Additional Note to Circular 116 to financial institutions
Summary: Additional Note to Circular 116 to financial institutions of the Bank of the Republic of Haiti — an instrument published alongside circular 116 to financial institutions, not the circular itself. Circulars are the operative prudential rules for supervised institutions, covering matters such as capital and liquidity requirements, credit-risk and governance standards, reserve requirements and foreign-exchange rules.
Key Findings
- The BRH note clarifies Circular 116 on limits for financial institutions' equity participations in non-financial companies.
- A financial institution's stake in a non-financial company may not exceed 25 percent of that company's capital, measured when the stake is taken.
- If a stake was already above 25 percent when Circular 116 entered into force, the institution may keep that level but may not increase it and must prove the prior excess to BRH's satisfaction.
- A financial institution's stake in one non-financial company may not exceed 15 percent of its core regulatory own funds, measured when the stake is taken.
- The aggregate of a financial institution's participations in non-financial companies may not exceed 45 percent of its core regulatory own funds except under the same valuation-growth condition described in the note.
How to cite
Bank of the Republic of Haiti (BRH), 2021, Additional Note to Circular 116 to financial institutions, https://www.brh.ht/wp-content/uploads/Notes-additionnelles-Circulaire-116.pdf