KNF guidelines for brokerage houses regarding dividend policy

The 5 Financial Supervision Commission on December this year took a position on the dividend policy of brokerage houses. During the meeting, a list of guidelines for companies that intend to pay dividends for 2017 was created.

KNF guidelines

The main recommendation is not to pay an amount higher than 3 / 4 of net profits earned by brokerage houses that meet the following criteria:

I. Entities subject to capital adequacy standards pursuant to Regulation 575/2013 as at December 31, 2017:

• Common Equity Tier 1 ratio was at least 6%,
• the Tier I capital ratio was at least 9%,
• the total capital ratio was at least 14%.

II. Entities not subject to the norms of capital adequacy

• in accordance with the 575 / 2013 regulation as at 31 December 2017, the ratio equal to the amount of equity in total assets is at least 50%.

III. the supervisory rating awarded in the BION process carried out in the year 2017 is 1 or 2;

• the entity in 2017 year did not violate the regulations regarding capital requirements contained in the 575 / 2013 Regulation and the Act on Trading in Financial Instruments (Journal of Laws of 2017, item 1768, as amended) and regulations regarding large exposure limits.

The dividend paid to 100% of the net profit achieved for 2017 is recommended only for brokerage houses which, in addition to the aforementioned standards, also meet the requirements listed in the first and second criterion at the end of each quarter in 2017.

In addition, the Commission recommends that brokerage houses in the decision-making process regarding dividend policy should take into account additional capital needs in the perspective of the next year, counting from the date of approval of the financial statements for the year 2017 ..