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34 2009

National Asset Management Agency Act 2009

PART 4

Designation of Credit Institutions as Participating Institutions and Designation of Eligible Bank Assets

Chapter 1

Designation of Participating Institutions

Definition (Chapter ).

61 .— In this Chapter “ group ”, in relation to a credit institution, means—

(a) the credit institution,

(b) its subsidiaries, if any, and

(c) any entity of which it is a subsidiary.

Applications for designation as participating institution.

62 .— (1) A credit institution may apply to the Minister, within 60 days (or such longer period that the Minister prescribes by order under this subsection) after the establishment day, for it and its subsidiaries to be designated as participating institutions. A credit institution that applies under this subsection shall include all of its subsidiaries in the application (including those that it has requested be excluded from designation).

(2) An applicant credit institution may include in its application a request to exclude particular subsidiaries from designation, and shall give reasons for any requested exclusion.

(3) An application under subsection (1) shall be in the form that the Minister directs. The Minister may direct that different forms shall be used for that purpose by different credit institutions.

(4) The Minister may direct an applicant credit institution to provide, as part of its application, a certificate, supported by a statutory declaration, in relation to it and all of its subsidiaries collectively, jointly by the chief executive officer and chief financial officer of the applicant credit institution—

(a) that since 30 July 2009, it and each of its subsidiaries has dealt in the way required by section 66 (1) with such of its bank assets as the Minister specifies, or if to any extent it has not done so, the extent to which it has not done so, and

(b) that the information in the application is accurate and complete.

(5) An applicant credit institution that is a subsidiary shall furnish an undertaking by its parent company to provide any information and do anything else required of the parent company or any other member of its group to enable the Minister to consider the application. The Minister is not obliged to consider an application by a subsidiary if no such undertaking is given.

(6) An applicant credit institution shall undertake to obtain all necessary consents, in accordance with any applicable law including the consents of all its subsidiaries (including subsidiaries that it has requested be excluded from designation) and any necessary consent of any other member of its group. The Minister may consider the relevant application whether or not he or she has evidence that any relevant consent has been obtained and is not required to seek evidence of any such consent.

(7) An applicant credit institution may make an application under this section notwithstanding that at the time of the application it has not yet received any or all of the necessary consents.

Effect of application for designation, etc.

63 .— (1) By making an application under this Chapter the applicant credit institution and all of its subsidiaries shall be taken to undertake, subject to any prohibition in any applicable law, to comply with the provisions of this Act (including this Act as amended from time to time) and of any regulations made under it (including any regulations made designating further classes of bank assets as eligible bank assets), so far as those provisions apply to it as an applicant or participating credit institution. As and from the making of the application they shall be bound to comply with that undertaking.

(2) The service of a notice on, or any communication with, an applicant credit institution is for all purposes effective as service of the notice on, or communication with, every subsidiary of the credit institution.

Information, etc., to be provided in support of application for designation.

64 .— (1) An applicant credit institution shall provide any information, explanation, books, documents and records that the Minister requires to consider the application, and in particular shall provide any information, explanation, books, documents and records that the Minister considers necessary to enable him or her to make a decision in relation to the matters set out in section 67 (2).

(2) The Minister may direct an applicant credit institution to procure that any of its subsidiaries provides the information, explanation, books, documents and records referred to in subsection (1) in relation to the subsidiary.

(3) The Minister may direct an applicant credit institution that any information provided by the credit institution or any of its subsidiaries under subsection (1) or (2) is to be certified as accurate and complete jointly by the chief executive officer and chief financial officer of the credit institution.

(4) An applicant credit institution shall, in a certificate under subsection (3), disclose in utmost good faith all matters and circumstances in relation to the credit institution or any subsidiary that might materially affect, or might reasonably be expected to materially affect, the Minister’s decision in relation to the matters mentioned in subsection (2) of section 67 (except paragraph (b) (iv) of that subsection).

Capacity of applicant credit institutions, etc.

65 .— (1) An applicant credit institution and each of its subsidiaries shall be taken to have, and always to have had, as part of its functions and objects, the power and capacity to—

(a) apply for designation as, and become, a participating institution pursuant to this Act,

(b) warrant the truth, accuracy and completeness of the information supplied to NAMA in relation to bank assets, and

(c) indemnify NAMA in relation to—

(i) any breach of such a warranty, or

(ii) any claim or obligation under section 135 .

(2) An applicant credit institution and each of its subsidiaries shall be taken to have, and always to have had, as part of its functions and objects, the power and capacity to engage in the following activities in so far as they relate to its designated bank assets:

(a) the provision of credit facilities;

(b) the entering into of joint venture, partnership, co-ownership, shareholder or other similar agreements;

(c) the entering into of contracts (including contracts in a currency other than the currency of the State) whose purpose or one of whose purposes is—

(i) to eliminate or reduce the risk of loss arising from changes in interest rates, currency exchange rates or from other factors of a similar nature, or

(ii) to eliminate or reduce the costs of raising funds or borrowing or the cost of other transactions carried out in the ordinary course of business;

(d) the entering into of contracts to increase the return on an investment (including a credit facility);

and shall be taken to have and always to have had, as part of its functions and objects, the power to engage in any other transaction in so far as it relates to the acquisition of designated bank assets by NAMA.

(3) Nothing in this section limits the liability of an applicant credit institution or subsidiary to any person based on a transaction beyond its powers. However, any claim based on such a transaction—

(a) is enforceable only against the applicant credit institution or subsidiary and not against NAMA or any NAMA group entity, and

(b) gives rise to a remedy in damages only.

Dealings by applicant credit institutions, etc., with eligible bank assets after application for designation.

66 .— (1) An applicant credit institution and each of its subsidiaries shall, until the Minister makes or is taken to have made a decision on the application—

(a) administer, service and deal with all of its eligible bank assets in the same manner as, and with the same level of professional skill, care and diligence as, a prudent lender acting reasonably would so administer, service and deal, and

(b) so act in relation to those bank assets in good faith having regard to the purposes of this Act.

(2) An applicant credit institution and each of its subsidiaries shall not without the prior written approval of NAMA—

(a) deal with any of its eligible bank assets otherwise than in the ordinary course of its business,

(b) deal with any of its eligible bank assets in such a way as to prejudice or impair NAMA’s prospective interests or priorities in relation to such a bank asset,

(c) compromise, release, vary or relinquish any claim or otherwise take or omit to take any action if its doing so could reduce, lessen or impair any security, right, obligation, ranking or priority held or enjoyed, directly or indirectly, in connection with such a bank asset, or

(d) amend or vary any contract relating to such a bank asset unless contractually obliged to do so.

(3) NAMA may issue guidelines or policy statements in relation to the kinds of transactions that it is likely to be prepared to approve under subsection (2).

Designation of participating institutions.

67 .— (1) The Minister, after consultation with the Governor and the Regulatory Authority, may designate an applicant credit institution as a participating institution if the credit institution has applied under section 62 to be so designated.

(2) The Minister shall not designate an applicant credit institution as a participating institution unless he or she is satisfied that—

(a) the applicant credit institution is systemically important to the financial system in the State,

(b) the acquisition of bank assets from the applicant credit institution or its subsidiaries is necessary to achieve the purposes of this Act, having regard to—

(i) support that—

(I) is available to,

(II) has been received by, or

(III) in normal commercial circumstances might reasonably be expected, or might reasonably have been expected, to be or to have been available to,

the applicant credit institution or its subsidiaries from the State, any other Member State or a member of the group of the applicant credit institution,

(ii) the financial situation and stability of the applicant credit institution and its subsidiaries,

(iii) the financial situation and stability of the applicant credit institution’s group in the event that bank assets are not acquired from the applicant credit institution or its subsidiaries, and

(iv) the resources available to NAMA and the Minister,

and

(c) the applicant credit institution has complied with all of its applicable obligations under this Act.

(3) The designation of an applicant credit institution as a participating institution operates to designate as participating institutions all of its subsidiaries except any subsidiary excluded under subsection (6).

(4) Designation (including designation of a subsidiary in accordance with subsection (3)) has effect notwithstanding the absence of any necessary consent to the relevant application. Designation of a subsidiary does not prejudice any rights that the subsidiary may have against the relevant applicant credit institution.

(5) Before deciding whether to designate an applicant credit institution as a participating institution, the Minister, having consulted the Regulatory Authority, may direct that specified due diligence and stress testing of the applicant credit institution or any member of its group be carried out.

(6) If the Minister designates an applicant credit institution as a participating institution, he or she may exclude any subsidiary of the applicant credit institution from designation on any condition that he or she specifies, if he or she is satisfied that the subsidiary should not be designated.

(7) Where the Minister has specified a condition under subsection (6) in relation to the exclusion of a subsidiary of an applicant credit institution, and there is a failure to comply with the condition, the Minister may, by written notice to the applicant credit institution and the subsidiary, designate the subsidiary as a participating institution as at and from the date of the notice or a later date that the Minister specifies in the notice.

(8) If the Minister has not designated a credit institution as a participating institution within 3 months after its application under section 62 , the Minister is taken to have refused the application.

Obligations of participating institutions.

68 .— (1) A participating institution shall—

(a) when making a report, or providing information, books, records or an explanation, whether or not in answer to a request from NAMA or the Minister, make full disclosure in utmost good faith of matters relevant to the making of a decision by NAMA whether or not to acquire a bank asset or the determination of its acquisition value,

(b) co-operate promptly and fully (including by way of supplying information, books, records and explanations to NAMA in response to any request by NAMA) with NAMA in its due diligence processes in relation to bank assets being considered for acquisition,

(c) provide such services (including relevant services within the meaning given by section 128 ) as NAMA directs in connection with an acquired bank asset, in accordance with any terms and conditions that NAMA specifies,

(d) comply with any direction given by the Minister or NAMA in relation to the performance of the participating institution’s obligations under this Act,

(e) comply with such monitoring of lending and balance sheet management as the Minister in consultation with the Regulatory Authority directs, and

(f) comply with any other requirement that the Minister specifies to achieve an effective acquisition of bank assets by NAMA.

(2) A participating institution shall provide such information, explanations, books, documents and records as the Minister requires to perform his or her functions under this Act.

(3) A participating institution shall be taken to have consented to any disclosure of information under section 205 .