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Ministry of Industries and Innovation

Financial Services and Markets - Act No 60/1997 on the Establishment of the Icelandic Investment Bank Ltd.

Translated from the Icelandic

May 26, 1997 No. 60





THE PRESIDENT OF ICELAND
Announces: Althingi has approved this Act and I confirmed it with my approval:
Article 1

The Government shall work towards the establishment of a credit institution in accordance with Act. No. 123/1993 on Credit Institutions other than Commercial Banks and Savings Banks, which shall be called the Icelandic Investment Bank Ltd. (Fjárfestingarbanki atvinnulífsins hf.). The provisions of Act No. 123/1993, and of Act No. 2/1995 Respecting Public Limited Companies, shall apply to the Investment Bank unless otherwise stipulated in this Act.
The Minister of Commerce shall handle the preparations for the establishment of the Investment Bank and be responsible for the implementation of this Act.

Article 2

The role of the Icelandic Investment Bank Ltd. is to provide financial services for Icelandic business. The Investment Bank shall undertake whatever such activities as are authorized by law to credit institutions other than commercial banks and savings banks, as further specified in its articles of association.

Article 3

The Icelandic Investment Bank Ltd. shall, on 1 January 1998, take over, as its shareholders' contribution in accordance with Article 4, all the assets, liabilities and commitments of the Fisheries Investment Fund (Fiskveiðasjóður Íslands), Industrial Loan Fund (Iðnlánasjóður), Export Credit Fund (Útflutningslánasjóður) and Industrial Development Fund (Iðnþróunarsjóður), apart from those otherwise allocated in accordance with the Act on the New Business Venture Fund (Nýsköpunarsjóður atvinnulífsins).

Article 4

The Treasury is the owner of all share capital in the Icelandic Investment Bank Ltd. upon its establishment.
The Minister of Commerce shall determine the total amount of share capital in the Investment Bank upon its establishment. This amount shall be determined on the basis that its total share capital upon establishment shall not be greater than the equivalence of the own funds of the Fisheries Investment Fund, Industrial Loan Fund, Export Credit Fund and Industrial Development Fund, which are contributed to the Investment Bank under the provisions of Article 3, as stated in the audited financial statements of those funds for the year 1996.
The Minister shall establish a three-man committee to evaluate the total amount of foundation capital of the Investment Bank. The findings of the committee shall be available at the latest on 1 October 1997. The access of the committee to documents and the duty of confidentiality of the committee members is determined in Art 20, paragraph 3. The Minister decides the terms of reference for committee members.

Article 5

The Minister of Fisheries and the Minister of Industry shall jointly administer the Treasury's share in the Icelandic Investment Bank Ltd.
Voting rights on behalf of the Treasury at the Investment Bank's annual general meeting and other shareholders' meetings shall be vested in a three-man committee. Two members thereof shall be appointed by the Minister of Industry, one of them in accordance with the recommendations of the organisation of industrial enterprises, and two shall be appointed by the Minister of Fisheries, one of them in accordance with the recommendations of the organisation of fisheries enterprises. The Minister of Industry and the Minister of Fisheries shall appoint one member jointly.

Article 6

Up to 49% of the Treasury's shares in the Icelandic Investment Bank Ltd. may be sold. The Minister of Industry and the Minister of Fisheries shall begin preparations for the sale of these shares immediately upon the entrance into effect of this Act.

Article 7

The provisions of Article 6 of Act No. 113/1996, cf. Article 6 of Act No. 123/1993, and, Article 14, paragraph 2 of Act No. 2/1995 Respecting Public Limited Companies, do not apply to the down payment of share capital in the Investment Bank. The provisions of Articles 6 and 7 of Act No. 2/1995 do not apply to payment of share capital in accordance with Article 4 and 5 of this Act.
The provisions of Article 3, paragraph 2, Article 20, paragraph 1 and Article 107, paragraph 1, point 2 of Act No. 2/1995 shall not apply to the number of founders and number of shareholders in the Icelandic Investment Bank Ltd.

Article 8

It is not authorised to grant shareholders in the Icelandic Investment Bank Ltd. more favourable terms than its other customers, or other special privileges in the business they do with it as a result of their shareholding.

Article 9

The Treasury is responsible for the obligations of the Fisheries Investment Fund, Industrial Loan Fund and Industrial Development Fund which carry state guarantees at the time of the establishment of the Icelandic Investment Bank Ltd. The Treasury's guarantee shall remain as originally granted and be valid until the respective obligation has been honoured in full.
The Treasury shall not be responsible for the obligations of the Icelandic Investment Bank Ltd. over and above the stipulations made in this Article and in the Public Limited Companies Act.

Article 10

All employees of the Fisheries Investment Fund, the Industrial Loan Fund and the Industrial Development Fund who are paid in accordance with the collective agreements of the Union of Icelandic Bank Employees or the collective agreements of other trade unions and who are not offered employment with the New Business Venture Fund, shall be offered employment with the Icelandic Investment Bank Ltd.
Persons previously employed by the Fisheries Investment Fund, the Industrial Loan Fund or the Industrial Development Fund who accept positions at the Icelandic Investment Bank Ltd shall enjoy the same rights as they had under their collective agreements or employment agreements. Their right to wages from the Fisheries Investment Fund, the Industrial Loan Fund or the Industrial Development Fund shall lapse when they enter their new positions.

Article 11

With regard to any right to severance pay, which may have accrued to employees of the Fisheries Investment Fund, the Industrial Loan Fund and the Industrial Development Fund, the provisions of Act No. 70/1996, on the rights and obligations of state employees, shall apply.

Article 12

The location for payment and the depository of debt instruments owned or awaiting collection by the Fisheries Investment Fund, the Industrial Loan Fund and the Industrial Development Fund shall be with the Icelandic Investment Bank Ltd. when it commences operation as a credit institution as stipulated in Article 19 of this Act. The Investment Bank shall assume all rights and all obligations of the Fisheries Investment Fund, Industrial Loan Fund, Export Credit Fund and Industrial Development Fund, including rights or obligations arising from debt instruments owned by them or involved in litigation pursued by them or being directed against them. The Fisheries Investment Fund, the Industrial Loan Fund, the Export Credit Fund and the Industrial Development Fund shall publish two notices to this effect in the Official Gazette. These notices shall be published with an interval of around two weeks, the former at least 30 days before the Icelandic Investment Bank Ltd. commences operation as a credit institution.

Article 13

In cases where the boards of directors of the Fisheries Investment Fund, Industrial Loan Fund, Export Credit Fund and Industrial Development Fund are authorized under the terms of debt instruments to determine their interest terms, the board of directors of the Icelandic Investment Bank Ltd. shall be authorized to make such decisions after the date stipulated in paragraph 1, Article 19 of this Act.

Article 14

The Fisheries Investment Fund Credit Unit basket (RFÍ), cf. Article 6 of Regulation No. 277/1991 as amended, shall from January 1 1998 inclusive be comprised of the same currencies with the same relative weighting as those on which the Fisheries Investment Fund bases its calculation of the unit's value on December 31 1997. From that time onwards, the Credit Unit thus comprised shall be applied for calculation of loans made by the Fund which are indexed to the basket. The value of foreign currencies shall be in as registered by the Central Bank of Iceland.
The Investment Bank's board of directors shall announce in January 1998 the currencies comprising the Credit Unit basket and their relative weighting. The same notice shall offer the borrowers concerned the opportunity to redeem the loan or renegotiate the index reference for their debts, and a grace period of not less than eight weeks may be fixed for this purpose. Changes to the terms shall be conditional on agreement by holders of lower pledges, in accordance with the general rules in this respect. Documents concerning such renegotiations shall be exempt from stamp duty.
Late payments of loans denominated in the Fisheries Investment Fund's Credit Unit basket (RFÍ) shall always be considered in RFÍ, i.e. the currency rate and indexation will remain until payment is made. Late payment interest shall be the prevailing negotiated interest of RFÍ loans at any given time plus an addition of one-quarter of the negotiated interest rate. The late payment interest is thus 1.25 times the negotiated interest rate per year. Late payment interest is calculated on a daily basis.

Article 15

The statement of establishment shall prescribe any points to be included in the statutes of association in accordance with the Act respecting Public Limited Companies other than those mentioned in the present Act.

Article 16

No notice to submit demands for payment shall be issued to the creditors of the Fisheries Investment Fund, Industrial Loan Fund, Export Credit Fund or Industrial Development Fund.

Article 17

The Icelandic Investment Bank Ltd. shall take over all rights and obligations relating to taxation of the Fisheries Investment Fund, the Industrial Loan Fund, the Export Credit Fund and the Industrial Development Fund. In other respects the Investment Bank shall comply with legislation on the tax obligations of credit institutions.

Article 18

In cases where the Fisheries Investment Fund, the Industrial Loan Fund, the Export Credit Fund and the Industrial Development Fund are entrusted with specific tasks under legislation which is in force after the Investment Bank commences operation as a credit institution, the Icelandic Investment Bank Ltd. shall take over those tasks as appropriate.

Article 19

The Icelandic Investment Bank Ltd. shall commence operation as a credit institution on January 1 1998, when it takes over the assets, liabilities and commitments stated in Article 3 of this Act. The Fisheries Investment Fund, Industrial Loan Fund, Export Credit Fund and Industrial Development Fund shall be abolished from the same time, whereupon the following Acts shall be rescinded:

1. Act No. 44/1976 on the Fisheries Investment Fund, as amended.
2. Act No. 10/1984, supplementary to Act No. 44/1976 on the Fisheries Investment Fund.
3. Act No. 72/1985, supplementary to Act No. 44/1976 on the Fisheries Investment Fund.
4. Act No. 135/1989, supplementary to Act No. 44/1976 on the Fisheries Investment Fund.
5. Act No. 76/1987 on the Industrial Loan Fund, as amended.
6. Act No. 9/1970 on the Industrial Development Fund, as amended.
7. Act No. 47/1970 on the Export Credit Fund, as amended.
8. Act No 93/1986, on the Fishing Vessels Contribution Fund.

The mandate granted to the boards of directors appointed in accordance with current legislation governing the Fisheries Investment Fund, Industrial Loan Fund and Industrial Development Fund shall be rescinded at the time stipulated in paragraph 1 of this Article.

Article 20

The public limited company The Icelandic Investment Bank shall be established at an inaugural meeting to be held no later than July 1, 1997. The meeting shall elect the Investment Bank's board of directors, which shall act until a new board has been elected at the first annual general meeting after the company has commenced operation as a credit institution, in accordance with Article 19 of this Act. Until the time stipulated in paragraph 1 of Article 19, it shall be the task of the Icelandic Investment Bank Ltd. to prepare its operation as a credit institution. The Icelandic Investment Bank Ltd. shall act in consultation with the board of directors of the New Business Venture Fund regarding negotiations with employees of the Fisheries Investment Fund, the Industrial Loan Fund and the Industrial Development Fund.
The foundation capital of the Icelandic Investment Bank Ltd. shall not be paid in to it before January 1 1998, cf. Article 3 of this Act.
From the establishment of the Icelandic Investment Bank Ltd. until it commences operation in accordance with paragraph 1 of Article 19, it shall have full access to the records of the Fisheries Investment Fund, the Industrial Loan Fund, the Export Credit Fund and the Industrial Development Fund, notwithstanding statutory provisions regarding confidentiality. The directors and employees of the funds shall provide the directors and employees of the Icelandic Investment Bank Ltd. with such assistance as is necessary. Management and employees of the Icelandic Investment Bank Ltd. shall be bound by a confidentiality obligation in the same way as management and employees of the said funds.
All expenses deriving from the establishment of the Icelandic Investment Bank Ltd. shall be paid by the Bank itself.

Article 21

This Act shall enter into force at once.

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Disclaimer: This section of the site details available translations on legislation relating to the Government Offices in Iceland. In case of any discrepancies between the translations and the original text in Icelandic, the original text as published in the Icelandic Legal Gazette prevails.

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