The Financial Institutions Act, 2008 - Ministry of …

1 THE Financial Institutions ACT, 2008 Arrangement of SectionsPRELIMINARYS ection1. Short Interpretation. 3. Meaning of connected party and connected party group .4. Restriction on the use of certain IIGENERALPROVISIONS CONCERNINGREGULATION ANDSUPERVISION5. Objectives of Appointment of Prohibition against Draft regulations 12. Contravention of Amendment to Delegation and exercise of powers through Delegation of IIILICENSING OFFINANCIALINSTITUTIONS16. Restriction on business of Restriction on business of a Financial Licence for branch of foreign Financial Guideline for approved Application for Approval and issue of Annual Fees 23.

2 Revocation of Restriction of Notice of Restriction or Directions to Notification and confirmation of Mandatory revocation and restriction in cases of Information as to licensed Amendment of articles of incorporation and other False statements as to licensed IV DIRECTORS ANDMANAGEMENT33. Persons debarred from Restriction on voting power of Duties of Audit Annual Policies and procedures for transactions with connectedparties and Information systems for credit Internal controlsPART V RESTRICTIONS ANDPROHIBITIONS41.

3 Limits on credit Limit on credit exposures to connected Reporting contravention of credit exposure Limits on acquisition of shares and ownership interests by Approval for certain Restriction on dividends and requirement to maintain Limits on financing for shares held in Branches and representative Notification of new products and Restriction on an officer or employee of licensee acting asinsurance Misleading or objectionable Information not to be VIRESERVES AND OTHERREQUIREMENTS56. Statutory Reserve Fund. 57. Reserve Selective credit Central Bank may fix maximum of working Maximum Preference to Trinidad and Tobago securities, and fixing ofratio.

4 PART VIIINSPECTION, INVESTIGATION ANDWINDING-UP62. Duties of Inspector to report on Rules as to proceedings in Voluntary winding-up. iiiPART VIIIOWNERSHIP OFLICENSEES67. Restructuring of ownership may be Restructuring not required in certain Restriction on activities of Financial holding Requirements for Requirements for controlling Requirements for significant shareholder. 73. Acquisitions. PART IXACCOUNTS, AUDITORS ANDINFORMATION75. Submission of statements and other information to Publication of inactive Consolidated Financial statements to be submitted Power to require Report on credit Consolidated audited Financial statements to be open topublication and inspection.

5 81. Appointment of Notification in respect of Duties of auditor to report to Further duties of Protection of auditor and other persons XCOMPLIANCEDIRECTIONS ANDINJUNCTIONS86. Compliance Injunctive XIFACILITATION OFTRANSFERS ANDUNDERTAKINGS88. Vesting Order. 90. Supplementary provisions as to Transfers subject to stamp XIIPAYMENTSYSTEMS92. Restriction on operating payment Application for Suspension or withdrawal of licence. 96. Equal Oversight powers of the Central Inter-Institutional Notification of External No retroactive effect of External Definitive character of Use of Settlement and Enforceability of Financial CollateralArrangements.

6 And Enforceability of Close-out Substitution and toping-up of Financial Perfection of pledged Financial Enforcement of pledged Financial Collateral110. Private International Governing XIIIAPPEALS112. Jurisdiction to hear Procedure on Determination of Costs or expenses on XIVSUPPLEMENTARY116. Offences and Fraud on Jurisdiction and Exempted XVMISCELLANEOUS122. Offences and Penalties 123. Power of Central Bank to require Offence to suppress Revocation of permit or licence126. Refusal re licence or Alternate Dispute Resolution Transactions and rights Act No 18 of 1993 Act No.

7 49 of 1981 Commencement of section 52(2)(b).132. Chap 79:02 SCHEDULE SECOND SCHEDULE THIRD SCHEDULE FOURTH SCHEDULEFIFTH SCHEDULESIXTH SCHEDULESEVENTH SCHEDULEviiANACTto provide for the regulation of banks andother Financial Institutions which engage in the busi-ness of banking and business of a Financial nature, formatters incidental and related thereto and for therepeal of the Financial Institutions Act, 1993[ Assented to 19th December, 2008 ]First Session Ninth Parliament Republic of Trinidad and Tobago REPUBLIC OF TRINIDAD AND TOBAGOAct No. 26 of 2008 [ ]WHEREASit is enacted inter alia, by subsection (1) ofsection 13 of the Constitution that an Act to which thatsection applies may expressly declare that it shall haveeffect even though inconsistent with sections 4 and 5 ofthe Constitution and, if any such Act does so declare, itshall have effect accordingly.

8 And whereas it is provided by subsection (2) of thesaid section 13 of the Constitution that an Act to whichthis section applies is one the Bill for which has beenpassed by both Houses of Parliament and at the finalvote thereon in each House has been supported by thevotes of not less than three-fifths of all the members ofthat House:And whereas it is necessary and expedient that theprovisions of this Act shall have effect even thoughinconsistent with sections 4 and 5 of the Constitution:ENACTEDby the Parliament of Trinidad and Tobago asfollows: PART Act may be cited as the Financial InstitutionsAct, (1) In this Act acquirer means a Financial entity or asignificant or controlling shareholder of afinancial entity that either alone or with anaffiliate, relative or connected party, isentitled to exercise ten per cent or more ofthe voting power at any general meeting ofa licensee; advertisement includes every form of adver-tising whether in a publication, or bydisplay or notices, or by means of circularsInterpretationShort titleEnactmentPreamble2No.

9 26 Financial Institutions2008or other documents, or by an exhibition ofphotographs or cinematographic films, orby way of sound broadcasting, television, ortelephonic, digital or electronic communi-cation, but does not include a prospectus asdefined in the Companies Act, issued by acompany, and references to the issue of anadvertisement shall be construed accord-ingly; affiliate , in relation to a given company ( C ),means (a)a company which is or has at anyrelevant time been (i) a holding company of C;(ii) a holding company of aholding company referredto in subparagraph (i); (iii) a subsidiary of a holdingcompany referred to insubparagraphs (i) or (ii); (iv) a subsidiary of C; or(v) a subsidiary of a sub-sidiary referred to in sub-paragraph (iv); and(b)where company C is a licensee, anycompany over which the licenseeand any connected party orconnected party group of thelicensee has control, and the word affiliation shall beconstrued accordingly; assigned capital in relation to a licensedforeign institution means the amount ofcash or approved securities deposited withthe Central Bank; No.

10 35 of 1995No. 26 Financial Institutions20083 attorney means the holder of a power ofattorney; bank means any institution which carries onbusiness of banking and business of afinancial nature; banking business or business of banking has the meaning assigned to thatexpression in section 16(2); Board means the Board of Directors of theCentral Bank as defined in the CentralBank Act; borrower group includes (a)a family group comprising anindividual and his spouse, parents,children, brothers or sisters whereeach member of the group issubstantially dependent upon thesame income sources;(b)a company in which the familygroup indicated in paragraph (a)has a controlling interest;(c)a company in which the familygroup indicated in paragraph(a)has a significant interest;(d)a group of companies which has acommon significant shareholder;(e)a group of companies which has acommon controlling interest.