Decisions of the Bank of Albania

Official Bulletin no. 224, dated December 21, 2017

On 6 December 2017, the Supervisory Council of the Bank of Albania, by decision no. 71, decided to make some amendments to the regulation “On the functioning of the central system of securities registration and reimbursement (AFISaR)”. The first amendment is made in points 26 and 47 of Article 4, which respectively stipulate that the standard contract is the contract of participation in AFISaR, according to Appendices 1.1 / 1, 2 and 3 of this Regulation, which is stipulated between the administrator and the participants, for the provision of registration and reimbursement services for transactions concerning securities, in which the rights and obligations of the contracting parties deriving from their positions in the system are determined in accordance with the provisions of this regulation and that the participant’s profile is the data set of the participant , which are registered in the system and uniquely identify him, in accordance with Appendices 10, 10/1 and 11 of this Regulation. Also, in Article 4, points 81 and 82 are added which respectively stipulate that the Securities Exchange is a regulated market to conduct securities transactions in accordance with provided license and that the Securities Exchange system is the platform used by the Securities Exchange to support the accomplishment of securities transactions among its members. Amendments are also made to Article 15, in which point 1, letter “a”, sub-paragraph “vii” is abrogated, but a paragraph “c” is added that stipulates that the Securities Exchange is a participant in the AFISaR system and sends settlement instructions on behalf of its customers in the system via VPN. This capacity is avail- able to all participants licensed by the relevant authorities. In addition, amendments are made to Article 21, letter “d” and in Article 25, point 2, letter “a”, which respectively provide that the administrator in cooperation with the candidate determine and applie the membership calendar as in appendix 12 to this decision and that direct participants are required to access the AFISaR system at any time during the day of operation, respecting its working hours according to appendix 7 to this decision. Following, Chapter IV / 1 is added which contains provisions regarding the Securities Exchange and the conditions of participation, the procedure for membership in the Securities Exchange, the Securities Exchange obligations in the AFISaR System, as well as the temporary restriction and exemption of the Securities Exchange in the AFISar system. Finally, this regulation is accompanied by some annexes which constitute integral parts of it. On 6 December 2017, the Supervisory Council of the Bank of Albania, by decision no. 72 decided to approve the regulation “On bank recovery plans”. The purpose of this regulation is to determine the supervission requirements for banks and banking groups recovery plans related to: a) the content of recovery plans and the content of simplified recovery plans, the manner and timing for their submission and updating; b) the minimum framework of qualitative and quantitative indicators included in recovery plans; c) the minimum criteria on which the assessment of recovery plans by the Bank of Albania is carried out. The subjects of this regulation are banks and branches of foreign banks, licensed by the Bank of Albania. In addition, the regulation contains provisions on the content of the recovery plan and on re- porting and supervisory requirements, In conclusion, the regulation contains a provision regarding the sanctions applied by the Bank of Albania in the event of failure to comply with the requirements of this regulation, as well as a final provision providing that the annexes attached to this regulation are an integral part of it. On 6 December 2017, the Supervisory Council of the Bank of Albania, by decision no. 73, decided to make some changes to the regulation “On the basic principles of the management of banks and branches of foreign banks and the criteria for the approval of their administrators”. The first amendment is made to Article 4, paragraph 2, letter “c”, which provides that the term “risk appetite / tolerance” is the aggregate level and the types of risk the bank is willing / able to undertake within its risk capacity , for the achievement of its strategic business objectives and its business plan. Additionally, Article 4 is supplemented with the letter “e” which states that the term “risk capacity” is the maximum level of risk that the bank may undertake, considering capital support, liquidity, borrowing capacity and regulatory limits. Article 5 is supplemented with point 5 which stipulates that the bank drafts a special policy for the appointment of members of the governing council, specifying the requirements on the diversification of the composition of the governing council, in order to provide its knowledge, qualifications and collective experience (steering council ), in different areas of management and control. Subsequently, some additions and amendments are made to Article 13 which set out rules regarding the particular structure / unit for carrying out the risk management function. Amendments have also been made to Article 14, amendments that stipulate that the structure / unit of compliance is independent of the business lines and of internal units that control and have sufficient authority, reputation and re- sources, as well as that the latter is supplemented with a new task, namely the one of assessing the possible impact of any legal and regulatory change in the bank’s activity and in the context of compliance. Other amendments are made to Articles 16, 17, 18 and 19, amendments respectively related to the criteria for the qualifications and experience of the administrators, the requirement for the documentation for approval of the administrators, the approval of the administrators, as well as the approval in case of change of the position of the administrators. Finally, Article 19/1 sets out the rules regarding the re-evaluation process of the administrators. On 6 December 2017, the Supervisory Council of the Bank of Albania, by decision no. 74, decided to make some amendments to the regulation “On the internal control system”. The first amendment is made to Article 7, paragraph 2, where the phrase “authorized accounting experts” is replaced by the phrase “legal auditor or audit company”. Article 8 also deals with the following amendments: i) In paragraph 1, the content of letter “b” changes as follows: “ensures that the internal audit unit performs its tasks independently and according to the international standards of internal control “ii) In paragraph 1, letter “c”, the phrase “authorized accounting experts “shall be replaced with the phrase “legal auditor or audit company, audit committee “; (iii) Letter “e” of paragraph 1 becomes paragraph “2” of this article, with the following content: “The control committee may propose to the governing council, the appointment or dismissal of the director and employees of the internal audit unit. “; (iv) After paragraph 2 is added paragraph 3 with the following content: “The members of the audit committee may be members of the governing council, as well as the chairman of the audit committee must in any case be a member of the governing council of the bank.” Article 12 is supplemented with paragraph 4, which stipulates that the internal audit unit implements international standards of internal control, in accordance with the provisions of the law “On legal audit, organization of the profession of legal auditor and approved accountant. In Article 14, paragraph 1, letter “a”, after the phrase “in the implementation of standards” is added the phrase “international”, while in Article 15, paragraph 3, letter “e”, the phrase “authorized accounting experts” is replaced by the phrase “legal auditor or audit company”. Finally, a transitional provision is added in relation with the necessary measures to comply with the requirement of Article 8, paragraph 3 of this Regulation and regarding the implementation of this decision as well as with its publication.