Legal Update/Mozambique: Investment Companies Regulatory Framework

Mozambique’s new regulatory framework for investment companies entered into force on 19 October, according to official legal database Legis-PALOP+TL.

Investment companies are now subject, with the necessary adaptations, to the Risk Management Guidelines established in 2013.

Investment companies are also subject to the Regimes for Calculating the Bases for Minimum Capital Requirements to Cover Credit Risk, Operational Risk and Market Risk, the Regime on Minimum Regulatory Provisions, the Regulation on Equity of Credit Institutions, the Regulation on Prudential Ratios and Limits of Credit Institutions and the Regime of Market Discipline and Prudential Limits to the Concentration of Risks.

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Exceptions to the limits on participation in the capital of other companies are established, provided that such limits are exceeded as a result of repayment of credit. For participations in institutions subject to the supervision of the Bank of Mozambique and in insurance companies based in Mozambique the following is now applicable:

⦁ Possibility of a credit institution holding shares in the capital of a company, directly or indirectly, the amount of which exceeds 15% of its equity;
⦁ Possibility of the global amount of qualifying holdings in companies exceeding 60% of a credit institution’s equity
⦁ Possibility that the total value of shares or other capital shares of any companies held by a credit institution and which are not qualifying holdings exceeds 25% of the equity of the same institution.
⦁ Possibility of credit institutions holding, directly or indirectly, in a company, holdings that grant them more than 25% of the voting rights corresponding to the share capital of the participated company.

The situations resulting from these exceptions must be regularized within a maximum period of 2 years.

 

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