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News
Rules on Acquisitions of Qualifying Holdings Clearer Now
22.06.2009
On 10 June, the Riigikogu adopted amendments to the Estonian Investment Funds Act, Insurance Activities Act, Credit Institutions Act, Central Register of Securities Act, and Securities Market Act, transposing Directive 2007/44/EC (the “Qualifying Holdings Directive”) into Estonian law.
The amendments aimed to facilitate mergers and acquisitions of financial institutions and to ensure effective supervision over such procedures. To achieve that, the procedural rules used by the Financial Supervision Authority to determine whether a qualifying holding can be acquired have been made more specific. For instance, the criteria that the acquirer of a qualifying holding must meet have been laid down in more detail. The data and documents that have to be submitted to the Financial Supervision Authority to apply for permission to acquire a qualifying holding have also been described more precisely. For example, according to the amendments a description of the acquisition target must be submitted to the Financial Supervision Authority, which must, among other things, include a list of the target's shares and data on the classes of the shares to be acquired and the voting rights they carry. An acquirer who is a natural person must, from now on, also submit a curriculum vitae in addition to other data required.
The amendments also include provisions on the length of proceedings. As a rule, the Financial Supervision Authority has to decide on whether to grant permission to the acquisition within 60 business days as of the moment when the Authority submits a written confirmation to the acquirer that it has received the necessary data and documents. If needed, the Financial Supervision Authority may request that the acquirer submit additional information; in such a case, the proceedings may be extended by up to 30 business days. Consequently, the Authority must decide on whether it authorises the acquisition or not within a maximum of 90 business days. The Authority has to inform the acquirer of its decision in writing within two business days after making the decision.
The amendments ensure greater transparency of proceedings and allow the acquirer to better assess the requirements it has to meet in order to get the Financial Supervision Authority's permission for the acquisition and the time that the application process may take.
