Contents
Chapter I Membership and purpose
Chapter II Capital and the Guarantee Fund
Chapter III The Guarantee Fund’s bodies
Chapter IV The Fund’s deposit guarantee and support to member institutions
Chapter V Annual report and accounts
Chapter VI Changes to the statues etc
Chapter I Membership and purpose
Section 1 Establishment and membership
(1) The Norwegian Banks’ Guarantee Fund (hereafter called the Guarantee Fund) was established by Act of 25 June 2004 on Amendments to the Guarantee Schemes Act through the merger of the Savings Banks’ Guarantee Fund and the Commercial Banks’ Guarantee Fund. The amending act enters into force on 1 July 2004. The activities of the Fund are regulated by the Act on Guarantee Schemes for Banks and Public Administration etc., of Financial Institutions (Act no. 75 of 6 December 1996), hereafter called the Act.
(2) The Fund’s registered office is in Oslo.
(3) Institutions entitled or obliged to be members of the Norwegian Banks’ Guarantee Fund:
a. Saving banks and commercial banks with their head office in Norway shall be members of the Guarantee Fund.
b. The King may decide that other credit institutions with their head office in Norway shall be members of the Guarantee Fund.
c. Credit institutions with their head office in another EEA state which take deposits from the public through a branch in Norway are entitled to become members of the deposit-guarantee scheme if the deposit-guarantee scheme in the branch’s home country cannot be considered to give the branch’s depositors protection equal to that provided under the Act.
d. The King may decide that branches of credit institutions with their head office in a non-EEA state shall be members of the deposit-guarantee scheme.
(4) The King may lay down further rules concerning membership for branches of foreign credit institutions, cf. the Act section 2-2 third paragraph.
(5) The Guarantee Fund is a legal entity in its own right. No member has a proprietary right to any part of the Guarantee Fund.
Section 2 Purpose
(1) The purpose of the Guarantee Fund is to secure the deposit liabilities of its members, pursuant to section 15.
(2) In order to ensure that a member as mentioned in section 1, subsection (3) a and b, can fulfil its obligations or continue its activities, or have its activities transferred to another institution, the Fund may also grant support under the rules of section 17 and section 18.
Section 3 Right to inspect members
(1) The Guarantee Fund may impose on members such reporting obligation as is necessary to enable the Fund to calculate annual membership levy.
(2) The Guarantee Fund may investigate members’ accounts and audit practice and appraise their conduct of business. In that connection the Fund may require a member to present any documents and information deemed necessary by the Fund.
Chapter II Capital of the Guarantee Fund
Section 4 The Guarantee Fund’s capital
(1) The Guarantee Fund’s aggregate capital shall at all times at least equal the sum of 1.5 per cent of total guaranteed deposits with the members plus 0.5 per cent of the sum of denominators of the capital adequacy requirements for members as mentioned in section 1, subsection (3) a and b. The capital shall be acquired through membership levy and guarantees as provided in sections 5 and 6. Derogation from these requirements may be done by regulation from the Ministry, unless otherwise regulated by law or regulations.
(2) For the purpose of calculating the guaranteed deposits with members pursuant to subsection 1, a basis shall be taken in an average of the members’ deposits at the end of the third and fourth quarter of the calendar year two years prior to the year of payment and at the end of the first and second quarter of the calendar year prior to the year of payment. The sum of denominators of the capital adequacy requirements shall be calculated in the same way.
Section 5 Members’ levy
(1) The members shall each year pay a levy to the Fund unless the Fund’s equity according to the last annual accounts exceeds the minimum requirement under section 4. Derogation from these requirements may be done by regulation from the Ministry, unless otherwise regulated by law or regulations.
(2) The levy shall be calculated in accordance with the provisions of section 2-7 and section 2-9 of the Act with appurtenant regulations.
(3) The board shall by 1 May each year notify each member of the size of the levy to be paid. The deadline for remittance shall be established by the board.
(4) New members of the Fund that have carried on business prior to joining shall pay a levy in accordance with a special decision made by the Ministry of Finance.
Section 6 Members’ guarantee
(1) To the extent that the Guarantee Fund’s assets fall below the minimum required under section 4, the shortfall shall be covered by guarantees from its members. The amount guaranteed by each member shall be calculated on a pro rata basis in the same way as the levy payable under section 5. Calls for payments pursuant to guarantee liabilities in a single year may not exceed one-tenth of the Guarantee Fund’s aggregate capital pursuant to section 4.
(2) The board undertakes distribution of the guarantee amounts. The distribution of the guarantee amounts shall be recalculated each year concurrently with the calculation of the Fund’s aggregate capital pursuant to section 4.
(3) The board decides how the guarantee declarations furnished by the members shall be formulated and sees to it that the declarations are obtained.
(4) The board stipulates whether and how the guarantee liabilities shall be secured.
Section 7 Investment of the Guarantee Fund’s assets
(1) The board shall, within the framework set out by the rules below, establish a strategy and guidelines for management of the Guarantee Fund’s assets based on prudent management, satisfactory return on investments, necessary liquidity and etical guidelines.
(2) Investment is subject to the following conditions:
a) At least one-third of the Fund’s assets to be invested in Norwegian and foreign government and government-guaranteed bonds.
b) The Fund may not invest assets directly or indirectly in shares, primary capital certificates or other capital issued by any Norwegian bank or parent company of a financial group which includes a Norwegian bank, unless such investment is a support measure pursuant to section 2-12 of the Act.
Section 8 Borrowing
(1) The board may decide that the Fund shall raise loans if this is necessary for fulfilment of the Fund’s purpose
Chapter III The Guarantee Fund’s bodies
Section 9 General meeting
(1) The Guarantee Fund’s highest authority is the general meeting. Except as otherwise decided by the King, each member of the Fund has one representative and one vote at the general meeting. A member institution may ask a representative who is entitled to attend on behalf of another member, to serve as a proxy.
(2) The ordinary general meeting is held once every year, and shall if possible be held by the end of June.
(3) The general meeting is convened by the board. Notice of the ordinary general meeting shall be given by letter sent to the members at least two weeks in advance of the meeting. The agenda for the general meeting shall be sent to the members at least one week in advance of the meeting. The general meeting may not make a final decision in matters other than those listed in the circulated agenda.
(4) Any proposal that a member wishes to be dealt with at the ordinary general meeting must be submitted in writing. Such proposals should be sent in good time before notice of the meeting is dispatched, and must have been received by the Fund three weeks in advance of the general meeting.
(5) An extraordinary general meeting shall be convened when decided by the board, or when at least ten members or members altogether representing more than 10 per cent of the members’ aggregate total assets request such a meeting and specify the business they wish to be dealt with. Notice of an extraordinary general meeting shall be in writing, such that the notice can be expected to reach all members no later than one week in advance of the general meeting.
(6) The chairman of the board or, in his absence, the vice-chairman shall chair the general meeting. If neither is able to attend, an ad hoc chairman shall be elected by the general meeting. Minutes of the proceedings shall be kept for which the chairman shall be responsible. The minutes shall be approved and signed by the chairman and two other participants to be elected at the meeting.
(7) Unless otherwise specifically provided by these statutes, the general meeting adopts decisions by simple majority. In the event of a tied vote the chairman has the casting vote, except at elections where the decision is reached by drawing lots.
(8) The general meeting adopts statutes for the Guarantee Fund and may establish instructions for the board.
(9) The following items shall be dealt with at the ordinary general meeting:
a. Annual report.
b. Accounts and auditor’s report.
c. Fixing of remuneration to the elected officers and auditor.
d. Election of board members with alternates.
e. Election of members of the election committee.
f. Other items to be dealt as listed by the board.
g. Members’ proposals.
Section 10 Election committee
(1) At the general meeting an election committee shall be elected which shall prepare the elections to be held at the next ordinary general meeting. The board’s elected members nominate members to the election committee.
(2) The election committee shall have five members who shall be elected for two years from among representatives of the member institutions. A member should preferably not be re-elected more than once. The general meeting nominates the chairman of the committee.
Section 11 The board
(1) The board has seven members. Five members and five alternates in numerical sequence are elected by the general meeting, preferably from among the chief executives of the member institutions. One member with an alternate shall be nominated by Norges Bank and one member with an alternate shall be nominated by Kredittilsynet (The Financial Supervisory Authority of Norway).
(2) The elected members and alternates are appointed for two years. When elections are held, importance shall be attached to achieving a balanced representation from member institutions of differing size and character. A member should preferably not be re-elected more than twice.
(3) The board appoints from among its members the chairman and deputy chairman for one year at a time.
(4) For a board decision to be valid at least four members must be present and in favour of the decision, unless otherwise provided by section 15 subsection (5), or section 17 subsection (3), below.
(5) Board meetings shall be held as often as the chairman deems necessary or when at least two board members so request. Notice of board meetings shall as far as possible be given in writing. The notice shall state the matters to be dealt with. The business manager shall circulate notice of board meetings on behalf of the board chairman.
(6) If deemed necessary for reasons of time, the board chairman may choose to submit a matter to the board on the basis of written procedure. However, a decision cannot be made on this basis if a board member demands that the matter be dealt with at a board meeting. Decisions made on the basis of written procedure shall be presented and entered in the minutes at the first upcoming board meeting.
(7) Minutes, for which the chairman is responsible, shall be kept of the board’s proceedings. Each member may request to have his vote recorded in the minutes. The minutes shall be signed by two board members and the business manager. A copy of the minutes shall be sent to the board members.
(8) The members of the board are entitled to remuneration for their work. The remuneration shall be fixed by the general meeting.
Section 12 The board’s duties
(1) The board is in charge of the activities of the Guarantee Fund.
(2) The board shall inter alia:
a. Give notice of ordinary and extraordinary general meetings.
b. Make decisions regarding collection of levy and obtaining guarantee declarations etc in pursuance of section 5 subsections (3) and (4) and section 6 subsections (2), (3) and (4), of these statutes.
c. Establish a strategy and guidelines for management of the Guarantee Fund’s assets in accordance with section 7 and make decisions regarding borrowing in accordance with section 8.
d. Engage a business manager for the Guarantee Fund, and establish the latter’s instructions and remuneration.
e. Make decisions regarding implementation of the deposit guarantee or regarding support measures pursuant to sections 15, 16, 17 and 18 of these statutes.
(3) The board’s power to commit the Guarantee Fund
a. The board chairman or at least two board members jointly may sign on behalf of the Fund.
b. The board may give the business manager limited authority to act on behalf of the Fund.
Section 13 Audit
(4) The general meeting shall appoint a state authorised auditor to perform the audit. The auditor shall present his report to the general meeting.
Section 14 Duty of confidentiality
(1) The Guarantee Fund’s elected officers, employees and auditors shall sign a declaration of confidentiality in respect of information which comes to their knowledge in the course of their duties.
Chapter IV The Fund’s deposit guarantee and support to member institutions
Section 15 Deposit guarantee
(1) The Guarantee Fund is bound to cover losses incurred by a depositor on deposits with a member institution. In these statutes deposit shall mean any credit balance on a nominative account, and any debt evidenced by a certificate of deposit issued to a named person, except deposits from other financial institutions. In these statutes deposits shall also include credit balances deriving from payment transfer orders or other ordinary banking services, as well as interest not fallen due.
(2) If a depositor’s total deposits with the member institution in question exceed NOK 2 million, the Fund is not obliged to cover losses on that part of the total deposits that exceeds this amount. Whenever the member institution is authorised to set off deposits against liabilities, an individual depositor’s total deposits shall be reduced by liabilities that have fallen due pursuant to other agreements. The King may decide by regulations that the limit on compulsory cover may be set at a level higher than NOK 2 million in the case of certain special types of deposit or in the case of deposits from particular depositors.
(3) The Fund is not bound to cover losses on:
a) deposits from mutual funds and other collective-investment undertakings,
b) deposits carrying an unusually high rate of interest or other financial advantages when such advantages have contributed to aggravating the institution’s financial situation.
(4) The Fund is not entitled to cover losses on:
a) deposits from companies in the same group as the member institution,
b) deposits consisting of the proceeds of a punishable act in respect of which a final and enforceable judgment has been handed down.
(5) Decisions to cover losses over and above the amount the guarantee fund is obliged to pay pursuant to subsections (2) and (3) require support from at least five board members.
Section 16 Settlement under the deposit guarantee
(1) The Fund shall cover losses on deposits pursuant to section 2-11 of the Act.
Section 17 Support measures
(1) In order to ensure that a member institution as mentioned in section 1 subsection (3) a and b can fulfil its obligations or continue its business, or in the event have its business transferred to another institution, the Fund may grant support by:
a) providing a guarantee or other support to secure deposits or cover losses that are not covered pursuant to section 15 above,
b) providing liquidity support, loans or guarantees for loans or fulfilment of other commitments,
c) supplying equity or providing an equity guarantee to enable the business to continue or be wound up,
d) covering losses incurred by creditors or certain groups of creditors as a result of a liquidity deficit or capital inadequacy.
(2) Support to a member institution may instead be given to the parent company of a financial group. The parent company shall in such case forward the support directly to the member institution.
(3) Decisions regarding support may only be made within the limits set out in section 19. When considering whether support shall be provided, the board shall attach particular weight to consideration of public confidence in the banking system and to consideration of the Fund’s financial position. The board shall also weigh the costs that would be associated with support measures against the costs that may accrue if the matter were to end in public administration and disbursement under the deposit guarantee. Any decision to grant support requires the backing of at least five board members, and the justification shall made clear in the minutes of the board of the Fund.
Section 18 Conditions for support
(1) The board decides whether and to what extent a member institution shall be given support as mentioned in section 17 above, and by what means.
(2) A member institution in receipt of support from the Fund shall implement such decisions and conditions as the Fund lays down to protect against losses. Such member institution shall make regular reports to the board of the Fund regarding the member institution’s position and business in accordance with further rules laid down by the board of the Guarantee Fund.
(3) The board of the Fund may instruct a member institution in receipt of support from the Fund to initiate negotiations with a view to merging with another member institution or other financial institution, or to make changes in the member institution’s management or its activities.
Section 19 Maximum limit for the Guarantee Fund’s overall obligations
(1) The board may not make decisions pursuant to section 17 or section 18 unless the Fund’s remaining capital subsequent to the support measure together with future receipts of annual levy and guarantee capital plus other supply of capital is assumed to be sufficient to cover the Fund’s obligations under the deposit-guarantee scheme.
(2) As provided in section 2-12 subsection 6 of the Act, the Guarantee Fund may not, except when authorised by the Ministry of Finance, provide a guarantee or assume other commitments in connection with a deposit guarantee or support measure which in aggregate amount to more than twice the Fund’s minimum capital pursuant to section 4.
Chapter V Annual report and accounts
Section 20 Annual report
(1) The annual report on the Guarantee Fund’s activities shall be submitted to the general meeting by the board. It shall accompany the notice of the general meeting. The annual report shall be signed by each board member and countersigned by the Fund’s business manager.
Section 21 Accounts
(1) The Guarantee Fund’s accounts shall be presented for the calendar year. The net profit shall be added to the capital.
(2) The business manager shall submit draft audited annual accounts to the board by the end of March.
(3) The accounts shall be signed by each board member and countersigned by the Fund’s business manager.
(4) The accounts shall accompany the notice of the ordinary general meeting.
Chapter VI Changes to the statutes etc.
Section 22 Statutes
(1) Any decision regarding changes to the statutes requires two-thirds of the votes cast. Such decision may not be implemented until it has been approved by the King.