Decree-Law no. 20/2016, published in the Portuguese Official Journal on 20 April 2016 ("Decree-Law 20/2016")  has amended the Credit Institutions and Financial Companies’ Legal Framework ("Regime Geral das Instituições de Crédito e Sociedades Financeiras" or “RGICSF”), with the purpose of enabling the shareholders of credit institutions (except mutual agricultural credit institutions and savings institutions) to periodically assess if the limitations applicable to shareholder voting rights that may result from the articles of association of the relevant credit institution should be maintained.

The enactment of the Decree-Law follows controversy surrounding negotiations between the main shareholders of Banco BPI, S.A. ("BPI"), that currently holds 50,1% of Banco Fomento Angola (“BFA”), to reduce its exposure to the Angolan market as per instructions given by the European Central Bank (“ECB”), which considers that Angola does not have a regulation and supervision system that is similar to the European Union framework. BPI's articles of association contain a rule which caps voting rights at 20%, irrespective of the shareholders holding a larger stake in the share capital of BPI. Removal of said limitation will favour the main shareholder who has launched a takeover bid over BPI.

According to the provision introduced by Decree-Law 20/2016 in RGICSF,  shareholders are given the opportunity to vote on the maintenance or elimination of the relevant provisions of the articles of association in respect of said limitations on voting rights at least once every five years. If, at the end of such period, there is no shareholder resolution on these matters, the relevant provisions shall expire automatically.

When such matter is taken to the shareholders meeting by proposal of the board of directors, the limitation on voting rights shall not apply, i.e. the shareholder voting at meeting resolving on the maintenance or elimination of the voting restrictions in the articles of association will not be subject to any limitations or caps other than the ones resulting from Portuguese law.  

Decree-Law 20/2016 also establishes a transitional framework, whereby credit institutions whose articles of association already include said limitations, shall be required to include the maintenance or elimination of the same in the agenda of a shareholders’ meeting to be held up to 31 December 2016. If, at the end of such period, there is no resolution concerning this matter, the provision setting out the relevant limitation shall expire automatically, unless otherwise decided by a court of law.       

Decree-Law 20/2016 comes into force on 1 July 2016.