Our first edition of 2022 focuses on Healthcare and Life Sciences. It is a sector that will once again have the spotlight on it this year as we continue to tackle COVID-19 and its subsequent variants. While the pandemic continues to challenge the sector, governments across the region forge ahead with their plans to expand and upgrade healthcare systems and develop robust world-class healthcare infrastructure.
For the region, healthcare is a vital pillar in diversifying its economies, both locally and as medical tourism hubs. To underpin this, healthcare authorities across the region continue to implement frameworks and regulations that provide structure and accountability.
In this edition, you have unique access to great insights and expert commentary on a number of pertinent healthcare regulatory developments. You will find a topical mix of articles; for example, our lawyers discuss vaccines and returning to work during the pandemic. They take you through several other areas, including stem cell research in Bahrain, clinical research laws in Egypt, and Saudi medical device and pharmaceutical laws.Take a read of the edition
For these reasons, the government has drafted an amendment to the Jordanian Banking Law No. 28 of 2000 (“the “Banking Law”) in a manner that gives the Central Bank more oversight and authority over the management in banks in order to maintain the security of all financial transactions deriving therefrom. The draft of the Amended Banking Law (the “Draft”) has not yet been passed as it is still under review.
Appointing the Management of the Bank
First, the Draft gives the Central Bank full discretion to determine the number of members of the Board of Directors and the Independent Members in addition to the conditions and requirements of this independence. These requirements have been highlighted in the Corporate Governance Instructions for Banks No. 58 of 2014 (the “Instructions”), which provides in Article 6(d) that the qualification of a Board Member as an independent director shall be subject, as a minimum, to the following requirements:
The Central Bank also has the right to object to the nomination of any person to the membership of the Board of Directors if the Central Bank finds that the nomination contradicts the requirements stated above or if this person is less than twenty five years of age, not of good reputation or is a member of the Board of Directors, general manager, regional manager or an employee of any other bank (provided that this bank is not an affiliate).
Secondly, the Draft stipulates that the general manager of the bank shall not be related, up to the third degree, to the chairman of the Board of Directors, any of its members or any Qualifying Shareholder. The Central bank shall also be entitled to apply the same condition to any of the high positions in the bank. Additionally, the Central Bank may object to the appointment of the general manager of the bank or any of the high positions if the appointment was not in full compliance with article 25 of the Banking Law which explicitly requires the appointed person to be of good reputation, not to be a member of the Board of Directors of any bank (provided that this bank is not an affiliate), to be fully dedicated to managing the bank’s activities and to hold sufficient banking expertise and qualifications.
Financial Crisis Procedures
In the event that a bank encounters a situation that has a fundamental effect on its financial status, the Draft entitles the Central Bank to take, in coordination with Jordan Deposit Insurance Corporation (the “JDIC”), any of the procedures stated below if it would be a better approach to achieve financial banking stability and of lower cost than commencing the liquidation process:
If the sale or merger stated above were not possible or if the Central Bank saw that delaying this decision may decrease the cost of correcting the situation, then the Central Bank may establish a bridge bank in coordination with the JDIC. The following provisions shall be utilized to facilitate the creation and operation of this bridge bank:
It is also worth noting that, in relation to the above, the Draft further empowers the Central Bank as follows:
The amendments highlighted above constitute a step forward in ensuring and maintaining the transparency of the management of Jordanian banks in addition to a set of steps and procedures for aiding banks that are encountering financial problems. All being said, the Draft attempts to avert any future financial crisis by expanding the Central Bank’s oversight of management and setting a plan for banks in trouble. Such an approach should reflect positively on the financial market, increase consumer protection and hopefully reduce the number of financial crimes.