New Act on Credit Institutions

The New Act on Credit Institutions (“Act”) has entered into force on 1 January 2014. By this new Act, the Croatian regulations are being harmonized with the EU regulations.

Several directives (especially important one: Directive 2013/36/EU on Access to the Activity of Credit Intuitions and the Prudential Supervision of Credit Institutions and Investments firms) are being implemented into the Croatian legal system and details of implementation of the Regulation no. 575/2013 are being defined. Quick EU law reminder: regulations are directly effective in member states, while directives have to be implemented in a legal system of each member state. You should keep in mind the Regulation no. 575/2013 (full name: Regulation no. 575/2013 on Prudential Requirements for Credit institutions and Investment Firms), since without it understanding the Act will be impossible. Namely, the Act does any more not contain definitions of various terms, instead it refers to a respective article of the Regulation no. 575/2013. E.g. if you wish to know what is exactly meant by the term “credit institution” you will have to take a look at the article 4, section 1, paragraph 1 of the Regulation 575/2013. The main amendments are done in relation to capital maintenance which is to be conducted through several different levels. Additional criteria for management of the credit institutions are also new, especially detailed prescription of requirements which are to be fulfilled by the supervisory board members. Several new boards are being introduced into the organizational structures of the credit institutions and such boards will be connected to the supervisory boards. Significant amendments also relate to supervision of the credit institutions and they reflect the fact that Croatia entered EU, they govern cooperation between regulatory authorities and exchange of information if needed.

Amendments of the Capital Markets Act

The Amendments of the Capital Markets Act have also entered into force on 1 January 2014. These amendments are also primarily result of harmonization of the Croatian regulations with the EU regulations. As already mentioned in relation to the new Credit Institutions Act the most important EU regulations for amendments of capital markets are the Directive 2013/36/EU on Access to the Activity of Credit Intuitions and the Prudential Supervision of Credit Institutions and Investments Firms and the Regulation no. 575/2013 on Prudential Requirements for Credit institutions and Investment Firms. Among other things, the Amendments of the Capital Markets Act affect provisions governing management boards of the investment firms, including duties and responsibilities of the management board members. It is important to point out that the Amendments of the Capital Markets Act also regulate investment firms capital requirements as well as risk reduction related provisions.