Cape Verde Commercial Registry Office: Financial Institutions Must Meet Strict Requirements
The Cape Verde Commercial Registry Office has announced that financial institutions operating in the country must meet strict requirements to ensure their stability and integrity.
Definition of a Financial Institution
According to Article 20 of the Cape Verdean law, a financial institution is defined as any entity that carries out financial activities, such as banking, insurance, or securities trading. To operate in the country, these institutions must obtain authorization from the Bank of Cape Verde and register with the Commercial Registry Office.
Requirements for Registration
To qualify for registration, financial institutions must meet specific requirements, including:
- Having adequate capital to cover risks
- Ensuring solvency
- Adopting strong corporate governance practices
- Having a clear organizational structure
- Well-defined lines of responsibility
- A remuneration policy that aligns with sound risk management practices
Minimum Regulatory Capital Requirements
The Bank of Cape Verde is responsible for establishing minimum regulatory capital requirements for each type of financial institution and/or activity undertaken. The institution also sets the elements that may integrate regulatory capital, defining their features.
Trade Name or Company Name
Financial institutions must adopt a trade name or company name that clearly indicates the financial activities they are authorized to carry out and registered with the Bank of Cape Verde. The name should not generate confusion in the financial markets or for the general public.
Principle of Exclusivity
Only banks may receive deposits or other repayable funds from the public for use on their own account. Insurance companies are allowed to receive repayable funds through capitalization operations, but only under specific conditions.
Prohibited Activities
Financial institutions are forbidden from engaging in certain activities, including:
- Purchasing, selling, or holding ownership or co-ownership of movable or immovable property that is not exclusively assigned to their own use or technical reserves
- Negotiating or acting as mediators in business dealings involving movable or immovable property, unless the ownership of this property derives from a transfer in lieu of payment or a judicial procedure for debt collection
Importance of Compliance
The Commercial Registry Office has emphasized the importance of these requirements, stating that they are essential to ensure the stability and integrity of the financial system. Financial institutions that fail to comply with these requirements may face penalties or even revocation of their authorization to operate.
Commitment to a Robust Regulatory Framework
The Cape Verdean government is committed to maintaining a robust regulatory framework that protects both financial institutions and consumers. By implementing these strict requirements, the country aims to promote a stable and trustworthy financial environment that supports economic growth and development.