Checklist for completing and submitting Bank Licence Applications

Transcription

1 2016 Checklist for completing and submitting Bank Licence Applications

2 1 completing and submitting Bank Licence Applications Checklist Contents 1. Details of the Applicant 2 2. Overview of the Parent/Group 2 3. Regulatory Supervision 4 4. Ownership Structure 5 5. Objectives and Proposed Operations 6 6. Legal Structure 7 7. Organisation of the Applicant and Governance Arrangements 7 8. Risk Oversight 9 9. Capital, Funding and Solvency Financial Information and Projections IT/Business Continuity Plan Conduct of Business and Consumer Protection Other Declaration Appendix 1 Ownership by an Industrial/Commercial group Appendix 2 Shareholder Details Appendix 3 Definition of Banking Business Appendix 4 Capital Contributions 23

3 Checklist for completing and submitting Bank Licence Applications Notes: Checklist 2 Complete all sections of this checklist. Insert the relevant section number, from the proposal, in the column of boxes entitled Applicant. (The last column is for Central Bank use only.) Where the checklist states confirm a will be accepted as a confirmation. If a question is not applicable then this should be indicated. Where the required confirmation/documentation/information is not provided with/in the initial proposal please refer to this in the covering letter indicating the proposed submission date thereof in the covering letter. (Delays in submitting required confirmations, documentation and/or information will have negative implications for licensing timeframes). This checklist is not to be used for authorisations under section 9A of the Central Bank Act, 1971 for which a separate checklist is to be used. Applicant Central Bank 1.0 Details of the Applicant 1.1 Supply full name and address (including country and post box). 1.2 Provide the contact details of a principal who will accept receipt of any correspondence from the Central Bank in respect of the proposal (i.e. name, address, post box, telephone, fax and e- mail details). 1.3 Provide contact details of professional advisors in relation to the credit institution licence proposal (if applicable), (i.e. name, address, telephone, fax and details). 1.4 Confirm that the Central Bank can liaise with the named professional advisors (at 1.3) in respect of the licence proposal. 1.5 Details of Trade Register 1.6 Details of any trading names used. 2.0 Overview of Parent/Group Provide: 2.1 Full name and address (including country and post box) of parent/group. 2.2 Brief history/background of parent/group.

4 Checklist 3 completing and submitting Bank Licence Applications 2.3 Overview on the ownership and structure of parent/group. 2.4 Is the ownership vested in an industrial or commercial group? Yes/ No If yes, please refer to Appendix 1 for further requirements and outline in the application how the applicant will comply with these requirements. 2.5 Is the applicant a subsidiary of: a) An international bank; b) An international banking group; c) A financial conglomerate; or d) Other (provide details). Yes/ No Where applicable, (i) Confirm that the supervisory authority in the country of origin of that bank or group i.e. the Home Country Supervisory authority, exercises effectively its supervisory responsibilities on a consolidated basis; and (ii) Confirm that the applicant has obtained the prior written consent of its home country supervisory authority to establish a subsidiary in Ireland (a copy of this consent must be provided by the applicant when submitting its initial proposal to the Central Bank). 2.6 Provide the organisation chart of the parent/group outlining: a) the legal structure of each of the entities concerned (i.e. whether the entities are incorporated, limited liability companies, unlimited liability companies, etc.); b) the percentage holding of each shareholder; and c) details as to where the applicant will be positioned in the group. In relation to the parent/group provide: 2.7 Information on industry ranking, size of parent on local and global scale. 2.8 Main activities/lines of business. 2.9 Details of main areas of global activity of parent/group Details of main areas of EU activity of parent/group.

5 Checklist for completing and submitting Bank Licence Applications 2.11 Details of all existing operations in Ireland, if any. The following information should be provided in respect of each of the existing Irish operations: 4 a) A description of the activities being carried out by each of the the entities; b) Details as to whether the operations are supervised by the Central Bank or any other regulatory authority; and c) Internal audit reports on the Irish operation(s). (Where greater than five internal audit reports have been prepared in the last financial year, a summary of the internal audit reports will suffice.) 2.12 Comment on the association of the applicant with: a) existing Irish operations; and b) other group operations providing details of any proposed links between existing operations (including Irish operations) and the applicant (setting out any interaction which the applicant will have with the existing operations including proposed timeframes for mergers of operations and group reorganisation, if applicable) Financial standing detail for parent/group i.e. summary (in tabular format) for the last five years of: a) Income and Profitability; b) Balance Sheet; c) Asset Quality; d) Capital Adequacy; and e) Leverage External Debt ratings for parent/group; e.g. Moody s, Fitch and S&P credit rating of parent bank/group and commentary thereon (this should include details of any upgrades/downgrades in the last 3 years and reasons therefore) Confirm that the board of the parent has approved the submission of the application for establishment of a credit institution to the Central Bank. (A certified copy of the board minute confirming that the parent has consented to the establishment of the applicant should be submitted.) 3.0 Regulatory Supervision 3.1 Provide contact details in respect of the group/parent s Home Regulator(s)/Supervisor(s). 3.2 Details of regulatory supervision/permissions (current/former) Yes/ No

6 5 completing and submitting Bank Licence Applications Checklist 3.3 Has the parent/group applied to establish a regulated entity, (over the last 5 years) in any other jurisdiction, which was either withdrawn or refused? 3.4 Has the parent/group been subject to an investigation into regulatory breaches and/or allegations of fraud, misconduct or malpractice by any regulatory authority (over the last 5 years) in any other jurisdiction? 3.5 Has the parent/group or any of its directors/senior Managers/executives, been censured or disciplined by any regulatory body further to its professional activities? 3.6 If yes in relation to provide full details thereof. 4.0 Ownership Structure 4.1 Provide details of a) All direct holders of shares or other interests in the applicant; and b) All indirect holders of shares/interests (where the holding/interest represents 10% or more of the capital or of the voting rights of the applicant (i.e. qualifying shareholder). (Clearly outline whether there are any holding companies involved in the ownership structure the rationale for such a structure should be provided). 4.2 Confirm that Appendix 2 has been completed (and the required supporting documentation is attached) in relation to each shareholder identified in 4.1(a) and (b) above. Confirm that: 4.3 The applicant is independent of dominant interests; and 4.4 The beneficial ownership of the credit institution is such as will ensure capacity to provide such new capital for the credit institution as may be required in the future. (A letter of comfort is required from the parent confirming that the subsidiary (insert applicant s name) will be in a position to meet its liabilities as they fall due for as long as the Yes/ No Yes/ No Yes/ No

7 Checklist for completing and submitting Bank Licence Applications parent/shareholder (insert relevant name) continues to hold the majority of the equity of the (name of applicant). 6 Please ensure that this letter is signed by the Chief Executive Officer of the parent/group/majority shareholder. The applicant is also required to provide to the Central Bank with a certified copy of the minute from the relevant board meeting approving the provision of this letter of comfort. 4.5 Demonstrate that there will be cohesion, continuity and consistency in the manner in which the business of the credit institution is directed by its owners. 5.0 Objectives and Proposed Operations 5.1 Clearly set out: a) The objectives; b) Full details of the applicant s proposed banking business which must include a description of all products/services that will be offered, anticipated customer base, senior staff responsible for product types, etc. (See Appendix 3 for definition of Banking Business ); and c) Other proposed area(s) of activity of the applicant; (ensuring that they are consistent with the principles enshrined in banking legislation). The proposal should be specific as to the activities, which the applicant proposes to carry out if granted a licence. In addition, the proposal should include confirmation as to which of the activities detailed in Annex 1 of CRD IV (Directive 2013/36/EU) will be undertaken by the applicant. The proposal should also specify in which EEA Member States it intends to undertake those activities. (In general, the Central Bank would expect that a proven track record in accordance with the original business plan would have to be displayed before a newly licensed credit institution could amend/expand its business lines). The following should also be included: 5.2 Rationale for seeking a banking licence and establishing in Ireland. 5.3 Detailed information on the sources of funding for the applicant (e.g. deposits, etc.). 5.4 If applicable, an overview of market research which has been undertaken regarding the establishment of a credit institution and its proposed activities. 5.5 Overview of the applicant s distribution network for products/services.

8 7 completing and submitting Bank Licence Applications Checklist 5.6 Likely sources of new business/future business activities for the applicant. 5.7 Details of the applicant s new product approval process. 5.8 Will the applicant be operating a Trading Book (as defined in point 86 of Article 4(1) of Regulation (EU) No 575/2013)? If yes, confirm that details thereof are included in the proposal. 6.0 Legal Structure 6.1 Confirm that the applicant will be registered in Ireland and subject to Irish law. 6.2 Outline the full legal structure of the applicant, i.e. limited company, unlimited company, etc. 6.3 If the applicant has a legal structure other than a limited company, please outline the rationale for using a different structure. 6.4 Confirm that the following documentation accompanies this checklist: a) A certified copy of the Certificate of the Incorporation of the applicant (and Certificate of Name Change if applicable). (A certified document is one that is stamped, signed and dated as being a true copy of the original at a particular date in time by a party independent of the applicant. Please note that the certification stamp must be present on the relevant document.) b) A draft copy of the Memorandum and Articles of Association of the Applicant. (The certified final copy will be required upon licensing of the applicant.) (It is the applicant s responsibility to ensure that the scope of its Memorandum of Association is sufficiently wide to carry out its proposed activities.) c) Latest audited accounts where the applicant is incorporated in excess of 18 months. Yes/ No 7.0 Organisation of the Applicant and Governance Arrangements Credit Institutions shall manage their business in accordance with sound administrative and accounting principles and shall put in place and maintain internal control and reporting

9 Checklist for completing and submitting Bank Licence Applications arrangements and procedures to ensure that the business is so managed Demonstrate how heart and mind will be present in Ireland. (The day-to-day operations must be conducted within the State.) 7.2 Board of Directors Provide details of the proposed board of directors, specifically identifying: a) Executive directors; b) Non-executive directors Group; c) Non-executive directors Independent 1 ; d) Proposed frequency of board meetings and location; and e) Potential conflicts of interest if any, including details of how they will be addressed. 7.3 Applicant s Governance Arrangements Provide: a) Organisation chart of the applicant s corporate governance structure; b) Details of all management committees and members, e.g., Credit Risk Committee; Audit Committee; Asset and Liability Committee; Risk and Compliance Committee; Remuneration Committee; Nomination Committee; and Other relevant committees. Details should include: composition thereof; frequency of meetings; general responsibilities/terms of reference; reporting lines; and details of sub-committees (if applicable). Senior Management/ Other Staff 7.4 Include detailed organisation chart for applicant. 7.5 Provide details of organisation structure/management team (to include the Compliance Officer and Money Laundering Reporting Officer), i.e. job titles, responsibilities, reporting lines, etc. 7.6 Confirm that a completed Individual Questionnaire in respect of each of the applicant s Pre-approval Controlled Functions with original signatures of the parties in question is attached. 7.7 Confirm that appropriate due diligence has been conducted in 1 A minimum of two independent non-executive directors is required.

10 9 completing and submitting Bank Licence Applications Checklist relation to all Controlled Functions and that they have agreed to abide by the Fitness and Probity Standards. (Please refer to the Fitness and Probity requirements available on the Central Bank s website.) 7.8 Outline the projected staffing requirements over the next 5 years of the applicant (broken down on a yearly basis). 7.9 Disclose details of the applicant s: a) Secretary; b) Bankers; c) Legal firm; and d) External Auditor. 7.8 Provide details of Remuneration Policies as required by Articles 92 to 96 Of CRD IV 8.0 Risk Oversight 8.1 Audit Detailed information is required in respect of the following key functions: The applicant is required to have a properly staffed internal audit function in place which has direct access to the board of directors, or an appropriate sub-committee of the board that reports to the board. Outline the role of internal audit. Include details of whether internal audit will be outsourced to parent or carried out locally. Outline expected frequency of internal audits. Confirm that the internal audit function will be independent of the operational activities of the applicant. Where the internal audit function is outsourced to the Group Audit Function: Confirm that the Audit Committee/Board of the applicant will have the right to request certain audits to be conducted notwithstanding the existence of a risk based audit approach at group level. 8.2 Compliance Indicate who will be responsible for the compliance function.

11 Checklist for completing and submitting Bank Licence Applications Set out compliance reporting lines, processes, key compliance responsibilities, etc. 10 Confirm that the compliance officer will be independent of the operational activities of the applicant. 8.3 Risk Management Outline the scope of the risk management function. Identify the major risks that the applicant faces, and detail how the applicant proposes to monitor, manage, control and report on each of these risks (in relation to each of its proposed business lines). Describe the applicant s definition of material risk. In doing so, please describe how a risk is determined to be non-material, the role of the applicant s board in reviewing this definition and the role of senior management in developing the definition. (Please refer to 9.2(b) below in relation to the ICAAP.) Demonstrate that comprehensive risk management systems commensurate with the scope, size and complexity of the applicant s activities, including derivatives and associated risks, will be in place, incorporating: - Continuous measuring, monitoring and controlling of risk; - Accurate and reliable management information systems; - Timely management reporting; and - Thorough audit and control procedures. Where the applicant is involved in a fiduciary capacity in the management of clients funds ensure that the possible risks to the applicant arising from such activities are adequately assessed and provided for. Confirm that the risk management function will be independent of the operational activities of the applicant. 8.4 Treasury Outline the treasury activities of the applicant and include information on the management of liquidity and funding. Submit copy of the Market Risk Policies. 8.5 Financial Control Detail the remit and staffing of the financial control function (including projections on compliance with prudential reporting requirements), the reporting lines of the financial control function, the key reports utilised and the frequency of reporting.

12 11 completing and submitting Bank Licence Applications Checklist 8.6 Credit Submit a copy of the applicant s policy relating to the management and control of lending (this should include policies relating to credit assessment, credit review, credit provisioning and the monitoring and control of large exposures). Comment on the projected level of large exposures and compliance with the large exposures requirements. Please ensure that the credit policy reflects the Central Bank s requirements in relation to prudent provisioning for loan losses as detailed in the Regulatory Document, dated 26 October 2005, on Impairment Provisions for Credit Exposures. 8.7 Internal Controls/ Policies Provide full details of the internal control procedures. (Applicants must ensure that adequate measures are in place regarding lending authorities, segregation of duties, procedures etc.) 8.8 Anti-Money Laundering Procedures Provide details of anti-money laundering and counterterrorist financing policies and procedures and the manner in which such policies and procedures comply with the requirements of the Criminal Justice Acts 2010 and Conflicts of Interest Provide full details regarding the possible conflicts of interest arising in the conduct of the different types of activity under the applicant s control, demonstrating that adequate arrangements have been made to protect the interests of clients. Confirm that, where a conflict of interest does arise, the applicant is capable of complying with the relevant requirements e.g. Consumer Protection Code, MiFID etc Liquidity a) Submit the applicant s policy for the management of liquidity and funding. This should be consistent with, and incorporate, the provisions of Regulation (EU) 575/2013 and Directive 2013/36/EU, as well

13 Checklist for completing and submitting Bank Licence Applications as the Requirements for the Management of Liquidity Risk document (June 2009) issued by the Central Bank. b) Is the applicant intending to apply for a derogation from the application of the liquidity requirements on an individual basis under Article 8 of Regulation (EU) 575/2013? c) Provide projected liquidity coverage ratio (LCR) for the first five years of operation. Yes/ No 12 d) Provide projected maturity mismatch calculations for the first year of operations Outsourcing Outsourcing proposals should comply with the EBA Guidelines on Outsourcing (December 2006). The following information should be included as part of the application: a) Full details of any outsourcing by the applicant to both affiliates and third parties. (Transaction flow charts for the activities involving outsourcing may be required, i.e. details of the interrelationships of the various entities, timings, etc.) b) Scope of activities to be outsourced (outlining whether suboutsourcing is permitted); c) Value of contracts to be outsourced; d) Number of employees involved in the entities providing outsourcing; (A detailed breakdown should be provided showing the position initially, and projected figures for the first five years on an annual basis (if applicable).) e) Exit strategies/ contingency plans in place; f) Measures the applicant has in place in respect of the oversight of the outsourced service (including the identity of the individual responsible) and measures to ensure compliance with statutory and other regulatory requirements e.g. Codes of Conduct); g) Confirm that the outsourcing service provider will provide access to the Central Bank and the applicant to: (i) Employment records in respect of persons providing services to the applicant; and (ii) Books, records and other documents in respect of the activities of the applicant that have been outsourced;

14 13 completing and submitting Bank Licence Applications Checklist h) Confirm that Service Level Agreements ( SLA ) will be in place in relation to material outsourcing contracts (submit copies of each SLA in relation to material outsourcing contracts); and (i) Confirm that the outsourcing service provider will permit the applicant to conduct audits. Other 8.12 Set out details of reporting lines of the applicant to the group. 9.0 Capital, Funding and Solvency 5 year projections are required in all instances where projections are referred to. 9.1 Capital Provide full details of proposals in relation to: Set out full details of: a) The capitalisation of the applicant (at time of submission of the proposal) and projected figures for licensing date (if changes planned) - splitting it between share capital, capital contribution, etc.; (Initial capital in the form of paid up shares must not be less than 5.0 million.) b) Projected Solvency Ratio; and c) Where capital contributions are provided for please confirm that the Central Bank s standard format is utilised (as per Appendix 4). d) Subordinated debt (if applicable) The draft subordinated loan agreement should be submitted for review and be accompanied by a legal confirmation re compliance with Article 63 of Regulation (EU) No.575/2013 (as applicable). 9.2 Capital Requirements Directive IV a) Indicate the approaches being utilised in relation to:

15 Checklist for completing and submitting Bank Licence Applications Credit Risk Market Risk; and Operational Risk. 14 (The applicant should discuss its approaches for calculating the capital to be held for the above risks at the first meeting with the Central Bank.) b) The Internal Capital Adequacy Assessment Process ( ICAAP ) The ICAAP is a formal and dynamic process that forms an integral part of the management process and decision-making culture of the institution. Applicants are reminded of the requirements that Article 73 of 2013/36/EU place on credit institutions. Should the applicant s licence application be successful, the Central Bank will be in contact within the twelvemonth period subsequent to the issuance of the licence to discuss the supervisory review of the applicant s ICAAP. Confirm that the applicant has a process in place for assessing its overall capital adequacy in relation to its capital levels. Provide the contact details of the person within the applicant for queries on the ICAAP (i.e. name, address, telephone, fax and e- mail details) and include an outline of the role and reporting line of this contact individual. c) Confirm that a breakdown of the capital required in relation to each of the approaches at 9.2(a) is provided (i.e. for each of the separate risk types, under the approach, over at least a fiveyear period). Capital projections should also be provided for risks to be considered under Pillar Solvency Projections Supply projected Core Equity Tier 1, Tier 1 and Total Capital Ratios: on a consolidated basis (if applicable);and for the applicant credit institution on a solo basis. 9.4 Funding Set out full details of: a) The funding policy of the applicant, ensuring a widely spread funding base; and b) Whether there will be any initial reliance on funding from the parent institution and an estimate of the time-span for the applicant to be independent of the parent from a funding perspective.

16 15 completing and submitting Bank Licence Applications Checklist 10.0 Financial Information and Projections 10.1 Provide audited accounts in respect of the group for the last 3 years. a) Disclose reporting currency and basis of preparation (IFRS or local GAAP) The following, projected, financial information is required in respect of the applicant s proposed activities (projected figures are required for 5 years): b) Projected Income Statement (including notes to the accounts) ; c) Projected Balance Sheet (including notes to the accounts); d) Prudential Ratios & Capital Structure; and e) Projected Key Financial Indicators (e.g. Return on Earnings, Cost/Income, etc.,) a commentary thereon should be provided Stress test of financials assuming a down turn (recession), e.g., if the entity suffered a drop in revenue or if there is an increased cost of funds IT/ Business Continuity Plan Provide details of: 11.1 All IT systems to be used in relation to front and back office operations; 11.2 The main IT service providers and back up IT service providers; and 11.3 The business continuity plan Conduct of Business and Consumer Protection 12.1 Confirm that: The applicant has and employs effectively the resources, policies and procedures, systems and control checks, including compliance checks, and staff training that are necessary for compliance with the consumer protection and conduct of

17 Checklist for completing and submitting Bank Licence Applications business requirements 2 to be applied to the regulated activities of the applicant from the proposed date of commencement of operations Minimum Competency Requirements Are persons exercising a controlled function or a pre-approval controlled function on a professional basis, the exercise of which includes the following: Yes/ No providing advice to consumers on retail financial products; arranging or offering to arrange retail financial products for consumers, including any amendments to insurance cover and the restructuring or rescheduling of loans; or the exercise of a specified function. (as set out in the Minimum Competency Code issued by the Central Bank) If applicable; I hereby confirm that the applicant is satisfied that the persons exercising a controlled function or a pre-approval controlled function on a professional basis, the exercise of which includes the following: providing advice to consumers on retail financial products; arranging or offering to arrange retail financial products for consumers, including any amendments to insurance cover and the restructuring or rescheduling of loans; or the exercise of a specified function. comply with the Standards and has agreed to abide by the Standards (as set out in the Minimum Competency Code 3 issued by the Central Bank) and the relevant individuals in the firm will comply with the minimum standards as set out in the Minimum Competency Code on an ongoing basis. 2 Full details available on Central Bank website 3 Full details available on the Central Bank website

18 17 completing and submitting Bank Licence Applications Checklist If not applicable; I hereby confirm that there are no individuals so acting and should there be in the future, the applicant will comply with the requirements set out in the Minimum Competency Code issued by the Central Bank Recovery and Resolution Provide details of Recovery and Resolution plans in the event of a significant deterioration in its financial position Other Confirm that: 14.1 Participation in the Irish payments and settlements systems a) Is the applicant participating directly or indirectly? (If indirectly provide details thereof.) b) Provide details of the risks to its business arising from participation in payments and settlements systems and procedures in place to minimise these risks Provide details of the fidelity guarantee insurance in place for all staff (or details of the alternative arrangements for consideration by the Central Bank) Location set out details of the applicant s: a) Initial Infrastructure Plans; and b) Future/Permanent Plans Please confirm that the applicant has considered the relevant legislation, corporate governance arrangements, liquidity and solvency ratios, large exposure requirements, shareholders interests, and other requirements as set out in the Central Bank s guidelines and publications, in preparing this application and is satisfied that the applicant is capable of meeting the necessary requirements Provide any other information relevant to the application Please confirm that you are aware that your firm will be legally obliged under the Investor Compensation Act, 1998 to make an annual contribution to the Investor Compensation Scheme. Details can be found at If the applicant firm or any person associated with the application was previously authorised/registered with the

19 Checklist for completing and submitting Bank Licence Applications Central Bank, confirm whether any contributions that were due under the following were discharged in full; (a)industry Funding Levy (b)investor Compensation Scheme The Central Bank will provide your industry correspondence details (including addresses), authorisation status, and other relevant information to the Investor Compensation Company DAC (the ICCL ) in order to allow the ICCL fulfil its statutory obligations and objectives The Central Bank may obtain information from the ICCL in respect of your annual contribution and participation in the Investor Compensation Scheme including information in respect of non-payment of contributions. DECLARATION I confirm that I am authorised by the applicant to make this banking licence application on its behalf; The information set out in the proposal and supporting documentation is complete, correct and accurate; and There is a willingness and a capacity on the part of the applicant to comply with codes, prudential and legislative requirements applicable to credit institutions on a continuous basis. Signed: Name (in Print): Title: Name of Employer: Date:

20 19 completing and submitting Bank Licence Applications Checklist Provisions in this document should not be deleted nor amended in any manner. The Central Bank may, with the consent of the Minister of Finance, under the provisions of Section 11 of the Central Bank Act 1971, revoke a licence if the holder of the licence has obtained the licence through false statements or any other irregular means.

21 Checklist for completing and submitting Bank Licence Applications APPENDIX 1 20 In considering a proposal where ownership of a bank would vest in an industrial or commercial group, a range of additional considerations will apply, the more important of which may be summarised as follows: (i) (ii) (iii) (iv) (v) (vi) the Central Bank s assessment of the proposal will have regard to any additional risks arising from the ownership structure and, in particular, from relationships with non-bank elements of the group; the Central Bank will attach high importance to the degree of independence accorded to the applicant and to the degree of decision making to be located within the State; only groups of the highest integrity and financial soundness (as evidenced by their trading record and international credit rating) will be considered; unless there are exceptional factors that warrant special attention, the Central Bank will require as a condition of granting a licence that there already exists, for some time, within the group, a separate financial entity, with its own management and financing structures and with skills and experience appropriate to banking; in general, funding for the bank should not include small retail deposits; if there is to be any dependence on group funding sources, due regard will need to be had to the continuity of those sources; in general, the bank would not be permitted to provide credit to or acquire assets from affiliated companies; and (vii) the principles of consolidated supervision will be applied by the Central Bank to the applicant group in an appropriate manner.

22 21 completing and submitting Bank Licence Applications Checklist APPENDIX 2 Please complete the relevant section below in relation to Each direct shareholder; and Each indirect shareholder with a holding/interest of 10% or more in the applicant ( qualifying shareholder ) (Copy the relevant section where necessary if more than one shareholder.) (Where a (qualifying) shareholder does not meet one of the legal forms provided below, e.g. individual shareholders, please discuss the ownership structure with the Central Bank in advance of submitting the proposal.) Shareholder Company Disclose name of Shareholder. Where a shareholder is an incorporated entity, confirm that the company (i.e. shareholder) has submitted the following: a) Description of activities; b) Whether or not the company is regulated and if regulated, by which authority; c) Most recent audited accounts if applicable. If not available most recent management accounts should be submitted. d) Details of proposed interaction with the applicant; e) Documentation evidencing the fact that the company is the registered holder of the shares, i.e. certified copy of the share register; and f) Written confirmation that the company is the beneficial owner of the shares. Shareholder Nominee Company Disclose name of Shareholder. Where a company holds 10% or more of the shares in an applicant firm on behalf of third parties, confirm that the company has submitted the following details relating to the proposed nominee holders of the shares: a) Documentation evidencing the fact that the nominee is the registered holder of the shares, i.e. certified copy of the share register; b) Documentation evidencing the ownership of the nominee company, i.e. certified copy of the share register; c) Audited accounts of the nominee company; d) Identity of the beneficial owners of the shares; e) Details regarding what object is intended to be served by using such a nominee company, rather than holding the shares directly; and f) Appropriate declarations in respect of the nominee holding the shares in trust for the beneficial owners, including formal confirmation from the nominee itself that the relevant declarations of trust remain valid and in force.

23 Checklist for completing and submitting Bank Licence Applications 22 Shareholder Trusts Disclose name of Shareholder. Where a shareholder is a trust, confirm that the trustees have submitted the following: a) Documentation evidencing the fact that the trust is the registered holder of the shares, i.e. certified copy of the share register; b) Copies of the trust deed and any other documentation constituting the trust or relating to the trust in some other way including any supplemental or ancillary deeds, documents or agreements or side letters; c) Completed Individual Questionnaires for the settlers of the trusts; d) Completed Individual Questionnaires for the trustees of the trusts; e) Completed Individual Questionnaires for the beneficiaries of the trusts (including details of age for minors) and those of all persons who are within the class of prospective beneficiaries; f) Most recent audited accounts (if available) or other relevant financial information in relation to the trusts; g) Reasons for structure; h) A signed undertaking is required to ensure that the requirements of the legislation in relation to the shareholders are met on a continuous basis. The undertaking must contain provisions to provide the Central Bank with: advance notice of any acquiring transactions or disposals advance notice of any proposed change in the beneficiaries to the trust, the trust deeds, or the trust s governing law; and must be signed by all Shareholders including the trustee(s) and the applicant firm; and i) Legal opinion confirming the validity and efficacy of the undertaking as drafted to suit the circumstances of any particular shareholder trust. Shareholder Partnerships Disclose name of Shareholder. Where a shareholder is a limited liability partnership ( LLP ), confirm that the partners have submitted the following: a) Description of the LLP itself (including names of general and limited partners and details of respective roles); b) Descriptions of activities of the LLP; c) Whether or not the LLP is regulated and by which authority; d) Most recent audited accounts if applicable. If not available most recent management accounts; e) Details of proposed interaction with applicant; f) Documentation evidencing the fact that the LLP is the

24 23 completing and submitting Bank Licence Applications Checklist registered holder of shares (if this is the case) i.e. certified copy of the share register; g) Written confirmation that the LLP is the beneficial owner of the shares; and h) A copy of the partnership deed and any relevant agreement between the general and limited partners.

25 Checklist for completing and submitting Bank Licence Applications APPENDIX 3 24 Definition of Banking Business (Section 2(1) of the Central Bank Act 1971, as substituted by Schedule 3, Part 4 of the Central Bank and Financial Services Authority of Ireland Act 2004) Banking Business, in relation to a person, means any business that consists of or includes- a) receiving money on the person s own account from members of the public either on deposit or as repayable funds (whether or not the issue of securities or any other form of financial obligation is involved), and b) any other business of a kind normally carried on by a bank (which may include the granting of credits on own account), and c) any other business of a kind prescribed under subsection (2) for the purpose of this paragraph, but does not include such a business in so far as the business consists of or includes- (i) receiving money on deposit by a trader either from employees of the trader in relation to the trader s business, or from customers of the trader in the normal course of the trader s business, or (ii) receiving money in respect of leasing or selling goods under a hire-purchase agreement, a leasing agreement or credit-sale agreement, or (iii) receiving money as security or collateral or as a bond for the repayment of a debt or the performance of a contract related to goods or services, or (iv) receiving money accepted by way of advance or part payment under a contract for the sale, hire or other provision of goods or services, and repayable only in the event that the goods or services are not in fact sold, hired or otherwise provided, or (v) receiving money solely as a premium in respect of the issue or renewal of a life assurance policy issued by a holder of an authorisation under the European Communities (Life Assurance) Regulations 1984 (S.I. No. 57 of 1984), or (vi) receiving money accepted as a contribution within the meaning of the Pensions Acts, or (vii) receiving money where it can be shown that- (I) no part of the business activities of the person receiving the money or of any other person is financed wholly or substantially out of those funds, (II) and those funds are, in the normal course of business, accepted only on a casual or incidental basis, or (viii) receiving money under financial contracts (within the meaning of the Netting of Financial Contracts Act 1995) (which may include the acceptance of collateral).] and "banking" and cognate words shall be construed accordingly.

26 25 completing and submitting Bank Licence Applications Checklist Appendix 4 CAPITAL CONTRIBUTION This Agreement is made on [ ]. It is hereby agreed that [name and address of Contributor] (the Contributor) will contribute the sum of (the capital contribution ) to [name and address of Applicant] ( the Applicant ) on. 1. It is acknowledged that: a) The Applicant is authorised by the Contributor to deliver a copy of this Agreement to the Central Bank, and such delivery will constitute an acknowledgement and representation and confirmation to the Central Bank of the matters set out in this paragraph 1, and an acknowledgement of the requirement to obtain the consent of the Central Bank as set out in paragraphs 2 and 5, failing which the agreement and the capital contribution to which it refers shall cease to have any effect for capital adequacy purposes. b) The current financial position of the Contributor is not such as would or might cause the Contributor to seek a distribution by the Applicant under 2(c). c) If the Contributor has borrowed to provide the capital contribution, the terms under which such loan was granted are not such as would or might cause the Contributor to seek a distribution by the Applicant under 2(c) in order to meet its loan obligations. d) The making, and the receipt, of the capital contribution are within the respective (corporate) powers and objects of the Contributor and the Applicant. e) The Applicant and the Contributor have put the terms of this Agreement before their respective boards of directors, which have approved its terms, and such approval has been duly recorded in the official board minutes. 2. It is agreed that: a) The Applicant has no obligation to bear any servicing cost or transfer any economic benefits of any kind to the Contributor or any other person in return for the capital contribution. b) The Applicant has no obligation to repay the capital contribution.

27 Checklist for completing and submitting Bank Licence Applications c) The Applicant shall not distribute the capital contribution by way of dividend, on a winding up or in any other way or cause the amount of the capital contribution to be reduced without the prior written approval of the Central Bank If any of the provisions of this Agreement are or become invalid, illegal or unenforceable under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 4. This Agreement constitutes the entire agreement as to the making of the capital contribution and replaces and suspends all other agreements or proposals (if any) in relation to it. Any other terms existing at the date hereof and not comprised in this Agreement shall be of no further force and effect. 5. Any amendments to this Agreement made or purported to be made without the consent of the Central Bank shall be void. 6. This Agreement shall be governed by, and construed in accordance with, the law of Ireland. SIGNED FOR AND ON BEHALF OF THE APPLICANT AFFIX SEAL OF APPLICANT SIGNATURE AND AFFIXATION OF SEAL WITNESSED BY SIGNED FOR AND ON BEHALF OF THE CONTRIBUTOR AFFIX SEAL OF CONTRIBUTOR SIGNATURE AND AFFIXATION

28 Checklist 27 completing and submitting Bank Licence Applications OF SEAL WITNESSED BY PRIVACY STATEMENT LICENSING PROCEDURE PURPOSE AND LEGAL BASIS FOR THE PROCESSING OF PERSONAL DATA IN THE CONTEXT OF THE LICENSING PROCEDURE Prior authorisation for taking up the business of credit institutions is a key prudential technique to ensure that only operators with a sound economic basis, an organisation capable of dealing with the specific risks inherent to deposit taking and credit provision, and suitable directors carry out those activities. Council Regulation (EU) No 1024/2013 of 15 October 2013 (SSM Regulation) 4 confers specific tasks on the European Central Bank (ECB) concerning policies relating to the prudential supervision of credit institutions on the basis of Article 127(6) of the Treaty on the Functioning of the European Union (TFEU). For prudential supervisory purposes, the ECB is entrusted with the tasks in relation to credit institutions established in the participating Member States referred to in Article 4, within the framework of Article 6, of the SSM Regulation. According to Article 4(1)(a) of the SSM Regulation, the ECB is to authorise credit institutions subject to Article 14 of the SSM Regulation. The latter provision provides that the application for an authorisation to take up the business of a credit institution to be established in a participating Member State shall be submitted to the National Competent Authority (NCA) of the Member State where the credit institution is to be established in accordance with the requirements set out in the relevant national law. The relevant NCA shall assess the application and provide the ECB with an authorisation draft decision if all requirements are met. The ECB shall only object to the draft decision where the conditions for authorisation set out in the relevant Union law are not met. Pursuant to Articles 13(1), 14(2), 16(3) and 91 of CRD IV 5 the suitability of the proposed members of the management body and shareholders must be ensured. Article 73 ss. of the SSM Framework Regulation 6 establishes the rules on cooperation between the NCAs and the ECB with regard to the licensing procedure. DISCLOSURE OF PERSONAL DATA 4 Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions, OJ L 175, Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, OJ L 176, Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities, OJ L 141,

29 All the required personal data is necessary to carry out the assessment of the suitability of the proposed members of the management bodies and shareholders within the application for an authorisation to pursue the activity of a credit institution. If not provided, the application shall be deemed incomplete and shall be rejected on that basis. RECIPIENTS OR CATEGORIES OF RECIPIENTS OF THE PERSONAL DATA In the licensing procedure the personal data may be disclosed, on a need-to-know basis, to the NCAs staff, the European Banking Authority s staff, the Joint Supervisory Teams staff (ECB Directorate General Micro-Prudential Supervision I or II), ECB Directorate General Micro-Prudential Supervision III staff, ECB Directorate General Micro-Prudential Supervision IV staff (Authorisation Division), the Secretariat of the Supervisory Board and the members of the Supervisory Board and of the Governing Council of the ECB. APPLICABLE RETENTION PERIOD The ECB is to store personal data regarding the licensing applications/notifications for a period of fifteen years; from the date of application or notification if withdrawn before a formal decision is reached; from the date of a negative decision or from the date the data subjects cease to be members of the management bodies, key function holders or founding shareholders of the supervised entity in the case of a positive ECB decision. In case of initiated administrative or judicial proceedings, the retention period shall be extended and end one year after these proceedings are sanctioned by a decision having acquired the authority of a final decision. APPLICABLE DATA PROTECTION FRAMEWORK AND DATA CONTROLLER Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data 7 is applicable to the processing of personal data by the ECB. For the purposes of Regulation (EC) No 45/2001, the ECB shall be the Data Controller. DATA SUBJECT RIGHTS The data subjects of the processing of personal data by the ECB for the mentioned prudential supervisory purpose have access rights to and the right to rectify the data concerning him or herself according to Article 9 of the ECB Decision of 17 April 2007 adopting implementing rules concerning data protection at the ECB (ECB/2007/1) 8. POINT OF CONTACT? In case of queries or complaints regarding this processing operation, you can contact the Data Controller at Authorisation@ecb.europa.eu, and/or the National Competent Authority at bank.authorisations@centralbank.ie Equally, you also have the right to have recourse at any time to the European Data Protection Supervisor. The data subjects also have the right to recourse at any time to the European Data Protection Supervisor: 7 OJ L 8, OJ L116,

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