Notice No. 3/2022, of February 2

---

PUBLISHED IN THE OFFICIAL GAZETTE, FIRST SERIES, NO. 22, OF FEBRUARY 2, 2022 NOTICE NO. 03/2022 SUBJECT: PAYMENT SYSTEM OF ANGOLA

• Operational Rules and Procedures Applicable to Financial Market Infrastructures

Whereas it is necessary to regulate Financial Market Infrastructures operating in the Payment System of Angola (SPA), aiming to adopt risk control mechanisms inherent to their operation; Considering the need to define operational rules and procedures inherent to Financial Market Infrastructures activities, regarding access, authorization, and operation of their operators and participants, establishing their duties and rights, as well as the exercise of Superintendence to ensure compliance with public interest objectives, namely security, efficiency and operational reliability, given the relevance of Financial Market Infrastructures to Financial System Stability; In accordance with the combined provisions of Articles 6 and 26 of Law No. 40/20, of December 16, Payment System of Angola Law, and Article 25(a) of Law No. 14/21, of May 19, General Regime for Financial Institutions Law, coupled with Article 21 of Law No. 24/21, of October 18, National Bank of Angola Law;

I DETERMINE: CHAPTER I (GENERAL PROVISIONS) Article 1.

CONTINUATION OF NOTICE NO. 03/2022 Page 2 of 42 (Subject Matter)

1. This Notice aims to: a) Establish requirements for Financial Market Infrastructures, hereinafter designated as FMI, namely payment systems, securities settlement systems, central securities depositories, central counterparties and transaction repositories; b) Ensure compliance with public interest objectives established in the Payment System of Angola Law, hereinafter designated as SPA, aiming to ensure proper functioning of FMIs; and c) Ensure observance of the Principles for Financial Market Infrastructures, hereinafter designated as PFMI, so as to mitigate risks to which they are subject and contribute to achieving financial stability. Article 2. (Scope) This Notice applies to FMIs, operators and participants of FMIs. Article 3. (Definitions)
2. Without prejudice to definitions provided in Law No. 40/20, of December 16, Payment System of Angola Law, for the purposes of this Notice, it is understood that: a) Central Counterparty – Entity interposed between counterparties in contracts traded in one or more financial markets, becoming the buyer for each seller and the seller for each buyer, ensuring thus execution of open contracts; b) Delivery versus Payment – mechanism guaranteeing that delivery of the security occurs if, and only if, financial settlement occurs, through linkage between a securities transfer system and a funds transfer system; c) Financial Market Infrastructure – multilateral system among participating institutions, including the system operator, used for clearing, settlement, payment recording, securities or other financial transactions, namely payment systems, securities settlement systems, central securities depositories, central counterparties and transaction repositories; d) Real-Time Gross Settlement – Settlement of obligations, one by one (gross), in real time; e) Deferred Funds Settlement – Settlement carried out at a later moment than that of acceptance of operations giving rise to corresponding obligations; f) Central Bank Money – Liability of a Central Bank, in the form of deposits held therein, which can be used for settlement purposes; g) Commercial Bank Money – Liability of a Commercial Bank, in the form of deposits held therein, which can be used for settlement purposes; h) Operator – Legal entity responsible for management and operation of a system; i) High-Value Payment – payment of high amount, transferred between banks or financial market participants, generally requiring urgent and timely settlement; j) Urgent Payment – payment where time is critical, generally requiring urgent and timely settlement; k) Credit Risk – Risk of a counterparty not settling an obligation for its full value, either at maturity or at any subsequent moment. In swap systems, risk is generally defined to include replacement cost risk and principal risk;

CONTINUATION OF NOTICE NO. 03/2022 Page 3 of 42 l) General Business Risk – Risk faced by a Financial Institution of any possible impairment of its financial condition (as a commercial concern), due to drops in revenues or growth in expenses resulting in expenses exceeding revenues and losses that must be charged against capital. Such losses may originate from adverse effects on reputation, poor execution of business strategy, ineffective response to competition, losses in other lines of business of the institution or its holding company, or other business factors; m) Legal Risk – Risk of loss due to unexpected application of a Law or regulation, because a contract cannot be fulfilled or because Laws or regulations do not support settlement system rules, execution of related settlement agreements, or ownership, rights and other interests held by the settlement system. Legal risk also arises if application of Laws and regulations is unclear; n) Liquidity Risk – Risk of a counterparty or participant in a settlement system not settling an obligation for its full value at maturity. Liquidity risk does not imply that a counterparty or participant is insolvent, as it may settle required debit obligations at some unspecified later moment; o) Operational Risk – Risk in which deficiencies in information systems or internal controls may result in unexpected losses. These deficiencies may be caused by human error or breakdown of some hardware, software or communication components crucial for settlement; p) System Operating Company – Non-Bank Financial Institution authorized by the National Bank of Angola, whose main object is operation of a payment system, clearing house, clearing system or settlement system, in accordance with the Payment System of Angola Law and General Regime for Financial Institutions Law; q) Payment versus Payment – Settlement mechanism guaranteeing that final transfer of a payment in one currency occurs if, and only if, transfer of a payment in another or other currencies occurs; r) PFMI – Principles for Financial Market Infrastructures, published by the Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO); s) Direct Participant – Participant responsible for settling its own payment operations, client payment operations, and indirect participants' payment operations on whose behalf it proceeds to settlement; t) Indirect Participant – Participant that does not have direct access to a system's services and, in principle, is not directly bound by the rules of the relevant system, and whose transfer orders are cleared, settled and recorded through a direct participant; u) Deferred Time – Moment subsequent to acceptance of operations.

CHAPTER II (GENERAL PRINCIPLES) Article 4. (Categorization)

1. Under this Notice, FMIs are categorized as: a) Payment Systems; b) Securities Settlement Systems; c) Central Securities Depositories; d) Central Counterparties; and, e) Transaction Repositories.

CONTINUATION OF NOTICE NO. 03/2022 Page 4 of 42 Article 5. (FMI Classification)

1. FMIs follow the following classification: a) Those bearing systemic risk are Systemically Important Institutions; b) Those relevant to the economy as a whole are Critical Institutions; c) Those relevant to specific economic sectors are Minor Institutions; d) Those with restricted or closed scope, considered of lesser interest for supervision purposes, are Non-Relevant Institutions.
2. In accordance with Article 25 of Law No. 40/20, of December 16, Payment System of Angola Law and the preceding paragraph, the National Bank of Angola designates: a) As Systemically Important Systems: i. Settlement systems for other systems, high-value and urgent payment systems, namely the Real-Time Gross Settlement System; and ii. Systems used to clear, settle or record payments, securities or other financial transactions. b) As Critical Systems, retail systems with a share equal to or greater than 25% of total operations volume in SPA; c) As Minor Systems, retail systems with a share lower than 25% of total operations volume in SPA; and d) As Non-Relevant Systems, closed or restricted-scope systems.
3. Systemically important designated FMIs must settle their obligations in central bank money, so as to minimize systemic risk.

CONTINUATION OF NOTICE NO. 03/2022 Page 5 of 42 4. Critically important designated FMIs must settle their obligations in central bank money, so as to minimize financial risk. 5. Without prejudice to the preceding paragraph, critically important designated FMIs may settle their obligations in commercial bank money, subject to National Bank of Angola approval. 6. Minor and non-relevant designated FMIs may settle their obligations in commercial bank money. 7. Operator designation is automatically determined by designation of their respective systems. 8. Based on the risk they represent, the National Bank of Angola reserves the right to include or exclude, designate or dismiss a given FMI. 9. In case of inclusion of an FMI, a period of up to six months is granted for the respective FMI operator to promote necessary adaptations. Article 6. (Requirements Applicable to Superintendence)

1. In accordance with Article 26 of Law No. 40/20, of December 16, Payment System of Angola Law, and with the Supervision Policy regarding FMI supervision requirements, these must adopt PFMI.
2. Systemically important designated FMIs must observe all applicable principles defined in PFMI, as per Annex I, which is an integral part of this Notice.
3. Critically important designated FMIs must observe principles 1, 2, 3, 4, 7, 8, 9, 13, 15, 16, 17, 18, 19, 21, 22 and 23 defined in PFMI, as per Annex I.
4. Minor designated FMIs must observe principles 1, 2, 3, 13, 15, 17, 18, 19, 21, 22 and 23 defined in PFMI.

CONTINUATION OF NOTICE NO. 03/2022 Page 6 of 42 5. Closed designated FMIs must adopt standards subject to general safety controls and customer protection rules, to be defined in specific regulation. 6. The National Bank of Angola must ensure biennial exercise of PFMI assessment applicable to FMIs, as provided in paragraph 1 and Annex I. 7. Regarding systemically important, critical and minor FMIs, the National Bank of Angola must: a) Approve FMI rules and procedures in a document named Rules and Procedures Manual, hereinafter designated RPM; b) Authorize FMI operation through assessments, namely consistency tests between provisions of respective RPM and procedures parameterized in supporting software applications; c) Revoke FMI operation authorization; d) Cancel activities carried out in the FMI, within the framework of FMI resolution and recovery process. 8. In exercising continuous assessment for non-relevant systems, the National Bank of Angola determines the following parameters, whose values are defined in specific regulation: a) Total value of payment operations; b) Number of operations performed; c) Number of participants; d) Number of clients; and e) Effects of their operation on the market. 9. The FMI operator and/or participant must report information regarding respective services to the National Bank of Angola, at frequency and form defined in specific regulation. 10. Non-relevant systems are obliged to the information duty provided in the preceding paragraph.

CHAPTER III (GOVERNANCE MODEL) Article 7. (Corporate Governance)

1. System operating companies must implement a corporate governance model ensuring security and efficiency, aiming to safeguard financial stability.
2. Policies and procedures on corporate governance must be clearly documented, namely: a) Ensuring risk management and internal control functions have sufficient authority, independence, resources and access to the Management Body; b) Specifying functions and responsibilities of the Management Body and procedures for its operation; and c) Being disclosed to owners, competent authorities, participants and, in cases of broad market impact, to the general public. Article 8. (Management Body)
3. For purposes of paragraph 1 of Article 8, the Management Body of the system operating company or FMI operator must: a) Possess necessary skills to perform its functions; b) Clearly define its functions and responsibilities; c) Possess adequate experience, qualifications and integrity to fulfill responsibilities for operation and risk management; d) Regularly review its performance, as well as that of each member;

CONTINUATION OF NOTICE NO. 03/2022 Page 7 of 42 e) Include procedures to identify and manage conflicts of interest among its members; f) Ensure that configuration, rules, overall strategy and relevant decisions of the corporate governance model adequately reflect legitimate interests of participants and other stakeholders; and g) Establish a clear and well-documented risk management structure, including a Risk Tolerance Policy that: i. Determines responsibilities in risk-related decision-making; ii. Determines Management Body accountability when risks exist; and iii. Establishes decision-making criteria in crisis or emergency situations. 2. The Management Body must ensure biennial exercise of self-assessment of applicable PFMI, as provided in paragraph 1 of Article 7 and Annex I. Article 9. (Governance Levels)

1. Governance model of systemically important systems, operated by the National Bank of Angola and institutions subject to its supervision, must be based on a three-level structure, as established in specific normative.
2. Regarding systemically important FMIs not operated by the National Bank of Angola and institutions subject to its supervision, governance model must be established by competent regulatory body in coordination with the National Bank of Angola, in conformity with protocol between parties.
3. Governance model for critical and minor designated FMIs must be based on a three-level structure, as to be established in specific normative.

CONTINUATION OF NOTICE NO. 03/2022 Page 8 of 42 4. Governance model for non-relevant designated FMIs is exclusively the competence of the FMI operating entity. CHAPTER IV (CLEARING AND SETTLEMENT) Article 10. (Calendar and Operating Hours)

1. Clearing and settlement of FMIs integrating SPA must be carried out according to calendar and hours defined in respective RPMs.
2. For purposes of preceding paragraph, FMI operator must communicate to National Bank of Angola, at least 10 (ten) business days in advance, any alterations occurring in established calendar and hours, and once approved, must be immediately disclosed to participants. Article 11. (Clearing)
3. Operations are considered accepted by FMIs at the time of closing clearing sessions, as provided in calendar and hours defined in respective RPMs.
4. For purposes of preceding paragraph, clearing occurs as long as FMI operator considers minimum necessary conditions for its realization are met, even in anomalous situations or exceptional occurrences notably affecting the financial system.
5. Whenever differences between transmitted values and actual values occur, operations must be regularized immediately by involved participants, as provided in respective RPMs or, in case of omission, in the most adequate manner, namely through bilateral contacts.
6. Clearing of operations referred to in this article is carried out based on processing transactions defined in respective RPMs and settlement FMI's RPM, management manuals and business continuity plans. Article 12.

CONTINUATION OF NOTICE NO. 03/2022 Page 9 of 42 (Settlement)

1. Settlement of rights and obligations of operations is irrevocable, unconditional and definitive, in accordance with Payment System of Angola Law.
2. Settlement moment for rights and obligations of FMIs settling in central bank money occurs in real time or deferred time.
3. Settlement moment for rights and obligations of FMIs settling in commercial bank money occurs in deferred time or real time.
4. FMI operator is responsible for organizing settlement process of clearing balances, on the value date of clearing and at established time.
5. For purposes of preceding paragraph, operator must establish operational procedures and credit, liquidity and risk containment measures, which can be implemented safely and quickly, as well as allowing full transparency regarding participant and central counterparty obligations, if existing.
6. Settlement carried out by FMIs must be based on processing transactions defined in RPMs, management manuals and business continuity plans of respective FMIs. Article 13. (Interoperability)
7. FMI operators must promote interoperability with settlement FMI, when applicable.
8. For purposes of preceding paragraph, implementation of interoperability requires prior authorization from National Bank of Angola, namely regarding settlement process between FMIs.
9. For purposes of preceding paragraph, intention to implement interoperability must follow rules provided in respective FMI's RPM.
10. FMI operators must communicate to National Bank of Angola implementation of interoperability, at least 60 (sixty) days prior to said implementation, containing detailed information on:

CONTINUATION OF NOTICE NO. 03/2022 Page 10 of 42 a) Conditions under which interoperability occurs; b) Proposed settlement process between systems and/or services; and c) Identification of their representatives, holders of settlement accounts in real-time gross settlement system, when applicable. 5. Cancellation of interoperability between systems requires National Bank of Angola authorization, requested at least 30 (thirty) days prior to expected cancellation date. Article 14. (Clearing and Settlement Procedures)

1. Operators must establish rules and procedures in RPM regarding clearing and settlement mechanisms.
2. Alterations related to FMI clearing and settlement procedures must be reported in advance by operators to participants within minimum 10 (ten) days.
3. FMI operators must require delivery of liquid assets as guarantee for commitments assumed by participants within settlement FIs they operate, as provided in monetary policy and guarantees regulatory framework.
4. For purposes of preceding paragraph, mentioned liquid assets must be taken as guarantee with adequate margin of valuation relative to market price and in sufficient amount to cover related obligations. CHAPTER V (PARTICIPATION CRITERIA) Article 15. (Participation)
5. Eligible for FMI participation are institutions provided in Article 32 of Payment System of Angola Law.
6. Without prejudice to preceding paragraph, National Bank of Angola may also consider participation of other entities in FMIs.

CONTINUATION OF NOTICE NO. 03/2022 Page 11 of 42 Article 16. (Types of Participation)

1. FMI participation may be direct or indirect, subject to provisions in this chapter and participation requirements defined in respective RPMs.
2. Participation in one FMI does not require participation in another FMI.
3. Requirements for FMI participation must be based on: a) Transparency, equity and ease of access; b) Operational, financial and legal criteria; c) Security and efficiency, according to their function in the market where they operate, being adapted and compatible with specific FMI risks; and d) Acceptable risk control standards, to define criteria with less restrictive impact.
4. FMI participation criteria and requirements, including restrictions, must be publicly disclosed.
5. Without prejudice to this article, participation in FMIs not supervised by National Bank of Angola is subject to conditions defined in FMI's RPM. Article 17. (Direct Participation Conditions)
6. Complementarily to Article 32 of Law No. 40/20, of December 16, Payment System of Angola Law, direct participation...