The Bank of Portugal released the final version of the guidelines that, as of next Wednesday (10th December), will regulate the new rules for the sale of bad debt by banks to non-financial entities.

The notice with the new guidelines was published in the Bank of Portugal’s Official Gazette and can be consulted on the regulator’s website.

The guidelines accompany the entry into force of the new Bank Credit Transfer and Management Regime, i.e. the rules on transactions in which financial institutions sell credit portfolios (generally non-performing) to third parties that are not financial entities and are not authorised to grant credit.

The new law, created in September by Decree-Law No. 103/2025, transposed into Portuguese law a European directive that should have been implemented almost two years ago, by 29 December 2023.

The new rules define the conditions that a bank must comply with in order to sell a bad debt to an external entity (usually investment funds) and the rules to be followed by the purchasing companies and the managers of the debts that are sold.

Since managers must be registered with the Bank of Portugal in order to carry out their activities and are subject to supervision by the central bank, the regulator’s notice defines the procedures to be followed by applicants to request this authorisation.

The text with the guidelines discloses the digital form template to be used and the documents that managers must submit to instruct applications to the BdP.

The notice also includes information on what elements must be sent to the BdP by credit managers authorised in Portugal who wish to carry out management activities in another European Union Member State.

The text also defines what information must be included in the public register of credit managers and what content must be included in communications sent by managers if they subcontract credit management activities.

The guidelines were finalised by the BdP after the draft notice was open for public consultation between 17 September and 29 October.

The directive on which the new credit transfer regime is based dates from 24 November 2021. The European text required European countries to transpose the new rules into national legislation by 29 December 2023. However, as Portugal is only now in the final stage of the legislative process, the Portuguese State faces infringement proceedings opened by the European Commission.

Original Story: Observador / Lusa
Photo: Image by Raten-Kauf from Pixabay
Translation & Edition:Prime Yield