Adopted at the first General Meeting of the Norwegian Banks' Guarantee Fund on 22 June 2004. Ratified by the Norwegian Ministry of Finance on 9 September 2004, and subsequently amended at the Annual General Meetings of 19 April 2005, 26 April 2006, 26 April 2007, 21 March 2013, 27 March 2014, and 30 March 2016. Ratified by the Ministry of Finance in letters dated 26 September 2006 and 16 May 2007, as well as by the Financial Supervisory Authority of Norway (on the delegated authority from the Ministry of Finance) in letters dated 24 June 2013, 28 May 2014, and 25 April 2016.
§ 1 Establishment and membership
(1) The Norwegian Banks' Guarantee Fund (hereafter the “Guarantee Fund” or the “Fund”) was established pursuant to the Act of 25 June 2004 on Amendments to the Bank Guarantees Act through the merger of the Commercial Banks’ Guarantee Fund and the Savings Banks’ Guarantee Fund. The amended legislation came into force on 1 July 2004. The new Financial Institutions Act came into force on 1 January 2016. The activities of the Guarantee Fund are now regulated by the Financial Institutions Act (hereafter the “Act”).
(2) The Fund is headquartered in Oslo.
(3) Institutions entitled or required to join the Norwegian Banks' Guarantee Fund:
a. Banks headquartered in Norway must be members of the Guarantee Fund.
b. The Ministry of Finance (hereafter the “MoF”) may, by means of statutory regulations, determine that other financial institutions headquartered in Norway shall become members of the Guarantee Fund, and may determine specific regulations covering such members.
c. Credit institutions headquartered in other EEA states but receiving deposits from the general public through branches in Norway may become members of the deposit guarantee scheme if the deposit guarantee scheme in the branch’s home country is not deemed to give the branch’s depositors the same degree of protection as that afforded under Norwegian legislation.
d. The MoF may decide that branches of credit institutions headquartered in states outside the EEA are also required to join the deposit guarantee scheme.
(4) The MoF may issue statutory regulations regarding branches’ membership of the Guarantee Fund, including regulations enabling the Fund to examine the branches’ financial statements and audits, and assess their management practices, cf. Section 19-2(3) of the Act.
§ 2 Objectives of the Fund
(1) Through the deposit guarantee scheme, the Guarantee Fund shall secure its members’ deposit liabilities by means of the deposit guarantee, cf. § 15.
(2) In order to ensure that a member as mentioned in § 1(3)(a)(b) can fulfil its obligations or continue its operations, and, if necessary, have the business transferred to another institution, the Fund can also provide support in accordance with the rules set out in §§ 17 and 18.
(3) The Fund is a separate legal entity. No member has a propriety right to any part of the Fund. The Fund cannot open bankruptcy or composition proceedings.
§ 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 Fund may examine members' financial statements and audit practice, and assess their management practices. To this end the Fund can demand that a member presents any documents or information that the Fund deems necessary.
§ 4 The Guarantee Fund’s capital
(1) The Guarantee Fund’s total capital must, at all times, equal no less than the sum of 1.5 per cent of the total amount of guaranteed deposits held by members, plus 0.5 per cent of the total basis for the calculation of members’ capital adequacy (risk weighted assets), as stated in § 1(3)(a)(b). The Fund’s capital is procured through levies and guarantees in accordance with §§ 5 and 6.
(2) Calculation of members’ total guaranteed deposits, as mentioned in sentence 1 above, is based on an average of the members' deposits at the end of the third and fourth quarter of the calendar year two years before the payment year, and the first and second quarter of the calendar year one year before the payment year. The same method is used to calculate the total risk weighted assets.
§ 5 Membership levy
(1) Each year members pay a levy to the Guarantee Fund.
(2) The levy is calculated in accordance with Sections 19–6 and 19–8 of the Act and associated regulations.
(3) The board must notify individual members of the size of the levy to be collected. The deadline for payment is to be determined by the board.
(4) The levy payable by any new members of the Fund that were operational before joining, is determined by the MoF on a case by case basis.
§ 6 Member guarantees
(1) To the extent that the Guarantee Fund’s assets fall below the minimum required in § 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 set out in § 5.Calls for payments pursuant to guarantee liabilities in a single year may not exceed one-tenth of the Fund’s aggregate capital, cf. §4.
(2) The Fund’s board allocates the guarantee amounts and determines how
the guarantee liability shall be secured. The allocation of guarantee amounts shall be recalculated if the board so decides and when the MoF so requires.
(3) The board determines the wording of guarantee declarations from the members and ensures that the declarations are obtained.
§ 7 Investment of the Guarantee Fund's assets
(1) Within the frameworks pursuant to the rules below, the board determines the strategy and guidelines for management of the Guarantee Fund’s assets in order to ensure prudent management, necessary liquidity and ethical management.
(2) Investments must be made within the following parameters.
a. A minimum of two-thirds of the Fund's assets must be invested in Norwegian and foreign government and government-guaranteed bonds.
b. The Fund may not invest assets directly or indirectly in shares, equity certificates or other subordinated capital instruments issued by Norwegian banks or in a parent company of a financial group that includes Norwegian banks, unless such investments are a support measure pursuant to Section 19-11 of the Financial Institutions Act.
§ 8 Borrowings
(1) The board may decide that the Fund should borrow funds if this is deemed necessary to fulfil its objectives.
§ 9. General Meeting
(1) The Fund's supreme authority is the General Meeting. Unless otherwise determined by the MoF, each member institution has one representative and one vote at the General Meeting. A member institution can appoint as its proxy a representative of another member institution entitled to attend the meeting.
(2) The General Meeting is held once a year, when possible by the end of June.
(3) The Annual General Meeting is convened by the board. Notice of the General Meeting is issued by means of a letter sent to the member institutions no later than 14 days before the meeting. The agenda of items to be considered by the General Meeting must be in the hands of the member institutions no later than one week before the meeting. The General Meeting may not make any final decision on items other than those included in the agenda.
(4) Any proposal which a member institution wishes to have considered by the General Meeting must be submitted in writing. Such proposals should be submitted long before the meeting is convened, and must be received by the Fund no later than three weeks before the General Meeting.
(5) An Extraordinary General Meeting is held when the board deems it necessary, or when at least ten member institutions or member institutions which together represent more than 10 per cent of the total assets which member institutions have under management so demand. Those requesting an Extraordinary General Meeting must indicate at the same time which issues they wish the meeting to consider. Notice of an Extraordinary General Meeting must be issued in writing, so that it can be expected to have been received by all member institutions no later than eight calendar days before the meeting takes place.
(6) The General Meeting is chaired by the board’s chair, and in the absence of the board’s chair by its deputy chair. Should both the above be absent, the General Meeting elects the meeting chair. The meeting chair is responsible for ensuring that minutes are kept of the General Meeting. The minutes must be approved and signed by the meeting chair and two other participants who are elected by the meeting.
(7) Unless otherwise expressly stated in the Statutes, the General Meeting passes resolutions with a simple majority. In the event of a tie, the meeting chair has the casting vote, except for votes where decisions are made by the drawing of lots.
(8) The General Meeting adopts the Guarantee Fund’s Statutes, and can issue instructions to the board.
(9) The Annual General Meeting reviews:
a. The Report of the Board of Directors
b. The financial statements and the auditor's report
c. Establishment of remuneration paid to elected representatives and the auditor
d. Election of board members and deputy members
e. Election of members of the Nomination Committee
f. Other items that the board has tabled for consideration
g. Proposals from member institutions.
§ 10 Nomination Committee
(1) A Nomination Committee is elected at the General Meeting and prepares nominations for the next Annual General Meeting. Members of the Nomination Committee are proposed by elected board members.
(2) The Nomination Committee consists of five members, who are elected for a term of two years from among the representatives of member institutions. Members should preferably be re-elected only once. The General Meeting appoints the committee’s chair.
§ 11 Board of Directors
(1) The Board of Directors consists of seven members. Five members and five deputy members are elected in numbered sequence by the General Meeting, preferably from among the CEOs of member institutions. One member and deputy member are appointed by Norges Bank (central bank of Norway) and one member and deputy member by the Financial Supervisory Authority of Norway.
(2) Board members and deputy board members are elected for a term of two years. The election of members should reflect the need to achieve a balanced representation from member institutions of varying asset sizes and business models. A member should preferably be re-elected only twice.
(3) The board elects a chair and deputy chair from among its own members for one year at a time.
(4) Unless otherwise specified in § 15(5) or § 17(3) below, at least four board members must be present and unanimous in their decision for a board resolution to be adopted.
(5) Board meetings are held as often as the chair deems necessary or when at least two board members so request. Wherever possible board meetings should be convened in writing. Notice of the meeting must state the items to be deliberated. The Fund’s business manager convenes the meeting on behalf of the board chair.
(6) If deemed necessary due to time restraints, the board chair can opt to submit a matter to the board for written consideration. Resolutions may nonetheless not be adopted with respect to matters considered in writing if a board member requests that the item be considered at a board meeting. Resolutions made with respect to matters considered in writing must be presented to and recorded in the minutes at the next board meeting.
(7) The Chair of the Board is responsible for ensuring that minutes are kept of the board's proceedings. Each board member may request to have his/her vote recorded in the minutes. The minutes are signed by two board members appointed by the board, and by the Fund’s business manager. A copy of the minutes shall be sent to the board members.
(8) The board members receive remuneration for their work, as established by the General Meeting.
§ 12 The functions of the board
(1) The board manages the Guarantee Fund's activities.
(2) The board shall:
a. Convene Annual and Extraordinary General Meetings.
b. Make decisions on the collection of levies and obtaining of guarantee declarations etc. in accordance with §5(3)(4) and §6(2)(3) of the Statutes.
c. Establish the strategy and guidelines for management of the Guarantee Fund's assets in accordance with § 7 and make decisions on borrowings in accordance with § 8.
d. Employ a business manager for the Guarantee Fund, and issue instructions for the latter's conduct and remuneration.
e. Make decisions on the implementation of the deposit guarantee scheme or on support measures, in accordance with §§ 15, 16, 17 and 18 of the Statutes.
(3) The board's authority to commit the Guarantee Fund:
a. The Fund is bound by the signature of the board chair or at least two board members jointly.
b. The board may grant the business manager limited authority to act on behalf of the Fund.
§ 13 Audit
(1) The General Meeting elects a certified public accountant to perform auditing services. The auditor issues his report to the General Meeting.
§ 14 Duty of Confidentiality
(1) Elected representatives, public officials and the auditors of the Guarantee Fund shall issue a declaration on the duty of confidentiality regarding any matters of which these parties may become aware in their official capacities.
§ 15 The Deposit Guarantee
(1) The Fund has a duty to cover any losses that a depositor incurs with respect to deposits made with a member institution, unless otherwise stated in Section 19-9 of the Act. Here deposits are deemed to be each credit balance on named accounts, and liabilities in accordance with the deposit certificate of the named individual, with the exception of deposits from other financial institutions. In this context deposits are also deemed to include balances in connection with payment transfers or other normal bank services, and interest not yet due.
(2) If a depositor has total deposits that exceed NOK 2 million in the relevant member institution, the Fund is not obliged to cover losses on that part of the overall deposit that exceeds this amount. If the member institution is permitted to offset deposits and liabilities, the depositor’s total deposits are reduced by the amount of any liabilities, which have fallen due, that he or she may have in respect of other agreements. The MoF may issue statutory regulations allowing the ceiling for compulsory coverage of losses on certain special types of deposit or of deposits from specific depositors to be set at a higher level than that stipulated in this paragraph’s first sentence.
(3) The Fund is not obliged to cover losses on:
a. deposits from mutual funds and other collective investment enterprises
b. deposits with an unusually high interest rate or other financial benefits when such benefits have contributed to a deterioration of the institutions' financial situation.
(4) The Fund is not permitted to cover losses on:
a. deposits from companies in the same group as the member institution
b. deposits comprising the proceeds of a criminal act for which a legally binding judgement has been handed down.
(5) To pass decisions to cover losses in excess of the amount the Guarantee Fund is obliged to cover in accordance with paragraphs 1 and 2 above, require the approval of at least five board members.
§ 16 Settlement under the Deposit Guarantee Scheme
(1) The Fund shall cover losses on deposits in accordance with Section 19-10 of the Act.
§ 17 Support measures
(1) In order to enable member institutions as stated in § 1(3)(a)(b) to fulfil their obligations or continue in operation, or, if necessary, have their business transferred to another institution, the Fund can grant support by:
a. issuing guarantees or providing other support in order to secure or cover losses on deposits that cannot be covered in accordance with § 15 above
b. providing liquidity support, providing loans or guarantees for borrowings or the fulfilment of other obligations
c. injecting equity or issuing equity guarantees in order to ensure that the business can continue or be wound up
d. covering losses incurred by all, or specific groups of, creditors as a result of inadequate liquidity or capital adequacy
(2) Support granted under Section 19-11 of the Act may, instead, be granted to the parent company of a financial group. In such cases the parent company must immediately pass on the support to the member institution.
(3) Resolutions with respect to support can only be made within the parameters established under § 19. In assessing whether support should be granted, the board must place particular emphasis on maintaining public confidence in the banking system, and to the Fund's finances. This includes comparing the costs of using support measures with the costs that would have been incurred if the matter were to end in public administration and settlement in accordance with the deposit guarantee scheme. To pass a decision of support requires the approval of at least five board members, where the reasons for approval must be documented in the Fund's board minutes.
§ 18 Conditions for support
(1) The Fund's board decides whether and to what extent a member institution is granted support as stated in § 17 above, and the manner in which this is extended.
(2) A member institution which has received support or guarantees from the Fund shall implement the instructions issued by the Fund’s board in order to secure against losses. The member institution shall provide regular reports to the Fund’s board with respect to the member’s position and operations, as specifically determined by the Fund’s board.
(3) The Fund's board may require a member institution receiving support from the Fund to enter into negotiations on a merger with another member institution or other financial institution, or that amendments be made to the member institution's management or business.
§ 19 Maximum limit for the Guarantee Fund's total liabilities
(1) The board may not pass a decision in accordance with § 17 and § 18 unless the Fund's residual capital after the support measure along with future receipts of the annual levy and guarantee capital, as well as other available capital, are deemed to be sufficient to meet the Fund's liabilities under the deposit guarantee scheme.
(2) Pursuant to Section 19-11(7) of the Act, the Guarantee Fund may not, without the consent of the MoF, issue any guarantee or incur other liabilities in connection with the deposit guarantee or support measures that, taken together, make up more than twice the Fund's minimum capital, as set out in § 4.
§ 20 Report from the Board of Directors
(1) The Report from the Board of Directors on the activities of the Guarantee Fund is presented to the General Meeting by the board. It should be enclosed with the notice convening the General Meeting. The Report form the Board of Directors is signed by the entire board and initialled by the Fund’s business manager.
§ 21 Financial statements
(1) The Guarantee Fund's financial statements are prepared for the calendar year. Any surplus is added to the Fund’s capital.
(2) The business manager shall submit a draft of the audited financial statements to the board before the end of March.
(3) The financial statements shall be signed by the entire board and initialled by the business manager.
(4) The financial statements are enclosed with the notice convening the Annual General Meeting.
§ 22 Statutes
(1) A decision to amend the Statutes require two-thirds of the votes cast. The decision may not be implemented until it has been approved by the MoF.