Amendments To The Law On Banks In FBiH

The National Assembly of the Federation of Bosnia and Herzegovina adopted amendments to the Law on Banks, which most notably include the following:

• The Banking Agency of FBiH may refuse to issue an approval to acquire or increase a significant ownership share (i.e. 10%, 33%, 50% and 66.7%) in the capital of a local bank in case of poor financial condition of the applicant investor or poor financial condition of the investor's majority owner. The issuance of an approval may also be refused in the cases where the provided information cannot be verified or the investor has not provided proof of the origin of funds. In certain cases the Banking Agency may also revoke an already given approval as well as order the sale of the shares for which the approval has been revoked.
• Legal entities that have significant (as defined above) voting rights in a bank are obliged to inform the Banking Agency within 8 days of any changes related to their Management Board and Supervisory Board members, their statutory changes and the statutory changes of their majority owners.
• Private individuals with significant (as defined above) voting rights in a bank are obliged to inform the Banking Agency within 8 days of any changes to their already submitted data that is essential to significant voting rights position.

The amendments to the Law on Banks in Federation of Bosnia and Herzegovina have come into effect on 5 September 2013.

Impact on investors: Shareholders with significant voting rights must comply with new disclosure obligations to the Banking Agency of FBiH. The latter may now also refuse to approve the acquisition of such significant ownership on poor financial condition grounds, if unable to verify provided information or obtain proof of the source of funds.