At the end of December 2010, the Portuguese Government enacted Decree-Law 140-A/2010 (with immediate effect on December 31), which transposed three European Union Directives on financial matters and amended the respective Portuguese financial legislation.
The main target of the amendments is the Law of Credit Institutions and Financial Companies (LACIFIC), which is one of the key statutes on financial matters in Portugal. Also amended is Decree-Law 104/2007, of April 3 2007, which transposed Directive 2006/48/CE and concerns the activity of credit institutions, their funds and risk evaluation techniques.
This Decree-Law, by transposing Directives 2009/111/CE, 2009/27/CE and 2009/83/CE, is yet another answer to the continuing financial crisis and aims to increase the solidity of Portuguese financial institutions and their resilience to any future crisis.
Specifically listed are five main objectives of the amendments: (i) to strengthen the solidity of Portuguese financial institutions; (ii) to increase the standards of recognition of external rating agencies; (iii) to improve and reinforce the powers of supervising authorities; (iv) to increase the transparency and accountability of the operations of subsidiaries of foreign financial institutions in Portugal; and (v) to implement more strict rules on securitisation.
LACIFIC is amended accordingly, in particular the sections concerning the powers of the Bank of Portugal, its coordination with other EU central banks (notably in times of negative development of the financial markets) and its supervisory powers with regard to subsidiaries of foreign financial institutions.
The trend of reinforcing the powers of regulatory authorities is thus continued. Securitisation regulations are also amended in a fashion designed to ensure transparency and an effective division of the risk between all intervening parties.