Decree-Law 20/2016, of april 20th

Decree-Law 20/2016, of April 20th has been published in the Portuguese Official Gazette and introduces the 41st amendment to the Legal Framework of Credit Institutions and Financial Companies (RGICSF), approved by Decree-Law 289/92, of December 31st, “aiming to grant to the credit institutions’ shareholders the possibility to regularly review the justification of the statutory limits concerning the exercise of voting rights”.

Decree-Law introduces a new Article 13-C in the RGICSF, which stipulates that:

• The maintenance or the repeal of the limits to the holding or exercising of voting rights of the credit institutions’ shareholders shall be subject to the approval of shareholders by way of a resolution at the general meeting, at least once every five years;
• The shareholders’ resolution, when proposed by the board of directors, is neither subject to any limits to the holding or exercising of voting rights, nor to any requirements for an aggravated quorum or majority as compared to the legal ones;
• The limits to the holding or exercising of voting rights in force automatically expire at the end of each five years period, if, until the end of the same period, the resolution is not adopted;
• The resolution concerning the maintenance of the applicable limits may be express or implied by rejecting the amendment or the repeal proposal.

Under the transitional provisions, the law provides that the general meetings of the credit institutions which the by-laws, at the time of the entry into force of this Decree-Law, set limits to the holding or exercising of shareholders’ voting rights, shall take place until 31 December 2016 and shall include on the agenda the decision about the maintenance or the repeal of those limits and this resolution, when proposed by the board of directors, follows the rule above mentioned.

If there is no valid and effective resolution, on 31 December 2016, on the matters in question, the limits to the holding or exercising of voting rights in force automatically expire on that date.

It should also be noted that these new regulations are neither applicable to mutual agricultural credit banks nor to savings banks.

This Decree-law enters into force on 1 July 2016.