-importná banka Slovenskej republiky under a special regulation; 37aa) this register is not subject to registration under a special regulation. 37)

(3) Národná banka Slovenska may, even without the client's consent, use data from the register in the performance of its tasks, activities and competences under this Act and a special act 8 ) and, even without the client's consent, provides data from the register to a bank, a branch of a foreign bank and Exportno-importná banka Slovenskej republiky. 37aa) Národná banka Slovenska shall also provide data from the register to a client if they concern his person, on the basis of a written request by the client. The client's request for the provision of data from the register must contain the officially certified signature of the client, the client's statutory body or another person demonstrably authorised to act on behalf of the client. An annex to the request of a client who is an entrepreneur or a legal person shall also be an extract from the commercial register or other official register in which the client is entered, not older than one month before delivery of the request.

Národná banka Slovenska shall provide the client with the information within one month from the day of delivery of the request. If a client finds that incorrect or incomplete data about him are stated in the register, he may request correction of the data about him only from the bank, branch of a foreign bank or Exportno-importná banka Slovenskej republiky that provided these data to the register. Národná banka Slovenska may set a fee for the provision of data from the register to a client, payable upon delivery of the request; the provisions of a special regulation on fees paid to Národná banka Slovenska shall likewise apply to these fees. 37ab)

(4) Data provided pursuant to paragraph 1 to Národná banka Slovenska shall continue to be subject to banking secrecy and may not be provided from the register to persons other than those referred to in paragraph 3. Data provided pursuant to paragraph 3 to banks, branches of foreign banks or the Export-Import Bank of the Slovak Republic shall continue to be subject to banking secrecy and may not be provided to persons other than the client to whom they relate. Národná banka Slovenska is obliged to keep data provided pursuant to paragraph 1 in the register for a period of at least five years from the date of the application for the provision of a loan, the repayment of the loan or its extinction, the extinction of the security for the claim from the provided loan or the extinction of the accepted commitment.

(5) Národná banka Slovenska may, on the basis of a mutual written agreement, provide data

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 77 from the register also without the client's consent to the central bank of another Member State or to another entity of a Member State which has the obligation to maintain databases of data comparable to the register, provided that the conditions of access to such data and the manner of their protection in the relevant Member State are at a level comparable to that laid down by this Act.

(6) Data provided to Národná banka Slovenska from the databases of the central bank of another Member State or of another entity of a Member State which has the obligation to maintain databases of data comparable to the register on the basis of a mutual written agreement shall become part of the register.

(7) For the purposes of maintaining and using the register pursuant to paragraphs 1 to 6, public authorities are obliged to make available and provide to Národná banka Slovenska free of charge information and documents from the public and non-public parts of the registers, 37aba) records, lists and other files of information and related collections of documents maintained by them, including the commercial register, the trade register, the register of organisations and the register of employers, also in electronic form in a manner enabling remote access via electronic communication.

(8) A measure, 23) which Národná banka Slovenska issues and which is announced in the collection of laws, shall lay down the details of the maintenance and use of the register, the scope and manner of providing data to the register and data from the register, details of corrections of data in the register and of sending notifications of performed corrections of data in the register to Národná banka Slovenska and the manner of technical ensuring the protection of the provided resources, as well as the requirements of a client's application for the provision of data from the register and the documents attached to such application; this measure shall also lay down the amount of fees or the rate of fees for the provision of data from the register to a client and may also lay down details of such fees, the method of calculating their amount and details of the rounding and payment of such fees.

§ 38a

(1) A bank and a branch of a foreign bank are obliged to prepare an analysis of risks related to the security of operational premises in which their employees conduct dealings with clients and at the same time handle cash.

(2) A bank and a branch of a foreign bank are obliged to secure the premises in which their employees conduct dealings with clients and at the same time handle cash

a) with a functional and active security system and alarm system and connect them to the alarm registration centre of the Police Force, to an alarm system operated by a private security service, municipal police or own protection, or to secure these premises with physical protection,

b) with a functional and active camera monitoring security system with 24-hour recording in a quality that allows the identification of a person,

c) with further security measures that are necessary on the basis of the risk analysis pursuant to paragraph 1.

(3) A bank and a branch of a foreign bank shall not allow public entry into the premises in which their employees conduct dealings with clients and at the same time handle cash if neither of the measures pursuant to paragraph 2 letters a) and b) is functional and active.

(4) A bank and a branch of a foreign bank are further obliged

a) to discuss with a unit of the Police Force the risk analysis pursuant to paragraph 1 and the security measures pursuant to paragraph 2,

b) to provide to the Police Force, at its request, records and data obtained by devices pursuant to paragraph 2 letter b) for the purposes of fulfilling the tasks of the Police Force.

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(5) A measure which Národná banka Slovenska issues and which is announced in the collection of laws shall lay down the content, scope and deadlines for preparing the risk analysis pursuant to paragraph 1, what is understood by security measures pursuant to paragraph 2, and the requirements for such security measures.

PART SEVEN BUSINESS DOCUMENTATION § 39

(1) A bank and a branch of a foreign bank are obliged to keep a business book, which for the purposes of this Act means a business book pursuant to a special regulation. 37ac) A bank and a branch of a foreign bank are obliged to regulate the manner of keeping the business book in their internal regulation.

(2) Positions in individual financial instruments and in individual commodities which a bank or a branch of a foreign bank holds for trading purposes are those positions where the financial instruments or commodities are held for the purposes of short-term sale and with the aim of achieving a return from actual or expected differences between their purchase and sale prices or from other changes in prices or in interest rates.

(3) Positions which a bank and a branch of a foreign bank record in the business book represent positions in individual financial instruments or commodities arising from trading on own account, positions in individual financial instruments or in individual commodities arising from the provision of investment services for a client and positions in individual financial instruments or in individual commodities resulting from market making. Positions resulting from the execution of internal hedges may also be recorded in the business book. A bank and a branch of a foreign bank are required to lay down in their internal regulation rules and procedures for internal arrangements and at the same time to ensure the diligent monitoring of all concluded internal arrangement agreements.

(4) A bank and a branch of a foreign bank are required to specify in their internal regulation the procedure and method of managing individual positions or a portfolio of positions recorded in the trading book and of managing the risks arising from such positions or portfolio of positions. By means of this internal regulation, a bank and a branch of a foreign bank demonstrate their trading intent.

(5) A bank and a branch of a foreign bank are required to lay down in their internal regulation, for the purposes of calculating own funds requirements, a procedure for determining which positions in financial instruments or commodities are to be recorded in the trading book, in accordance with the rules set out in paragraphs 1 to 4 and having regard to the nature of the risk management system of the bank or the branch of a foreign bank. A bank and a branch of a foreign bank are required to ensure the regular verification of whether the recording of positions in financial instruments and commodities in the trading book is in compliance with this internal regulation, to record the results of such verifications in written form, and the fulfilment of the procedure for determining which positions in financial instruments or commodities are to be recorded in the trading book is subject to regular internal audit.

(6) A bank and a branch of a foreign bank are required to value all positions recorded in the trading book daily. For the valuation of positions recorded in the trading book, a bank or a branch of a foreign bank uses the market prices of the given day. If the market price of a financial instrument or commodity for the given day is not available, such financial instrument or commodity may be valued at another appropriate price. To arrive at another appropriate price of a financial instrument or commodity, a bank or a branch of a foreign bank uses a qualified estimate based on its own method.

(7) A bank and a branch of a foreign bank are obliged to keep a bank ledger in which they record daily the transactions and positions that are not recorded in the trading ledger pursuant to paragraphs 1

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 79 to 6. The bank is obliged to value all positions recorded in the bank ledger and, when valuing these positions, is obliged to take into account the degree of credit risk.

(8) For the purposes of keeping the trading ledger and the bank ledger, the following are understood

a) as a financial instrument, a financial instrument, 37a) another security, another derivative or a legal relationship on the basis of which one party to the legal relationship acquires a financial asset and another party to the legal relationship acquires a financial liability or an equity instrument,

b) as a commodity, a tangible object or controllable energy, in particular a product, electrical energy and a mineral raw material including precious metals other than gold, with which trading is or may be conducted on the secondary commodity market.

(9) A bank and a branch of a foreign bank are obliged to keep analytical records of assets and liabilities with which they deal in their own name for the account of another, separately from their own assets and liabilities.

(10) A bank and a branch of a foreign bank are obliged to post every accounting entry relating to banking activity or to other activity of the bank or branch of a foreign bank to the accounting books on the day on which such accounting entry took place, pursuant to a special regulation. 38)

(11) In addition to the financial statements pursuant to a special regulation 30d), a bank and a branch of a foreign bank also prepare interim financial statements as at the last day of the calendar quarter. A bank and a branch of a foreign bank submit the interim financial statements to the National Bank of Slovakia within 30 calendar days after the expiry of the relevant calendar quarter.

(12) Legal entities that are part of a consolidated whole pursuant to § 44 shall, in addition to the financial statements pursuant to a special regulation 30d), also prepare interim financial statements as of the last day of the calendar half-year.

(13) A parent bank or a parent financial holding company shall prepare its interim consolidated financial statements as of the last day of the calendar half-year. The parent bank or the parent holding company shall submit the interim consolidated financial statements within 60 calendar days after the end of the relevant calendar half-year to the National Bank of Slovakia.

(14) A bank and a branch of a foreign bank are obliged to keep records of assets and liabilities 30d)

according to the risks or losses associated with them. A bank and a branch of a foreign bank are obliged to draw up and submit to the National Bank of Slovakia a report on the state of assets and liabilities according to these records.

(15) By a measure, 23) which is issued by the National Bank of Slovakia and which is announced in the collection of laws, the following shall be laid down:

a) requirements for keeping the trading book pursuant to paragraph 1 and what is understood by the management of the trading book and the ensuring of transactions with financial instruments and commodities,

b) requirements for recording positions arising from the execution of internal hedges in the trading book pursuant to paragraph 3,

c) requirements for the procedure and method of managing individual positions or the aggregate of positions recorded in the trading book pursuant to paragraph 4,

d) the minimum scope of areas covered by the overall management of the trading book pursuant to paragraph 4,

e) rules for the valuation of positions in the trading book and the periodicity of valuation, if a market price is not available pursuant to paragraph 6,

f) details on keeping the trading book pursuant to paragraphs 1 to 6,

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g) details on the records of assets and liabilities and on their keeping, as well as on the content, form, structure, deadlines, method and place of submitting the report pursuant to paragraph 14.

§ 40

(1) A bank and a branch of a foreign bank are obliged in a written contract with an auditor to ensure

a) the drawing up of an auditor's report on the verification of data in the reports required by the National Bank of Slovakia pursuant to § 42 para. 2,

b) verification of the correctness of accounting at the written request of the National Bank of Slovakia during the calendar year; the bank is entitled to reimbursement of necessary material costs from the National Bank of Slovakia if no deficiencies were found during the verification,

c) preparation of an extended report 41) according to the outline laid down by the measure 23) issued by the National Bank of Slovakia and promulgated in the collection of laws,

d) verification of the correctness of data pursuant to § 37 para. 6.

(2) The report pursuant to paragraph 1 letters a) and c) shall be submitted by the bank and the branch of a foreign bank to the National Bank of Slovakia by 30 June of the year following the calendar year for which the verification of data was carried out. The auditor's report on the verification of the annual financial statements pursuant to a special regulation 40) shall be filed by the bank in the public part of the register of financial statements 34) and by the branch of a foreign bank in the non-public part of the register 34) by 30 June after the end of the accounting period for which the annual financial statements are verified.

(3) The bank and the branch of a foreign bank are obliged to notify the National Bank of Slovakia in writing which auditor or audit company has been entrusted with the verification of the financial statements, by 30 June of the calendar year or half of the accounting period for which the audit is to be carried out; this also applies to an auditor or audit company that provides audit services for the bank or branch of a foreign bank in the name and on behalf of another auditor or audit company. The National Bank of Slovakia is entitled to reject the selection of the auditor or audit company by 31 August of this calendar year or within eight months from the beginning of the accounting period after delivery of this notification. If it concerns a bank or a branch of a foreign bank that was granted a banking licence during the calendar year, the notification shall be made within three months from the finality of the decision granting the banking licence.

The National Bank of Slovakia is entitled in such a case to reject the auditor or audit company within 30 days after delivery of the notification. Within 45 days after the finality of the decision on rejection, the bank and the branch of a foreign bank are obliged to notify the National Bank of Slovakia in writing of a new auditor or audit company. If the National Bank of Slovakia also rejects the selection of another auditor or audit company, the National Bank of Slovakia shall determine which auditor or audit company will verify the financial statements.

(4) A person who has a special relationship to the bank pursuant to § 35 para. 4 letters

a) to h) and j) and pursuant to § 35 para. 5 letters a) to h) and j) for the reasons stated in a special regulation, 42)

and an auditor who does not fulfil the obligations pursuant to paragraph 5, and during the forced administration of the bank administrator, deputy administrator and appointed expert advisor. The same applies to a natural person who carries out audit activities on behalf of an audit company.

(5) The auditor is obliged to immediately inform in writing the National Bank of Slovakia and the supervisory board of the bank of facts that he has discovered during the performance of his activities and that concern facts leading to the expression of possible qualifications to the financial statements of the bank or branch of a foreign bank and to the detection of violations of laws and other generally binding legal regulations. The auditor shall immediately draw the attention of the National Bank of Slovakia to the following facts:

a) the bank is in arrears, 43)

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 81

b) the bank or branch of a foreign bank prepares false, incorrect or incomplete financial statements and reports required by the National Bank of Slovakia pursuant to § 42 para. 2.

(6) A bank is in arrears if it has less assets including receivables than liabilities.

(7) The auditor is obliged, at the written request of the National Bank of Slovakia, to provide documents on the facts pursuant to paragraph 5 and other information and documents discovered during the performance of his activities in the bank or branch of a foreign bank.

(8) The bank and the branch of a foreign bank are obliged to ensure the protection of electronic processing and storage of data against misuse, destruction, damage, theft or loss.

(9) The bank and the branch of a foreign bank are obliged to ensure once a year the verification of the security of the information system by which banking data are processed and stored, and to inform the National Bank of Slovakia in writing thereof.

§ 41

(1) The bank and the branch of a foreign bank are obliged to submit to the National Bank of Slovakia information on the intention to introduce a new type of transaction together with an assessment of this transaction by the internal control and internal audit unit pursuant to § 23 para. 4.

(2) The bank and the branch of a foreign bank are obliged to immediately inform the National Bank of Slovakia of deficiencies found in the performance of activities pursuant to § 23 para. 4.

(3) The bank and the branch of a foreign bank shall submit to the National Bank of Slovakia by 31 March of the calendar year a report on the results of the activities of the internal control and internal audit unit for the previous calendar year, on measures adopted to remedy deficiencies in the activities of the bank or branch of a foreign bank found by the internal control and internal audit unit and the approved plan of control activities for the calendar year. The report on the results of the activities of the internal control and internal audit unit also includes the results of control activities, findings and measures in the area of protection of the bank or branch of a foreign bank against money laundering and terrorist financing.

(4) For the purposes of this Act, a type of transaction means a group of transactions within the banking activities listed in § 2 paras. 1 and 2, for which certain features or contractual conditions of their provision by the bank or branch of a foreign bank are typical. A change in the amount of interest rates or other price changes within an agreed transaction are not a new type of transaction.

§ 42

(1) A bank, a foreign bank and a branch of a foreign bank are obliged to keep and protect against damage, alteration, destruction, loss, theft, disclosure, misuse and unauthorised access the data and copies of documents proving the identity of a client and documents on ascertaining the ownership of funds used by a client to carry out a transaction and contracts and other documents on executed transactions for at least five years from the termination of the transaction.

(2) A bank, a foreign bank and a branch of a foreign bank are obliged to draw up and submit to the National Bank of Slovakia statements, reports and other reports in the established manner and within the established deadlines; their structure, scope, content, form, breakdown, deadlines, manner, procedure and place of submission, including the methodology for drawing them up, shall be laid down by a measure, 23) which shall be issued by the National Bank of Slovakia and which is announced in the collection of laws. The data and other information stated in the statements, reports and other reports must be comprehensible, clear, demonstrable, must provide a true picture of the reported facts and must be submitted in a timely manner. If

Page 82 Collection of Laws of the Slovak Republic 483/2001 Z. z.

the submitted statements, reports and other reports do not correspond to the established methodology or if reasonable doubts arise as to their correctness or completeness, the bank, foreign bank and branch of a foreign bank are obliged, at the request of the National Bank of Slovakia, to submit the underlying documents and provide an explanation within the deadline determined by it.

(3) A bank, a foreign bank and a branch of a foreign bank are obliged to submit to the National Bank of Slovakia data from accounting records and statistical records in the form of statements, reports or overviews in the established manner and within the established deadlines. The scope, manner and deadlines of submission shall be laid down by a measure which shall be issued by the National Bank of Slovakia and which is announced in the collection of laws.

(4) A bank, a foreign bank and a branch of a foreign bank are obliged to submit to the ministry data from accounting records and statistical records in the form of statements, reports or overviews in the established manner and within the established deadlines; such provision of data shall not be considered a breach of banking secrecy under § 91. The scope, manner and deadlines of submission shall be laid down by a generally binding legal regulation which shall be issued by the ministry.

§ 43 The provisions of this part of the Act shall not affect the obligations of banks and branches of foreign banks under a special regulation. 39)

PART EIGHT SUPERVISION ON A CONSOLIDATED BASIS § 44

(1) Supervision on a consolidated basis means supervision over a consolidated group for the purpose of monitoring and limiting the risks to which a bank is exposed as a result of its participation in a consolidated group.

(2) A consolidated group is formed by

a) a parent undertaking or a parent undertaking in the European Union and at least one bank, financial institution or ancillary banking services undertaking over which the parent undertaking or the parent undertaking in the European Union exercises control or in which it holds a qualifying participation,

b) a financial holding undertaking, a mixed financial holding undertaking, a financial holding undertaking in the European Union or a mixed financial holding undertaking in the European Union and at least one bank over which the financial holding undertaking, the mixed financial holding undertaking, the financial holding undertaking in the European Union or the mixed financial holding undertaking in the European Union exercises control or in which it holds a qualifying participation, or

c) a mixed-activity holding undertaking and at least one bank over which the mixed-activity holding undertaking exercises control or in which it holds a qualifying participation.

(3) The National Bank of Slovakia exercises supervision over the consolidated group referred to in paragraph 2(c) to the extent of monitoring intragroup transactions pursuant to Section 49i(2) between the mixed-activity holding undertaking and a bank which is part of the consolidated group referred to in paragraph 2(c), and to the extent of providing information pursuant to Section 45(8).

(4) The National Bank of Slovakia keeps a list of financial holding undertakings or mixed financial holding undertakings pursuant to special regulation 44) and paragraph 2(a)

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 83 b). The National Bank of Slovakia sends this list to the competent supervisory authorities of the Member States, the European Supervisory Authority (European Banking Authority) and the Commission.

(5) The National Bank of Slovakia is authorised, in the course of exercising supervision over the consolidated groups referred to in paragraph 2(a) or (b), to exclude from the consolidated group referred to in paragraph 2(a)

or (b) such a person,

a) which has its registered office in the territory of another State and the legal order of that State does not permit the exchange of information for the purposes of consolidated supervision,

b) which is of negligible significance for the purposes of consolidated supervision, in particular if the total assets of that legal person are less than 10 000 000 euro or less than 1 % of the total assets of that bank or financial holding undertaking or mixed financial holding undertaking or

c) whose inclusion in consolidated supervision is not expedient from the point of view of ensuring the objectives of consolidated supervision.

(6) Consolidated supervision shall, however, be exercised over such persons referred to in paragraph 5(b) if several such persons together represent a non-negligible significance for the purposes of the exercise of consolidated supervision.

(7) The National Bank of Slovakia shall notify the person concerned of its exclusion pursuant to paragraph 5(b) or (c); that person shall be obliged to provide, upon request, the information necessary for the exercise of consolidated supervision to the competent supervisory authority of the Member State in which its parent undertaking has its registered office.

(8) The National Bank of Slovakia may request information pursuant to Section 45(5) to (7) and Section 46(1) from subsidiaries of a bank, a financial holding undertaking, a mixed financial holding undertaking or a mixed-activity holding undertaking which are not part of the consolidated group referred to in paragraph 2. In such a case, the procedures for the transmission and verification of information set out in the aforementioned provisions shall apply.

(9) The National Bank of Slovakia is authorised to exclude from supervision a subsidiary which is a bank and to delegate the exercise of supervision to the competent supervisory authority in another Member State, if that authority exercises supervision over the parent undertaking of the bank which was granted a banking licence by the National Bank of Slovakia. Such exclusion takes place on the basis of a written agreement concluded in accordance with special regulation 44a) between the National Bank of Slovakia and the competent supervisory authority of another Member State. The National Bank of Slovakia informs the European Supervisory Authority (European Banking Authority) of this agreement.

(10) If a bank whose parent undertaking is a foreign bank with its registered office in a State which is not a Member State, or a financial holding undertaking with its registered office in a State which is not a Member State, or a mixed financial holding undertaking with its registered office in a State which is not a Member State, is not subject to consolidated supervision pursuant to this Act, the National Bank of Slovakia verifies whether that bank is subject to supervision equivalent to consolidated supervision pursuant to this Act. The National Bank of Slovakia takes into account any guidance of the European Committee for Banking and carries out consultations with the European Supervisory Authority (European Banking Authority).

(11) The National Bank of Slovakia shall verify the fact referred to in paragraph 10 on its own initiative or at the request of a regulated person which was granted authorisation in a Member State, or at the request of the parent undertaking.

(12) If the National Bank of Slovakia finds pursuant to paragraph 11 that consolidated supervision equivalent to consolidated supervision pursuant to this Act is not exercised over the bank,

Page 84 Collection of Laws of the Slovak Republic 483/2001 Z. z.

it shall, after consulting the competent supervisory authorities of the Member States, include that bank in the exercise of consolidated supervision or apply other appropriate supervisory procedures which ensure the objectives of such supervision; in particular, it may require the establishment of a financial holding undertaking with its registered office in a Member State or a mixed financial holding undertaking with its registered office in a Member State for the purpose of its inclusion in the exercise of consolidated supervision.

The National Bank of Slovakia shall notify these procedures to the other competent supervisory authorities of the Member States, the European Supervisory Authority (European Banking Authority) and the Commission.

(13) For the purposes of this Act, the following is understood

a) a direct or indirect holding or their total of at least 20 % of the share capital of a legal person or of the voting rights in a legal person by way of a capital interest, or the possibility of exercising influence on the management of such legal person comparable to the influence corresponding to such holding,

b) a bank, securities trader, insurance company, reinsurance company, management company, alternative investment fund manager and an equivalent foreign person as a regulated entity.

§ 45

(1) A parent bank shall be required to ensure that the provisions of § 23, 27 and § 29(4) are also complied with by the consolidated group of which it is a part.

(2) A bank that is part of a consolidated group pursuant to § 44(2)(b) shall be required to ensure that the provisions of § 23, 27 and § 29(4) are complied with by the consolidated group of which it is a part.

(3) If more banks are part of a consolidated group pursuant to § 44(2)(b), paragraph 2 shall apply only to the bank subject to consolidated supervision.

(4) If a bank, as a subsidiary, simultaneously exercises control over a financial institution or a management company seated in a state that is not a Member State, or holds a capital interest in such persons, such bank shall be required to ensure that the provisions of § 23, 27 and § 29(4) are also complied with by the consolidated group of which it is a part; the same obligation shall apply to such bank also in the case where the aforementioned control or capital interest belongs to its parent financial holding company or its parent mixed financial holding company.

(5) A person that is part of a consolidated group pursuant to § 44(2)(a) or (b) shall be required to draw up and submit to the National Bank of Slovakia, directly or through the parent bank or the parent financial holding company or the parent mixed financial holding company, or a bank designated by the National Bank of Slovakia, all returns, reports and other communications necessary for the exercise of consolidated supervision, in the prescribed manner and within the prescribed deadlines; the parent bank or the parent financial holding company or the parent mixed financial holding company shall be required to draw up and submit to the National Bank of Slovakia all returns, reports and other communications necessary for the exercise of consolidated supervision, in the prescribed manner and within the prescribed deadlines; their structure, scope, content, form, breakdown, deadlines, manner, procedure and place of submission, including the methodology for their preparation, shall be laid down by a measure, 23) which shall be issued by the National Bank of Slovakia and which shall be published in the Collection of Laws. Data and other information stated in returns, reports and other communications must be intelligible, clear, verifiable, must provide a true picture of the reported facts and must be submitted in a timely manner. If the submitted returns, reports and other communications do not comply with the prescribed methodology or if reasonable doubts arise as to their accuracy or completeness, the bank, financial holding company or mixed financial holding company or other person that prepared and submitted them shall, at the request of the National Bank of Slovakia, be required to submit supporting documents and to file

483/2001 Coll. of Laws of the Slovak Republic Page 85 explanation within the period determined therein.

(6) The auditor of a person that is part of the consolidated group pursuant to Section 44(2)(a) or (b) is obliged, for the purposes of consolidated supervision, to provide information to the National Bank of Slovakia and to the auditors of its parent bank or parent financial holding company or parent mixed financial holding company.

(7) The parent bank or parent financial holding company or parent mixed financial holding company shall notify the National Bank of Slovakia of the auditors who will carry out the audit of persons that are part of the consolidated group pursuant to Section 44(2)(a) or (b) no later than the end of the calendar year for which the audit is to be carried out.

(8) Paragraphs 5 and 6 shall apply mutatis mutandis to a mixed-activity holding company pursuant to Section 44(2)(c), to a person that is part of the consolidated group pursuant to Section 44(2)(c), and to the auditor of such persons.

§ 46

(1) A person that is part of the consolidated group pursuant to Section 44(2) is obliged to establish control mechanisms that ensure the accuracy of the information provided for the purposes of consolidated supervision, and is equally obliged to ensure compliance with the provisions of Section 23 by the consolidated group for the purpose of ensuring that the control mechanisms within internal control systems are sufficiently aligned and that all information necessary for consolidated supervision is available and accurate. Persons that are part of the consolidated group are obliged, for the purposes of consolidated supervision, to provide each other with the information necessary for the fulfilment of the obligations arising to them in connection with their participation in the consolidated group.

(2) The National Bank of Slovakia is authorised to carry out an on-site inspection 45) or is authorised to request the competent supervisory authority of another Member State to carry out an on-site inspection over persons that are part of the consolidated group pursuant to Section 44(2) and have their registered office in another Member State, for the purposes of carrying out this consolidated supervision; the National Bank of Slovakia is obliged to carry out an on-site inspection at the request of the competent supervisory authority of another Member State.

(3) The parent bank or parent financial holding company is obliged to ensure that an audit is carried out in persons that are part of the consolidated group pursuant to Section 44(2), for the purposes of consolidated supervision. These persons are obliged, at the request of the parent bank or parent financial holding company, to conclude an audit engagement contract.

§ 47

(1) If a bank is part of a consolidated group over which supervision is carried out by the competent supervisory authority of another Member State, the National Bank of Slovakia is authorised to agree on the conditions for the exercise of consolidated supervision and the method of exchanging information in a written agreement concluded between the National Bank of Slovakia and the competent supervisory authority of another Member State. The National Bank of Slovakia shall propose the conclusion of such an agreement if a bank with its registered office in another Member State is part of the consolidated group pursuant to Section 44(2)(a) or (b). In the event that such an agreement is not concluded, the National Bank of Slovakia shall exercise consolidated supervision if a bank with the highest assets within the consolidated group has its registered office in the Slovak Republic; if the amount of assets of the bank and of a foreign bank with its registered office in another Member State within the consolidated group is the same, the National Bank of Slovakia shall exercise consolidated supervision if the authorisation was granted to the bank first.

(2) The National Bank of Slovakia shall also exercise consolidated supervision over banks with their registered office in another Member State if they are part of the consolidated group pursuant to Section 44(2)(b).

Page 86 Collection of Laws of the Slovak Republic 483/2001 Coll.

(3) The National Bank of Slovakia shall exercise supervision pursuant to paragraph 2 only if the parent financial holding company, parent mixed financial holding company, parent financial holding company in the European Union or parent mixed financial holding company in the European Union has the highest value of assets among the other financial holding companies with their registered offices in other Member States that equally control the said bank in another Member State or hold a capital interest in it.

(4) The National Bank of Slovakia shall exercise supervision pursuant to paragraph 2 only if at least one of the banks that are part of the consolidated group pursuant to Section 44(2)(b) has its registered office in the Slovak Republic; the National Bank of Slovakia shall also exercise supervision pursuant to paragraph 2 if no other Member State meets the preceding condition and at the same time the bank with the highest value of assets among the other banks that are equally part of the consolidated group of a financial holding company with its registered office in another Member State or a mixed financial holding company with its registered office in another Member State has its registered office in the territory of the Slovak Republic.

(5) In the cases pursuant to paragraphs 2, 3 and 4, the National Bank of Slovakia may, on the basis of a mutual written agreement with the competent supervisory authorities of other Member States, waive the conditions set out in these paragraphs if their application would be disproportionate having regard to the nature of the banks and the significance of their activities in the various countries, and may entrust the competent supervisory authority of another Member State to exercise consolidated supervision. In these cases, the National Bank of Slovakia shall, as necessary, enable the parent bank in the European Union or the parent financial holding company in the European Union or the parent mixed financial holding company in the European Union, or the bank with the highest value of total assets, to comment on the draft decision being prepared in cooperation with the competent supervisory authorities of other Member States.

(6) The Národná banka Slovenska shall, at the request of the competent supervisory authority of another Member State, carry out on-site supervision on a consolidated basis or enable the carrying out of on-site supervision on a consolidated basis by the persons appointed by the competent supervisory authority of another Member State in respect of persons that are included in the exercise of supervision on a consolidated basis in the Member State of the competent supervisory authority; the details of the exercise of this on-site supervision on a consolidated basis may be laid down by an agreement pursuant to paragraphs 1 and 5. The competent supervisory authority of another Member State shall be obliged to notify the Národná banka Slovenska in advance of the carrying out of on-site supervision on the territory of the Slovak Republic. The persons appointed by the competent supervisory authority of a Member State shall have the same powers, obligations and responsibilities as the employees of the Národná banka Slovenska appointed to carry out on-site supervision pursuant to a special regulation; however, they shall not be obliged to draw up a written record of the supervision carried out by them and shall not be obliged to set and notify in writing to the supervised entity the deadlines for the adoption and fulfilment of measures to remedy the deficiencies identified during the supervision.

(7) The Národná banka Slovenska shall comply with a request for information related to the exercise of supervision on a consolidated basis from the competent supervisory authority of another Member State.

(8) The Národná banka Slovenska shall notify the Commission and the European Supervisory Authority (European Banking Authority) of the conclusion of a written agreement pursuant to paragraphs 1 and 5 and of its content.

(9) Where the Národná banka Slovenska is responsible for the exercise of supervision on a consolidated basis over parent banks in the European Union and over banks which are controlled by parent financial holding companies in the European Union or by parent mixed financial holding companies in the European Union, or in which parent financial holding companies in the European Union or parent mixed financial holding companies in the European Union have a qualifying holding,

a) it shall plan on-site supervision and coordinate on-site supervisory activities in the ordinary course of business and also

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 87 in relation to the obligations pursuant to § 6 (2), § 23 to 27 and § 37 (9) to (15) in cooperation with the competent supervisory authorities,

b) it shall carry out on-site supervision and verify compliance with the requirements set out in § 37, § 45 (1) to (3) and § 46 (1),

c) it shall coordinate the collection and provision of significant or necessary information in the ordinary course of business and in critical situations to other competent supervisory authorities of Member States,

d) it shall plan on-site supervision and coordinate on-site supervisory activities in the ordinary course of business in cooperation with the competent supervisory authorities and, where necessary, with central banks, in preparing for and during critical situations, including periods of adverse developments in banks or foreign banks or on financial markets, using, where possible, defined existing communication channels to facilitate crisis management; the planning and coordination of activities shall include the exceptional measures referred to in § 49 (1) and (2), the preparation of joint assessments, the implementation of contingency plans and communication with the public,

e) may alert the European Supervisory Authority (European Banking Authority) if the competent supervisory authorities do not cooperate with it to the extent necessary to carry out the tasks referred to in points (a) to (d).

(10) For the purposes of this Act, the following shall be understood:

a) significant information means information necessary for the exercise of consolidated supervision by the competent supervisory authorities of the Member States,

b) essential information means information that may significantly affect the assessment of the reliability and safety of a bank or financial institution in another Member State.

(11) In the case of applications for prior consent under Sections 30 to 32 or for the use of own estimates of loss given default and own estimates of conversion factors submitted by a parent bank in the European Union and its subsidiaries, or jointly with the subsidiaries of a parent financial holding company in the European Union or a parent mixed financial holding company in the European Union, Národná banka Slovenska shall cooperate with the competent supervisory authorities of other Member States in deciding on the granting of such prior consents and determining the conditions to which such prior consent should be subject. This application shall be submitted to Národná banka Slovenska if it concerns a parent bank in the European Union or a bank controlled by a parent financial holding company in the European Union or a parent mixed financial holding company in the European Union, or in which a parent financial holding company in the European Union or a parent mixed financial holding company in the European Union has a holding.

(12) Národná banka Slovenska shall decide on an application under paragraph 11 independently if, within a period of no later than six months, a joint decision with the competent supervisory authorities of other Member States is not adopted, with the reasoning for this decision being jointly approved in a single document, and is not delivered to the applicant in this period in the form of a decision on prior consent. This period shall begin on the day of delivery of the complete application to Národná banka Slovenska, which shall immediately forward it to the other competent supervisory authorities of other Member States. If, within the six-month period referred to in the first sentence, any of the supervisory authorities under paragraph 11 requests the European Supervisory Authority (European Banking Authority) to assist in reaching an agreement in accordance with a special regulation, 18ab) Národná banka Slovenska shall decide on the application under paragraph 11 in accordance with the decision of the European Supervisory Authority (European Banking Authority).

If the European Supervisory Authority (European Banking Authority) does not issue such a decision no later than one month after receiving the request for assistance, Národná banka Slovenska shall issue a decision independently.

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(13) The decision of the National Bank of Slovakia under paragraph 11, together with the full reasoning and the opinions of the other competent supervisory authorities of other Member States expressed within the six-month period, shall be delivered to the applicant and forwarded to the other supervisory authorities.

(14) The National Bank of Slovakia shall proceed mutatis mutandis in accordance with paragraphs 11 to 13 if a bank with its registered office in the territory of the Slovak Republic is included in supervision on a consolidated basis carried out by the competent supervisory authority in another Member State.

(15) If the National Bank of Slovakia is the supervisory authority responsible for the exercise of supervision on a consolidated basis,

a) it shall, within the framework of its powers, together with the competent supervisory authorities of the subsidiaries of the parent bank in the European Union or the parent financial holding company in the European Union or the parent mixed financial holding company in the European Union, make maximum efforts to reach a joint decision on

1. the application of § 6(2) and § 27(7) in order to establish that the amount of own funds on a consolidated basis held by the group is sufficient with regard to its financial situation and risk profile and has the required level of own funds in relation to each entity within the group of institutions on a consolidated basis and that it is not necessary to apply the requirement under § 50(13),

2. measures to address any material matters and material findings relating to liquidity supervision, including those relating to the adequacy of the organisation and treatment of liquidity risk under § 23(6)(a) fourth point and those relating to the need for specific parameters for the bank,

b) it shall submit to the other competent supervisory authorities a report containing an assessment

1. for the purposes of point (a) first point, of the risk of the group of institutions on a consolidated basis under § 6(2) and § 27(7),

2. for the purposes of point (a) second point, of the liquidity risk profile of the group of institutions on a consolidated basis to the consolidating supervisor under § 23(6)(a)

fourth point,

c) it shall reach a joint decision within four months under point (a) first point and within one month under point (a) second point after the submission of the report under point (b) first point,

d) it shall take into account in the joint decision under point (c) the risk assessment of the subsidiaries carried out by the competent supervisory authorities under § 6(2) and § 27(7), and shall state its full reasoning,

e) it shall deliver the joint decision under point (c) to the parent bank in the European Union,

f) it shall, at the request of any of the other competent supervisory authorities, consult the European Supervisory Authority (European Banking Authority) on any disagreements arising in the adoption of the decision; if the European Supervisory Authority (European Banking Authority) expresses its opinion, it shall consider its recommendations and explain any significant deviation from them,

g) it may consult its procedure with the European Supervisory Authority (European Banking Authority) on its own initiative,

h) it shall issue a decision under § 50(13) in conjunction with § 6(2) in the event of non-compliance with § 27(7) on a consolidated basis, if no joint decision is reached under point (c), while duly considering the risk assessment of the subsidiaries carried out by the competent supervisory authorities and their opinions and reservations,

i) it shall justify the decision issued under point (h),

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 89

j) it shall submit to all competent supervisory authorities and the parent bank in the European Union the decision under point (h),

k) it shall reach a joint decision under point (c), and if no such decision exists, it shall issue a decision under point (h),

l) it shall review the ongoing validity, and if necessary, update the joint decision under point (c), and if no such decision exists, review the ongoing validity, and if necessary, issue a new decision under point (h), whereby a new decision shall also be deemed to be an amendment or repeal of the previous decision issued under point (h); the review of ongoing validity and any issuance of a new decision shall be carried out at least once a year, or if the competent supervisory authority of the subsidiaries of the parent bank in the European Union or the parent financial holding company in the European Union or the parent mixed financial holding company in the European Union, in the case of the application of the requirement under § 50(13), requests the issuance of a new decision by submitting a written and duly reasoned request to the National Bank of Slovakia, in which case the review of ongoing validity and the issuance of a new decision may be carried out on a bilateral basis between the National Bank of Slovakia and the competent supervisory authority that submitted it,

m) it shall proceed mutatis mutandis in accordance with points (a) to (l) if a bank under § 2(1) is included in supervision on a consolidated basis carried out by the competent supervisory authority in another Member State; the joint decision reached with the competent supervisory authority responsible for the exercise of supervision on a consolidated basis shall be binding on the bank that is included in supervision on a consolidated basis.

(16) If, within the period under paragraph 15 point (c), any of the supervisory authorities under paragraph 15 requests the European Supervisory Authority (European Banking Authority) for assistance in reaching an agreement in accordance with a special regulation, 19) the National Bank of Slovakia shall decide under paragraph 15 point (c) in accordance with the decision of the European Supervisory Authority (European Banking Authority). If the European Supervisory Authority (European Banking Authority) does not issue such a decision within one month of receiving the request for assistance, the National Bank of Slovakia shall issue the decision independently.

§ 48

(1) If a critical situation arises, including an adverse development on the financial markets, which potentially threatens the liquidity of the market and the stability of the financial system in the member state in which the entities of the group of banks and foreign banks were granted authorisation or in which significant branches are established pursuant to § 6 para. 14, Národná banka Slovenska shall, without delay, taking into account the obligation of confidentiality, notify the ministry and the competent supervisory authority responsible for the exercise of supervision on a consolidated basis and shall communicate to them all information important for the performance of their tasks. If Národná banka Slovenska is the supervisory authority responsible for the exercise of supervision on a consolidated basis and a critical situation arises, including the situation referred to in special regulation 45aa) or including an adverse development on the financial markets, which potentially threatens the liquidity of the market and the stability of the financial system in the member state in which the entities of the group of banks and foreign banks were granted authorisation or in which significant branches are established pursuant to § 6 para. 14, Národná banka Slovenska shall, without delay, taking into account the obligation of confidentiality, notify the European Supervisory Authority (European Banking Authority), the European Systemic Risk Board, the competent supervisory authorities of another member state, the ministry and other public authorities and persons whose activities are related to the supervision of supervised entities, and shall communicate to them all information important for the performance of their tasks.

(2) If Národná banka Slovenska needs information that has already been provided to the competent supervisory authority of another member state, it shall contact this supervisory authority whenever possible,

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in order to avoid duplication in the provision of information to the various supervisory authorities responsible for its exercise.

(3) If Národná banka Slovenska is the supervisory authority responsible for the exercise of supervision on a consolidated basis, it is obliged, for the purpose of achieving high efficiency and effectiveness in its exercise, to conclude with the competent supervisory authorities of the member states written agreements on mutual coordination and cooperation in the exercise of supervision on a consolidated basis.

(4) The agreements pursuant to paragraph 3 may determine further obligations of Národná banka Slovenska in the exercise of supervision on a consolidated basis, as well as details of the joint procedure of the supervisory authorities in the exercise of supervision on a consolidated basis and details of the decision-making process.

(5) Národná banka Slovenska is obliged, in the exercise of supervision, to cooperate with the competent supervisory authorities of other member states, providing them upon request with significant information and, on its own initiative, with information necessary for the exercise of their supervision on a consolidated basis carried out under regulations comparable to this Act. Národná banka Slovenska shall cooperate with the European Supervisory Authority (European Banking Authority)

and shall provide it with all information necessary for the performance of its duties in accordance with a special regulation. 45ab) Národná banka Slovenska may notify the European Supervisory Authority (European Banking Authority) if

a) the competent supervisory authority of another member state has not provided Národná banka Slovenska with significant information, or

b) the competent supervisory authority of another member state has rejected or failed to handle Národná banka Slovenska's request for the provision of significant information within a reasonable period.

(6) If a bank with its registered office in another member state is part of the consolidated group pursuant to § 44 para. 2 letter a) or b), Národná banka Slovenska shall provide the competent supervisory authority of the other member state which exercises supervision over this bank, in particular all significant information.

The scope of the significant information provided shall be determined by Národná banka Slovenska depending on the significance of these subsidiaries for the financial systems of the member states concerned.

(7) The necessary information pursuant to paragraph 5 shall include

a) the legal, management and organisational structure of the consolidated group at the required level, including all regulated entities, unregulated entities, unregulated subsidiaries and significant branches belonging to the group and parent companies included in this consolidated group, in accordance with § 7 paras. 2 and 3, § 8 paras. 2 and 3, § 9 paras. 4 and 5, § 37 paras. 8 and 9 and § 47 paras. 1 and 9, and a list of the competent supervisory authorities of other member states which exercise supervision over the regulated entities of this consolidated group,

b) the method of obtaining data from the banks pursuant to letter a) and the method of their verification,

c) an assessment of the adverse development of the economic situation of the banks pursuant to letter a) or of other persons included in the same consolidated group, whose behaviour could have an impact on the economic situation of these banks,

d) serious corrective measures adopted by Národná banka Slovenska pursuant to § 50, including the imposition of an obligation to maintain the bank's own funds at a level higher than that resulting from § 29 para. 4, the imposition of fines by Národná banka Slovenska pursuant to § 50 and decisions on restricting the use of the advanced measurement approach pursuant to § 32.

(8) By a measure, 23) which is issued by Národná banka Slovenska and which is announced in the Collection of Laws, the following shall be established:

a) the scope and method of compliance with the obligations of the parent bank, as well as the methods of consolidation of data

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 91 for these purposes,

b) the scope and method of compliance with the obligations of a bank which is part of a consolidated group pursuant to § 44 para. 2 letter a) or b),

c) what is understood as a critical situation pursuant to § 47 para. 9 and § 48 para. 1, a significant bank pursuant to § 48 para. 7 and a serious measure pursuant to § 48 para. 7.

(9) If Národná banka Slovenska is the supervisory authority responsible for the exercise of supervision on a consolidated basis, it shall establish a college of supervisory authorities (hereinafter referred to as the "college") for the purpose of simplifying the performance of the tasks referred to in § 47 paras. 9, 11 to 15 and § 48 para. 1 and, taking into account the obligation of confidentiality, shall ensure coordination and cooperation also with the competent supervisory authorities in states which are not member states. Through the college, Národná banka Slovenska ensures the performance of the following tasks:

a) the exchange of information between Národná banka Slovenska, the European Supervisory Authority (European Banking Authority) in accordance with special regulation 45ac) and other competent supervisory authorities,

b) the achievement of a possible agreement on the voluntary entrustment of tasks and voluntary delegation of responsibilities between Národná banka Slovenska and other competent supervisory authorities,

c) the determination of programmes of examinations carried out by supervisory authorities, which are based on the risk assessment of the group pursuant to § 6(2) and § 47(9),

d) increasing the effectiveness of supervision in connection with requests for information referred to in § 48(2) and (5),

e) the consistent application of business requirements under this Act in all entities of a group of banks and foreign banks,

f) the application of § 47(9)(d),

g) cooperation pursuant to § 49k(2) and § 49l,

h) the application of § 49k(1) and (3).

(10) Národná banka Slovenska shall establish and ensure the functioning of the college pursuant to paragraph 9 on the basis of written agreements pursuant to § 48(3). It may involve in the activities of the college the competent authorities responsible for the supervision of subsidiaries of a parent bank in the European Union or a parent financial holding company in the European Union or a parent mixed financial holding company in the European Union and the competent authorities of the Member State in which significant branches of the bank are established, or central banks, and, as necessary, the competent supervisory authorities of third countries, taking into account the obligation of confidentiality.

Národná banka Slovenska

a) chairs the meetings of the college and decides which competent supervisory authorities participate in the meeting or activities of the college,

b) informs each member of the college in advance and in full of the date, place and agenda of the college meeting,

c) promptly provides all members of the college with complete information on decisions adopted at meetings or measures taken,

d) in its decision-making takes into account the importance of the supervisory activity to be planned or coordinated for these authorities, and in particular the possible consequences for the stability of the financial system in the Member States concerned pursuant to § 6(2) and the obligations pursuant to § 6(16),

e) informs, taking into account the obligation of confidentiality, the European Supervisory Authority (European Banking Authority) of the activities of the college.

(11) If Národná banka Slovenska is a member of a college established by the competent supervisory authority of another Member State, it shall cooperate closely with the competent supervisory authority that established the college,

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as well as with the other members of the college and the European Supervisory Authority (European Banking Authority).

§ 49

(1) Before issuing its decision, Národná banka Slovenska is obliged to negotiate with the competent supervisory authorities of other Member States whenever the decision concerns a bank included in a consolidated group, which also includes persons supervised by the competent supervisory authority of another Member State, and if this Act does not provide otherwise. This obligation to negotiate applies to decisions issued to a bank included in a consolidated group by which

a) a change in the shareholder structure of the bank or a change in the management structure of the bank is authorised,

b) a serious remedial measure and fines pursuant to § 50 are imposed.

(2) Národná banka Slovenska shall always conduct negotiations pursuant to paragraph 1 with the competent supervisory authority of another Member State if the decision pursuant to paragraph 1(b) concerns a person included in supervision on a consolidated basis carried out by that competent supervisory authority of another Member State, except where such a decision would prevent an effective procedure for issuing the decision, of which it shall immediately inform the competent supervisory authorities of other Member States.

(3) Národná banka Slovenska shall, at the request of the competent supervisory authority of another Member State responsible for carrying out supervision on a consolidated basis, verify the information necessary for carrying out supervision on a consolidated basis concerning a person to which the said supervision applies and whose registered office is in the territory of the Slovak Republic, or shall verify this information through authorised persons.

Persons authorised by the competent supervisory authority of another Member State are entitled to participate in the verification carried out by Národná banka Slovenska or may verify this information independently with the consent of Národná banka Slovenska.

PART NINE SUPPLEMENTARY SUPERVISION OF FINANCIAL CONGLOMERATES § 49a Supplementary supervision of financial conglomerates (hereinafter referred to as "supplementary supervision") is the monitoring and regulation of risks of financial conglomerates that include banks, securities dealers, insurance companies, reinsurance companies or management companies, for the purpose of limiting the risks to which a bank or another regulated entity is exposed due to its participation in a financial conglomerate.

§ 49b For the purposes of this Act, the following terms shall mean

a) a financial conglomerate

1. a group, if 1a. it is controlled by a regulated entity, 1b. the regulated entity pursuant to point 1a is the parent company of an entity in the financial sector or is an entity that has a participating interest pursuant to § 44(5)(m) in an entity in the financial sector, or is an entity linked to an entity in the financial sector by a relationship of control pursuant to § 49b(d) third point, 1c. at least one of the entities in the group is from the insurance sector and at least one is from the banking sector or from the investment services sector, and 1d. the consolidated activities or the aggregate activities of the entities in the group in the insurance sector

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 93 and the consolidated activities or the aggregate activities of the entities in the group in the banking sector and in the investment services sector are significant pursuant to § 49e(2) and (4),

2. a group, if 2a. at least one of the persons in the group is a regulated entity, 2b. it is not controlled by a regulated entity and the group's activities are concentrated in the financial sector pursuant to § 49e(1), 2c. at least one of the persons in the group is from the insurance sector and at least one from the banking sector or from the investment services sector, and 2d. the consolidated activities or the aggregate of activities of the persons in the group in the insurance sector and the consolidated activities or the aggregate of activities of the persons in the group in the banking sector and in the investment services sector are significant pursuant to § 49e(2) and (4), or

3. a subgroup of another financial conglomerate which meets the conditions under the first or second point,

b) financial sector means the sector in which one legal person or several of these legal persons operate:

1. a bank, another financial institution pursuant to § 5(ab) or an auxiliary banking services undertaking; these constitute the banking sector,

2. an insurance undertaking, a reinsurance undertaking 45a) or an insurance holding company pursuant to a special regulation; 45ae) these constitute the insurance sector,

3. a securities dealer or another legal person pursuant to the first point; these constitute the investment services sector,

c) group means a group of persons mutually linked by a control relationship pursuant to point d), including a subgroup,

d) control means a relationship where

1. one person controls another person,

2. one person has an ownership interest in another person, or

3. persons are mutually linked by a relationship expressing influence over management comparable to the influence corresponding to an ownership interest or through a majority of the same persons in the statutory bodies or supervisory bodies of two or more persons.

§ 49c

(1) Národná banka Slovenska shall exercise supplementary supervision if

a) the financial conglomerate is controlled by a bank,

b) the financial conglomerate is controlled by a mixed financial holding company which is the parent company of a bank and the financial conglomerate does not consist of other regulated entities,

c) the parent company of the bank is a mixed financial holding company and the financial conglomerate consists of at least two regulated entities with their registered office in a Member State and the most significant financial sector of the financial conglomerate is the banking sector,

d) the financial conglomerate is controlled by more than one mixed financial holding company with registered offices in different Member States and a regulated entity has its registered office in each of these Member States, while the regulated entity with the highest total assets in the financial conglomerate is a bank, or if the most significant financial sector of the financial conglomerate is the banking sector; if a foreign bank with its registered office in a Member State is also part of the financial sector, on the basis of an agreement between Národná banka Slovenska and the competent supervisory authority of that Member State,

e) the financial conglomerate is controlled by a mixed financial holding company with its registered office in the Slovak Republic, which is the parent company of more than one regulated entity with its registered office in a Member State, and none of these regulated entities has been granted authorisation

Page 94 Collection of Laws of the Slovak Republic 483/2001 Z. z.

in the Slovak Republic and the most significant financial sector of the financial conglomerate is the banking sector,

f) the financial conglomerate is not controlled by a parent company or is controlled otherwise than as set out in points a) to e), if the most significant financial sector of the financial conglomerate is the banking sector and the regulated entity with the highest total assets in this sector is a bank.

(2) Národná banka Slovenska may, on the basis of an agreement with the competent supervisory authorities of the Member States responsible for the supervision of regulated entities forming part of the financial conglomerate, and after the person controlling the relevant financial conglomerate has expressed its view, assume the exercise of supplementary supervision also in cases not set out in paragraph 1, if this is appropriate with regard to fulfilling the objectives of supplementary supervision.

(3) Národná banka Slovenska may, on the basis of an agreement with the competent supervisory authorities of the Member States responsible for the supervision of regulated entities forming part of the financial conglomerate, and after the person controlling the relevant financial conglomerate has expressed its view, leave the exercise of supplementary supervision in the cases set out in paragraph 1 to the competent supervisory authority of a Member State, if this is appropriate with regard to fulfilling the objectives of supplementary supervision.

§ 49d

(1) Národná banka Slovenska, in cooperation with the competent supervisory authorities of the Member States responsible for the supervision of regulated entities forming part of the financial conglomerate, shall determine, on the basis of the criteria pursuant to § 49e, which financial conglomerates are subject to supplementary supervision.

(2) Národná banka Slovenska shall notify the competent supervisory authorities of the Member States responsible for the supervision of regulated entities forming part of the financial conglomerate and the Joint Committee of the European Supervisory Authorities established pursuant to a special regulation, 45ad)

of every further proposal to include a financial conglomerate in supplementary supervision.

(3) Národná banka Slovenska shall notify the person which controls the financial conglomerate pursuant to § 49c(1), or the bank with the highest total assets, if the most important financial sector of the financial conglomerate is the banking sector, that this financial conglomerate will be subject to supplementary supervision. Národná banka Slovenska shall inform the competent supervisory authorities of the Member State in which the mixed financial holding company has its registered office, and the Joint Committee of the European Supervisory Authorities established pursuant to a special regulation, of this. 45ad)

(4) Národná banka Slovenska shall notify the Financial Conglomerates Committee at the European Commission of the principles it applies in supplementary supervision over risk concentration pursuant to § 49h and over intra-group transactions pursuant to § 49i.

(5) Národná banka Slovenska shall publish on its website a link to the list of financial conglomerates published on the website of the Joint Committee of the European Supervisory Authorities established pursuant to a special regulation. 45ad)

§ 49e

(1) Activities are considered to be concentrated in the financial sector if the share of the total assets of regulated entities and unregulated entities of the financial sector in the group to the total assets of the group as a whole is higher than 40 %.

(2) Activities in the financial sectors are significant if the average of the values of the shares for each financial sector is higher than 10 %, while the average is calculated from these shares:

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 95

a) from the share of the total assets of one financial sector to the total assets of entities of the financial sector in the group and

b) from the share of the minimum amount of own funds of one financial sector to the sum of the minimum amount of own funds of entities of the financial sector in the group.

(3) The smallest financial sector in a financial conglomerate is the financial sector whose average of the shares under paragraph 2 is the lowest; the most significant financial sector in a financial conglomerate is the financial sector whose average of the shares under paragraph 2 is the highest. For the purposes of calculating the average of the shares under paragraph 2 for measuring the smallest and most significant financial sector, the banking sector and the investment services sector are considered one sector.

(4) If the group does not reach the value of the average under paragraph 2 from the shares under paragraph 2, but the total assets of the smallest financial sector in the group are higher than 6 000 eur, or if the group reaches the value of the average under paragraph 2 from the shares under paragraph 2, but the total assets of the smallest financial sector in the group are lower than 6 000 eur, Národná banka Slovenska is authorized, in agreement with the competent supervisory authorities of the member states responsible for the supervision of regulated entities forming part of the financial conglomerate, to determine that the group will not be considered a financial conglomerate or that the provisions of § 49g to 49j will not apply, if the exercise of supplementary supervision is not appropriate from the point of view of the objectives of supplementary supervision.

(5) Decisions of Národná banka Slovenska adopted under paragraph 4 Národná banka Slovenska shall also notify the competent supervisory authorities of the member states responsible for the supervision of regulated entities forming part of the financial conglomerate and shall publish them, unless exceptional circumstances occur that would be an obstacle to publication.

(6) Národná banka Slovenska is authorized, in agreement with the competent supervisory authorities of the member states responsible for the supervision of regulated entities forming part of the financial conglomerate, to exclude one or more participations in the smallest financial sector, if these participations are decisive for the identification of the financial conglomerate and together are of negligible significance for the purposes of exercising supplementary supervision. Národná banka Slovenska is authorized, in agreement with the competent supervisory authorities of the member states responsible for the supervision of regulated entities forming part of the financial conglomerate, to exclude a legal person from the calculation of shares under paragraphs 1 to 3, if it is a person

a) which has its registered office in the territory of a state that is not a member state and whose legal order does not allow the exchange of information for the purposes of exercising supplementary supervision; however, a person that demonstrably changed its registered office from a member state to a state that is not a member state in order to avoid supervision cannot be excluded from the calculation of shares under paragraphs 1 to 3,

b) which is of negligible significance for the purposes of exercising supplementary supervision,

c) whose inclusion in the financial conglomerate is inappropriate from the point of view of the objectives of supplementary supervision.

(7) Národná banka Slovenska is authorized, after the opinion of the competent supervisory authorities of the member states responsible for the supervision of regulated entities forming part of the financial conglomerate, to take into account the values of the shares referred to in paragraphs 1 and 2 for three consecutive years, in order to prevent a sudden change in the regime of exercising supplementary supervision, and not to take into account the achievement of the values of the shares referred to in paragraphs 1 and 2, if significant changes occur in the structure of the group.

(8) Národná banka Slovenska is authorized in particularly justified cases and after the opinion of the competent supervisory authorities of the member states responsible for the supervision of regulated entities forming part of the financial conglomerate, when calculating the value of the shares under paragraphs 1

Page 96 Collection of Laws of the Slovak Republic 483/2001 Z. z.

and 2 to replace or supplement the criterion based on total assets with criteria based on the structure of income, total assets under management or off-balance-sheet activities, by one or more at the same time, or to add one criterion or several such criteria, if they are of particular importance from the point of view of the purpose of supplementary supervision.

(9) If the value of the share under paragraph 1 falls below 40 % or the value of the average of the shares under paragraph 2 falls below 10 % in the case of financial conglomerates to which supplementary supervision already applies, for the following three years the value of the share of 35 % shall apply in the calculation under paragraph 1 and the value of the average of the shares of 8 % shall apply in the calculation under paragraph 2.

(10) If, in the case of a group over which supplementary supervision is already exercised, the total assets of the smallest financial sector of the group fall below 6 mld. eur, for the following three years the amount of 5 mld. eur shall apply in the calculation under paragraph 4.

(11) Národná banka Slovenska may, with the consent of the competent supervisory authorities of the member states responsible for the supervision of regulated entities forming part of the financial conglomerate, during the period laid down in paragraphs 7 to 10 determine that the lower values of shares or the lower amount laid down in paragraphs 7 to 10 for financial conglomerates subject to supplementary supervision shall cease to apply.

(12) Calculations concerning total assets are made by summing the data on the total assets of entities in the group from their annual financial statements. For the purposes of this calculation, for entities in which a holding participation has been acquired, the amount of the participation acquired in the given entity shall be taken into account. If consolidated financial statements have been prepared, these shall be used instead of the sum of data.

(13) The minimum amount of own funds of banks for the purposes of supplementary supervision shall mean such an amount of own funds at which the bank maintains its own funds at least at the level of the sum of the values corresponding to the own funds requirements, 20a) while the value of risks does not change.

(14) The own funds requirements of regulated entities other than a bank, which are included in the calculations under paragraphs 2 to 6, shall be determined in accordance with special regulations, 45b) which apply to the determination of own funds requirements, the amount of own funds and the solvency of the relevant regulated entity.

(15) Národná banka Slovenska shall annually evaluate deviations from the application of supplementary supervision and assess the quantitative indicators laid down in paragraphs 1 to 14 and the risk-focused assessments relating to financial groups.

§ 49f

(1) A bank which is part of a financial conglomerate shall comply with the conditions under § 49g to 49j if

a) it controls a financial conglomerate,

b) its parent company is a mixed financial holding company whose registered office is located in a Member State,

c) it is linked to a legal person of another financial sector by a control relationship under § 49b letter d) third point, or

d) its parent company is a regulated entity or a mixed financial holding company with its registered office in a state which is not a Member State, if in that state supervision over financial conglomerates equivalent to supplementary supervision is exercised.

(2) If a financial conglomerate is a subgroup of another financial conglomerate which includes a bank meeting any of the conditions under paragraph 1, the conditions under § 49g to 49j shall

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 97 apply to the bank which is part of the financial conglomerate including the subgroup.

(3) A bank whose parent company is a regulated entity or a mixed financial holding company with its registered office in a state which is not a Member State, and in that state supervision over financial conglomerates equivalent to supplementary supervision is not exercised, shall comply with the conditions under § 49g to 49j. If it is not possible to comply with the conditions under § 49g to 49j because the supervision over financial conglomerates applied by a state which is not a Member State is not equivalent to supplementary supervision, Národná banka Slovenska may determine that the bank which is part of such a financial conglomerate shall submit to Národná banka Slovenska special statements, reports and notifications on participation in such a financial conglomerate, and may also restrict or prohibit such a bank from carrying out intra-group operations which could affect compliance with a sufficient amount of own funds at the level of the financial conglomerate.

(4) Národná banka Slovenska shall verify whether supervision over financial conglomerates equivalent to supplementary supervision is exercised over the financial conglomerate under paragraph 3, if it has so agreed with the authority, supervisory authorities of the Member State in which the regulated entities forming the financial conglomerate have their registered offices, at the request of the parent company under paragraph 3, at the request of a regulated entity which forms part of the financial conglomerate, or on its own initiative.

Národná banka Slovenska shall discuss with the Financial Conglomerates Committee at the European Commission the issuance of a decision under paragraph 3 and shall notify the Commission of the issuance of a decision under paragraph 3. If Národná banka Slovenska has not agreed with the competent authority of a Member State on the matter under the first sentence, the procedure under a special regulation shall be followed. 45c)

(5) If legal persons have a participating interest in one regulated entity or in several regulated entities or, without a participating interest, exercise in relation to these regulated entities another significant influence than the influence under paragraphs 1 to 3, Národná banka Slovenska, in cooperation with the competent supervisory authorities of the Member States responsible for the supervision of the regulated entities forming part of the financial conglomerate, shall determine whether and to what extent supplementary supervision will be exercised over the regulated entities as if they constituted a financial conglomerate which would be subject to supplementary supervision; Národná banka Slovenska shall inform the Commission and the competent supervisory authorities of the Member States responsible for the supervision of the regulated entities forming part of the financial conglomerate of this extent.

In order for such supplementary supervision to be exercised, at least one of the legal persons under the first sentence must be a bank, the conditions laid down in § 49b letter a) first point points 1c and 1d must be met and it is necessary for the purposes of fulfilling the objectives of supplementary supervision.

§ 49g

(1) A bank under § 49f paragraph 1 shall ensure that a sufficient amount of own funds is maintained at the level of the financial conglomerate and that rules ensuring compliance with a sufficient amount of own funds are adopted at the level of the financial conglomerate. The own funds of a financial conglomerate are sufficient if the difference between the own funds at the level of the financial conglomerate and the sum of the minimum amounts of own funds of the persons in the financial conglomerate is zero or a positive number.

(2) A bank which is part of a financial conglomerate shall carry out calculations of the sufficient amount of own funds according to one of the methods laid down in a generally binding legal regulation issued by Národná banka Slovenska under paragraph 9.

(3) Národná banka Slovenska, after the opinion of the competent supervisory authorities of the Member States responsible for the supervision of the regulated entities forming part of the financial conglomerate, shall be entitled, on its own initiative or at the request of a regulated entity or a mixed financial holding company under paragraph 4, to notify the regulated entity or the mixed financial holding company which of the methods of calculating the sufficient amount of own funds laid down

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in the generally binding legal regulation under paragraph 9 is to be used.

(4) A bank that controls a financial conglomerate is obliged to submit to the National Bank of Slovakia semi-annually, as well as upon the request of the National Bank of Slovakia, data on the amount of own funds and on the amount of own funds at the level of the financial conglomerate required to meet the conditions of sufficient amount of own funds at the level of the financial conglomerate that is subject to supplementary supervision. If the financial conglomerate is not controlled by a bank, the data pursuant to the first sentence is obliged to submit to the National Bank of Slovakia a mixed financial holding company or a regulated entity designated by the National Bank of Slovakia after prior consultation with the regulated entities or mixed financial holding companies forming the financial conglomerate.

(5) The calculation of the sufficient amount of own funds at the level of the financial conglomerate includes own funds requirements only for the persons referred to in § 49b letter b) and for the mixed financial holding company.

(6) The National Bank of Slovakia may decide that it will not include in the calculation of the requirements for a sufficient amount of own funds at the level of the financial conglomerate subject to supplementary supervision a person,

a) which has its registered office in a state that is not a member state and whose legal order does not allow the exchange of information necessary for the performance of supplementary supervision,

b) which is of negligible significance for the purposes of supplementary supervision over regulated entities in the financial conglomerate; this does not apply if more legal persons would be excluded from the calculation, whose share in the financial conglomerate is in total significant according to § 49e paragraphs 2 and 4,

c) whose inclusion would be inappropriate or disproportionate from the point of view of the objectives of supplementary supervision.

(7) The National Bank of Slovakia shall discuss the non-inclusion of a person according to paragraph 6 letter c) with the competent supervisory authorities of the member states responsible for supplementary supervision in the respective member state.

(8) The provision of paragraph 6 does not affect the obligation of the persons concerned to provide information for the purposes of performing supplementary supervision, nor the right of supervisory authorities to provide information about these persons for the purposes of performing supplementary supervision or supervision over financial conglomerates in another member state.

(9) By a measure issued by the National Bank of Slovakia and announced in the collection of laws, for the purposes of calculating the sufficient amount of own funds at the level of the financial conglomerate, the following shall be established:

a) what constitutes own funds at the level of the financial conglomerate, and the method of their calculation, including the own funds of the mixed financial holding company,

b) what is understood as the minimum amount of own funds of persons in the financial conglomerate, and the method of their calculation,

c) methods of calculating the sufficient amount of own funds of the financial conglomerate.

§ 49h

(1) A bank that controls a financial conglomerate is obliged to submit to the National Bank of Slovakia semi-annually, as well as upon the request of the National Bank of Slovakia, data on the risk concentration of the financial conglomerate. If the financial conglomerate is not controlled by a bank, the data pursuant to the first sentence is obliged to submit to the National Bank of Slovakia a mixed financial holding company or a regulated entity designated by the National Bank of Slovakia after prior consultation with the regulated entities

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 99 or mixed financial holding companies forming the financial conglomerate.

(2) Risk concentration of the financial conglomerate for the purposes of supplementary supervision means any activity of persons of the financial conglomerate that may cause such a loss that may jeopardize the solvency or safety and soundness of regulated entities in the financial conglomerate;

such concentration may be in credit risk, investment risk, insurance risk, market risk, liquidity risk, credit risk, operational risk and other risk or a combination of these risks.

(3) If the financial conglomerate is controlled by another regulated entity, the provisions of a special regulation apply mutatis mutandis to the risk concentration of the financial conglomerate. 45b)

(4) If the financial conglomerate is controlled by a mixed financial holding company and if the most significant financial sector in the financial conglomerate is the banking sector, § 33 applies mutatis mutandis to the risk concentration of the banking sector and the mixed financial holding company.

(5) By a measure issued by the National Bank of Slovakia and announced in the collection of laws, for the purposes of determining risk concentration, details shall be established on

a) the calculation of the asset exposure of the financial conglomerate and details on the asset exposure of the financial conglomerate,

b) the calculation of the asset exposure of the banking sector and details on the asset exposure of the banking sector,

c) the calculation of the asset exposure of the mixed financial holding company and details on the asset exposure of the mixed financial holding company,

d) the risk concentration of the financial conglomerate and the method of their calculation.

§ 49i

(1) A bank that controls a financial conglomerate is obliged to submit to the National Bank of Slovakia semi-annually, as well as upon the request of the National Bank of Slovakia, data on significant intra-group transactions of the financial conglomerate. If the financial conglomerate is not controlled by a bank, the data pursuant to the first sentence is obliged to submit to the National Bank of Slovakia a mixed financial holding company or a regulated entity designated by the National Bank of Slovakia after prior consultation with the regulated entities or mixed financial holding companies forming the financial conglomerate.

(2) An intra-group transaction for the purposes of supplementary supervision means a transaction in which regulated entities forming a financial conglomerate directly or indirectly use other persons of the same group or a natural person, or a legal person, which they control, to fulfill an obligation, regardless of whether this obligation is determined by a contract and whether the fulfillment of this obligation is for consideration.

(3) A significant intra-group transaction for the purposes of supplementary supervision means an intra-group transaction whose amount is at least 5 % of the determined amount of own funds at the level of the financial conglomerate according to § 49g paragraph 9 letter a).

(4) In significant intragroup transactions with persons with a special relationship, the procedure shall be followed pursuant to § 35.

(5) If a financial conglomerate is controlled by a mixed financial holding company and if the most significant financial sector in the financial conglomerate is the banking sector, § 44(4) shall apply to intragroup transactions of the banking sector and of the mixed financial holding company.

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§ 49j

(1) A bank that is part of a financial conglomerate is obliged to establish a risk management system and an internal control system, including management procedures and accounting, for the purpose of monitoring and complying with the provisions of this Act at the level of the financial conglomerate.

(2) The risk management system for the purposes of supplementary supervision includes

a) an appropriate management system ensuring, at the level of the financial conglomerate, the approval and regular review of the business strategy in relation to the risks arising from the activities of the financial conglomerate,

b) procedures to ensure an adequate amount of own funds, which include the possible impact of the business strategy on the risk profile and on the bank's own funds,

c) procedures for monitoring risks and measures ensuring the monitoring and control of risks at the level of the financial conglomerate,

d) measures aimed at preparing and developing appropriate plans and procedures for recovery and resolution; these measures must be regularly updated.

(3) The internal control system for the purposes of supplementary supervision includes

a) an assessment of the procedures for identifying and measuring risks affecting compliance with the own funds requirements at the level of the financial conglomerate and an assessment of their functionality and effectiveness,

b) an assessment of the accounting and information-provision procedures which serve to identify, measure, monitor and control intragroup transactions and risk concentrations.

(4) A bank that is part of a financial conglomerate is obliged, at the level of the financial conglomerate, to regularly, on an annual basis,

a) provide the National Bank of Slovakia with information on its legal form, management and organisational structure, including all persons regulated by it, unregulated subsidiaries and significant branches,

b) publish on its website a description of its legal form, management and organisational structure.

(5) If the National Bank of Slovakia coordinates the exercise of supplementary supervision pursuant to Section 49k (2), it shall notify the information pursuant to paragraph 4 and Section 49l (3) (a) to the Joint Committee of the European Supervisory Authorities established pursuant to a special regulation. 45ad)

§ 49k

(1) The National Bank of Slovakia, in the exercise of supplementary supervision

a) ensures the coordination of the collection and dissemination of information necessary for monitoring the activities of the financial conglomerate, as well as the provision of information important for the exercise of supplementary supervision in the individual financial sectors to the relevant supervisory authorities of other states which are responsible for the supervision of the regulated persons forming part of the financial conglomerate,

b) collects information necessary for assessing the financial situation of the financial conglomerate for the purposes of exercising supplementary supervision,

c) monitors compliance with the provisions on own funds requirements, risk concentrations and intragroup transactions,

d) monitors the structure of the financial conglomerate, its organisation and monitors the functionality of the

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 101 risk management system and the functionality of the internal control system pursuant to Section 49j,

e) plans and coordinates the exercise of supplementary supervision in any situation in cooperation with the relevant supervisory authority of other states which are responsible for the supervision of the regulated persons forming part of the financial conglomerate,

f) performs other tasks necessary for the exercise of supplementary supervision.

(2) The National Bank of Slovakia is obliged, in cooperation with the relevant supervisory authorities of other states which are responsible for the supervision of the regulated persons forming part of the financial conglomerate, to coordinate the exercise of supplementary supervision and to lay down cooperation procedures in the application of the provisions of Section 49d, Section 49e, Section 49f (3) and (5), Section 49g, Section 49l (2) and Section 51a.

(3) Information necessary for the exercise of supplementary supervision which has already been provided to the relevant supervisory authority of another state which is responsible for the supervision of the regulated persons forming part of the financial conglomerate shall be requested by the National Bank of Slovakia from that authority. If the National Bank of Slovakia has not obtained such information by the procedure set out in the first sentence, it is entitled to request it directly from the persons forming part of the financial conglomerate which are referred to in Section 49g (2).

(4) For the purposes of coordination and cooperation between the National Bank of Slovakia and the relevant supervisory authorities of other Member States which are responsible for the supervision of the regulated persons forming part of the financial conglomerate, the provisions of Section 48 (9) to (11) shall apply mutatis mutandis in the exercise of supplementary supervision.

§ 49l

(1) The National Bank of Slovakia, in the exercise of supplementary supervision, cooperates with the relevant supervisory authorities of the Member States which are responsible for the supervision of the regulated persons forming part of the financial conglomerate, even if the supplementary supervision is exercised by the relevant supervisory authority of a Member State, at least to the extent set out in paragraph 3.

(2) The National Bank of Slovakia is obliged, at the request of the relevant supervisory authorities of the Member States which are responsible for the supervision of the regulated persons forming part of the financial conglomerate, to provide them with the information necessary for the exercise of supervision over the regulated persons in the financial conglomerate and supervision over financial conglomerates, at least to the extent set out in paragraph 3. The National Bank of Slovakia is also obliged to provide this information of its own accord if it establishes that the said information is important for the exercise of supervision over financial conglomerates. The National Bank of Slovakia is entitled to request from the relevant supervisory authorities of the Member States which are responsible for the supervision of the regulated persons forming part of the financial conglomerate the information necessary for the exercise of supplementary supervision at least to the extent set out in paragraph 3, and it is also entitled to exchange information necessary for the exercise of supervision over financial conglomerates also with foreign central banks, the European System of Central Banks and the European Central Bank and, in accordance with special regulation 45d), also with the European Systemic Risk Board.

(3) Cooperation and the exchange of information pursuant to paragraphs 1 and 2 shall relate in particular to

a) the legal, management and organisational structure of the financial conglomerate, including all regulated persons and unregulated persons, unregulated subsidiaries and significant branches belonging to that financial conglomerate and persons with a qualifying holding in the person controlling the financial conglomerate and the competent supervisory authorities of the Member States responsible for supervising the regulated persons forming part of the financial conglomerate,

b) the strategy and orientation of the financial conglomerate,

c) the financial situation of the financial conglomerate, in particular the adequacy of own funds,

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intra-group transactions, concentration of risks and results of operations,

d) shareholders with a qualifying holding in the persons forming part of the financial conglomerate and members of the statutory bodies of the persons forming part of the financial conglomerate,

e) the organisation, risk management and internal control system at the level of the financial conglomerate,

f) procedures for collecting information from the persons forming part of the financial conglomerate and for verifying that information,

g) adverse developments in the regulated persons or other persons in the financial conglomerate which could have a serious negative impact on the bank,

h) serious sanctions and extraordinary measures adopted by the National Bank of Slovakia, the competent supervisory authorities of the Member States responsible for supervising the regulated persons forming part of the financial conglomerate.

(4) The National Bank of Slovakia shall consult the competent supervisory authorities of the Member States responsible for supervising the regulated persons forming part of the financial conglomerate on

a) the issuing of a decision on prior consent pursuant to Section 28 (1) (a) and (b) and Section 9 (4), if changes in the shareholding structure or changes in the bodies of the bank would affect the exercise of supplementary supervision,

b) the imposition of sanctions or the adoption of measures against regulated persons in the financial conglomerate which could also affect regulated persons subject to supplementary supervision exercised by the competent supervisory authority of the Member State responsible for supervising the regulated persons forming part of the financial conglomerate.

(5) The National Bank of Slovakia is not obliged to consult pursuant to paragraph 4 if such consultation could jeopardise the adoption of decisions within the relevant period or if the adoption of sanctions and measures cannot be delayed.

In such a case, the National Bank of Slovakia shall inform the competent supervisory authorities of the Member States responsible for supervising the regulated persons forming part of the financial conglomerate without undue delay.

(6) In exercising supplementary supervision, the National Bank of Slovakia is entitled to call upon the competent supervisory authority of the Member State responsible for supervising the regulated persons forming part of the financial conglomerate in the Member State in which the parent undertaking has its registered office to request the parent undertaking to provide the information necessary for the performance of the tasks of the National Bank of Slovakia pursuant to Section 49k and to forward that information to it.

(7) The provisions of paragraphs 1 to 6 also apply to the cooperation of Národná banka Slovenska with the supervisory authorities of states with which the European Union has concluded an agreement on cooperation in the supervision of financial conglomerates.

(8) The provision of paragraph 7 is without prejudice to the right to conclude an agreement on the conditions for the exercise of supervision over financial conglomerates and on the mutual exchange of information with the competent supervisory authority of a non-Member State, if such an agreement is not contrary to the rules for the exercise of supplementary supervision.

§ 49m

(1) Národná banka Slovenska shall, at the request of the competent supervisory authority of a Member State responsible for the supervision of regulated entities forming part of a financial conglomerate, verify the information necessary for the exercise of supervision over the financial conglomerate concerning an entity that is part of the financial conglomerate and has its registered office in the territory of the Slovak Republic, or shall verify such information through authorised persons. Persons authorised by the competent supervisory authority

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 103 of a Member State are entitled to participate in the verification carried out by Národná banka Slovenska or may verify such information independently with the consent of Národná banka Slovenska.

(2) Národná banka Slovenska is entitled to request the competent supervisory authority of a Member State responsible for the supervision of regulated entities forming part of a financial conglomerate to verify the information necessary for the exercise of supervision over the financial conglomerate concerning an entity that is part of the financial conglomerate and has its registered office in the territory of a Member State, or to verify such information through authorised persons. Persons authorised by Národná banka Slovenska are entitled to participate in the verification carried out by the competent supervisory authority of a Member State or may verify such information independently with the consent of the competent supervisory authority of the Member State.

§ 49n Entities that are part of a financial conglomerate are obliged, for the purposes of supplementary supervision, to provide each other with the information necessary for the fulfilment of obligations under § 49g to 49j.

§ 49o

(1) Mixed financial holding companies pursuant to § 49c are obliged to prepare and submit to the National Bank of Slovakia all statements, reports and other reports containing data that are necessary for the performance of supplementary supervision pursuant to § 49g(2), § 49h(1) and § 49i(1), in the established manner and within the established deadlines; their structure, scope, content, form, breakdown, deadlines, manner, procedure and place of submission, including the methodology for their preparation, shall be laid down by a measure, 23) which shall be issued by the National Bank of Slovakia and which shall be announced in the collection of laws.

(2) The data and other information stated in the statements, reports and other reports must be comprehensible, clear, verifiable, must provide a true picture of the reported facts and must be submitted in a timely manner. If the submitted statements, reports and other reports do not comply with the established methodology or if reasonable doubts arise as to their correctness or completeness, the mixed financial holding company is obliged, at the request of the National Bank of Slovakia, to submit supporting documents and provide an explanation within the deadline determined by it.

PART TEN REMEDIAL MEASURES AND PENALTIES § 50

(1) If the National Bank of Slovakia finds deficiencies in the activities of a bank or a branch of a foreign bank, consisting in non-compliance with the conditions specified in the banking licence or in a decision on prior consent, conditions or obligations arising from other decisions of the National Bank of Slovakia imposed on the bank or the branch of a foreign bank, in non-compliance with the conditions pursuant to § 7(2), (4) and (6), § 8(2), (4) and (6) or in non-compliance with or circumvention of other provisions of this Act, legally binding acts of the European Union relating to the performance of banking activities, special laws 46) or other generally binding legal regulations relating to the performance of banking activities, the National Bank of Slovakia may, according to the seriousness, scope, duration, consequences and nature of the identified deficiencies

a) impose on the bank or the branch of a foreign bank to adopt measures for its recovery,

b) impose on the bank or the branch of a foreign bank to submit special statements, reports and reports,

c) impose on the bank or the branch of a foreign bank to terminate unauthorised activity,

d) impose a fine on the bank or the branch of a foreign bank from 3 300 eur to 332 000 eur and in the case of a repeated or serious deficiency up to 10 % of the total annual turnover for the

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preceding calendar year; if the bank is a subsidiary, the gross income from the consolidated financial statements of the parent company shall be used as the basis for the total annual turnover in the preceding calendar year,

e) restrict or suspend for the bank or the branch of a foreign bank the performance of certain banking activity or the performance of certain types of transactions,

f) withdraw the banking licence for the performance of certain banking activity,

g) impose correction of accounting or other records according to the findings of the National Bank of Slovakia or an auditor,

h) impose the publication of a correction of incomplete, incorrect or untrue information that the bank or the branch of a foreign bank published on the basis of a statutory obligation,

i) impose the settlement of losses from management with share capital after settlement of losses with retained earnings from previous years, with funds created from profit and with capital funds,

j) introduce forced administration over the bank or the branch of a foreign bank for the reasons stated in § 53,

k) withdraw the banking licence from the bank or the branch of a foreign bank for the reasons stated in § 63,

l) impose on the bank or the branch of a foreign bank to adopt measures to improve risk management,

m) impose on the bank to maintain the value of own funds at an amount exceeding the value of the own funds requirements determined by this Act pursuant to § 29(4),

n) impose on the bank to apply special procedures for taking into account the impairment of assets and expected losses from off-balance sheet items of the bank, if the valuation of assets performed by the bank or the value of expected losses from off-balance sheet items calculated by the bank does not correspond to objective reality, for the purposes of maintaining the bank's own funds in relation to values corresponding to the own funds requirements,

o) impose on the bank or the branch of a foreign bank to reduce significant risks it incurs in the performance of its activities,

p) impose on the bank or the branch of a foreign bank to maintain the established scope of assets of the bank or the branch of a foreign bank at a determined amount,

r) impose on the bank to limit the provision of the variable component of total remuneration to persons pursuant to § 23a in the amount determined by a percentage of total remuneration paid to persons pursuant to § 23a for at least one preceding calendar year, for the purposes of maintaining the bank's own funds pursuant to § 29(4),

s) impose on the bank to use profit to maintain the value of own funds at an amount exceeding the value of the own funds requirements pursuant to § 29(4),

t) impose on the bank the obligation to publish a public statement stating the bank responsible for the deficiency in activity, as well as the nature of the breach,

u) impose on the bank the obligation to refrain from conduct or to abstain from conduct that is contrary to this Act or special regulations,

v) impose on the bank the obligation to comply with special liquidity requirements,

(2) The National Bank of Slovakia may impose on a member of the statutory body of a bank, a member of the supervisory board of a bank, the head of a branch of a foreign bank, the deputy head of a branch of a foreign bank, a procurator, a senior employee of a bank or a branch of a foreign bank, an administrator for the performance of forced administration, or a member of the statutory body, a member of the supervisory body or a senior employee of a financial holding company pursuant to § 44(3) or a mixed financial holding company pursuant to § 49c(1)(b) to (e) or a deputy of the administrator for

483/2001 Coll. Collection of Laws of the Slovak Republic Page 105 performance of forced administration for a breach of obligations arising for it from this Act, special laws 46) or other generally binding legal regulations relating to the performance of banking activities on an individual basis, on a consolidated basis and within a financial conglomerate, from the bank's articles of association and other internal management acts, or for a breach of conditions or obligations imposed by a decision issued by the National Bank of Slovakia, a fine according to the seriousness, degree of fault and nature of the breach of up to twelve times the monthly average of its total income for the previous year from the bank or branch of a foreign bank and from members of the consolidated group or members of the financial conglomerate to which the bank or branch of a foreign bank belongs; a fine of at most up to 50 % of twelve times the monthly average of its total income for the previous year from the bank or branch of a foreign bank and from members of the consolidated group or members of the financial conglomerate to which the bank or branch of a foreign bank belongs may be imposed on a senior employee.

If the relevant person received income from the bank or branch of a foreign bank and from members of the consolidated group or members of the financial conglomerate to which the bank or branch of a foreign bank belongs only during part of the previous year, the monthly average shall be calculated from its total income for that part of the year. A person who has become a person of disrepute by the final imposition of a fine under Section 7(15)(e) must be immediately removed from office by the bank, foreign bank, financial holding company under Section 44(3) or mixed financial holding company under Section 49c(1)(b). For breaches under the first sentence, the National Bank of Slovakia may temporarily prohibit these persons from performing a function in a bank or branch of a foreign bank or, in the case of a serious breach, impose a fine of up to 5 000 000 euros.

(3) Measures for the recovery of a bank or branch of a foreign bank shall mean

a) the submission of a binding recovery programme, which must contain

1. a plan for maintaining the bank's own funds in relation to the values corresponding to the own funds requirements,

2. a plan for the projection of the current and expected development of the economic situation of the bank or branch of a foreign bank at least in the scope of balance sheet, profit and loss statements, budget, strategic business plan, analysis of the profitability of achieving the programme's objectives,

3. other information that the National Bank of Slovakia considers necessary,

b) the submission of an analysis of deficiencies in the bank's activities and a binding plan including a timetable for adopting measures to achieve compliance with the provisions of this Act, legally binding acts of the European Union relating to the performance of banking activities, special laws, 46) other generally binding legal regulations relating to the performance of banking activities,

c) restriction or suspension of the payment of dividends, 47) bonuses 48) and other shares in profit, remuneration and non-monetary benefits to shareholders, members of the statutory body, members of the supervisory body and employees,

d) restriction or suspension of increases in wages or remuneration of members of the statutory body, members of the supervisory board and all employees of the bank or branch of a foreign bank,

e) the introduction of daily monitoring of the development of the financial situation of the bank or branch of a foreign bank,

f) restriction or suspension of the expansion of new transactions of the bank or branch of a foreign bank; it may begin to carry out these transactions only after the prior consent of the National Bank of Slovakia,

g) the adoption of measures to improve risk management,

h) the adoption of measures to prevent risk transfer in securitisation.

(4) The National Bank of Slovakia is obliged to call on the bank to adopt measures for its recovery,

Page 106 Collection of Laws of the Slovak Republic 483/2001 Coll.

if the bank fails to fulfil obligations under Sections 23 and 30 or if it finds that the bank has provided hidden support for securitisation more than once.

(5) The statutory body of a bank that fails to fulfil obligations under Section 23 or 30 is obliged to submit a binding recovery programme to the National Bank of Slovakia within 30 days of discovering this fact.

The binding recovery programme must be approved by the statutory body and the supervisory board of the bank.

The National Bank of Slovakia is obliged, within ten days of receiving the binding recovery programme, to approve or reject it.

(6) If the reasons for which the measure under paragraph 1(e) was issued have ceased to exist, the National Bank of Slovakia shall notify this fact in writing to the obligated bank or branch of a foreign bank.

(7) For a breach of the provisions of Section 3, Section 4(1) and Section 28, the National Bank of Slovakia may impose a measure to eliminate and remedy the unlawful state and a fine

a) of up to 10 % of total annual turnover in the previous calendar year, if it is a legal person; if the legal person is a subsidiary, the gross income from the consolidated financial statements of the parent company shall be used as the basis for total annual turnover in the previous calendar year,

b) of up to 5 000 000 euros, if it is a natural person or

c) of up to twice the amount of enrichment resulting from the breach of these provisions, if this amount can be determined.

(8) The imposition of a fine under paragraph 1, 2 or 7 shall not affect liability under special regulations.

(9) A fine and remedial measures under paragraph 1 may be imposed concurrently and repeatedly. A fine under paragraph 1, 2 or 7 is due within 30 days from the date of finality of the decision imposing the fine. A finally imposed fine shall be administered by the Government Audit Office; 48aaa) for this purpose, the National Bank of Slovakia shall send the final decision imposing the fine to the Government Audit Office. The proceeds from fines shall be income of the state budget of the Slovak Republic.

(10) A fine under paragraph 1(d), paragraphs 2 and 7, Section 51(1), Section 51a(1) or Section 82(2) or remedial measures may be imposed within three years of discovering the deficiencies, but no later than ten years from their occurrence. The limitation periods under the first sentence are interrupted when a fact establishing the interruption of the period under a special regulation occurs, 48aa) whereby a new limitation period begins to run from the interruption of the limitation period. Deficiencies in the activities of a bank or a branch of a foreign bank, or of another person over whom supervision is exercised under this Act, stated in the record of an on-site supervision carried out shall be deemed to have been identified as of the date of termination of the relevant on-site supervision under a special regulation. 48a)

(11) Národná banka Slovenska is also authorized, outside proceedings on the imposition of a remedial measure or a fine, to impose on a bank or a branch of a foreign bank the obligation to submit special statements, reports and notifications and to discuss deficiencies in the activities of the bank or the branch of a foreign bank with the members of the statutory body of the bank, the head of the branch of a foreign bank, the members of the supervisory board of the bank, senior employees, the heads of the internal control and internal audit department, who are obliged to provide Národná banka Slovenska with the cooperation it requests.

(12) Národná banka Slovenska is authorized to impose on a bank or a branch of a foreign bank the obligation to maintain a specified scope of the bank's or the branch of a foreign bank's assets in a specified amount also if this is necessary due to objective circumstances relating to the financial markets, the effects of which could result in a disruption of the stability of the financial market or a disruption of the credibility of the financial market.

483/2001 Coll. Collection of Laws of the Slovak Republic Page 107

(13) If Národná banka Slovenska, on the basis of supervision carried out under § 6 ods. 2, finds that the risks to which the bank is or may be exposed are not sufficiently covered by its own funds, even after the bank has taken measures arising from a notification sent by Národná banka Slovenska under § 6 ods. 2, Národná banka Slovenska may impose on the bank a special own funds requirement in an amount exceeding the value of the own funds requirements laid down by this Act under § 30 ods. 4 and 5, taking into account the quantitative and qualitative aspects of the system for assessing the adequacy of internal capital under § 27 ods. 3.

(14) If a bank or a branch of a foreign bank informs 48b) Národná banka Slovenska of the result of stress tests which will correspond to an exceedance of the own funds requirements for the correlation trading portfolio, Národná banka Slovenska may determine an own funds requirement for covering the specific risk for the correlation trading portfolio.

(15) Information on the operative part of remedial measures and fines under paragraphs 1, 2, 7, § 51 ods. 1, § 51a ods. 1 and 2 and § 52 ods. 1, against which no appeal is any longer admissible, Národná banka Slovenska shall publish on its website for at least five years, 48c) and this without delay after the bank, branch of a foreign bank, mixed financial holding company or person has been informed of the imposition of the remedial measure or fine.

(16) Under paragraph 15, Národná banka Slovenska shall publish in particular information on the type of remedial measure and fine imposed, the nature of the breach, the business name, registered office and identification number of the bank, branch of a foreign bank, mixed financial holding company, the name and surname, address of permanent residence or business name, registered office and identification number of the person on whom the remedial measure or fine was imposed. The information under the first sentence shall be published in accordance with a special regulation. 48d)

(17) The information under paragraph 16 shall be published anonymously if it concerns

a) a natural person and the publication of personal data is disproportionate,

b) a justified risk of endangering the stability of the financial markets or of an ongoing investigation under a special regulation, 48e)

c) a justified risk of causing disproportionate harm to the bank or the natural person.

(18) Národná banka Slovenska is authorized to impose the obligation under paragraph 1 letter d) also if the financial situation of the bank deteriorates significantly, if the person concerned has seriously breached the legal regulations or the bank's articles of association, or if it has committed serious errors in the performance of its tasks.

(19) Národná banka Slovenska shall, within two working days of the issuance of a decision under § 50, send the decision to the resolution board for its information. The resolution board is authorized to impose on the bank the obligation to begin negotiations with potential interested parties in the purchase of the bank or part thereof under a special regulation. 48f)

§ 50a Národná banka Slovenska is obliged to preserve the anonymity of an employee, senior employee, member of the statutory body or member of the supervisory board of a bank as well as of an employee or senior employee of a branch of a foreign bank who has provided Národná banka Slovenska with any information on deficiencies in the activities of the bank and the branch of a foreign bank under § 50 ods. 1.

§ 51

(1) Národná banka Slovenska may impose on a legal person which is included in the consolidated

Page 108 Collection of Laws of the Slovak Republic 483/2001 Coll.

group over which it exercises supervision on a consolidated basis, according to the gravity, scope, duration, consequences and nature of the identified deficiencies, a fine of from 3 300 eur to 664 000 eur, if this legal person

a) does not enable an on-site supervision to be carried out,

b) does not provide the required statements, reports and other notifications for the purposes of exercising supervision on a consolidated basis,

c) provides incorrect, false or incomplete statements, reports and other notifications, or fails to comply with the deadlines for their submission, or

d) fails to fulfil the obligation under § 47 ods. 1.

(2) The provisions of § 50 ods. 7 to 9 and ods. 10 first sentence shall apply to fines under paragraph 1.

§ 51a

(1) Národná banka Slovenska may impose on a mixed financial holding company or another person which is part of a financial conglomerate over which Národná banka Slovenska exercises supplementary supervision, according to the gravity, scope, duration, consequences and nature of the identified deficiencies, a fine of from 3 300 eur to 664 000 eur, if

a) it does not enable an on-site supervision to be carried out,

b) it does not provide the required statements, reports and other notifications for the purposes of exercising supplementary supervision,

c) it provides incorrect, false or incomplete statements, reports and other notifications, or fails to comply with the deadlines for their submission, or

d) fails to fulfil obligations under § 49g to 49j.

(2) If the solvency of a financial conglomerate is threatened or if compliance with a sufficient amount of own funds in a financial conglomerate subject to supplementary supervision is threatened, Národná banka Slovenska is authorised to, in relation to a mixed financial holding company,

a) impose measures for the recovery of the financial conglomerate under § 50(3), or

b) restrict or suspend the execution of certain intra-group transactions.

(3) If a financial conglomerate includes a person over whom Národná banka Slovenska exercises supervision under § 6(1), Národná banka Slovenska is authorised to impose a sanction under § 50 also on the basis of a notification from the competent supervisory authority of a Member State responsible for the supervision of the financial conglomerate of which the person under § 6(1) is part.

(4) If Národná banka Slovenska has imposed a sanction on a person under § 6(1) who is part of a financial conglomerate subject to supplementary supervision exercised by the competent supervisory authority of a Member State, and if the imposition of this sanction is significant for the exercise of supplementary supervision, it shall notify this fact to the competent supervisory authority of the Member State.

§ 52

(1) A person who has performed an act that resulted in a breach of § 28(1)(a), or who obtained prior consent under § 28(1)(a) on the basis of false data, may have the exercise of the right to participate and vote at the bank's general meeting and the right to request the convening of an extraordinary general meeting of the bank suspended by Národná banka Slovenska. Národná banka Slovenska may also suspend the exercise of these rights in respect of a person whose activities concerning the bank are detrimental to the proper and prudent conduct of the bank's business, or in respect of whom such activities can be reasonably expected, in the cases provided for in § 28(12).

(2) The bank is obliged to submit to Národná banka Slovenska an extract from its issuer register and from its

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 109 list of shareholders drawn up as at the decisive day, 49a) which is determined at least five working days before the day of the general meeting. The bank is obliged to deliver this extract to Národná banka Slovenska on the day it is drawn up. Národná banka Slovenska shall without delay mark in writing on this extract the person whose exercise of the rights referred to in paragraph 1 it has suspended, and shall deliver it to the bank no later than the day preceding the date of the bank's general meeting.

(3) The bank is bound by the interim measure under paragraph 3.

(4) Delivery under paragraph 3 also includes delivery of the interim measure to a representative authorised to represent this person at the general meeting.

(5) The bank may not admit to its general meeting the participation of a person marked by Národná banka Slovenska under paragraph 3, nor the participation of a person not listed in the extract submitted by the bank under paragraph 3, nor persons authorised by these persons to act on their behalf.

(6) Shares to which the suspended rights referred to in paragraph 1 are attached shall not be considered shares with voting rights during the suspension of these rights. These shares shall not be taken into account when assessing the ability of the general meeting to adopt resolutions or when the general meeting decides. For the resulting increase in the share of voting rights of other persons listed in the extract submitted by the bank under paragraph 3, the prior consent of Národná banka Slovenska under § 28(1)(a) is not required.

(7) If the reasons for suspending the exercise of the rights referred to in paragraph 1 cease to exist, Národná banka Slovenska shall without delay cancel their suspension.

(8) Národná banka Slovenska is authorised to file a petition with the court for a declaration that a decision of the bank's general meeting is invalid on the grounds of conflict with laws, other generally binding legal regulations, decisions of Národná banka Slovenska or the bank's articles of association, within three months from the day it learned of this decision, but no later than one year from the adoption of this decision.

§ 52a

(1) Národná banka Slovenska shall notify the European Supervisory Authority (European Banking Authority) of the sanctions it has imposed, for the purposes of the exchange of information between competent supervisory authorities through the central database of sanctions maintained by the European Supervisory Authority (European Banking Authority). Národná banka Slovenska shall provide the European Supervisory Authority (European Banking Authority) with all necessary information to update this central database.

(2) Národná banka Slovenska shall use the central database under paragraph 1 for the purposes of assessing the good repute of persons under this Act. When providing data from the criminal register to competent supervisory authorities, Národná banka Slovenska shall proceed in accordance with a special law. 49aa)

§ 53

(1) Národná banka Slovenska may introduce forced administration over a bank if, taking into account the circumstances and situation of the bank, a measure under § 65a(6) would not lead to the elimination of deficiencies in the bank's activities or to an improvement in its financial situation.

(2) The purpose of forced administration over a bank is in particular

a) to prevent the exercise of functions by the bank's bodies responsible for the deteriorating economic situation of the bank,

b) to eliminate the most serious deficiencies in the management and activities of the bank with the aim of halting the deterioration

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of the bank's economic situation,

c) to protect the deposits of the bank's clients and other rights of the bank's clients from the occurrence of damage or the accumulation of damage,

d) to adopt a recovery programme, if the economic recovery of the bank is realistic, including the adoption and implementation of organisational and other measures for the gradual stabilisation of the bank and the restoration of its liquidity, in particular in cooperation with the bank's main shareholders.

(3) Forced administration is a reorganisation measure that may affect existing rights of third parties.

(4) Národná banka Slovenska is obliged to introduce forced administration if the bank maintains its own funds at a level lower than 50 % of the sum of values corresponding to the bank's own funds requirements. 20a)

(5) Národná banka Slovenska may introduce forced administration if deficiencies in the bank's activities endanger its safe operation or endanger the rights or legally protected interests of its clients, if the result of the management of the current period and previous periods is a loss of the bank exceeding 30 % of its registered capital, or in the case of another serious deficiency in the bank's activities.

Národná banka Slovenska shall introduce forced administration under the first sentence only if the dismissal of a member of the board of directors or a member of the supervisory board and the election of a new member of the board of directors or a member of the supervisory board and the performance of their function in the bank did not lead to the elimination of deficiencies in the bank's activities that endanger its safe operation or endanger the rights or legally protected interests of its clients, did not lead to the elimination of other serious deficiencies in the bank's activities, or did not lead to the correction of the bank's financial situation consisting in a loss exceeding 30 % of the bank's registered capital as a result of the management of the current period and previous periods.

(6) Forced administration is introduced at the moment of delivery of the decision on forced administration to the bank and is immediately effective vis-à-vis the bank and vis-à-vis other persons. By delivering this decision, the information obligation of Národná banka Slovenska is fulfilled.

(7) Forced administration over a bank applies from the moment of its introduction also to its branches located in the territory of member states and is effective also in relation to third parties. Forced administration in a branch of a bank located in the territory of a member state shall be carried out and its effects shall be governed by this Act, unless this Act provides otherwise.

(8) Národná banka Slovenska cannot introduce forced administration over a branch of a foreign bank established by a foreign bank with its registered office in another member state. The provisions on forced administration over a bank shall apply mutatis mutandis to forced administration over a branch of a foreign bank.

(9) A foreign reorganisation measure with a purpose and effect on existing rights of third parties similar to the purpose and effect of forced administration (hereinafter referred to as "foreign reorganisation measure"), which was introduced in a member state in a foreign bank with its registered office in that member state, applies from the moment of its introduction also to its branch located in the territory of the Slovak Republic and is effective also in relation to third parties in the territory of the Slovak Republic. A foreign reorganisation measure introduced in a member state over a branch of a foreign bank whose registered office is outside the European Union is effective from the moment of its introduction also in relation to third parties in the territory of the Slovak Republic. A foreign reorganisation measure introduced in a member state shall be carried out in the territory of the Slovak Republic and its effects shall be governed by the legal regulations of that member state, unless this Act provides otherwise.

(10) Národná banka Slovenska shall without delay ensure the publication of the operative part of the decision on the introduction of forced administration, the instruction on the appeal and the purpose of the introduction of forced administration in the Bulletin of Národná banka Slovenska, in at least two nationwide daily newspapers and in publicly accessible areas of the registered office and business premises of the bank over which forced

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 111 administration was introduced; persons whom Národná banka Slovenska requests to publish such data are obliged to comply with this request. If forced administration is introduced over a bank that has a branch located in the territory of a member state, Národná banka Slovenska shall without delay ensure the publication of the operative part of the decision on the introduction of forced administration, the instruction on the appeal and the purpose of the introduction of forced administration also in the Official Journal of the European Union and in the relevant member state in at least two nationwide daily newspapers, in the Slovak language and in the official language of the relevant member state. The publication of this data does not affect the effects of the introduction of forced administration.

(11) Národná banka Slovenska shall without delay inform the competent supervisory authority of the member state of the introduction of forced administration in a bank that has a branch located in the territory of that member state. The information also includes a statement of the effects resulting from the introduction of forced administration.

(12) If Národná banka Slovenska, in the exercise of supervision under § 16 over a branch of a foreign bank, finds reasons for the introduction of a foreign reorganisation measure in a foreign bank that has its registered office in a member state and to which this branch belongs, it shall inform the competent supervisory authority of the relevant member state thereof.

§ 54

(1) Forced administration of a bank shall be carried out by a temporary administrator of the bank (hereinafter referred to as "administrator") and a deputy administrator. The administrator and at most two deputies for each administrator shall be appointed and dismissed by Národná banka Slovenska, whereby it may appoint one or more administrators for the same bank.

The administrator and deputy administrator may be appointed for a maximum of one year. Národná banka Slovenska may extend this period in exceptional situations if the conditions for their appointment continue to be met.

(2) A certificate of the appointment of the administrator and deputy administrator to carry out forced administration and of persons carrying out a foreign reorganisation measure in a foreign bank with its registered office in a member state shall be the original of the document on appointment or a confirmation issued by Národná banka Slovenska or the competent supervisory authority of the member state. The translation of this certificate into the official language of the member state does not require official certification or any other similar procedure.

(3) The administrator may be a natural person or a legal person referred to in paragraph 5.

(4) The requirements for professional competence as for members of the supervisory board of a bank under § 7 para. 14 shall apply mutatis mutandis to the administrator and deputy administrator, if a natural person, to members of the statutory body of the administrator and deputy administrator, if a legal person. The administrator and deputy administrator may not be a person

a) who is an employee of Národná banka Slovenska or a member of the resolution board or who was an employee of Národná banka Slovenska or a member of the resolution board at any time in the period of the last two years before the introduction of forced administration,

b) who has been finally convicted of a criminal offence committed in the performance of a management function or of an intentional criminal offence,

c) who at any time during the period of the last three years performed in the bank over which forced administration was imposed the function of a member of the supervisory board, a member of the statutory body, a procurator or a senior employee, if he did not voluntarily resign from the performance of this function,

d) who has a special relationship to the bank over which forced administration was imposed pursuant to § 35(4),

e) who is a debtor or creditor of the bank over which forced administration was imposed,

f) who is an employee of the administrator through whom the administrator performs forced administration or a member of the statutory body or supervisory body of a legal entity that is a debtor or creditor of the bank over which forced administration was imposed,

Page 112 Collection of Laws of the Slovak Republic 483/2001 Z. z.

g) who is a member of the statutory body or supervisory body of another bank, or the head or deputy head of another branch of a foreign bank,

h) who at any time during the period of the last year provided to the bank over which forced administration was imposed auditing services without expressing reservations regarding the activities of this bank.

(5) Paragraph 4 applies to the partners or shareholders of an administrator that is a legal entity, to the statutory body, members of the statutory body, members of the supervisory body of this legal entity and employees of this legal entity through whom the administrator performs forced administration of the bank.

(6) The administrator is authorized to manage the bank and its employees or to cooperate with the statutory body of the bank in managing the bank and its employees. The statutory body is obliged to provide the administrator with all cooperation necessary for the exercise of his competences. The competences of the administrator are defined by this Act, special regulations 49b) and the contract on the performance of the administrator's activities concluded pursuant to § 57(1), to which a special regulation does not apply. 27) The performance of the function of an administrator who is a natural person is considered a public function, for the performance of which leave is provided pursuant to a special regulation. The administrator is bound by the restrictions set out in the decision of the National Bank of Slovakia on the imposition of forced administration or in the contract on the performance of the administrator's activities.

(7) The deputy administrator is responsible for the area of the bank's activities entrusted to him by the administrator and is subordinate to the administrator in the performance of forced administration. The competences of the deputy administrator are determined in the contract on the performance of the deputy administrator's activities concluded with the National Bank of Slovakia pursuant to § 57(1), to which a special regulation does not apply. 27) The performance of the function of a deputy administrator who is a natural person is considered a public function, for the performance of which leave is provided pursuant to a special regulation. With the prior written consent of the National Bank of Slovakia, the administrator may in writing authorize one of his deputies to perform acts in his name, on the basis of a written power of attorney with a signature certified pursuant to special regulations; 50)

the prior consent may be expressed directly in the contract on the performance of the administrator's activities.

(8) The administrator and the deputy administrator, when performing forced administration in the territory of another Member State, must proceed in accordance with the laws and other generally binding legal regulations of the Member State in whose territory they operate, in particular in the realization of assets and the provision of information to employees.

(9) A person performing a foreign reorganization measure imposed in a Member State and his deputy have, in the performance of this foreign reorganization measure, the same legal status and are authorized to exercise in the territory of the Slovak Republic all competences as in the performance of forced administration in the territory of the Member State in which the foreign reorganization measure was imposed; however, in the exercise of their competences they must proceed in accordance with the laws and other generally binding legal regulations of the Slovak Republic, in particular in the realization of assets and the provision of information to employees.

(10) In connection with the performance of forced administration, the administrator is authorized, with the prior written consent of the National Bank of Slovakia, to engage expert advisers in the interest of a speedy resolution of serious problems in the bank; this prior consent may be expressed directly in the contract on the performance of the administrator's activities. For the purpose referred to in the first sentence, the administrator may engage an expert adviser only for such acts for the performance of which he has the necessary expert knowledge and experience.

An expert adviser may not be a person who, under paragraph 4, cannot be an administrator.

(11) The performance of the function of the administrator and his deputies shall end on the day of the termination of the forced administration, upon the expiry of the period for which they were appointed, or on the day of their recall from the function. The National Bank of Slovakia shall recall the administrator or deputy administrator if, in connection with the forced administration, they violate this Act or other generally binding legal regulations or if the grounds for their recall specified in the contract on the performance of the administrator's activities or in the contract on the performance of the deputy's activities are fulfilled

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 113 administrator.

§ 55

(1) By the imposition of forced administration, the performance of the function of all bodies of the bank except the general meeting and the senior employees of the bank is suspended, and the competence of the statutory body and the supervisory board passes to the administrator. In the case of members of the statutory body and members of the supervisory board, the running of their term of office is suspended. This does not affect the right of the statutory body to file remedies against the decision on the imposition of forced administration. In the exercise of the competence of the statutory body and the supervisory board, the administrator is subject to a special regulation. 1 )

(2) The administrator is authorized to convene the general meeting of the bank, determine the agenda of the general meeting, conduct its proceedings and has the right to submit proposals at it. The administrator is authorized to convene the general meeting and determine its agenda only with the prior consent of the National Bank of Slovakia.

(3) The administrator is authorised to take the measures necessary for the gradual stabilisation of the bank and the restoration of the bank's liquidity, in particular to dispose of receivables and other assets, including the sale of a branch of the bank or an organisational unit of the bank as part of the bank's undertaking or the sale of the bank's undertaking at a reasonable price, to close a branch or other organisational unit of the bank or to terminate their activities; this is without prejudice to the provisions of § 28(1).

(4) The administrator is obliged, no later than 30 days from the introduction of forced administration, to submit to the National Bank of Slovakia a recovery plan for the bank over which forced administration has been introduced, or another proposal for resolving the situation in the bank.

(5) The administrator may, with the prior consent of the National Bank of Slovakia and the resolution board, file a petition for bankruptcy, 52) if the bank is insolvent. 24aa)

(6) The administrator may submit to the National Bank of Slovakia a proposal to withdraw the banking licence if it ascertains the facts referred to in § 63.

(7) The provisions of paragraphs 1 to 6 shall not apply if the administrator's competences under § 54(6) consist in cooperation with the statutory body in the management of the bank.

§ 56

(1) The administrator, the administrator's deputy and the expert adviser engaged are obliged to perform their functions with due professional care and are liable for damage caused by their activity.

The administrator and the administrator's deputy authorised by him are obliged to regularly inform the National Bank of Slovakia of the acts performed during the forced administration. The National Bank of Slovakia may require the administrator to regularly submit to it a report on the financial position of the bank. The administrator is obliged to submit the report no later than two weeks before the end of the forced administration.

(2) The administrator, the administrator's deputy and the expert adviser engaged must not misuse information obtained in the performance of forced administration to their own benefit or to the benefit of other persons, and must not dispose of the bank's assets to their own benefit or to the benefit of persons close to them. 30)

(3) The administrator, the administrator's deputy and the expert adviser engaged are obliged to maintain confidentiality about all facts related to the performance of forced administration towards all persons except the National Bank of Slovakia in connection with the fulfilment of its tasks under this Act or a special regulation; 8 ) they also have the duty of confidentiality after the end of their activity related to the performance of forced administration. The provisions of § 91(2) to (7), § 92(1) to (7) and § 93 are without prejudice to this.

Page 114 Collection of Laws of the Slovak Republic 483/2001 Z. z.

§ 57

(1) The National Bank of Slovakia shall conclude with the administrator a contract on the performance of the administrator's activity, which shall define in more detail his rights and obligations and regulate his liability for damage caused in connection with the performance of his function. The National Bank of Slovakia shall conclude with the administrator's deputy a contract on the performance of the administrator's deputy's activity, which shall define in more detail his rights and obligations and regulate his liability for damage caused in connection with the performance of his function.

(2) The engagement of expert advisers under § 54(10) shall be carried out by the administrator on a contractual basis and under conditions agreed by the National Bank of Slovakia.

(3) The amount of the remuneration of the administrator and the administrator's deputy for the performance of their function shall be determined by the National Bank of Slovakia.

(4) The costs associated with the performance of forced administration, including the remuneration of the administrator, the administrator's deputies and expert advisers, shall be borne by the bank over which forced administration has been introduced.

§ 58

(1) The members of the statutory body, the members of the supervisory board, the senior employees, the head of the internal control and internal audit unit are obliged, at the administrator's request, to cooperate with the administrator, in particular to provide him with all documents and other materials requested by the administrator in connection with the performance of forced administration.

(2) The administrator is authorised to immediately terminate the employment relationship of senior employees, the head of the internal control and internal audit unit, to give them notice or to transfer them to other work. 27) This shall not apply if the administrator's competences under § 54(6) consist in cooperation with the statutory body in the management of the bank.

(3) As a result of the introduction of forced administration, no remuneration may be paid to members of the statutory body and members of the supervisory board in the event of termination of membership in these bodies of the bank arising from a contract between the bank and a member of the statutory body or a member of the supervisory board or granted by the bank's internal regulations.

§ 59

(1) The effects of the introduction of forced administration in a bank that has a branch located in another Member State, where it concerns

a) employment contracts and labour-law relationships, shall be governed by the law of the Member State by which the employment contract is governed,

b) purchase contracts and lease contracts relating to immovable property, shall be governed by the law of the Member State in whose territory the immovable property is located,

c) rights relating to immovable property, a ship or an aircraft which must be registered in the real estate cadastre or in another public register, shall be governed by the law of the Member State in whose territory the relevant public register is kept; the same also applies to legal acts performed after the introduction of forced administration concerning immovable property, a ship, an aircraft and to rights connected therewith, for which their entry in a public register or other similar record kept in a Member State is required,

d) ownership or other rights to financial instruments, 37a) which must be registered in a public register of securities or in another similar record and which are held or located in a Member State, shall be governed by the law of the Member State in whose territory the relevant public register or other similar record is kept; the same also applies to legal acts performed after the introduction of forced administration concerning financial instruments and to rights

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 115 connected therewith, for which their entry in a public register or other similar record kept in a Member State is required,

e) contracts on settlement or other similar agreements whose purpose is to replace or change the total difference of several mutual claims and obligations of the contracting parties into a single aggregate mutual claim and obligation of these contracting parties, contracts on purchase with repurchase and contracts on stock exchange transactions shall be governed by the legal order that is decisive for these contracts.

(2) During six months from the introduction of forced administration, claims against the bank may not be assigned and mutual claims between the bank over which forced administration has been introduced and other persons may not be set off, except in cases where the legal order of another Member State in which the creditor has residence or registered office permits the assignment of a claim and the set-off of claims even during the introduction of a reorganisation measure.

(3) The administrator may contest a legal act, 53) which was made in the last three years before the introduction of forced administration with the intention of defrauding the bank or its creditors, if this intention had to be known to the bank; this shall not apply if the other party proves that it could not have known, even with due care, of the bank's intention to defraud the bank's creditor.

(4) The administrator may also contest a legal act, 53) by which the bank was defrauded and which occurred in the last three years before the introduction of forced administration between the bank and a person with a special relationship to the bank.

(5) The introduction of forced administration or a foreign reorganisation measure in a Member State shall not affect the rights in rem of creditors or third parties in relation to assets belonging to the bank or a foreign bank which, at the time of the introduction of forced administration or a foreign reorganisation measure, are located in the territory of another Member State.

(6) The introduction of forced administration in a bank purchasing an asset or a foreign reorganisation measure in a foreign bank purchasing an asset shall not affect the seller's right to retain ownership if, at the time of the introduction of forced administration or the introduction of a foreign reorganisation measure in a Member State, this asset was located in the territory of another Member State.

(7) The introduction of forced administration in a bank selling an asset or a foreign reorganisation measure in a foreign bank selling an asset shall not be a reason for the cancellation or termination of the sale of an already delivered asset and shall not prevent the buyer from acquiring ownership if, at the time of the introduction of forced administration or the introduction of a foreign reorganisation measure in a Member State, the asset being sold was located in the territory of another Member State.

(8) The introduction of forced administration or a foreign reorganisation measure in a Member State and the provisions of paragraphs 2, 5, 6 and 7 shall not be an obstacle to filing a motion with a court for a determination of the invalidity of legal acts or the ineffectiveness of contestable legal acts harming creditors, a motion for a determination of the right to withdraw from legal acts or a motion for a declaration of invalidity of legal acts harming creditors, nor to a motion for an interim measure imposing the obligation to refrain from performing legal acts harming the creditors of a bank in forced administration or the creditors of a foreign bank in which a foreign reorganisation measure has been introduced. If, before the introduction of forced administration, court proceedings were commenced in a Member State concerning an asset or right which was taken from the bank, these proceedings shall, even after the introduction of forced administration, be governed by the legal order of the Member State in which these proceedings were commenced and are being conducted.

(9) The introduction of forced administration over a bank shall not affect the validity, effectiveness and exercise of rights under a contract on final settlement of profits and losses or a contract on financial collateral, if these contracts meet the requirements under special regulations. 53a)

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§ 60

(1) The introduction of forced administration, data on the administrator and his deputy, the termination of forced administration and related changes shall be entered in the commercial register. 1 ) The motion for the entry of forced administration shall be filed by the National Bank of Slovakia; the provision of a special regulation shall not be used for the filing of this motion. 54)

(2) The following shall be entered in the commercial register

a) the name, surname, address of permanent residence and birth number of the administrator and the deputy administrator, if a natural person, and

b) the business name, registered office and identification number of the administrator, deputy administrator, if a legal person.

(3) The administrator may propose that the forced administration be entered in the commercial register or a similar public register kept in another Member State in whose territory the branch of the bank over which forced administration has been introduced is located, if such an entry is permitted by the legal order of the relevant Member State. The entry of the administrator in the commercial register shall not be required if he is authorised only to cooperate with the statutory body of the bank in the management of the bank and its employees.

(4) The introduction of a foreign reorganisation measure in a foreign bank with its registered office in a Member State which has a branch located in the territory of the Slovak Republic, its termination and related changes shall be entered in the commercial register. The motion for entry shall be filed by the competent supervisory authority of the Member State or the person carrying out the foreign reorganisation measure. The name, surname and address of residence of the person carrying out the foreign reorganisation measure shall also be entered in the commercial register.

§ 61

(1) During forced administration, the National Bank of Slovakia may provide the bank with financial assistance to eliminate a temporary shortage of liquidity. The loan by which such financial assistance is provided to the bank must be sufficiently secured by assets serving to secure obligations, and in providing such financial assistance, no bank may be favoured or disadvantaged in comparison with other banks.

(2) The claim for the return of financial assistance provided under paragraph 1 shall have priority over all other obligations of the bank, with the exception of those other obligations which have priority in the satisfaction of claims under special regulations. 55)

§ 62

(1) Forced administration shall end

a) upon delivery of the decision of the National Bank of Slovakia on the termination of forced administration, if the reasons for its continuation cease to exist,

b) upon the declaration of bankruptcy over the bank,

c) upon the expiry of 12 months from the introduction of forced administration; this shall not apply if, in the assessment of the National Bank of Slovakia, the grounds for its introduction persist after the expiry of 12 months from the introduction of forced administration, or

d) by the withdrawal or termination of the banking licence.

(2) The notification of the termination of forced administration under paragraph 1 shall be published by the National Bank of Slovakia

483/2001 Coll. Collection of Laws of the Slovak Republic Page 117 without delay at least in one nationwide daily newspaper and in publicly accessible areas at the registered office of the bank over which forced administration was introduced, and in all its business premises. Persons whom the National Bank of Slovakia requests to publish this fact are obliged to comply with this request.

(3) Immediately after the termination of forced administration, the bank is obliged to convene an extraordinary general meeting so that it takes place within 30 days of the termination of forced administration. The bank is obliged to include in the agenda of the extraordinary general meeting the dismissal of the existing members and the election of new members of the bank's statutory body and the bank's supervisory board; the new members of the bank's statutory body and the bank's supervisory board must meet the conditions set out in § 7 para. 2 letter e).

§ 62a

(1) If the National Bank of Slovakia is the supervisory authority responsible for performing supervision on a consolidated basis, it shall notify the European Supervisory Authority (European Banking Authority), the members of the college, and discuss with the members of the college its intention to issue a decision on the introduction of forced administration over a bank that is a parent company. The National Bank of Slovakia shall take into account the impact of the introduction of forced administration on the members of the group concerned with their registered office in another Member State.

The National Bank of Slovakia shall inform the members of the college and the European Supervisory Authority (European Banking Authority) of the issuance of the decision.

(2) If the supervisory authority of another Member State which supervises a member of a group notifies the National Bank of Slovakia, as the supervisory authority responsible for performing supervision on a consolidated basis, of its intention to issue a decision on a foreign reorganisation measure, the National Bank of Slovakia may assess the likely impact of the decision on the group or on members of the group from other Member States and communicate its comments to the competent supervisory authority of the other Member State within three days.

(3) The National Bank of Slovakia shall notify the European Supervisory Authority (European Banking Authority) of its intention to issue a decision on the introduction of forced administration over a bank that is part of a group and shall discuss it with the competent supervisory authority performing supervision on a consolidated basis. After notifying its intention to issue a decision on the introduction of forced administration and discussing this intention with the members of the college, the National Bank of Slovakia shall decide whether to introduce forced administration under § 53 paras. 1 and 2. The National Bank of Slovakia shall inform the members of the college and the European Supervisory Authority (European Banking Authority) of the issuance of the decision.

(4) If the National Bank of Slovakia, as the supervisory authority responsible for performing supervision on a consolidated basis, determines on the basis of a notification under paragraph 2 that one or more competent supervisory authorities of another Member State supervising a member of the group intend to issue a decision on a foreign reorganisation measure, the National Bank of Slovakia shall assess and endeavour with these supervisory authorities of the other Member State to reach a joint decision on whether, for the purpose of achieving redress for several members of the group, it is more expedient to appoint a single administrator for all the members of the group concerned, within five days from the date of the notification of the intention under paragraph 1. If no joint decision is reached within the period referred to in the first sentence, the National Bank of Slovakia shall decide on the introduction of forced administration over the bank independently. If, within the period referred to in the first sentence, any of the supervisory authorities requests the European Supervisory Authority (European Banking Authority) to assist in reaching an agreement in accordance with a special regulation, 19) the National Bank of Slovakia, as the supervisory authority responsible for performing supervision on a consolidated basis, shall decide in accordance with the decision of the European Supervisory Authority (European Banking Authority). If the European Supervisory Authority (European Banking Authority) does not issue such a decision within three days of receipt of the request for assistance at the latest, the National Bank of Slovakia shall decide on the introduction of forced administration over the bank independently. The National Bank of Slovakia shall inform the members of the college of the issuance of a decision on the introduction of forced administration.

Page 118 Collection of Laws of the Slovak Republic 483/2001 Coll.

(5) If the National Bank of Slovakia disagrees with the intention of the competent supervisory authority to issue a decision on a foreign reorganisation measure in relation to a parent company that is part of a group together with a bank that is a subsidiary over which the National Bank of Slovakia performs supervision, or in relation to a subsidiary with its registered office in another Member State that is part of a group over which the National Bank of Slovakia performs supervision, or if no joint decision is reached, the National Bank of Slovakia may request the European Supervisory Authority (European Banking Authority) for assistance in accordance with a special regulation. 19)

§ 63

(1) The National Bank of Slovakia is obliged to withdraw a banking licence if

a) the bank's own funds fall below the level of the registered capital under § 7 para. 2 letter a),

b) the bank maintains its own funds at a level lower than 25 % of the sum of values corresponding to the bank's own funds requirements, 20a)

c) the bank or a branch of a foreign bank does not commence, within 12 months of the banking licence becoming final, the activities under § 2 para. 2 introductory sentence, or does not carry out these activities for a period of 12 months,

d) the bank or a branch of a foreign bank obtained the banking licence on the basis of false data stated in the application for the granting of a banking licence,

e) the bank or a branch of a foreign bank is unable to meet its due obligations for at least 30 days or has been declared unable to pay deposits under a special regulation, 32)

f) it concerns a branch of a foreign bank and this foreign bank has lost the authorisation to operate as a bank in the state of its registered office,

g) a bank or a branch of a foreign bank breaches the provisions of § 7(6) and (7), § 8(6) and (7) and § 28(5), (8) and (9).

(2) Národná banka Slovenska may withdraw a banking licence if serious deficiencies arise in the activities of a bank or a branch of a foreign bank and if the requirements for the conduct of business of banks and branches of foreign banks are breached, if

a) the bank incurs a loss exceeding 50 % of its share capital in one year or 10 % annually in three consecutive years,

b) the bank, a branch of a foreign bank or a foreign bank partially or fully suspends the depositors' disposal of their deposits in the bank or in the branch of a foreign bank without the prior consent of Národná banka Slovenska or a decision under a special regulation, 56)

c) the bank or a branch of a foreign bank fails to fulfil its obligations under a special regulation, 57)

d) the bank or a branch of a foreign bank has not fulfilled the conditions for commencing activities within the period specified in the banking licence,

e) the bank fails to fulfil the conditions under § 7(2) or the branch of a foreign bank fails to fulfil the conditions under § 8(2),

f) the bank or a branch of a foreign bank has changed its registered office without the prior consent of Národná banka Slovenska,

g) the bank or a branch of a foreign bank repeatedly or after a procedural fine has been imposed obstructs the performance of supervision,

h) sanctions imposed under this Act or a special Act 89) have not led to the remedy of the identified deficiencies.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 119 § 64

(1) A banking licence expires

a) for a bank, on the day of its dissolution for a reason other than the withdrawal of the banking licence,

b) for a bank, on the day of the declaration of bankruptcy over the bank's assets under a special regulation, 58)

c) for a branch of a foreign bank, on the day of the declaration of bankruptcy over the assets of the foreign bank or on the day of the dissolution of the foreign bank for a reason other than the withdrawal of the banking licence,

d) for a bank or a branch of a foreign bank, on the day of the return of the banking licence; the banking licence may be returned only in writing and with the prior consent under § 28(1)(b),

e) if the bank or a branch of a foreign bank has not filed an application for registration in the commercial register under § 9(6),

f) on the day of the sale of the undertaking of the bank or of the branch of a foreign bank, 28)

g) for a branch of a foreign bank, on the day of the termination of its activities by the foreign bank,

h) for a bank or a branch of a foreign bank, for those banking activities for which its special licence under § 2(4) has expired.

(2) A bank, a foreign bank and a branch of a foreign bank are obliged to inform Národná banka Slovenska in writing of the facts referred to in paragraph 1(a), (b), (c), (d), (e) and (g) within 30 days of their occurrence.

§ 65

(1) After the moment of delivery of a decision to withdraw a banking licence or from the day of expiry of a banking licence, Národná banka Slovenska shall immediately terminate for the legal person whose banking licence has been withdrawn or whose banking licence has expired the provision of payment services and their settlement carried out under § 2(13).

(2) From the moment of delivery of a decision to withdraw a banking licence or from the day of expiry of a banking licence, the legal person under paragraph 1 may not accept deposits and provide loans and carry out other activities with the exception of those necessary for the settlement of its claims and liabilities; payment services for the settlement of existing claims and liabilities shall be carried out by such legal person through an account established in another bank.

(3) A legal person whose banking licence has been withdrawn or whose banking licence has expired, when carrying out activities under paragraph 2, shall proceed as a bank or a branch of a foreign bank under this Act until it settles its claims and liabilities. The obligation to submit financial statements, statistical statements and reports on the requirements for the conduct of business of banks does not apply to such legal person.

(4) Národná banka Slovenska shall send a decision to withdraw a banking licence for publication to the Commercial Bulletin within 30 days from the date of its legal force. 24c)

(5) A final decision to withdraw a banking licence from a foreign bank for the performance of banking activities through its branch shall be notified by Národná banka Slovenska to the supervisory authority in the state in which the foreign bank has its registered office. If a decision to withdraw a banking licence is issued to a legal person that has established a branch abroad, Národná banka Slovenska shall also notify this fact to the supervisory authority in the state in which the legal person whose banking licence has been withdrawn has its branch.

(6) The withdrawal of a banking licence shall be recorded in the commercial register. 1 ) Within 15 days from the legal force of a decision to withdraw a banking licence, Národná banka Slovenska shall send

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the decision with a proposal for the court keeping the commercial register to record this fact; when submitting this proposal, the provision of a special regulation shall not be applied. 54)

(7) Immediately after the legal force of a decision to withdraw a banking licence, Národná banka Slovenska shall file with the competent court a proposal for the dissolution and liquidation of the bank and for the appointment of a liquidator. Before deciding on the dissolution, the court may not use the procedure under a special regulation. 60)

(8) Národná banka Slovenska shall suspend proceedings on the withdrawal of a banking licence on the basis of a declaration of bankruptcy under a special regulation. 58)

§ 65a Early intervention measures

(1) If Národná banka Slovenska identifies deficiencies in the activities of a bank consisting in non-compliance with or circumvention of the provisions of this Act, legally binding acts of the European Union relating to the performance of banking activities or other generally binding legal regulations relating to the performance of banking activities, or if Národná banka Slovenska has a reasonable suspicion that a deficiency in activities may occur in the near future, in particular due to the deteriorating financial situation of the bank, Národná banka Slovenska may impose on the bank an early intervention measure, which is the obligation to

a) implement one or more measures set out in the recovery plan or update the recovery plan and implement one or more measures set out in the updated recovery plan,

b) to prepare an analysis of its situation, identify measures to overcome the identified problems and prepare a plan of measures for their adoption, including a timetable,

c) to convene the bank's general meeting and determine the agenda of the general meeting according to the proposals of Národná banka Slovenska; if the bank does not convene the general meeting, Národná banka Slovenska is entitled to convene the general meeting and determine its agenda, whereby the provisions of a special law shall apply mutatis mutandis to this procedure, 1 )

d) to dismiss a member of the board of directors, a member of the supervisory board, a procurator or a senior employee, if they do not meet the requirements under § 7 par. 14 and 15 and § 25,

e) to prepare a plan for negotiations on the restructuring of liabilities with the bank's creditors,

f) to make changes in the bank's business strategy,

g) to make changes in the bank's organisational structure and in the performance of banking activities, or

h) to submit to the resolution board all information necessary for updating the bank's crisis resolution plan or for preparing resolution proceedings and carrying out the valuation of the bank's assets and liabilities under a special regulation. 60a)

(2) When assessing whether a deterioration of the financial situation under paragraph 1 is occurring, Národná banka Slovenska shall take into account in particular the deteriorating situation of the bank in relation to liquidity risk, increasing financial leverage, the volume of non-performing loans or increasing concentration risk and the level of own funds adequacy which exceeds the own funds requirement by less than 1.5 percentage points.

(3) The time limit for complying with early intervention measures under paragraph 1 shall be determined by Národná banka Slovenska in proportion to the circumstances and the seriousness of the identified deficiency in the bank's activities or the reasonable suspicion that a deficiency may occur in the near future.

(4) The application of early intervention measures under paragraph 1 shall be without prejudice to the provisions of § 50.

(5) For the application of early intervention measures to a bank that is part of a consolidated

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 121 unit, the procedure under § 62a shall apply mutatis mutandis.

(6) If the bank's financial situation deteriorates significantly or Národná banka Slovenska has identified serious deficiencies in the bank's activities and the early intervention measures under paragraph 1 do not lead to the correction and elimination of the deficiencies, Národná banka Slovenska is entitled to dismiss a member of the board of directors, a member of the supervisory board or a senior employee.

(7) The application of the procedure under paragraph 6 shall be without prejudice to the provision of § 50.

(8) An early intervention measure may be imposed within two years of the identification of the deficiencies or of the reasonable suspicion that a deficiency may occur in the near future, but no later than within ten years of their occurrence. The same time limits shall apply to the dismissal of a person under paragraph 6.

The limitation periods under the first and second sentences shall be interrupted when a fact constituting an interruption of the period under a special regulation occurs, 48aa) whereby a new limitation period begins to run from the interruption of the limitation period. Deficiencies in the bank's activities shall be considered identified as of the date of completion of the relevant on-site supervision under a special regulation. 48a)

(9) Upon delivery, the decision imposing an early intervention measure shall be enforceable. A remedy under a special regulation may be lodged against the decision. 60b)

(10) The provisions of § 50 par. 15 to 17 shall apply to the publication of information on the operative part of the decision on an early intervention measure or the dismissal of a person under paragraph 6.

(11) The provision of a special regulation shall apply to the measures under paragraph 1. 60c)

PART ELEVEN LIQUIDATION OF A BANK § 66

(1) If a bank is being dissolved with liquidation, only Národná banka Slovenska is entitled to submit a proposal for the appointment and dismissal of a liquidator. A special regulation shall not be used for the submission of this proposal. 54)

(2) A liquidator may not be a person who has or had a special relationship with the bank, who is or was the bank's auditor in the last five years or participated in any way in the audit of the bank without expressing qualifications to the bank's activities.

(3) Národná banka Slovenska shall determine the liquidator's remuneration taking into account the scope of their activities and shall also determine the due date of this remuneration.

(4) Persons involved in the liquidation of a legal entity whose banking licence has been withdrawn or has expired are obliged to maintain confidentiality about all facts related to the performance of the liquidation towards all persons except Národná banka Slovenska in connection with the performance of its tasks under this Act or a special law, 8 ) and this even after the termination of the liquidation;

the provisions of § 91 to 93a shall be without prejudice to this.

(5) The liquidator is obliged to submit to Národná banka Slovenska without delay the financial statements and documents processed during the liquidation in accordance with a special regulation 1 ) and other documents required by Národná banka Slovenska for the purpose of assessing the liquidator's activities and the course of the liquidation.

(6) The liquidator is obliged to enforce the surrender of performance from invalid legal acts or contestable legal acts by which the bank or its creditors were harmed. The liquidator also performs other activities necessary for the purposes of the liquidation of this legal entity. These activities may be performed only with the consent of Národná banka Slovenska. The granting of consent shall not be subject to

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the provisions of § 94 to 114 nor the general regulations on administrative proceedings. 83)

(7) The liquidator shall publish the operative part of the decision on the liquidation of a legal entity whose banking licence has been withdrawn or has expired in the Official Journal of the European Union and in at least two nationwide daily newspapers in each Member State in which this legal entity has a branch, in the Slovak language and in the official language of the relevant Member State.

(8) The provisions of paragraphs 1 to 7 shall apply mutatis mutandis to the liquidation of a branch of a foreign bank having its registered office outside the European Union.

(9) The provisions of § 54 para. 2 and § 59 paras. 1, 2 and 5 to 8 shall likewise apply to the liquidation of a legal entity whose banking licence has been withdrawn or has expired, including its branch located in the territory of another Member State, to the liquidation of a branch of a foreign bank having its registered office outside the European Union, as well as to the procedure of the liquidator.

PART TWELVE MORTGAGE BANKING § 67

(1) For the purposes of this Act, a mortgage transaction shall mean

a) the provision of mortgage loans and the related issuance of mortgage bonds, 61)

b) the provision of municipal loans and the related issuance of municipal bonds by a bank. 62)

(2) Mortgage transactions may be carried out in euros or in a foreign currency.

(3) In the case of carrying out mortgage transactions in a foreign currency, the exchange rate risk shall be borne by the bank or the branch of a foreign bank which carries out mortgage transactions (hereinafter referred to as the "mortgage bank"). The mortgage bank shall be obliged to adopt measures to prevent the emergence of exchange rate risk from the covering of mortgage bonds or municipal bonds by receivables from mortgage loans or municipal loans.

(4) The conditions for the provision of mortgage loans to consumers which are not laid down in paragraphs 1 to 3 and in § 68 to 88 shall be governed by the general regulation on housing loans. 62a)

§ 68 A mortgage loan is a loan with a maturity of at least four years and at most 30 years secured by a lien on a domestic real estate, including one under construction, which is financed, unless this Act provides otherwise, at least to the extent of 90 % through the issuance and sale of mortgage bonds by a mortgage bank pursuant to a special regulation 61) and which the mortgage bank provides for the following purposes:

a) the acquisition of a domestic real estate or a part thereof,

b) the construction or alteration of completed buildings, 63)

c) the maintenance of domestic real estates or

d) the repayment of a provided loan used for the purposes under letters a) to c), which is a mortgage loan,

e) the repayment of a provided loan used for the purposes under letters a) to c), which is not a mortgage loan.

§ 69 A municipal loan is a loan with a maturity of at least four years and at most 30 years secured by a lien on the real estate property of a municipality or on the real estate property of a higher

483/2001 Coll. Collection of Laws of the Slovak Republic Page 123 territorial unit, which is financed, unless this Act provides otherwise, at least to the extent of 90 % through the issuance and sale of municipal bonds by a mortgage bank pursuant to a special regulation 62) and which banks provide for the acquisition of domestic real estates, construction, alteration of completed buildings 63) and maintenance of domestic real estates and other buildings with the aim of using them for a public benefit purpose.

§ 70 A mortgage bank may temporarily deposit free funds obtained from mortgage transactions in a bank or in a branch of a foreign bank. Furthermore, it may use these funds for the purchase of

a) mortgage bonds issued by another mortgage bank,

b) municipal bonds 62) issued by another mortgage bank,

c) treasury bills of the National Bank of Slovakia,

d) government bonds, 64)

e) government treasury bills.

§ 71

(1) The issuance and particulars of mortgage bonds and municipal bonds shall be governed by a special regulation. 13) The National Bank of Slovakia may, in the banking licence for carrying out mortgage transactions, lay down special conditions for the financing of mortgage loans and municipal loans for a mortgage bank for a period of at most two years from the granting of this banking licence.

(2) The National Bank of Slovakia may, by its decision issued on the basis of an application by a mortgage bank for reasons worthy of special consideration, for a period of at most two years, determine special conditions for the financing of mortgage loans and municipal loans at least to the extent of 70 % through the issuance and sale of mortgage bonds by a mortgage bank pursuant to a special regulation 61) or the issuance and sale of municipal bonds by a mortgage bank pursuant to a special regulation, 62) and this even repeatedly. A reason worthy of special consideration is in particular an effort to maintain the stability of the financial sector.

§ 72

(1) Only receivables of a mortgage bank from mortgage loans and receivables from municipal loans which are secured by a lien on real estate pursuant to § 74 and which do not exceed 70 % of the value of the pledged real estate determined pursuant to § 73 may be used for the proper covering of issued mortgage bonds and municipal bonds.

(2) Mortgage loans and municipal loans may be provided beyond the framework under paragraph 1 only on the condition that the total value of the receivables of the mortgage bank which exceed this framework does not exceed 10 % of the total sum of provided mortgage loans and municipal loans.

(3) The mortgage bank may not pledge the assets serving to cover the nominal value of issued mortgage bonds and municipal bonds, including liens on real estates pursuant to § 74, nor use them for other securing of its obligations.

(4) The holders of mortgage bonds shall have a preferential security right to the assets serving to cover the issued mortgage bonds, including liens on real estates pursuant to § 74, and the holders of municipal bonds shall have a preferential security right to the assets serving to cover the issued municipal bonds, including liens on real estates pursuant to § 74; by this security right, in the procedure pursuant to this Act or special regulations, 64a) the receivables of the holders of mortgage bonds and the receivables of the holders of municipal bonds towards the mortgage

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bank for the payment of the nominal value and yields from mortgage bonds and the nominal value and yields from municipal bonds shall be secured.

§ 73

(1) The value of a real estate for the purposes of this Act shall be determined by the mortgage bank on the basis of an overall assessment of the real estate. When determining this value, the mortgage bank may take into account only the permanent characteristics of the property and the possible yield that the property can provide to its owner in the long term under proper management. For a property that is encumbered by a lien or a restriction on the transfer of the property in accordance with § 74 para. 2, the mortgage bank shall always reduce the value of this property by the amount of the claim for whose securing this lien or restriction on the transfer of the property serves.

(2) The mortgage bank is bound only by its own valuation of the property.

§ 74

(1) A lien to secure the claims of a mortgage bank from mortgage loans or from municipal loans arises upon its registration in the real estate cadastre pursuant to a special regulation 65) on the basis of a proposal by the mortgage bank and the owner of the property. The mortgage bank has the status of a lien creditor.

(2) A mortgage loan and a municipal loan may not be secured by a lien relating to a property on which another lien or restriction on the transfer of the property has already arisen and continues to exist, with the exception of a lien or restriction on the transfer of property established under a special regulation, 66) a lien established in favour of the same mortgage bank to secure another mortgage loan or municipal loan provided by it, a lien established in favour of a building savings bank or the State Housing Development Fund, and a lien established to secure the fulfilment of claims arising from the transfer of ownership of an apartment or non-residential premises for a regulated price under a special regulation. 66b) For a lien that was registered in the real estate cadastre in the first place in the order decisive for the satisfaction of liens, with the exception of the liens referred to in the first sentence, and which serves to secure the claims of a mortgage bank from a mortgage loan or municipal loan, the mortgage bank must not, until the extinction of this lien, agree pursuant to a special regulation 66b) or allow to be registered in the real estate cadastre any other place in the order decisive for the satisfaction of liens.

(3) A property is not considered to be encumbered by a lien or encumbered by a restriction on the transfer of the property if the claim that is secured by another lien or restriction on the transfer of the property ceases to exist on the basis of the provided mortgage loan or municipal loan by which the claim is repaid, and if the lien on the property or the restriction on the transfer of the property ceases to exist. For the purposes of this Act, a property is not considered to be encumbered by a lien even if the mortgage bank, at least for the period from the first day of the provision of even a part of the funds from the mortgage loan or municipal loan until the extinction of the lien that serves to secure the claims of the mortgage bank from mortgage loans or from municipal loans, agrees for this lien pursuant to a special regulation 66a) and ensures by registration in the real estate cadastre the first place in the order decisive for the satisfaction of liens, with the exception of the liens referred to in paragraph 2 first sentence.

(4) A lien on a property established to secure claims from a mortgage loan or from a municipal loan ceases to exist upon repayment of this loan including its accessories. The mortgage bank shall notify the extinction of the lien on the property to the state administration body in the field of the real estate cadastre. 65)

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(5) The mortgage bank may, in the exercise of the lien, sell the pledged property by execution pursuant to a special regulation 67) on the basis of an agreement drawn up in the form of a notarial deed, concluded between the mortgage bank and its debtor, as well as the pledgor, if the debtor is not the pledgor, if the contracting parties in this agreement agree on execution pursuant to a special regulation. 67)

This agreement must contain a legal obligation, the designation of the authorised person and the obliged person, the legal reason, the subject and the time of performance.

§ 75

(1) The mortgage bank provides mortgage loans and municipal loans according to the general conditions for the provision of mortgage loans and municipal loans issued by it, which must contain in particular

a) the requirements of an application for a mortgage loan or municipal loan,

b) the procedure for submitting an application for a mortgage loan or municipal loan,

c) the conditions for the provision of a mortgage loan or municipal loan, including a framework definition of the type, method and scope of the method of securing the claims of the mortgage bank from the mortgage loan or municipal loan agreement and a definition of the costs required from the client that are related to the mortgage loan or municipal loan and to the conclusion of an agreement on such a loan,

d) the methods of terminating the agreement on the provision of a mortgage loan or municipal loan,

e) the procedure of the mortgage bank in the event of the debtor's delay in repaying the mortgage loan or municipal loan or its accessories,

f) the cases of changes in circumstances on the part of the debtor under which the mortgage bank is entitled to demand early repayment of the mortgage loan or municipal loan,

g) the conditions for the realisation of the lien on real estate established to secure mortgage loans or municipal loans,

h) information on the client's rights under paragraphs 6 to 12.

(2) For reasons on the part of the mortgage bank or its legal successors, early repayment of claims from a mortgage loan and municipal loan cannot be enforced; this also applies in the event of the dissolution and liquidation of the mortgage bank.

(3) The information that the mortgage bank is obliged to make available in its business premises pursuant to § 37 para. 1 must also include the mortgage bank's general conditions for the provision of mortgage loans and municipal loans pursuant to paragraph 1 and the percentage amount of the contribution pursuant to § 84 para. 1 and § 85a para. 1 determined for individual calendar years. At the client's request, the mortgage bank is obliged to provide him with further supplementary information.

(4) The mortgage loan agreement or the municipal loan agreement must be in writing and must contain

a) identification data concerning the mortgage bank and the client, at least to the extent of

1. name, surname, birth number, if assigned, date of birth and address of permanent residence, if the client is a natural person,

2. name, identification number, if assigned, and address of the registered office or place of business, if the client is a legal person,

b) the amount of the mortgage loan or municipal loan provided and its maturity period, the rules for repayment of principal and interest on the mortgage loan or municipal

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loan, the amount of the annual percentage interest rate of the mortgage loan or municipal loan provided, which in the case of a mortgage loan consists of the valid base interest rate of the mortgage bank and the gross margin of the mortgage bank, and a detailed definition of other costs required from the client that are related to the mortgage loan or municipal loan and to the conclusion of a contract for such a loan; for the purposes of this Act, the valid base interest rate of the mortgage bank means the base interest rate of the mortgage bank determined by the mortgage bank, expressed in percentages and published pursuant to paragraph 9 as of the date of conclusion of the mortgage loan contract, and the gross margin of the mortgage bank means the interest margin determined by the mortgage bank, expressed in percentages,

c) the precise designation of the domestic real estate for which the mortgage loan or municipal loan is provided; the precise designation of this domestic real estate in an amendment to the mortgage loan contract or to the municipal loan contract concluded no later than before the provision of even a part of the funds from the mortgage loan or municipal loan shall also be considered fulfillment of this condition,

d) conditions dependent on objective facts upon whose fulfillment the amount of the annual percentage interest rate or other costs required from the client may be adjusted,

e) a detailed definition of the type, method and scope of securing the mortgage bank's claims under the mortgage loan contract or municipal loan contract,

f) other conditions for the provision and repayment of the mortgage loan or municipal loan required under the general conditions of the mortgage bank for the provision of mortgage loans and municipal loans,

g) the conditions for possible early repayment of the mortgage loan or municipal loan at the client's initiative,

h) the mortgage bank's obligation, if the client is a natural person under Section 85a(1), to allow the client to defer repayment of the principal of the mortgage loan or to reduce the monthly installment of the mortgage loan by up to one half of its amount for 36 months, if this client has a child born or this client adopts a minor child and this client requests the mortgage bank in writing within six months of the birth of the child or the adoption of the minor child and also attaches the child's birth certificate to the request; the mortgage bank is also permitted to specify in the mortgage loan contract other circumstances and reasons under which it will allow deferral of repayment of the principal of the mortgage loan or a reduction of the monthly installment of the mortgage loan.

(5) The mortgage loan contract or municipal loan contract may also contain other particulars agreed between the mortgage bank and the client.

(6) The mortgage bank may not require the client to pay interest, fees or other costs that are not specified in the mortgage loan contract or municipal loan contract.

The mortgage bank is prohibited from requiring the client to pay interest, fees or other costs in connection with early repayment of the mortgage loan or part thereof at the client's initiative, if the early repayment of the mortgage loan or part thereof occurs in connection with the expiry of the fixed interest rate period of the mortgage loan or in connection with a change in the interest rate of the mortgage loan, if it is a variable interest rate; the mortgage bank is obliged to notify the client free of charge of the date

a) of expiry of the fixed interest rate period of the mortgage loan, no later than two months before the expiry of this period, unless otherwise provided in paragraph 11,

b) of the implementation of the change in the interest rate of the mortgage loan, the interest rate for the next interest period, the current amount of the base interest rate published pursuant to paragraph 9 as of the date of preparation of the notification and the amount of the gross margin for the next interest period, no later than two months before its implementation and the commencement of the application of this change, unless otherwise provided in paragraph 11.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 127

(7) Deferral of repayment of the principal of the mortgage loan or reduction of the monthly installment of the mortgage loan pursuant to paragraph 4(h) may be exercised by a client who is a natural person under Section 85a(1) during five years from the provision and commencement of interest charging on the mortgage loan only if the client has not exercised deferral of repayment of the principal of the mortgage loan pursuant to Section 85a(3)(b) second point; in this case, the entitlement to the state contribution for young people remains preserved.

(8) Deferral of repayment of the principal of the mortgage loan or reduction of the monthly installment of the mortgage loan pursuant to paragraph 4(h), on the basis of the client's selection from these options pursuant to paragraph 4(h), shall begin to run on the date of effectiveness of the amendment to the mortgage loan contract the subject of which is the deferral of repayment of the principal of the mortgage loan or the reduction of the monthly installment of the mortgage loan.

(9) The mortgage bank is obliged to publish the amount of its base interest rate on its website.

(10) In the notification pursuant to paragraph 6, the mortgage bank is obliged to instruct the client on the conditions of early repayment of the mortgage loan or part thereof upon whose fulfillment it is not possible to require the client to pay interest, fees or other costs.

(11) If a mortgage bank requires the submission of an application for early repayment of a mortgage loan or part thereof before the expiry of the fixed interest rate period of the mortgage loan or before a change in the mortgage loan interest rate is made, it is obliged to send the notification under paragraph 6 no later than two months before the deadline required by the mortgage bank for the submission of this application.

(12) If it concerns a mortgage loan with a variable interest rate, for which no change in the mortgage loan interest rate occurred during the period of the preceding calendar year, the client is entitled once a year to early repay such a mortgage loan or part thereof, whereby the mortgage bank is prohibited from requiring the client to pay interest, fees or other costs in connection with this early repayment of the mortgage loan.

§ 76

(1) The list and scope of mortgage loans and municipal loans, liens and claims of the mortgage bank from mortgage loans and municipal loans, which serve to cover mortgage bonds and municipal bonds, or other values serving as substitute coverage, must be individually recorded by the mortgage bank in its register of mortgages.

(2) The register of mortgages and the documents on the basis of which entries were made in the register of mortgages must be kept by the mortgage bank separately from other documents and secured against misuse, destruction, damage, theft or loss.

(3) By the end of January and July of each calendar year, the mortgage bank is obliged to submit to the National Bank of Slovakia and the ministry information on the records from the register of mortgages that were made over the last six months.

(4) A generally binding legal regulation issued by the National Bank of Slovakia and the ministry shall lay down the requirements and method of keeping the register of mortgages under paragraph 2 and the requirements and form of the information under paragraph 3.

§ 77 The mortgage bank is obliged to keep separate analytical records of mortgage transactions in the accounting system.

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§ 78

(1) The National Bank of Slovakia appoints for each mortgage bank a mortgage administrator who performs supervision over the execution of mortgage transactions to the extent laid down by this Act and a special regulation. 13) Likewise, for each mortgage bank, a deputy mortgage administrator is appointed, who represents the mortgage administrator during his absence to the full extent of his rights and obligations.

(2) The appointment of the mortgage administrator and his deputy shall be discussed in advance by the National Bank of Slovakia with the mortgage bank for which they are being appointed.

(3) The mortgage administrator and his deputy are recalled by the National Bank of Slovakia.

(4) The mortgage administrator and his deputy may only be a natural person who is professionally qualified and of good character for this activity. A natural person with completed university education who has carried out economic or legal practice in the field of banking for at least five years shall be considered a professionally qualified person. A natural person who has not been finally convicted of a criminal offence committed in the performance of a managerial function or of any intentional criminal offence shall be considered a person of good character.

§ 79

(1) The mortgage administrator performs his activity independently, autonomously and impartially. In the performance of his activity, he is bound only by generally binding legal regulations, the contract on the performance of the activity of the mortgage administrator and decisions issued in supervision or oversight under a special regulation 13) over the activity of the mortgage administrator.

(2) Disputes between the mortgage administrator and the mortgage bank shall be decided by the National Bank of Slovakia.

§ 80

(1) The mortgage administrator performs supervision over the issuance of mortgage bonds and municipal bonds from the point of view of their requirements and coverage under a special regulation. 13)

(2) The mortgage administrator is obliged to draw up for each issue of mortgage bonds or municipal bonds before their issuance a written certificate that their coverage is secured under a special regulation 68) and that an entry has been made in the register of mortgages.

(3) The mortgage administrator checks whether the mortgage bank, in accordance with this Act and other generally binding legal regulations, provides mortgage loans and municipal loans including their securing by lien and whether the mortgage bank fulfils its obligations concerning the register of mortgages.

(4) The mortgage administrator is obliged, at the request of the mortgage bank, to cooperate in activities related to the execution of mortgage transactions which the mortgage bank cannot carry out without his cooperation.

§ 81

(1) If the mortgage administrator identifies deficiencies under § 80, he is obliged to immediately inform the National Bank of Slovakia in writing of these facts.

(2) In the performance of his activity, the mortgage administrator acts in his own name and on account of the mortgage bank.

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(3) The mortgage bank is obliged to enable the mortgage administrator to perform his activity, in particular it is obliged to enable him to inspect accounting records, the register of mortgages and other documents related to mortgage transactions.

(4) The amount of remuneration for the mortgage administrator and his deputy shall be determined by the National Bank of Slovakia in agreement with the mortgage bank. The remuneration shall be paid by the mortgage bank.

(5) The mortgage bank shall conclude with the mortgage administrator a contract on the performance of the activity of the mortgage administrator, which shall specify in more detail the rights and obligations of the mortgage bank and the mortgage administrator. The mortgage bank shall conclude with the deputy mortgage administrator a contract on the performance of the activity of the deputy mortgage administrator, which shall specify in more detail the rights and obligations of the mortgage bank and the deputy mortgage administrator.

§ 82

(1) The activity of the mortgage administrator and his deputy is subject to supervision performed by the National Bank of Slovakia under this Act.

(2) If the National Bank of Slovakia, in the performance of supervision, identifies deficiencies in the activity of the mortgage administrator or his deputy, it may impose on him a fine of up to 3 300 eur.

§ 83 The National Bank of Slovakia and the ministry shall lay down the details of the status and activities of the mortgage administrator and his deputy by a generally binding legal regulation.

§ 84

(1) A debtor under a mortgage loan agreement (§ 75(4)) provided for the purposes under § 68(a) to (d), who is a natural person (hereinafter referred to as "mortgage loan recipient"), is entitled, subject to the conditions laid down by this Act, to a contribution from the funds of the state budget of the Slovak Republic (hereinafter referred to as "state contribution").

(2) The state contribution is understood to be the percentage by which the state reduces the interest rate set in the mortgage loan agreement. The state contribution is set for individual calendar years by the Act on the state budget for the respective year and in that year applies to all mortgage loan agreements; this does not affect the provision of § 122a. The state contribution is rounded up to whole euro cents.

(3) For the purpose of calculating the state contribution on a mortgage loan provided in a foreign currency, the amount of the mortgage loan shall be converted at the reference exchange rate determined and published by the European Central Bank or the National Bank of Slovakia, 31) which is valid on the day of conclusion of the mortgage loan agreement.

(4) The state contribution shall be provided on a mortgage loan up to a maximum mortgage loan amount of 83 000 euro per one residential property, including in the case of spouses or the acquisition of such property into co-ownership by shares. For the purposes of this Act, residential properties are understood to be residential buildings within the meaning of a special regulation. 71)

(5) Installments of a mortgage loan, including interest, for which a state contribution is provided, are generally agreed in regular monthly installments. If the installments of a mortgage loan are agreed otherwise, the amount of funds provided as a state contribution for such a mortgage loan may not exceed the amount that would be provided as a state contribution for such a mortgage loan in the case of regular monthly installments.

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(6) If the interest rate set at the granting of a mortgage loan or after the expiry of the interest rate fixation period of a mortgage loan or at any other change of the interest rate of a mortgage loan is lower than the amount of the state contribution, the recipient of the mortgage loan is entitled to the state contribution only up to the amount of the interest rate of the mortgage loan.

§ 85

(1) The recipient of a mortgage loan asserts a claim to a state contribution against the state budget of the Slovak Republic through a mortgage bank on the basis of an application submitted to it.

(2) A state contribution is provided to the recipient of a mortgage loan annually during the agreed maturity period of the mortgage loan agreed upon conclusion of the mortgage loan contract, and only for one mortgage loan contract. An amendment to the same mortgage loan contract is also considered to be the same mortgage loan contract, by which the mortgage loan is increased up to the amount specified in Section 84 (4).

(3) If the recipient of a mortgage loan concludes more mortgage loan contracts, the state contribution is provided for the contract for which they declare so in writing; if such a declaration is contained simultaneously in several mortgage loan contracts in one calendar year, the recipient of the mortgage loan loses the claim to a state contribution from all contracts for the period of the following 12 calendar months, whereby this period starts to run on the first day of the calendar month following receipt of the written information from the ministry or a legal person designated by it about the existence of several contracts with an asserted claim to a state contribution. In the case of spouses or co-owners of shares, the entitlement to the state contribution expires in this case for both spouses or all co-owners of shares.

(4) The entitlement to the state contribution expires

a) during the period when the mortgage bank, due to the delay of the recipient of the mortgage loan, reclassifies the claim arising from the mortgage loan among such classified claims for which it is reasonably assumed that they will not be satisfied in full in their nominal value, or

b) if the recipient of the mortgage loan

1. fails to comply with the purpose for which the mortgage loan was provided,

2. transfers the obligation from the mortgage loan to another person with the exception of a person close to him or

3. repays the mortgage loan before the expiry of four years from the provision of the mortgage loan.

(5) If the joint ownership of spouses or co-ownership of shares of the recipient of the mortgage loan ceases to exist or if the recipient of the mortgage loan dies, the entitlement to the state contribution passes to the person to whom the outstanding obligations from the mortgage loan pass.

(6) If the recipient of the mortgage loan breaches the conditions set out in paragraph 4 letter b) third point, he is obliged to immediately return, through the mortgage bank, the state contribution provided during the entire specified maturity period of the mortgage loan agreed upon at the conclusion of the contract.

§ 85a

(1) The debtor from a mortgage loan contract (§ 75 par. 4) provided for the purposes according to § 68 letter a) to c), who is a natural person who, as of the date of submitting the application for a mortgage loan, has reached 18 years of age and has not exceeded 35 years of age (hereinafter referred to as the "young recipient of the mortgage loan"), is entitled, under

483/2001 Coll. Collection of Laws of the Slovak Republic Page 131 the conditions laid down by this Act, to a contribution for young people from the state budget resources (hereinafter referred to as the "state contribution for young people"). If the young recipients of the mortgage loan are spouses or several co-debtors, each of these persons must meet the age requirement according to the first sentence.

(2) The state contribution for young people means the percentage by which the state reduces the amount of the interest rate determined in the mortgage loan contract. The state contribution for young people is determined annually by the state budget act for the relevant budget year and in that year applies to all mortgage loan contracts concluded under the conditions according to paragraphs 1 and 3. The state contribution for young people is rounded up to whole eurocents.

(3) The young recipient of the mortgage loan shall be granted the state contribution for young people if

a) the young mortgage loan recipient has, as of the date of submitting the mortgage loan application, an average monthly income calculated from the income for the calendar year preceding the calendar year in which the mortgage loan application was submitted, of no more than 1.3 times the average monthly nominal wage of an employee in the national economy of the Slovak Republic as determined by the Statistical Office of the Slovak Republic for the calendar quarter preceding the calendar quarter that precedes the calendar quarter in which the mortgage loan application was submitted; if the young mortgage loan recipients are spouses, their combined average monthly income must not exceed 2.6 times the average monthly nominal wage of an employee in the national economy of the Slovak Republic as determined by the Statistical Office of the Slovak Republic for the calendar quarter preceding the calendar quarter that precedes the calendar quarter in which the mortgage loan application was submitted, and if the young mortgage loan recipients are multiple co-debtors, their combined average monthly income must not exceed the product of the number of co-debtors and 1.3 times the average monthly nominal wage of an employee in the national economy of the Slovak Republic as determined by the Statistical Office of the Slovak Republic for the calendar quarter preceding the calendar quarter that precedes the calendar quarter in which the mortgage loan application was submitted,

b) the mortgage bank undertakes that, for a period of five years from the provision and commencement of interest charging on the mortgage loan, it will, for the young mortgage loan recipient,

1. reduce the interest rate determined in the mortgage loan contract by the same amount as the state contribution for young people is determined under paragraph 2, but by no more than 1 %,

2. allow the repayment of the principal of the mortgage loan to be deferred,

3. allow an extraordinary repayment of the mortgage loan without a fee,

c) the mortgage loan application was submitted from 1 January 2007.

(4) For the purposes of calculating the state contribution for young people for a mortgage loan provided in a foreign currency, the amount of the mortgage loan shall be converted using the reference exchange rate determined and announced by the European Central Bank or the National Bank of Slovakia, 31) which is valid as of the date of conclusion of the mortgage loan contract.

(5) The state contribution for young people shall be provided for a mortgage loan on no more than the amount of the mortgage loan of 50 000 euros per one property intended for housing, including in the case of spouses or the acquisition of such property into co-ownership shares.

(6) The repayments of the mortgage loan, including interest, for which the state contribution for young people is provided, shall be agreed, as a rule, in regular monthly instalments. If the mortgage loan repayments are agreed otherwise, the amount of funds provided as the state contribution for young people for such a mortgage loan may not exceed the amount that would have been provided as the state contribution for young people for such a mortgage loan in the case of regular monthly instalments.

The provisions of the first and second sentences are without prejudice to the provision of paragraph 3 letter b) second

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and third point.

§ 85b

(1) The entitlement to the state contribution for young people against the state budget shall be claimed by the young mortgage loan recipient through the mortgage bank on the basis of an application submitted to it.

(2) The state contribution for young people shall be provided to the young mortgage loan recipient annually for a period of five years from the commencement of interest charging on the mortgage loan, and only for one mortgage loan contract. A change to the same mortgage loan contract by which the mortgage loan is increased to no more than the amount specified in § 85a paragraph 5 shall also be considered the same mortgage loan contract.

(3) If the young mortgage loan recipient concludes more than one mortgage loan contract, the state contribution for young people shall be provided for the mortgage loan contract declared in writing by the recipient; if several mortgage loan contracts contain such a declaration at the same time in one calendar year, the young mortgage loan recipient's entitlement to the state contribution for young people shall lapse for all mortgage loan contracts for the period of the following 12 calendar months, with this period beginning on the first day of the calendar month following the receipt of written information from the ministry or a legal entity designated by it about the existence of multiple mortgage loan contracts with a claimed entitlement to the state contribution for young people. In the case of spouses or co-owners of shares, the entitlement to the state contribution for young people shall in this case lapse for both spouses or all co-owners of shares.

(4) The young mortgage loan recipient shall not be entitled to the state contribution for young people during the period when the mortgage bank, due to the young mortgage loan recipient's delay, classifies the claim arising from the mortgage loan among such classified claims for which it is reasonably assumed that they will not be satisfied in full at their nominal value.

(5) The entitlement to the state contribution for young people shall lapse if

a) the young mortgage loan recipient

1. fails to comply with the purpose for which the mortgage loan was provided,

2. transfers the obligation from the mortgage loan to another person with the exception of a person close to him, whereby the close person must, as of the date of transfer of the obligation, meet the conditions under § 85a paragraphs 1 and 3 letter a),

3. repays the mortgage loan before the expiry of four years from the provision of the mortgage loan,

4. submitted false data on the amount of average monthly income when concluding the mortgage loan contract with the state contribution for young people, or

b) the natural person to whom the state contribution for young people was provided submitted false data on age when concluding the mortgage loan contract with the state contribution for young people.

(6) If the joint property of spouses or co-ownership shares of the young mortgage loan recipient ceases to exist or if the young mortgage loan recipient dies, the entitlement to the state contribution for young people shall pass to the person to whom the outstanding obligations from the mortgage loan pass.

(7) If the young recipient of a mortgage loan loses the entitlement to the state contribution for young people under paragraph 5 letter a) third or fourth point, he is obliged to immediately return, through the mortgage bank, the state contribution for young people that was provided to him. If a natural person to whom the state contribution for young people was provided loses the entitlement to this contribution under paragraph 5 letter b), he is obliged to immediately return, through the mortgage bank, the provided state contribution for young people.

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(8) The mortgage bank is not responsible for the truthfulness of the data on the amount of the average monthly income under § 85a paragraph 3 letter a).

(9) The young recipient of a mortgage loan loses the entitlement to the state contribution for young people after five years from the commencement of interest on the mortgage loan, and at the same time acquires the entitlement to the state contribution; in this case, the provision of § 85 paragraph 3 applies equally.

(10) The provisions of § 86 to 88 apply equally to mortgage loan contracts with the state contribution for young people.

§ 86

(1) The Ministry of Construction and Regional Development of the Slovak Republic pays the state contribution to the mortgage bank monthly.

(2) The mortgage bank applies for the state contribution for the relevant month at the Ministry of Construction and Regional Development of the Slovak Republic no later than the 25th day of the following month.

(3) The Ministry of Construction and Regional Development of the Slovak Republic transfers the funds under paragraph 2 by the 25th day of the month following the month in which the mortgage bank's application for the provision of the state contribution was submitted to a special account of the mortgage bank established for this purpose at the mortgage bank. From this account, the mortgage bank draws monthly the relevant amount for individual recipients of mortgage loans who are entitled to the state contribution.

(4) The settlement of the provided state contribution for the relevant year shall be carried out by the mortgage bank within the deadline set by the Ministry of Construction and Regional Development of the Slovak Republic.

(5) The mortgage bank is responsible for

a) timely application of claims for the state contribution from the state budget,

b) correct calculation of the amount of state contributions,

c) return of the state contribution in case of non-compliance with the conditions for providing the state contribution.

§ 87

(1) The central register of mortgage loan contracts for which the entitlement to the state contribution is applied is maintained by the ministry or a legal entity designated by it.

(2) Mortgage banks are obliged to provide the ministry or a person designated by it monthly, within the deadlines, manner and under the conditions agreed with the ministry, information on newly concluded mortgage loan contracts for the purposes stated in paragraph 1. This information must contain

a) the birth number of the recipient of the mortgage loan,

b) the number of the mortgage loan contract,

c) a declaration of application of the claim for the provision of the state contribution,

d) the amount of the mortgage loan in euros,

e) the amount of the monthly installment,

f) the maturity date of the mortgage loan,

g) the amount of the interest rate agreed in the mortgage loan contract,

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h) the period of reclassification of the mortgage loan claim due to the recipient's default,

i) the purpose of providing the mortgage loan,

j) the amount of the state contribution in euros,

k) the exact identification of the real estate that will be the subject of the lien serving to secure the mortgage bank's claims from the mortgage loan.

(3) State supervision over compliance with the conditions for providing the state contribution is carried out by the ministry. The ministry is entitled to request from the mortgage bank all documents for checking compliance with the conditions for providing the state contribution. The provisions of a special regulation shall apply mutatis mutandis to the exercise of this state supervision. 72)

(4) Employees and members of the bodies of the person designated under paragraph 1 and of the ministry are obliged to maintain confidentiality about all facts related to the performance of activities under paragraphs 1 to 3. This confidentiality obligation continues even after the revocation of the authorization for this person to perform activities under paragraph 1 or after the termination of the employment relationship or other legal relationship or after the termination of the performance of a function in the bodies of this person; the provisions of § 91 paragraphs 2 to 7, § 92 paragraphs 1 to 7 and § 93 are not affected by this.

(5) If the ministry, in the exercise of state supervision, finds deficiencies in the activity of the mortgage bank consisting in non-compliance with the conditions for providing the state contribution, it shall impose on the mortgage bank the obligation to return to the state budget the amount of the unlawfully used state contribution.

(6) In addition to the measure under paragraph 5, the ministry may impose on the mortgage bank, depending on the severity of the breach of obligation and the duration of the unlawful state, also a fine up to twice the amount of the unlawfully used state contribution for the mortgage loan. If the measure under paragraph 5 is not fulfilled, the fine may be imposed repeatedly, but in total not exceeding the amount under the first sentence. The proceeds from fines are income of the state budget.

(7) The provisions of the general regulation on administrative proceedings apply to proceedings under paragraphs 5 and 6. 72a)

(8) The ministry shall provide monthly to the Ministry of Construction and Regional Development of the Slovak Republic information on the total claim for the state contribution for individual mortgage banks in the relevant calendar month for the purposes of transferring funds under § 86 paragraph 3; the ministry shall provide this information no later than the 20th day of the following month.

The ministry shall provide to the Ministry of Construction and Regional Development of the Slovak Republic, for the purposes of fulfilling its tasks in providing the state contribution, also summary data on the purposes of provided mortgage loans stated in the information of the mortgage bank under § 76 paragraph 3, within ten working days from the date of submission of this information to the ministry.

§ 88 For the purposes of mortgage transactions and the state contribution, the provisions of this Act and of the special regulation, 13) which relate to real estate, shall likewise apply to apartments and non-residential premises.

Part Thirteen Newlywed Loan § 88a

(1) Debtors under a loan agreement who are spouses and neither of the spouses has exceeded 35

483/2001 Coll. Collection of Laws of the Slovak Republic Page 135 years of age and whose marriage has lasted at most two years as of the date of submission of the application (hereinafter referred to as "newlyweds") for this loan (hereinafter referred to as "newlywed loan") shall be entitled, under the conditions laid down by this Act, to a contribution from state budget funds (hereinafter referred to as "state contribution for newlyweds").

(2) The state contribution for newlyweds means the percentage by which the state reduces the amount of the interest rate determined in the newlywed loan agreement. The percentage amount of the state contribution for newlyweds may not change during the entire maturity period of the newlywed loan agreed upon at the conclusion of the newlywed loan agreement. The percentage amount of the state contribution for newlyweds for agreements concluded in individual calendar years shall be determined by the act on the state budget for the relevant budget year. The state contribution for newlyweds shall be rounded up to whole eurocents.

(3) Newlyweds shall be granted the state contribution for newlyweds if

a) together, as of the date of submission of the application for a newlywed loan, they have an average monthly income calculated from income for the calendar year preceding the calendar year in which the application for a newlywed loan was submitted, of no more than 2.6 times the average monthly nominal wage of an employee in the national economy of the Slovak Republic ascertained by the Statistical Office of the Slovak Republic for the calendar quarter preceding the calendar quarter that precedes the calendar quarter in which the application for a newlywed loan was submitted,

b) the bank or branch of a foreign bank undertakes that, from the provision and commencement of interest charging on the newlywed loan throughout the entire maturity period of the newlywed loan agreed upon at the conclusion of the newlywed loan agreement, it will reduce the interest rate determined in the newlywed loan agreement by at least half of the state contribution for newlyweds determined under paragraph 2,

c) the application for a newlywed loan was submitted from 1 April 2010.

(4) For the purposes of calculating the state contribution for newlyweds for a newlywed loan provided in a foreign currency, the amount of the newlywed loan shall be converted using the reference exchange rate determined and announced by the European Central Bank or the National Bank of Slovakia, 31) which is valid as of the date of conclusion of the newlywed loan agreement.

(5) The state contribution for newlyweds shall be provided for a newlywed loan the amount of which is at most 10 000 euros.

(6) The instalments of the newlywed loan, including interest, for which the state contribution for newlyweds is provided, shall be agreed, as a rule, in regular monthly instalments. If the instalments of the newlywed loan are agreed otherwise, the amount of funds provided as the state contribution for newlyweds for such a newlywed loan may not exceed the amount that would have been provided as the state contribution for newlyweds for such a newlywed loan in the case of regular monthly instalments.

§ 88b

(1) Newlyweds shall assert the claim to the state contribution for newlyweds against the state budget through a bank or branch of a foreign bank on the basis of an application submitted to it.

(2) The state contribution for newlyweds shall be provided to newlyweds annually during the specified maturity period of the newlywed loan agreed upon at the conclusion of the newlywed loan agreement, and only for one newlywed loan agreement. An amendment to the newlywed loan agreement by which the newlywed loan

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is increased to at most the amount stated in § 88a para. 5 shall also be considered the same newlywed loan agreement.

(3) If newlyweds conclude more than one newlywed loan agreement, the state contribution for newlyweds shall be provided for that newlywed loan agreement which they declare in writing; if several newlywed loan agreements contain such a declaration at the same time in one calendar year, the newlyweds shall lose the claim to the state contribution for newlyweds from all newlywed loan agreements for the period of the following 12 calendar months, this period beginning on the first day of the calendar month following receipt of written information from the ministry or a legal entity designated by it about the existence of several newlywed loan agreements with an asserted claim to the state contribution for newlyweds.

(4) Newlyweds shall not be entitled to the state contribution for newlyweds during the period when the bank or branch of a foreign bank, due to a delay of more than 90 days, classifies the claim arising from the newlywed loan among such classified claims for which it is reasonably assumed that they will not be satisfied in the full amount of their nominal value.

(5) The claim to the state contribution for newlyweds shall lapse if the newlyweds

a) transfer the obligation from the newlywed loan to another person with the exception of a person close to them, whereby the close person must, as of the date of transfer of the obligation, meet the conditions under § 88a para. 1 and para. 3 letter

a),

b) submitted, when concluding the newlywed loan agreement with the state contribution for newlyweds, false data on the amount of average monthly income or false data on age,

c) divorce during the term of the newlywed loan agreement.

(6) If one of the newlyweds or both newlyweds die, the claim to the state contribution for newlyweds shall pass to the person to whom the outstanding obligations from the newlywed loan pass.

(7) If the newlyweds' claim to the state contribution for newlyweds lapses under paragraph 5 letter b), they are obliged to return without delay, through the bank or branch of a foreign bank, the state contribution for newlyweds that was provided to them.

(8) The bank and the branch of a foreign bank shall not be responsible for the accuracy of the data on the amount of the average monthly income pursuant to § 88a para. 3 letter a).

§ 88c

(1) The Ministry shall pay to the bank and the branch of a foreign bank the state contribution for newlyweds on a monthly basis.

(2) The bank and the branch of a foreign bank shall claim the state contribution for newlyweds for the relevant month from the Ministry no later than by the 25th day of the following month.

(3) The Ministry shall transfer the funds pursuant to paragraph 2 by the 25th day of the month following the month in which the application of the bank or branch of a foreign bank for the provision of the state contribution for newlyweds was submitted to a special account of the bank or branch of a foreign bank established for this purpose at the bank or branch of a foreign bank.

From this account, the bank or branch of a foreign bank shall draw monthly the relevant amount for individual newlyweds who are entitled to the state contribution for newlyweds.

(4) The settlement of the provided state contribution for newlyweds for the relevant year shall be carried out by the bank and the branch of a foreign bank within the time limit determined by the Ministry.

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(5) The bank and the branch of a foreign bank shall be responsible for

a) the timely claiming of entitlements to the state contribution for newlyweds from the state budget,

b) the correct calculation of the amount of state contributions for newlyweds,

c) the return of the state contribution for newlyweds in the event of non-compliance with the conditions for the provision of the state contribution for newlyweds.

§ 88d

(1) The central register of contracts on newlywed loans, for which a claim to the state contribution for newlyweds is applied, shall be maintained by the Ministry or a legal entity designated by it.

(2) Banks and branches of foreign banks are obliged to provide the Ministry or a legal entity designated by it, on a monthly basis, within the time limits, in the manner and under the conditions agreed with the Ministry, information on newly concluded contracts on newlywed loans for the purposes referred to in paragraph 1. This information must contain

a) the birth numbers of the newlyweds,

b) the number of the contract on the newlywed loan,

c) a declaration on the application of the claim for the provision of the state contribution for newlyweds,

d) the amount of the newlywed loan in euros,

e) the amount of the monthly installment in euros,

f) the maturity date of the newlywed loan,

g) the amount of the interest rate agreed in the contract on the newlywed loan,

h) the period of reclassification of the claim from the newlywed loan pursuant to § 88b para. 4,

i) the amount of the state contribution for newlyweds in euros.

(3) State supervision over compliance with the conditions for the provision of the state contribution for newlyweds shall be exercised by the Ministry. The Ministry is authorized to request from the bank and the branch of a foreign bank all documents for the control of compliance with the conditions for the provision of the state contribution for newlyweds. For the performance of this state supervision, the provisions of a special regulation shall apply mutatis mutandis. 72)

(4) If the Ministry, in the performance of state supervision, finds deficiencies in the activities of a bank or a branch of a foreign bank consisting in non-compliance with the conditions for the provision of the state contribution for newlyweds, it shall impose on the bank or the branch of a foreign bank the obligation to return to the state budget the amount of the state contribution for newlyweds used without authorization.

(5) In addition to the measure pursuant to paragraph 4, the Ministry may impose on the bank or the branch of a foreign bank, depending on the seriousness of the breach of obligation and the duration of the unlawful state, also a fine up to twice the amount of the state contribution for newlyweds used without authorization. If the measure pursuant to paragraph 4 is not fulfilled, the fine may be imposed repeatedly, but in total not exceeding the amount pursuant to the first sentence. The proceeds from fines shall be income of the state budget.

(6) The proceedings pursuant to paragraphs 4 and 5 shall be governed by the provisions of the general regulation on administrative proceedings. 72a)

(7) Employees and members of the bodies of the person designated pursuant to paragraph 1 and of the Ministry are obliged to maintain confidentiality about all facts related to the performance of activities pursuant to paragraphs 1 to 3. This obligation of confidentiality shall continue even after the revocation of the authorization for this person to

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perform activities pursuant to paragraph 1, after the termination of the employment relationship, other legal relationship or after the termination of the performance of a function in the bodies of this person; the provisions of § 91 paras. 2 to 7, § 92 paras. 1 to 7 and § 93 shall not be affected.

FOURTEENTH PART PROTECTION OF CLIENTS AND BANKING SECRECY § 89

(1) The bank and the branch of a foreign bank, in the performance of banking activities in the territory of the Slovak Republic, shall conclude and execute transactions with their clients on a contractual basis in accordance with the legal order of the Slovak Republic. The client has the right to conclude a transaction contract in the Slovak language, as well as to the provision of information by the bank and the branch of a foreign bank, to submit filings to the bank and the branch of a foreign bank and to carry out other communication with the bank and the branch of a foreign bank in the Slovak language; this does not affect the possibility of the concurrent use of other languages, if so provided by a special act or if the bank or the branch of a foreign bank so agrees in writing with its client, whereby the client has the right to choose the decisive language for the wording of the contract, unless a special act provides otherwise. 72b)

The bank or the branch of a foreign bank may contractually arrange with its client the rights and obligations arising from transactions differently from the act or a special regulation, if this is not expressly prohibited by the act or a special regulation or if it does not follow from the nature of their provisions that they cannot be deviated from; 72c) such a contract must have the form and form required by the act or by agreement of the parties, whereby the bank and the branch of a foreign bank shall be responsible for its demonstrable execution in documentary form or on another durable medium 72d) no later than at the conclusion of the transaction and for its storage and protection pursuant to § 42 para. 1.

(2) The bank and the branch of a foreign bank are obliged, in every transaction, to require proof of the client's identity, except for transactions listed in paragraph 5; in every transaction, the client is obliged to comply with every such request of the bank or branch of a foreign bank. The bank and the branch of a foreign bank are obliged to refuse to carry out a transaction while maintaining the client's anonymity.

(3) For the purposes of paragraph 2, the identity of clients may be proven by the client's identity document under special regulations on identity documents, 73) or by the client's signature, if this client is personally known and if his signature is without any doubt identical with the client's signature on the signature specimen deposited with the bank or branch of a foreign bank, when signing which the client proved his identity with an identity document; when carrying out a transaction through technical devices, identity is proven by a special identification number or a similar code which the bank or branch of a foreign bank assigns to the client, and an authentication datum which the bank or branch of a foreign bank agrees with the client, or by an electronic signature under a special act. In the case of a minor client who does not have an identity document, the identity document verifies the identity of his legal representative and a document is submitted from which the representative's authority to represent is evident, as well as the birth certificate of the minor client.

(4) The bank and the branch of a foreign bank are obliged, in every transaction with a value of at least 15 000 euros, to ascertain the ownership of the funds used by the client to carry out the transaction. For the purposes of this provision, the ownership of funds is ascertained from a binding written declaration of the client, in which the client is obliged to state whether these funds are his property and whether he is carrying out the transaction on his own account; this written declaration of the client on the ownership of financial funds may also be part of the written contract which the bank or branch of a foreign bank concludes with the client in connection with the agreed transaction. If these funds are the property of another person or if the transaction is carried out on account of another person, in the declaration the client is obliged to state the name, surname, birth number or date of birth and address of permanent residence of a natural person or the name, registered office and identification number of a legal person, if one has been assigned, to whom the funds belong and on whose account the transaction is carried out; in such a case the client is obliged to hand over to the bank or branch

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 139 of a foreign bank also the written consent of the person concerned to the use of his funds for the transaction being carried out and for carrying out this transaction on his account. The obligation to submit written consent under the preceding sentence does not apply to the National Bank of Slovakia, the resolution council, a bank, a branch of a foreign bank, a stock exchange, a commodity exchange, a central securities depository, a securities dealer, a branch of a foreign securities dealer, an investment services intermediary, an insurance company, a branch of a foreign insurance company, a reinsurance company, a branch of a foreign reinsurance company, a management company or a branch of a foreign management company, if in the binding written declaration submitted under this paragraph they state that they carry out transactions exclusively on their own account or on account of their clients under a special act 6 ) and that for carrying out transactions they use exclusively their own funds or the funds of their clients which they have entrusted and administer for their clients under a special act; 6 ) this equally applies also to a pension management company, a supplementary pension company and an administrator of a residential building under a special regulation 73a), if they are an obliged person under a special regulation. 21a) The obligation to submit written consent under this paragraph does not apply either to a foreign bank with its registered office in a member state, a foreign electronic money institution with its registered office in a member state and a foreign financial institution with its registered office in a member state. If the client fails to fulfil the obligations under this paragraph, the bank and the branch of a foreign bank are obliged to refuse to carry out the requested transaction.

(5) If the client handles an amount not exceeding 2 000 euros and if a special act 21a) does not provide otherwise, banks and branches of foreign banks are not obliged to require proof of the client's identity

a) in transactions carried out through currency exchange machines,

b) in the provision of financial services at a distance, 74a)

c) in handling a deposit except for the establishment of a deposit.

(6) The provisions of paragraphs 2 and 4 are without prejudice to the obligations of banks and branches of foreign banks under a special regulation; 21a) equally without prejudice is the right of banks and branches of foreign banks to ascertain identity through third persons under a special act. 21a)

§ 90

(1) The bank and the branch of a foreign bank are obliged to notify in writing to the tax office competent according to the registered office or permanent residence of the entrepreneur, 75) who is their client, the number of every established and every cancelled current account and deposit account of the entrepreneur who is or was their client, within 10 days after the end of the calendar month in which such account was established or cancelled; the tax office may provide this information only in accordance with a special regulation. 76)

(2) The bank and the branch of a foreign bank are obliged to provide information to a legal person with 100 % state ownership participating, on the basis of a decision of the Government of the Slovak Republic, in the programme of providing assistance to clients who have lost the ability to repay a housing loan as a result of the economic crisis (hereinafter referred to as the "agency for providing assistance to clients"), upon the request of the agency for providing assistance to clients and to the extent necessary for verifying data concerning the repayment of credit obligations and the financial and property situation of clients applying for or included in this programme.

(3) Unless a special regulation provides otherwise, 76aa) a public authority is entitled to conclude with a bank and a branch of a foreign bank an agreement on electronic communication in an automated manner through a special information system, which must meet the requirements for smooth, reliable and secure exchange of information. This agreement on electronic communication in an automated manner through a special information system is also entitled to be concluded on behalf of banks and branches of foreign banks by an interest association of banks and branches of foreign banks, 86f) for the association of which this interest association was created, 86f) and on behalf of public

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authorities associated in a professional self-governing chamber, 87d) this professional self-governing chamber is also entitled to conclude this agreement, whereby the interest association of banks and branches of foreign banks is obliged to provide the text of the concluded agreement on electronic communication without delay to every bank and branch of a foreign bank. If an agreement on electronic communication is concluded between a professional self-governing chamber associating public authorities and an interest association of banks and branches of foreign banks 86f) to the extent according to a special regulation, 87d) all banks and branches of foreign banks are obliged to apply the procedure according to the agreement, whereby the professional self-governing chamber and the interest association of banks and branches of foreign banks are obliged to jointly and severally ensure the requirements for smooth, reliable and secure exchange of information. 86f) The interest association of banks and branches of foreign banks, together with the agreement on electronic communication in an automated manner through a special information system, shall also agree on the form for electronic submission or electronic official document, and this form is binding also if the electronic submission or electronic official document is not submitted through the agreed electronic communication through a special information system in an automated manner.

§ 91

(1) The subject of banking secrecy comprises all information and documents on matters concerning a client of a bank or a client of a branch of a foreign bank which are not publicly accessible, in particular information on transactions, account balances and deposit balances. A bank and a branch of a foreign bank are obliged to keep such information confidential and protect it against disclosure, misuse, damage, destruction, loss or theft. Information and documents on matters protected by banking secrecy may be provided by a bank and a branch of a foreign bank to third parties only with the prior written consent of the affected client or upon his written instruction for the purposes and under the further conditions stated in such consent or instruction, unless this Act provides otherwise. A client has the right, against reimbursement of material costs, to acquaint himself with the information kept about him in the database of a bank or a branch of a foreign bank, and to obtain an extract therefrom. The provision of information in aggregate form from which the name of the bank or branch of a foreign bank, the client's first and last name, and information according to a special regulation are not apparent shall not be considered a breach of banking secrecy. 76a)

(2) For the purposes of this part of the Act, a client of a bank or a branch of a foreign bank shall also be deemed to include the legal successor of the original client to the extent relating to the rights and obligations acquired by that legal successor, a person with whom the bank or branch of a foreign bank negotiated the conclusion of a transaction, even if the transaction was not carried out, a person who ceased to be a client of the bank or branch of a foreign bank, and also a person about whom the bank or branch of a foreign bank received data under this Act from another bank or branch of a foreign bank, data from the register of bank loans and guarantees under Section 38, data from the register of clients under Section 92(7) or data from the common register of banking information under Section 92a.

(3) A report on all matters that are the subject of banking secrecy shall be provided by a bank and a branch of a foreign bank without the client's consent to the National Bank of Slovakia, to persons entrusted with the performance of supervision, including invited persons 15a) and persons referred to in Section 6(7) and Section 49(2), to the resolution board for the purposes of carrying out its competence under this Act or a special regulation, 30zx) to auditors in the activity laid down by this Act or a special Act 40) and to the Deposit Protection Fund for the performance of tasks under a special regulation; 77) a building savings bank shall also provide such a report to persons entrusted with the control of the use of the state premium in building savings 78) and a mortgage bank also to its mortgage administrator and the representative of that mortgage administrator and to persons entrusted with the control of the use of the state contribution in mortgage transactions.

(4) A report on matters concerning the client that are the subject of banking secrecy shall be provided by a bank and a branch of a foreign bank without the client's consent only upon a written request

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a) of a court, including a notary as a court commissioner, for the purposes of civil proceedings and administrative judicial proceedings in which the client of the bank or branch of a foreign bank is a participant or the subject of which is the property of the client of the bank or branch of a foreign bank, 79)

b) of an authority active in criminal proceedings or a court for the purposes of criminal proceedings, 80)

c) of a tax authority, 80a) customs authority 80b) or tax administrator, which is a municipality, 80c) in matters of tax administration or of a customs authority in matters of customs proceedings in which the client of the bank or branch of a foreign bank is a participant under a special regulation, 81) including the recovery of a tax arrears in tax execution proceedings or the recovery of a customs debt in customs execution proceedings,

d) of the Government Audit Office 82) in the performance of financial control under a special regulation 82) at the client of the bank or branch of a foreign bank,

e) a judicial executor entrusted with carrying out execution under a special regulation, 67) or the Slovak Chamber of Executors for the purpose of ensuring the performance of an audit of the accounting and execution proceedings of an executor whose performance of office has ceased under a special regulation, 82a)

f) a state administration authority for the purpose of enforcing a decision, 83) by which an obligation to pay a monetary performance was imposed on a client of a bank and a branch of a foreign bank or on a creditor of a client of a bank and a branch of a foreign bank,

g) the criminal police service and the financial police service of the Police Force for the purpose of detecting criminal offences, identifying their perpetrators and searching for them 84) and for the purposes of the tasks of the financial police under a special regulation 84a) on proving the origin of property,

h) a ministry in the exercise of control laid down by this Act or a special regulation, 85)

i) an administrator or preliminary administrator in bankruptcy proceedings, restructuring proceedings, settlement proceedings or debt relief proceedings, or a supervisory administrator performing supervisory administration, if it concerns matters relating to a client of a bank or a branch of a foreign bank whose assets are subject to bankruptcy proceedings, restructuring proceedings, settlement proceedings, debt relief proceedings or over which supervisory administration has been introduced under a special regulation, 58)

j) the competent state authority for the purpose of fulfilling obligations under an international treaty by which the Slovak Republic is bound, 86) if the fulfilment of obligations under this treaty cannot be refused on grounds of protection of banking secrecy,

k) the National Security Authority, the Slovak Information Service, Military Intelligence and the Police Force for the purpose of carrying out security screenings within their competence under a special regulation, 86a)

l) the Office for Personal Data Protection for the purpose of supervision under a special act 37) over the processing and protection of personal data of a client of a bank or a branch of a foreign bank,

m) the Supreme Audit Office of the Slovak Republic for the purpose of control under a special act 86b) at a client of a bank or a branch of a foreign bank,

n) the Judicial Treasury for the purpose of enforcing a judicial claim under a special act 86c) from a client of a bank or a branch of a foreign bank,

o) the Slovak Information Service for the purpose of combating organised crime and terrorism under a special regulation, 86d)

p) Military Intelligence for the purpose of obtaining, concentrating and evaluating information important for ensuring the defence of the Slovak Republic on the activities of foreign intelligence services, terrorism and facts capable of seriously threatening or damaging the military-economic interests of the Slovak Republic under a special regulation, 86da)

r) an agency for providing assistance to clients to the extent necessary for verifying data

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concerning the repayment of credit obligations and the financial and property situation of clients applying for inclusion or included in the programme of providing assistance to clients who have lost the ability to repay a housing loan as a result of the economic crisis,

s) the Criminal Office of the Financial Administration for the purpose of performing tasks in detecting criminal offences, identifying their perpetrators and searching for them, 86db)

t) a ministry in connection with the application of international sanctions under a special regulation, 86dc)

u) the competent court to the extent necessary for the performance of its tasks in identifying the ultimate beneficial owner and in maintaining the register of public sector partners under a special regulation, 86dd)

v) a bank or a branch of a foreign bank for the purpose of verifying information under § 27c(2) and § 27d(3) second sentence,

w) the Antimonopoly Office of the Slovak Republic to the extent necessary for the performance of its tasks in the protection of economic competition under special regulations, 86de)

x) the Financial Directorate of the Slovak Republic to the extent necessary for the exercise of supervision over the provision of prohibited offers and supervision over activities related to the provision of prohibited offers, 86df)

y) the Social Insurance Agency 86dg) for the purpose of enforcing claims by ordering a claim from the account of a client of a bank or a branch of a foreign bank who is a party to proceedings before the Social Insurance Agency in matters of enforcing claims under a special regulation, 86dh)

(5) A written request under paragraph 4 must contain data according to which the bank or branch of a foreign bank can identify the relevant matter, in particular the exact designation of the person about whom data is requested, and a definition of the scope of the requested data; these identification data need not be stated in a written request under paragraph 4 letters b), g), o) and w). A written request under paragraph 4 letter a) must also contain the court's authorisation for a notary as a court commissioner, and a written request under paragraph 4 letter e) must contain the court's authorisation for a judicial executor to carry out execution. A written request under paragraph 4 letter i) must contain the bankruptcy court's decision on appointment to the office of administrator or preliminary administrator or a reference to the Commercial Gazette in which such decision was published; if it concerns a written request of a supervisory administrator, it must contain a reference to the Commercial Gazette in which the notice of the introduction of supervisory administration was published. The court's decision on such authorisation or appointment must be handed over in the original copy or as an officially certified copy under special regulations, 50) if it was not published in the Commercial Gazette. A written request under paragraph 4 may, by agreement with the bank and the branch of a foreign bank, also be submitted by electronic means using an electronic signature, a qualified electronic signature or another mutually agreed written method of verifying the identity of the applicant, or in written form and by the procedure under paragraph 10; in such case, the court's decision on authorisation or appointment need not be submitted.

(6) The provision of data necessary for the provision of payment services through a designated legal entity shall not be considered a breach of banking secrecy. 9 ) The provision of data by a bank or a branch of a foreign bank to the extent of fulfilling its obligations as an authorised person for the purposes of maintaining the register of public sector partners shall also not be considered a breach of banking secrecy. 86dd)

(7) The fulfilment of the reporting obligation of a bank or a branch of a foreign bank concerning unusual business transactions under a special regulation 21a) shall not be considered a breach of banking secrecy

nor shall the notification by a bank or a branch of a foreign bank under a special regulation 80) to a law enforcement authority of its suspicion that a criminal offence is being prepared, is being committed or has been committed, which is related to matters otherwise protected by banking secrecy.

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(8) A bank and a branch of a foreign bank are obliged to provide to the ministry in writing, within the time limits determined by it, a list of clients to whom international sanctions imposed under a special regulation apply; 86e) the provided list must also contain the account numbers and the amount of the balance on the accounts of these clients.

(9) A bank and a branch of a foreign bank may also submit the report under paragraph 4 by electronic means; this shall be without prejudice to the provisions of paragraph 10.

(10) A written request under paragraph 4 may be submitted to a bank or a branch of a foreign bank in electronic form, and the requested bank or branch of a foreign bank is obliged to submit the report under paragraph 4 with the required information about the client to the applicant also in electronic form, whereby the mutual transmission of information between the applicant and the bank or branch of a foreign bank shall be carried out through an automated electronic communication system procured by the interest association of banks and branches of foreign banks. 86f) The written request under the first sentence shall be made in the manner and with the particulars under paragraph 5 on the basis of an agreement concluded between the applicant or a group of applicants and the interest association of banks and branches of foreign banks, whereby the interest association is obliged to provide the text of the concluded agreement without delay to every bank and branch of a foreign bank, and all banks and branches of foreign banks are obliged to apply the procedure under the agreement. If the applicant or a group of applicants under paragraph 4 agrees with the interest association of banks and branches of foreign banks on a form of written request, the relevant applicant or the relevant group of applicants is obliged to use this form uniformly for each of its written requests under paragraph 4, even if it does not submit the written request through the automated electronic communication system procured by the interest association of banks and branches of foreign banks.

(11) The fulfilment of the notification obligation to the competent authority of the Slovak Republic for the purpose of automatic exchange of information on financial accounts for the purposes of tax administration under a special regulation shall not be considered a breach of banking secrecy. 86g)

(12) The fulfilment of the obligation 86h) of a bank, a foreign bank, a branch of a foreign bank and a creditor under a special regulation shall not be considered a breach of banking secrecy. 86i)

§ 92

(1) A bank and a branch of a foreign bank are obliged, even without the client's consent, to provide data for the identification of this client, data on his account number and data on the payment transaction, upon a written request, to a person who submits to the bank or branch of a foreign bank a written declaration that

a) as a result of an error in the execution of payment or clearing operations, it suffered a property detriment consisting in the transfer and crediting of funds belonging to it or managed by it to the client's account and

b) for the recovery of the unjust enrichment thus arising, the data for the identification of this client and the data on his account to which the funds were credited as a result of the error under letter a) are necessary.

(2) A bank and a branch of a foreign bank shall not provide the data under paragraph 1 if, upon their written notice of the submitted request, this client gives the bank or branch of a foreign bank an order for the reverse transfer of the credited funds, within seven calendar days after the day of delivery of the written request for the provision of identification data about the client to the bank or branch of a foreign bank.

(3) If a client of a bank or a branch of a foreign bank fails to fulfil its obligations towards the bank or branch of a foreign bank properly and on time, even despite its written call, the bank or branch

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of a foreign bank is also, without the consent of the affected client, entitled to provide information about this client to the extent under § 93a par. 1 letter a) points 1 to 3 and information and documents about the client's unfulfilled obligations to an expert for the performance of a financial valuation of the client's obligation, 87) to a judicial executor whom it designated in the proposal for the execution of execution against the client or to whom it registers its right against the client in the execution conducted against the client, and to an auctioneer with whom it has concluded a contract for the performance of a voluntary auction under a special regulation in connection with the client's unfulfilled obligation. 87a) If a client of a bank or a branch of a foreign bank fails to fulfil its obligations towards the bank or branch of a foreign bank properly and on time, even despite its written call, or if another dispute arises between the bank or branch of a foreign bank and their client, the bank or branch of a foreign bank may, even without the consent of the affected client, provide information about this client to the extent under § 93a par. 1 letter a) points 1 to 3 and information and documents about the relevant dispute to a lawyer to whom it has granted a written power of attorney for its representation against the relevant client for the purpose of protecting or asserting the unsatisfied or disputed rights of the bank or branch of a foreign bank. A bank or a branch of a foreign bank may thereby provide only information and documents on the client's unfulfilled obligations or on its disputed relations with the client to which the granted power of attorney applies; information and documents on any other of its relations with the client may be provided by a bank or a branch of a foreign bank only under the conditions and to the extent laid down by this Act.

(4) The persons and bodies referred to in paragraphs 1 to 3 or Section 91 (1) to (7) may use the information, data and reports on matters that are subject to banking secrecy provided by a bank or a branch of a foreign bank only for the purpose or for the proceedings for which these information and reports were provided to them; they are obliged to maintain confidentiality. The persons and bodies referred to in paragraphs 1 to 3 or Section 91 (1) to (7) may provide these information to each other only for the same purpose or for the proceedings for which they were provided to them; otherwise they may provide them only with the consent of the bank or the branch of a foreign bank in accordance with the conditions under paragraphs 1 to 3 and Section 91 (1) to (7).

(5) If a claim of a bank or a branch of a foreign bank from a loan granted or a guarantee provided is classified under Section 39 (11) and (12) among such classified claims due to the client's default, where it is reasonably assumed that they will not be satisfied in full at their nominal value, then the bank or the branch of a foreign bank is entitled, even without the consent of the client concerned, to provide other banks and branches of foreign banks with data that this client, identified at most to the extent of the data under Section 93a (1) (a) points 1 and 2, has breached its obligations and is in default of fulfilling the claim, as well as data on the relevant claim and its classification. If, despite a written demand by a bank or a branch of a foreign bank, its client is in default of fulfilling even a part of its monetary obligation or any other of its obligations towards the bank or the branch of a foreign bank for longer than 90 calendar days, or if the client repeatedly breaches its obligations towards the bank or the branch of a foreign bank in a similarly serious manner, the bank and the branch of a foreign bank are entitled, after prior warning to the client, even without its consent, to inform other banks and branches of foreign banks that the client has breached its obligations towards the bank agreed in the contract or laid down by generally binding legal regulations. The bank may in this case state only the identification of the client including the place of its registered office or place of permanent residence and the identification of the obligation breached by the client. The bank may not continue in such informing about the obligation breached by the client after the client has eliminated the consequences of the breach of this obligation in full extent, in particular if the client has paid the overdue monetary obligation in full extent including its accessories; it shall inform without delay about this remedy the other banks and branches of a foreign bank. The information provided in this manner is subject to banking secrecy.

(6) If it concerns the enforcement of a pledge right by a pledge creditor who is in the order to be satisfied from the pledge after the bank or branch of a foreign bank, this bank or branch shall provide information which are subject to banking secrecy on the amount of the claim secured by the pledge right of the bank or

483/2001 Coll. Collection of Laws of the Slovak Republic Page 145 of a branch of a foreign bank necessary for the valuation of collateral, and only to a person who values the collateral for the purpose of enforcing a lien under a special regulation. 87ab)

(7) A bank and a branch of a foreign bank are authorized

a) to keep their own register of clients who do not duly and timely fulfill obligations arising from contractual relationships between the bank and the client, clients who have committed conduct assessed by the bank and the branch of a foreign bank under special regulation 21a) as an unusual business transaction, and clients to whom international sanctions under special regulation 86d) apply,

b) to provide, even without the client's consent, information from this register to other banks and branches of foreign banks; the information provided is subject to banking secrecy for these banks and branches of foreign banks.

(8) If, despite a written request by the bank or branch of a foreign bank, its client is continuously in delay for more than 90 calendar days in fulfilling even part of its monetary obligation towards the bank or branch of a foreign bank, the bank or branch of a foreign bank may assign its claim corresponding to this monetary obligation by written contract to another person, including a person that is not a bank (hereinafter referred to as the "assignee"), even without the client's consent; this is without prejudice to the rules for assigning claims from consumer credit contracts under special regulation 87ac) or the rules for assigning claims from housing loan contracts under a special regulation. 87ad) The bank or branch of a foreign bank cannot exercise this right if the client, before the assignment of the claim, paid the bank or branch of a foreign bank the overdue monetary obligation in full, including its accessories; this does not apply if the sum of all the client's delays in fulfilling even part of the same monetary obligation towards the bank or branch of a foreign bank exceeded one year. Upon assignment of the claim, the bank or branch of a foreign bank is obliged to hand over to the assignee also the documentation on the obligation relationship on the basis of which the assigned claim arose; the bank or branch of a foreign bank may provide the assignee with information on individual other obligation relationships between the bank or branch of a foreign bank and the client only under the conditions and to the extent laid down by this Act.

(9) Information protected by banking secrecy may be provided only with the prior consent of the National Bank of Slovakia in connection with the sale of a bank, a branch of a foreign bank or their part under special regulation 28) or in connection with the sale of a share in the registered capital of a bank of at least 33 % or in connection with the merger or amalgamation of a bank, including the merger of another legal person with a bank. These information may be provided by a bank or a branch of a foreign bank only to a person with whom negotiations are being conducted on the conclusion of such a contract, or to a person with whom the bank is to merge or amalgamate, and to a person who prepares the documents necessary for a decision on the conclusion of a contract related to the sale, merger or amalgamation of the bank. Persons who have become acquainted with information protected by banking secrecy are obliged to maintain confidentiality about it, even after the termination of negotiations, after the preparation of documents or after the legal effects of the merger or amalgamation of the bank have taken effect. The bank or branch of a foreign bank is obliged to conclude with such persons a written contract in which it shall regulate the obligation to maintain confidentiality, to protect information protected by banking secrecy, as well as liability for their misuse. Without the conclusion of such a contract, Národná banka Slovenska cannot grant prior consent.

(10) For submitting a report to the auditor pursuant to § 91 para. 3 and for submitting a report pursuant to § 91 para. 4 letter

a), e) and i), the bank and the branch of a foreign bank are entitled to reimbursement of the costs incurred thereby. Reimbursement of costs is due to the bank and the branch of a foreign bank for submitting a report pursuant to § 91 para. 4 letter a),

e) and i) also if the person about whom data was requested in a written request is not a client of the bank or branch of a foreign bank. For reimbursement of costs for submitting a report pursuant to § 91 para. 4 letter

i), a special regulation does not apply. 87aa)

(11) A bank that is part of a consolidated group controlled by another bank, foreign

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bank or financial institution, over which supervision on a consolidated basis is exercised in the state of its registered office, has the right, even without the client's consent, to provide information that is the subject of banking secrecy to the person controlling this group, to the extent necessary for the preparation of statements and reports on a consolidated basis, but at most to the extent pursuant to § 93a para. 1 letter a), and with the condition that the person controlling this group ensures the protection of the provided information at least at the same level as the providing bank. Information provided in this way remains the subject of banking secrecy and may be used only for the purpose for which it was provided.

§ 92a

(1) Banks and branches of foreign banks may, for the purposes of preparing, concluding and executing transactions with clients and for the purposes of documenting the activities of banks and branches of foreign banks, using automated or non-automated means, create a common register of banking information (hereinafter referred to as the "common banking register"), through which banks and branches of foreign banks are entitled, only under the conditions laid down by this Act and a special Act 37), to mutually, with the client's consent pursuant to § 91 para. 1, free of charge or for reimbursement of material costs, make accessible and provide data on loans and bank guarantees provided to their clients, data on requested loans and bank guarantees, if clients have demonstrably requested them, data on these clients to the extent pursuant to § 93a para. 1 letter a)

points 1 to 3, data on their receivables and on the securing of their receivables against clients from provided loans and bank guarantees, data on the repayment of clients' obligations from provided loans and bank guarantees and data on the creditworthiness and trustworthiness of clients from the point of view of the repayment of their obligations from provided loans and bank guarantees.

(2) The operation of the common banking register, including the processing of data in the common banking register, may be entrusted by banks and branches of foreign banks, under the conditions laid down by this Act and a special Act 37), as a controller 87b) only to a joint enterprise of auxiliary banking services, in whose registered capital only banks, branches of foreign banks and Národná banka Slovenska may have an ownership interest. This joint enterprise of auxiliary banking services is obliged to keep the common banking register and the information in the common banking register, to back it up appropriately, to keep it secret and to protect it against unauthorized access, disclosure, misuse, alteration, damage, destruction, loss or theft. This joint enterprise of auxiliary banking services and the common banking register are subject to banking supervision. The joint enterprise of auxiliary banking services is entitled to entrust third parties 87b) with the processing of data in the common banking register under the conditions laid down by a special Act; 37) if the processing of data is carried out in a manner for which the consent of the Office for Personal Data Protection is required under a special Act, 37) the joint enterprise of auxiliary banking services is entitled to entrust third parties 87b) with such processing of data only on the basis of the consent of the Office for Personal Data Protection.

(3) Information provided to the common banking register or from the common banking register remains the subject of banking secrecy. Information from the common banking register and information on other facts related to the operation of the common banking register may be provided only to banks, branches of foreign banks, Národná banka Slovenska, the agency for providing assistance to clients to the extent necessary for verifying data concerning the repayment of credit obligations and the financial and property situation of clients applying for inclusion or included in the program of providing assistance to clients who have lost the ability to repay a housing loan as a result of the economic crisis, to other persons and authorities under the same rules and conditions as apply to the making accessible and providing of information protected by banking secrecy pursuant to the provisions of § 91 paras. 2 to 9 and § 92 para. 4, and with the client's consent pursuant to § 91 para. 1 also to another person defined by this consent, if this person ensures the protection of the provided information at least at the same level as the operator of the common

483/2001 Coll. Collection of Laws of the Slovak Republic Page 147 of the banking register pursuant to paragraph 2, whereby the information provided may be used only in accordance with the client's consent pursuant to § 91 para. 1 and for the purpose for which it was provided; information from the common banking register about consumers shall, under the same conditions as for banks and branches of foreign banks, also be made accessible to other persons defined by a special law. 87c) Towards all other persons, employees and members of the bodies of the joint undertaking for auxiliary banking services pursuant to paragraph 2 are obliged to maintain confidentiality about such information.

(4) Information about a client and his transactions referred to in paragraph 1, which a bank or a branch of a foreign bank provided to the common banking register, may be kept in the common banking register for five years from the extinction of the client's obligations from the transactions referred to in paragraph 1, unless the client has granted demonstrable consent pursuant to § 91 para. 1 for a different retention period for such information in the common banking register; this period cannot be subsequently shortened. A bank and a branch of a foreign bank which has provided data about a client and his transactions referred to in paragraph 1 to the common banking register is obliged to demonstrably notify the joint undertaking for auxiliary banking services pursuant to paragraph 2 of the date of extinction of the client's obligations from the transactions referred to in paragraph 1.

(5) A client of a bank or a branch of a foreign bank has, under the conditions laid down by a special regulation 37), the right to familiarize himself free of charge with the information kept about him or his transactions in the common banking register, has the right at least once a year free of charge to require from the operator of the common banking register the provision of a nominal list of persons to whom information about the respective client or his transactions was provided from the common banking register, and also has the right, under the conditions laid down by a special regulation 37), to require free correction or liquidation of incorrect, incomplete or outdated information kept in the common banking register about the respective client or his transactions.

§ 92b

(1) Banks and branches of foreign banks may, for the purpose of providing the basic banking product pursuant to § 27c, using automated or non-automated means, create a common register of consumers who have been provided with the basic banking product, through which banks and branches of foreign banks are entitled, only under the conditions laid down by this Act and a special law 37), to make accessible and provide to each other, even without the consent and information of the consumer as a data subject pursuant to a special law 37), free of charge or for reimbursement of material costs, information about the basic banking product provided to consumers and data about such consumers to the extent pursuant to § 93a para. 1 letter a) first and third point.

(2) Information provided to the common register of consumers who have been provided with the basic banking product, or from this common register, remains subject to banking secrecy.

Information from this common register and information about other facts related to the operation of this common register may be provided only to banks and branches of foreign banks. Towards all other persons, employees and members of the bodies of the joint undertaking for auxiliary banking services are obliged to maintain confidentiality about such information.

(3) The provisions of § 92a paras. 2, 4 and 5 apply equally to the common register of consumers who have been provided with the basic banking product.

§ 92c The Ministry is, for the purpose of exercising its competence and fulfilling its tasks under this Act and special regulations 1a) and for statistical purposes, entitled to request an interest association 86f) of banks and branches of foreign banks to submit a statement, explanation and other documents and information which

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are related to the activity of this interest association or to the activity of its members. The requested interest association is, for the purpose of providing this cooperation to the Ministry, entitled to collect and process documents and information from its members in order to provide them to the Ministry.

§ 93

(1) Employees of a bank and a branch of a foreign bank, as well as members of the statutory body or supervisory board of a bank, a mortgage administrator and his deputy and persons carrying out translation or activity pursuant to § 92 para. 3 are obliged to maintain confidentiality in matters concerning the interests of the bank and the branch of a foreign bank or their clients, unless this Act provides otherwise.

For the reasons stated in § 91 paras. 3 to 7 and in § 92 paras. 1 to 5, they shall be released from this obligation by the statutory body of the bank or the head of the branch of a foreign bank. The obligation of confidentiality pursuant to this paragraph shall not apply towards persons entrusted with the performance of supervision.

(2) Employees and members of the bodies of a designated legal entity, 9) which ensures payment services and their settlement, are obliged to maintain confidentiality towards all persons except the National Bank of Slovakia when performing tasks under this Act or a special regulation 8) and the resolution board when performing tasks under this Act or a special regulation 30zx) about all facts related to the provision of payment services and their settlement.

(3) The obligation to maintain confidentiality continues even after the termination of the employment relationship or other legal relationship or after the termination of the performance of a function pursuant to paragraph 1 or 2.

(4) The provisions of paragraphs 1 to 3 are without prejudice to the obligation imposed by a special law to prevent or report the commission of a criminal offence. 88)

§ 93a

(1) For the purposes of ascertaining, verifying and checking the identification of clients and their representatives, for the purposes of concluding and executing transactions with clients and for other purposes stated in paragraph 3, clients and their representatives are, even without the consent of the data subjects, obliged, in every transaction, at the request of a bank and a branch of a foreign bank

a) to provide:

1. if it is a natural person, including a natural person representing a legal entity, personal data 88a)

on identity in the scope of first name, surname, permanent residence address, temporary residence address, birth number, if assigned, date of birth, nationality, type and number of identity document, and if it is a natural person who is an entrepreneur, also to provide the address of the place of business, subject of business, designation of the official register or other official record in which it is entered, and the number of entry in that register or record,

2. if it is a legal person, identification data in the scope of name, identification number, if assigned, registered office address, subject of business or other activity, address of the location of the establishment or organisational units and other address of the place of performance of activity, as well as a list of persons forming the statutory body of that legal person and data on them in the scope according to point 1, a list of partners of that legal person to whom a share of more than 10 % of the registered capital or voting rights of that legal person belongs, and data on them, if they are legal persons, in the scope of name, legal form, registered office address, identification number and designation of the country of the registered office by ISO code, and if they are natural persons, in the scope according to point 1, designation of the official register or other official record in which the relevant legal person is entered, 88b) and the number of entry in that register or record,

3. contact telephone number, fax number and electronic mail address, if it has them,

4. documents and data proving and evidencing 4a. the client's ability to fulfil its obligations from a trade,

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 149 4b. required collateral for obligations from a trade, 4c. authorisation to represent, if it is a representative, 4d. fulfilment of other requirements and conditions for concluding or executing a trade that are laid down by this Act or by special regulations, or that are agreed with a bank and a branch of a foreign bank,

b) enable the acquisition, by copying, scanning or other recording of

1. personal data 88a) of identity from an identity document in the scope of title, first name, surname, birth surname, birth number, date of birth, place and district of birth, permanent residence address, temporary residence address, citizenship, record of restriction of legal capacity, type and number of identity document, issuing authority, date of issue and validity of the identity document, and

2. further data from documents proving and substantiating the data referred to in letter a).

(2) For the purposes of ascertaining, verifying and controlling the identification of clients and their representatives, for the purposes of preparing, concluding and executing transactions with clients and for the further purposes referred to in paragraph 3, a bank and a branch of a foreign bank shall be entitled to require from the client and his representative, in each transaction, data in the scope according to paragraph 1 and to repeatedly obtain them in each transaction by the method referred to in paragraph 1 letter b), and it shall also be entitled, without the consent and information of the client or the client's representative, when concluding and executing a transaction via the telephone service of electronic communications, to process for these purposes also biometric data of the client or the client's representative in the scope of the voice biometric characteristic. The client and the client's representative shall be obliged to comply with any such request of the bank and the branch of a foreign bank.

(3) For the purposes of identifying, verifying and checking the identification of clients and their representatives, for the purposes of concluding and executing transactions between a bank or a branch of a foreign bank and their clients, for the purpose of protecting and asserting the rights of a bank or a branch of a foreign bank vis-à-vis their clients, for the purpose of documenting the activities of a bank and a branch of a foreign bank, for the purposes of performing supervision over banks and branches of foreign banks and over their activities, and for the fulfilment of the tasks and obligations of banks and branches of foreign banks under this Act or special regulations 88c)

a bank and a branch of a foreign bank are, even without the consent and information of the data subjects 88d)

entitled to ascertain, acquire, record, store, use and otherwise process 88e) personal data and other data to the extent under paragraph 1, § 91 para. 1, § 38 para. 3 and § 92a; in doing so, a bank and a branch of a foreign bank are entitled, using automated or non-automated means, to make copies of identity documents and to process birth numbers 88f) and other data and documents to the extent under paragraph 1, § 91 para. 1, § 38 para. 3 and § 92a.

(4) The data to which paragraphs 1 to 3, § 91 para. 1, § 38 para. 3 and § 92a relate, a bank and a branch of a foreign bank are obliged, even without the consent and information of the data subjects 88d)

to make available and provide 88g) for processing to other persons designated by law only under the conditions laid down by this Act or a special Act 88h) and to the National Bank of Slovakia for the purposes of keeping the register of bank loans and guarantees and exercising its powers, supervision and activities under this Act and special Acts. The data to which paragraphs 1 to 3, § 91 para. 1 and § 92a relate and which are recorded in the register of bank loans and guarantees, the National Bank of Slovakia is entitled to process and from its information system to make available and provide 88g) to banks and branches of foreign banks for the purposes under paragraph 3.

(5) The data to which paragraphs 1 to 3, § 91 para. 1, § 38 para. 3 and § 92a relate, a bank and a branch of a foreign bank are, even without the consent and information of the data subjects 88d), entitled from its information system to make available and provide 88g) only to persons and authorities to which it has a statutory obligation to provide or to which it is entitled by law to provide

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information protected by banking secrecy, and only when providing and only to the extent of providing information protected by banking secrecy.

(6) The data to which paragraphs 1 to 3, § 91 para. 1, § 38 para. 3 and § 92a relate, a bank and a branch of a foreign bank may make available or provide abroad only under the conditions laid down in a special Act 88i) or if so provided by an international treaty by which the Slovak Republic is bound and which takes precedence over the laws of the Slovak Republic.

(7) The premises of a bank, a branch of a foreign bank and the National Bank of Slovakia and ATMs and currency exchange machines not located in the premises of a bank or a branch of a foreign bank may be monitored by means of video recording or audio recording even without marking the monitored area, 88ia) whereby the recording made may be used for the purposes of detecting criminal offences, identifying and tracing their perpetrators, in particular for the purposes of protection against money laundering and terrorist financing, detecting illegal financial operations, court proceedings, criminal proceedings, proceedings on offences and supervision over the fulfilment of statutory obligations of banks and branches of foreign banks. 88ia) This video recording or audio recording shall be provided, if it is recorded, by the bank, branch of a foreign bank or the National Bank of Slovakia without delay to the authorities referred to in § 91 para. 4 letters b), g)

and o) at their request. If the recording made is not used for these purposes, the person who made the recording shall destroy it without delay after the expiry of thirteen months after the day on which the recording was made. 88ia)

(8) A bank is authorised to process personal data of clients and other data subjects for the purposes of assessing the risks associated with an intended transaction between the client and the bank to the extent referred to in paragraph 1 letter a). Part of the prior approvals of the National Bank of Slovakia under § 30 is a decision of the National Bank of Slovakia on whether the personal data processed, which the bank defined in its application for the granting of a prior approval, correspond in their scope, content and manner of processing or use to the purpose of their processing, whether they are compatible with the given purpose of processing, whether they are necessary for achieving the purpose, or whether they are temporally and materially outdated in relation to this purpose.

§ 93b

(1) Banks and branches of foreign banks are obliged to offer their clients an irrevocable proposal for the conclusion of an arbitration agreement 88j) that their possible mutual disputes arising from transactions [§ 5 letter i)] will be decided in arbitration proceedings by a permanent arbitration court established under a special act, 88k) in such a way that the client has the possibility of choosing whether to accept or not to accept the submitted proposal for the conclusion of an arbitration agreement. When submitting the proposal for the conclusion of an arbitration agreement, the bank and the branch of a foreign bank are also obliged to demonstrably instruct the client about the consequences of concluding the proposed arbitration agreement on the resolution of their mutual disputes arising from transactions.

(2) Banks and branches of foreign banks are obliged to submit the proposal for an arbitration agreement under paragraph 1 to their clients no later than at the conclusion of a transaction to which an already concluded arbitration agreement does not apply. The client is not obliged to accept the proposal for an arbitration agreement submitted under paragraph 1; if the client does not accept the proposal for an arbitration agreement submitted under paragraph 1, any disputes arising from a transaction with such a client shall be resolved in accordance with special regulations. 88l)

(3) The provisions of § 93a shall apply equally to a permanent arbitration court established under a special act, 88k) namely for the provision, acquisition, making available and processing of data for the purposes of proceedings and decision-making of this permanent arbitration court on disputes between clients and their banks and branches of foreign banks and also for the purpose of documenting the activities of this permanent arbitration court. However, this permanent arbitration court shall make available and provide 88g) the data covered by § 93a paras. 1 to 3, § 91 para. 1, § 38 para. 3 and § 92a only to the National Bank of Slovakia

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 151 for the purposes of exercising its competence, supervision and activities under this Act and special acts and only to the parties to the arbitration proceedings before this permanent arbitration court to the extent necessary for the purposes of the arbitration proceedings. 88m)

PART FIFTEEN PROCEEDINGS BEFORE THE NATIONAL BANK OF SLOVAKIA § 94

(1) Proceedings and decision-making in matters entrusted to the National Bank of Slovakia by this Act shall be governed by a special act, 89) unless this Act or a special act 89a) provides otherwise.

(2) The National Bank of Slovakia shall decide at first instance on an application under § 30 to 32 within nine months of the delivery of a complete application and on an application for the granting of approval for an amendment to the articles of association under § 9 para. 4 within 30 days of the delivery of a complete application and on an application for the granting of prior approval for the election, appointment, nomination and designation of persons under § 9 para. 4 within two months of the delivery of a complete application. The application for the granting of approval or prior approval under § 9 para. 4 shall be submitted by the bank. The application for the granting of prior approval for the election or appointment of members of the statutory body of the bank or for the election or appointment of members of the supervisory board of the bank, or for the designation of senior employees may also be submitted by a shareholder with a qualifying holding in the bank, if the election and dismissal of these members falls within the competence of the general meeting and if it concerns a senior employee and his or her position is connected with the position of a member of the statutory body of the bank.

(3) If necessary, the National Bank of Slovakia in proceedings under paragraph 2 may, before issuing a decision in the matter, verify the fulfilment of the conditions directly in the bank. An official record shall be drawn up on the verification of the fulfilment of the conditions under the first sentence. The official record shall capture a description of the factual state, an assessment of the fulfilment of the conditions under the first sentence, any deficiencies in the application, if identified, the time limits and conditions for remedying the deficiencies in the application or a call for supplementing the application and other related necessary facts.

(4) If the decision on the granting of prior approval under § 30 to 32 is tied to the fulfilment of the conditions stated in the operative part of this decision, the bank is obliged to demonstrate the fulfilment of these conditions to the National Bank of Slovakia within the time limit and to the extent determined by the National Bank of Slovakia.

If the fulfilment of these conditions is not demonstrated within the determined time limit or to the determined extent, the National Bank of Slovakia shall amend or revoke the decision. If different time limits are set for individual conditions in the operative part of the decision, the bank is obliged to demonstrate to the National Bank of Slovakia the fulfilment of these conditions within the respective time limits; otherwise, the National Bank of Slovakia shall revoke the decision due to failure to demonstrate the fulfilment of the condition whose fulfilment is to be demonstrated last in terms of the set time limits.

PART SIXTEEN COMMON, TRANSITIONAL AND FINAL PROVISIONS § 114a This Act transposes the legally binding acts of the European Union listed in the annex.

§ 114b

(1) The National Bank of Slovakia exercises in the Slovak Republic the scope and powers of the competent supervisory authority 13h) under a special regulation 30x) and under Commission delegated regulations issuing regulatory technical standards or Commission implementing regulations issuing implementing technical standards to the special regulation 30x) issued on a proposal from the European Supervisory Authority (European Banking Authority). 30zg) If a special regulation, 30x)

Commission delegated regulation issuing regulatory technical standards or implementing

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Commission regulation issuing implementing technical standards does not provide otherwise, the National Bank of Slovakia shall proceed in the exercise of this scope and powers mutatis mutandis in accordance with the provisions of this Act and special regulations. 90)

(2) The National Bank of Slovakia as the competent supervisory authority 13h) shall exercise the national options arising from the special regulation, 30x) shall determine the application of the relevant national options in the Slovak Republic and shall notify these national options to the Commission.

(3) By a measure, 23) which is issued by the National Bank of Slovakia and which is announced in the collection of laws, the requirements, limits, methods, levels, percentages, percentage shares, percentage values, coefficients, indicators or non-application of requirements for the implementation of Articles 4, 6, 8, 9, 10, 11, 15, 18, 19, 24, 27, 31, 49, 78, 79, 83, 84, 89, 95, 97, 99, 116, 124, 125, 126, 129, 151, 152, 164, 178, 179, 225, 243, 244, 282, 283, 284, 311, 315, 317, 327, 329, 352, 358, 366, 380, 382, 395, 396, 400, 412, 413, 415, 416, 420, 422, 425, 450, 458, 465, 467, 468, 471, 473, 478, 479, 480, 481, 493, 495, 496, 499 and Article 500 of Regulation (EU) of the European Parliament and of the Council

No. 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (OJ L 176, 27. 6. 2013).

§ 115 The protection of deposits placed in banks and in branches of foreign banks, including interest and other property benefits therefrom, is governed by a special regulation. 32)

§ 116 The provisions of this Act also govern legal relationships arising before the entry into force of this Act; however, the origin of these legal relationships, as well as claims arising from them before the entry into force of this Act, shall be assessed according to the previous regulations, unless this Act provides otherwise.

§ 117

(1) Banks that provided loans or to which claims from loans provided before 1

January 1990 have transferred, whereby these loans became classified due to the existence of a risk that the claims from them will not be repaid by the debtors properly and on time in their full nominal value, shall complete the process of restructuring their loan portfolio with the participation of the state, which began and was carried out according to the previous regulations.

(2) The bank referred to in paragraph 1 is entitled to be provided with special guarantees by the government or, on the basis of its authorization, by the ministry for the purpose of restructuring its loan portfolio.

(3) If the obligations of the bank referred to in paragraph 1, for which a special guarantee was provided under paragraph 2, are taken over by another legal entity, including a legal entity that is not a bank, the provided special guarantee shall pass together with the taken-over obligations and shall continue to apply to the taking-over legal entity.

(4) If the bank referred to in paragraph 1, within the process of restructuring its loan portfolio, assigns claims from loans to another legal entity, including a legal entity that is not a bank, the obligation under § 38 para. 1 shall apply to this legal entity. The bank referred to in paragraph 1 may, within the process of restructuring its loan portfolio, assign a claim to another legal entity even if the period of delay or other restriction laid down in § 92 para. 8 is not met.

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 153 § 118

(1) If a bank incurred a property loss after 1 February 1992 due to the mandatory provision of loans under legal regulations issued before 1 February 1992, the bank has the right to compensation for this property loss from the state budget, in the proven amount according to the loan agreements under the conditions laid down in paragraphs 2 and 3.

(2) The bank is obliged to notify the ministry of the expected amount of the property loss within the deadlines set for the preparation of the draft state budget for the following budget year.

(3) The ministry shall compensate the bank from the state budget for the property loss, which fulfilled the obligation under paragraph 2, in the actually proven amount, but at most up to the amount laid down by the state budget act for the respective year. The bank is obliged to prove the actual amount of the property loss to the ministry within five calendar days after the end of the calendar month, and the ministry shall transfer the compensation for the property loss to the bank within 15 days after its proof, unless they agree on other deadlines.

§ 119

(1) Proceedings initiated and not legally completed before the entry into force of this Act shall be completed according to the previous regulations, unless this Act provides otherwise. From the date of entry into force of this Act, deficiencies identified in the activities of banks, branches of foreign banks and other persons, which occurred under the previous regulations and in respect of which no proceedings were conducted under the previous regulations, shall be assessed and dealt with under this Act, if they are such deficiencies that are also assessed as deficiencies under this Act. However, from the date of entry into force of this Act, only such a measure to eliminate an unlawful state, a fine or a remedial measure may be imposed as is permitted by this Act. The legal effects of acts that occurred in the proceedings before the entry into force of this Act shall remain preserved.

(2) For time limits that had not yet expired on the day this Act enters into force, the provisions of this Act shall apply. If the previous regulations did not lay down time limits for issuing a decision or for performing other acts in proceedings commenced and not finally concluded before this Act enters into force, the time limits under this Act shall apply, beginning on the day this Act enters into force; if the previous regulations laid down longer time limits for performing these acts than this Act, the time limits under the previous regulations shall apply.

(3) Banks, branches of foreign banks and other persons shall, no later than within six months from the day this Act enters into force, bring their legal relationships with third parties arising in the performance of activities under the previous regulations into compliance with this Act; however, from the day this Act enters into force, no one may continue an activity the performance of which is contrary to this Act. Every bank shall also be obliged, within 12 months from this Act entering into force, to bring its articles of association into compliance with this Act; if a bank fails to bring certain provisions of its articles of association into compliance with this Act before the expiry of this time limit, those provisions shall cease to be valid on the day this time limit expires.

(4) Special conditions for the financing of mortgage loans and municipal loans for a period of at most two years from this Act entering into force may also be laid down by Národná banka Slovenska for a mortgage bank that holds a banking licence to carry out mortgage transactions as at the day this Act enters into force and that requests in writing that such special financing conditions be laid down.

§ 120

(1) A licence to operate as a bank granted to a bank or a branch of a foreign bank under

Page 154 Collection of Laws of the Slovak Republic 483/2001 Z. z.

the previous regulations, which is valid as at the day this Act enters into force, shall be deemed to be a banking licence granted under this Act. If activities that are not among banking activities under § 2(1) and (2) are stated in this licence, the banking licence to perform them shall expire to that extent from the day this Act enters into force.

(2) Implementing legal regulations issued under Act No. 21/1992 Zb. on banks, as amended, and valid as at the day this Act enters into force shall, until new implementing legal regulations are issued, be deemed to be implementing legal regulations issued under this Act.

§ 121

(1) The legal form of a bank established as a state monetary institution under the previous regulations shall be transformed into a joint-stock company under a special Act 1) by a decision of the founder of the state monetary institution being transformed on its transformation; this shall not apply to a state monetary institution whose entire property and enterprise are, before the expiry of the time limit under paragraph 2, settled by the procedure under a special regulation. 92) A decision on the transformation of a state monetary institution into a joint-stock company must contain in particular

a) trade name, registered office and identification number of the bank as a state monetary institution before the change of legal form,

b) trade name and registered office of the bank as a joint-stock company after the change of legal form,

c) the subject of business (activities) of the bank as a joint-stock company after the change of legal form; this subject of business (activities) may be defined to the maximum extent of the banking activities for which the state monetary institution being converted has been granted permission to operate as a bank at the time of the conversion,

d) the amount of the share capital of the bank as a joint-stock company after the change of legal form; this share capital shall be determined in the same amount as the amount of the contribution to the share capital of the state monetary institution before the change of legal form,

e) the number, type, nominal value, appearance and form of the shares into which the share capital of the bank as a joint-stock company after the change of legal form is divided in accordance with the provision of Section 2 (6),

f) the articles of association of the bank as a joint-stock company after the change of legal form, which form an annex to the decision on the change of legal form; in addition to the particulars laid down in a special regulation 25)

these articles of association must also contain the particulars laid down by this Act,

g) names, surnames, birth numbers and permanent residence addresses of the members of the statutory body of the bank as a joint-stock company after the conversion of the legal form, indicating the manner in which they act in its name,

h) names, surnames, birth numbers and permanent residence addresses of the members of the supervisory board of the bank as a joint-stock company after the conversion of the legal form.

(2) The founder of the state monetary institution shall draw up the decision pursuant to paragraph 1 without an invitation to subscribe for shares no later than six months from the effective date of this Act. An application for the registration of the conversion of the legal form of the state monetary institution into a joint-stock company shall be filed by the founder of the state monetary institution being converted; the annex to this application shall be the decision pursuant to paragraph 1, which replaces the deed of incorporation and the decisions of the founders upon the establishment of the joint-stock company without an invitation to subscribe for shares and which, for the purposes of entry in the Commercial Register, is a document of the facts to be entered in the Commercial Register concerning the conversion of the legal form of the bank as a state monetary institution into a bank as a joint-stock company. This conversion of the legal form and its effects shall take place on the day of registration of the relevant conversion in the Commercial Register, whereby all data on the conversion shall be entered in the Commercial Register as of the same day; from the effective date of this Act until this conversion, the existing provisions shall apply to the legal relations of the bank established as a state monetary institution.

(3) On the day of the conversion of the legal form pursuant to paragraphs 1 and 2, the contribution to the share capital

483/2001 Z. z. Collection of Laws of the Slovak Republic Page 155 of the bank being converted as a state monetary institution becomes the contribution of the state to the share capital of the converted bank as a joint-stock company, the state acquires the shares into which the share capital of the converted bank as a joint-stock company is divided, whereby all shareholder rights associated with the shares belonging to the state are exercised by the ministry.

(4) On the day of the conversion of the legal form under paragraphs 1 and 2, the authorization to operate as a bank that was granted at the time of the conversion to the converting bank as a state monetary institution shall pass in its entirety to the converted bank as a joint-stock company; the restriction under § 9 para. 1 shall not apply to this transfer; this authorization to operate as a bank shall be considered a banking authorization under this Act in accordance with the provision of § 120 para. 1.

(5) On the day of the conversion of the legal form under paragraphs 1 and 2, the sources of financing of the converted bank as a joint-stock company shall be

a) own resources consisting of share capital, funds and the economic result of the relevant year,

b) foreign resources consisting of temporarily usable foreign funds,

c) entrusted resources provided from the state budget.

(6) On the day of the conversion of the legal form under paragraphs 1 and 2 without liquidation, the assets, receivables, liabilities and other business assets of the converting bank as a state monetary institution shall pass in their entirety to the converted bank as a joint-stock company. The securing of receivables and liabilities of the converting bank as a state monetary institution shall remain preserved, including the state guarantee for liabilities arising on the basis of a decision of the relevant state authority, and also for liabilities arising on the basis of a decision adopted before the entry into force of this Act; all rights and obligations from this securing shall pass in their entirety to the converted bank as a joint-stock company on the day of the conversion of the legal form under paragraphs 1 and 2.