PORTUGAL Trends and Developments Contributed by: André Figueiredo and Hugo Nunes e Sá, PLMJ
To implement this change, CMVM Regulation 3/2025 outlines the conditions under which such investments can be made. Notice 2/2025 of the Bank of Portugal on the gov- ernance, internal control systems and organisational culture of supervised institutions On 20 March 2025, Banco de Portugal Notice 2/2025 (the “Notice”) was published, amending Banco de Portugal Notice 3/2020 on the governance, internal control systems, and organisational culture of super- vised institutions. This Notice entered into force on 21 March 2025, but institutions have a period of six months from the date of entry into force to adapt to the new obligations. However, credit institutions and financial companies with their registered office in Portugal, as well as finan- cial companies, mixed financial companies and hold- ing companies subject to supervision by the Banco de Portugal, and when classified as parent companies under the General Framework for Credit Institutions and Financial Companies, have 12 months from the date of entry into force to adopt a supervisory body. The following changes aim to ensure more efficient supervision and adapt regulatory practices to the requirements of the European financial landscape, promoting a more robust and proportionate organi- sational culture: • obligation to establish training plans for members of the management and supervisory bodies; • clarification of the concept of deficiencies, which has been revised to include defaults, with the aim of simplifying and standardising the treatment of this issue by supervised institutions; • flexibility in the organisational model for internal control functions – institutions now have the option of segmenting the risk management function into different organisational units; • institutions authorised to receive deposits, whose total assets over an uninterrupted period of two years and on an individual basis are less than EUR3 billion, and which do not provide common services in accordance with the provisions of Arti- cle 50 (3) of the Notice, may now combine the risk
management and compliance functions in a single structural unit; • the use of aggregated pre-approvals for related party transactions is now permitted, subject to certain conditions; • institutions will now be able to use collaborative solutions to carry out operational tasks as part of their internal control functions – in addition, sub- contracting of these tasks, which was previously allowed only on an ad hoc basis, can now be done on a permanent basis; • procedures must be established to ensure that the appointment of the statutory auditor or audit firm is reported to the supervisory authority and should be included in the selection and appointment policies of statutory auditors or audit firms for institutions authorised to receive deposits; and • the reference and reporting dates for the self- assessment report on the appropriateness and effectiveness of the organisational culture, and the governance and internal control systems of the supervised institutions, have been changed – the annual report will now be drawn up on 30 Septem- ber of each year, instead of 30 November. Digital transformation and fintech Portugal’s fintech sector has matured consider- ably. What was once a small cluster of start-ups has become a recognised part of the financial services landscape, attracting both domestic and foreign cap- ital (over approximately 70% of Portuguese fintech funding in recent years has come from international investors, highlighting the global integration of the ecosystem). Open banking, mandated under the EU’s Second Pay- ment Services Directive (PSD2), has moved beyond compliance into commercial application. Banks are now offering consumers and businesses the ability to aggregate accounts, use personalised financial man- agement tools and integrate banking functions into non-financial platforms through embedded finance. Payment innovation has also accelerated. Portugal is among the leaders in the adoption of Single Euro Pay- ments Area (SEPA) instant credit transfers, with most major banks now offering 24/7 payments that clear in seconds. This has improved customer experience and reduced settlement risk.
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