CZECH REPUBLIC Law and Practice Contributed by: Tomas Sedlacek, Zdeněk Husták, Adam Nečas and Mikuláš Zacpal, BBH, advokátní kancelář, s.r.o.
3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank According to the AoB, persons acting in concert must obtain ex ante approval from the CNB to acquire a share of 10% or more or to increase their share to exceed the 20%, 30% or 50% thresholds of voting rights or capital sharehold - ing in a bank, directly or indirectly. This applies even if such persons do not exercise the voting rights associated with the shareholding in the bank. Applications for CNB approval shall contain details on the person or persons intending to acquire or increase their share in the bank or control the bank, including details about the bank in which the share is to be acquired or increased, total share amount that the applicant will acquire and details about the person trans - ferring the share to the applicant. The applicant must attach the respective evidence. The CNB shall confirm acceptance of an appli - cation no later than two working days from the date of receipt of the “complete” application. However, initial applications usually require addi - tional filings. The CNB shall issue a decision on the application within 60 working days of the date of the written acknowledgement of receipt of the complete application. If the CNB does not issue a decision within this period, consent shall be deemed to have been granted. When the person acquiring control of a bank is a financial institution with a relevant licence granted by another EU member state, the CNB shall obtain a statement of their home compe - tent authority regarding the acquisition of control over the bank.
Persons acting in concert are similarly obliged to notify the CNB without undue delay of cir - cumstances that reduce their qualified holding in a bank below the thresholds of 50%, 30% or 20%, or if they lose their share altogether, or if they reduce their participation to such an extent that they no longer control the bank. Should a bank be listed on a stock exchange, persons acting in concert acquiring a share must also comply with the Takeover Act, which estab - lishes additional obligations. 4. Governance 4.1 Corporate Governance Requirements The AoB states that banks are obliged to set up and maintain governance arrangements. These arrangements shall include: • the prerequisites for proper corporate govern - ance, such as: (a) management principles and procedures; (b) an organisational structure with a delinea - tion of responsibilities and decision-mak - ing, which also identifies incompatible functions and avoids conflicts of interest; and (c) administrative and accounting proce - dures; • a risk management system, which comprises internal control systems, including internal auditing and compliance functions; • a way to ensure the credibility, competence and experience of key personnel; and • remuneration policies and procedures. The governance arrangements must be effec - tive, comprehensive and proportionate to the nature, scale and complexity of the bank’s risks. The bank must verify and regularly evaluate the
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