Financial Crime World

Ownership Restrictions and Implications for Banks in the Dominican Republic

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Description of Control and Shareholding Interests

  • A 30% shareholding interest is considered a “relevant participation” and constitutes control for ownership purposes, not the term “control” itself.
  • This implies that any entity or individual holding more than 30% of a bank’s shares would be subject to specific regulations.

Restrictions on Foreign Ownership

Article 39 of the Monetary and Financial Law (MFL) establishes certain restrictions on foreign direct investment in the banking system and on a foreign bank establishing a branch or subsidiary in the Dominican Republic.

Changes in Control

Regulatory Approvals for Acquiring Control

  • The approval of the Monetary Board is required to acquire control, which is defined as a significant participation of 30% or more of the shareholding interest.
  • This implies that any entity or individual seeking to acquire control must first obtain the board’s approval.

Factors Considered by Regulatory Authorities

When evaluating an acquisition of control, the relevant regulatory authorities consider compliance with provisions set out by law and seek full satisfaction from the Superintendency of Banks (SIB) before granting approval by the Monetary Board.

Required Filings for Acquisition of Control

For individuals, the following documents must be filed:

  • Official documentation indicating name and legal domicile
  • Proof of identity
  • Tax identification number
  • Certification of good conduct
  • Good standing certificate from relevant authorities in their country of origin
  • Translations of documents (if language used is not Spanish)

Implications for Controlling Entities or Individuals

Insolvency Declaration Process

The extent of controlling entity liability will be determined during the insolvency declaration process, carried out by monetary and financial authorities.

Capital Adequacy Guidelines

Capital adequacy guidelines have changed as outlined in the answers above; no changes are expected in the near future.