On August 28, Law no. 67/2013 was published, which approves the “Legal Framework on Regulators” and establishes the principles and rules that govern these bodies1. The law is structured in three Titles: (i) “Purpose and scope” (ii) “General principles and rules”, and (iii) “Organization, services and management”.

The law expressly recognizes as regulators the following entities: i) the Insurance Institute of Portugal; ii) the Portuguese Securities Market Commission; iii) the Competition Authority; iv) the Energy Services Regulator; v) the National Communications Authority (former ICP - ANACOM); vi) the National Civil Aviation Authority (former INAC); vii) The Institute for Mobility and Transports, IP; viii) the Regulatory Authority for Water and Waste and ix) the Regulatory Authority of Health. However, are excluded from its scope the Bank of Portugal and the Regulatory Authority for the Media which are ruled by specific legislation. In this context, the existing entities must submit to the Government a draft of their by-laws with amendments accordingly with the new legal framework within 30 days from the first business day after its publication. The by-laws shall be adapted by decree-law within 90 days after the entry into force of this law and must come into force on the 1st day of the month following its publication.

Title II of this legal framework contains general provisions relating to the legal nature, principles, rules, creation, extinction, merger, demerger, cooperation, scope and territorial organization of regulatory entities, among which shall be highlighted the rules concerning to the compliance by the regulatory entities with (i) a set of requirements, in particular, to have administrative and financial independence, to have management independence, to be organically, functionally and technically independent, to have its own bodies, services, staff and own property, to have regulation, regulatory, monitoring, supervisory and sanctioning powers and to protect the rights and interests of consumers (see article 3, no. 2) and with (ii) a set of management principles, such as the transparency in the activities through public discussion of draft documents that contain regulatory provisions and through the public release of relevant documentation on their activities and operations that impact on consumers and regulated entities, including on the cost of its operations for the regulated sector and the respect for the principles of prior programming and programming in expenditure which imply the assumption of commitments and payments in arrears of public entities.

Concerning to organization, it is established in Title III as mandatory bodies of the regulatory entities (i) the board of directors and (ii) the audit committee or auditor, also working with these entities a remuneration committee. The by-laws of the regulatory entities may establish other advisory bodies, tariff regulation bodies or bodies for the participation of the recipients of their activity.

In addition to the general rules relating to the function, composition, appointment, mandate, status, powers and functioning of the bodies provided for in Title III, it should be stressed the limitations arising from the regime of incompatibilities and impediments defined therein for the members of the board, who shall work on exclusivity during the exercise of its functions (see article 19, no. 1)2. After the termination of their mandate, for a period of two years, the members of the board of directors are forbidden to establish any contractual relationship with the companies, groups of companies or other entities which activity is regulated by the regulator3, having the right, in that period of two years, to a compensation4 equivalent to ½ of their monthly salary (see article 19, no. 2). In case of non-compliance with article 19, no. 2, a former member of the board of directors is obliged to return the amount corresponding to all net wages earned during the period in which he worked, as well as the total net compensation received under article 19, no. 2. (see also article 19, no. 6).

Regarding the employees of the regulatory entities, although it is applicable the legal framework of individual contracts of employment, they are also submitted to the requirements and limitations arising from the pursuit of public interest for workers in public functions, such as accumulations and incompatibilities legally established, as well, some rules on incompatibilities and impediments (see article 32).

With regard to financial and asset management, regulatory entities have their own budgetary autonomy5 and may use the net results for the benefit of consumers or for the regulated sector (see article 38, no. 5).

The law also establishes a vast set of powers of regulators, particularly in the context of its activity in regulating, supervising, monitoring, inspecting, auditing and sanctioning (see article 40 and following). It is also established the independence of these bodies in the exercise of their functions, which are subject to government supervision (see article 45.).