Circular No. 07/EFI/2022, of December 21 - Structure for Presenting Information Elements for the Preparation of Resolution Plans

Bank of Mozambique Administration

FINANCIAL STABILITY DEPARTMENT CIRCULAR NO. 07/EFI/2022 Maputo, December 21, 2022

SUBJECT: Structure for presenting information elements for the preparation of Resolution Plans

The Bank of Mozambique established, through Notice No. 04/GBM/2022, of July 14, the rules for providing information for the preparation of resolution plans, in compliance with the obligation introduced by Article 140 of Law No. 20/2020, of December 31.

Given the need to establish the structure for presenting the aforementioned information elements, as established by Article 7 of Notice No. 04/GBM/2022, of July 14, the Bank of Mozambique instructs:

1. The provision of information for the preparation of resolution plans must follow the structure set out in the Annex to this Circular.
2. The information referred to in the preceding paragraph must be properly completed and sent to the Bank of Mozambique through the Bank Supervision Application (BSA).
3. This Circular enters into force immediately.

Any doubts arising from the interpretation and application of this Circular must be submitted to the Macroprudential Analysis Department of the Bank of Mozambique.

BANK OF MOZAMBIQUE Financial Stability Department [Signature] Benedita Maria Guimino Administrator

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Bank of Mozambique Administration

ANNEX I

Structure for presenting information elements for the preparation of Resolution Plans.

Section I Organizational Structure

1. Presentation and description of the organizational and corporate structure of the institution and the group, where applicable, including a list of all entities comprising it: a) Shareholder structure; b) Shareholdings; c) Governance structure; d) Complete organizational chart of the corporate structure.

2. Identification of shareholders with qualifying participations in the share capital or voting rights of the institution and the other group entities, where applicable.

3. Registered office address;

4. Identification of the members of the institution's management body and description of their respective functions and responsibilities;

5. Identification of each group entity, where applicable, including: a) Name; b) Location; c) Number of branches and geographical distribution; d) Licensing authority; e) License type.

6. Identification of the supervisory and resolution authorities for each entity comprising the group, where applicable: a) Banking entities; b) Non-banking entities.

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Section II Business Structure

7. Description of the business model and funding strategies of the institution or group, where applicable.

8. Identification of all critical functions, assets, and liabilities of the institution and group, where applicable: a) Critical functions; i. Entities associated with the functions; ii. Main business lines; iii. Critical services shared with third parties. b) Assets and liabilities: i. Type; ii. Amount; iii. Currency.

9. Identification of all strategic business lines of the institution and group, where applicable, including: a) Geographical location; b) Description of criteria used for classification; c) Assets and liabilities: i. Type; ii. Amount; iii. Currency; d) Identification and contacts of the managers for each business line.

10. Mapping between each critical function identified in point 8 and the business lines served by that function.

11. Mapping between each strategic business line identified in point 9 and each group entity, where applicable.

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12. Mapping between the strategic business lines of the institution or group, where applicable, and the assets and liabilities specifically allocated to them. In the case of groups, reference must be made to each of the entities comprising it.

13. Identification and contacts of the main managers for each critical function: a) Responsible manager: i. Name; ii. Role; iii. Department; iv. Telephone contact; v. Email address.

14. Identification and address of the facilities where each critical function is carried out, as well as the facilities where the supporting infrastructure is located.

15. Description of the liquidity management policy and the liquidity position of the institution or group, where applicable, including: a) Emergency funding mechanisms that may be used in the event of resolution measures being applied; b) Intra-group funding relationships.

16. Description of activities recognized in off-balance sheet items, hedging strategies, and accounting practices.

17. Identification of all contracts (type, counterparty, and amounts) entered into by the institution or other group entities, where applicable, whose conditions provide for their potential early termination following the application of resolution measures.

Section III Operational Structure

18. Identification and description of the IT systems and applications and their respective licenses that appear critical for the development or operation of each critical function, including:

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a) Type:
    i. Core banking system;
    ii. Treasury system;
    iii. Risk management;
    iv. Accounting;
    v. Financial reporting;
    vi. Regulatory reporting;
    vii. Others.
b) User:
    i. Entity Name;
    ii. Contract type;
    iii. Critical functions;
    iv. Strategic business lines.
c) Counterparty and respective contracts;
d) Responsible manager:
    i. Name;
    ii. Telephone contact;
    iii. Email address.

19. Identification and description of the systems in which the institution or group, where applicable, carries out operations in a materially significant number or amount, as well as management information systems.

20. Identification of service providers involved in each critical function and description of their responsibilities, including the owners of the systems identified in points 18 and 19.

21. Interconnections and interdependencies between the different group entities, where applicable, regarding the existence of common or shared personnel, facilities, and systems.

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Section IV Financial Information

22. Presentation of the structure and amounts of the liabilities of the institution and other entities comprising the group, where applicable, stratified by type, debt maturity, and counterparty, regarding the following elements: a) Secured, unsecured, and subordinated liabilities; b) Liability hierarchy according to the prevailing insolvency regime; c) Maturity intervals (short, medium, and long term).

23. Disaggregation of liabilities by counterparty type, specifying responsibilities regarding: a) Central banks and central administrations; b) Public sector; c) Other financial institutions; d) Group financial entities, where applicable; e) Group non-financial entities, where applicable; f) Non-financial enterprises; g) Individuals.

24. Presentation of the asset structure of the institution and other entities comprising the group, where applicable, indicating the set of assets considered necessary for the development of each strategic business line.

25. Other details of the financial position statement and off-balance sheet items, including: i. Off-balance sheet exposures; ii. Liabilities to major counterparties; iii. Off-balance sheet items received from major counterparties; iv. Liabilities to other credit institutions.

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26. Information on derivative instruments to which the institution is exposed, indicating notional values by instrument type, by underlying asset classes, by counterparty, and by purpose (hedging or trading).

27. Quantification and identification of all intra-group exposures of the institution and exposures of other group entities towards the institution, including the identification of each counterparty, the type of exposure, and the respective amount.

28. Quantification and identification of exposures of other financial institutions towards the institution and towards other group entities, where applicable, including the identification of each counterparty (namely the legal name, tax identification number, and institution type), the type of exposure, and the respective amount.

29. Complete list of encumbered assets on the institution's balance sheet, with amount stratification, beneficiaries of each encumbrance according to the counterparty classification in point 25, and indication of the jurisdiction where the encumbered assets are located.

Section V Qualitative Analysis Related to Financial Information in Section IV Regarding each topic:

30. Description of the information gathering process (sources, data preparation and verification process).

31. Indication of the time required to update and present the relevant information upon request by the Bank of Mozambique.

32. Identification of contracts whose termination should not be based on the application of resolution powers provided for in paragraph 1 of Article 167 of Law 20/2020, of December 31.

33. Identification of Terms and Conditions in relationships with custodians related to assets eligible for Interbank Money Market and Capital Market operations.

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Section VI Information Reporting

34. Identification and contacts of the person responsible for providing the information set out in this Annex and of the managers for the different group entities, where applicable: a) Reporting responsible manager: i. Name; ii. Role; iii. Department; iv. Telephone contact; v. Email address.

35. Description of the mechanisms implemented by the institution to ensure that, in the event of resolution, the Bank of Mozambique has, at all times and in a timely manner, updated information regarding the elements set out in this Annex.

Section VII Payment Systems

36. Identification of each payment, clearing, or settlement system in which the institution carries out a significant number of operations, by critical functions and strategic business lines.

37. List of entities that provide or that the institution provides payment services to, and description thereof.

38. List and description of all applications, services, and communication channels necessary to ensure regular and effective functioning and the processing of operations through each identified system, from an "end-to-end" perspective (from the initial payer to the final beneficiary).

39. Regarding each system, and where applicable, regarding each application and service, the following information elements must be presented: a) User Manual and any other relevant documentation, including business continuity plans and a daily activity checklist;

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b) Access management policy description (e.g., profiles, privileges, actions subject to the four-eyes principle, access administrators, time required for user creation, deletion, and modification);
c) List of contacts of essential staff to ensure regular and effective functioning and operation processing in each system (including respective departments and physical facilities), from a business and IT perspective, considering all identified applications and services;
d) Identification and description of any parameters that can be altered to control operations processed through each system (e.g., maximum credit transfer value via internet banking, maximum payment value initiated by the institution's back office without specific authorization, parameters managed at the deposit account level);
e) Identification and contact list of all counterparties that must be notified in the event of resolution measures being applied, including indication of the most appropriate means for this purpose (e.g., SWIFT messages or email);
f) List of contacts of personnel responsible for "Critical data" per system, i.e., when the value and/or volume of operations increases (e.g., at the end of each month, in December, etc.) or when critical operations need to be processed;
g) List and description of critical actions that must be executed regularly (including due dates and times), to ensure correct system usage and involved personnel.

40. List of all payment means and instruments made available to clients (e.g., checks, debit and credit cards, transfers, direct debits).

41. List and description of all applications and services necessary to ensure that payment means and instruments can be made available and used by clients without any disruption.

42. List of contacts of the managers of relevant service providers.

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43. Description of any other aspect considered relevant to ensure the regular and effective use of payment, clearing, or settlement systems, as well as payment instruments.

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ANNEX II

REPORTING MODELS

Auxiliary Notes for Filling in the Information Reporting Maps for the Preparation of Resolution Plans

1. Introduction

The objective of the maps below is to collect information related to governance and management, main business lines, liability structure, guarantees offered, off-balance sheet exposures, payment clearing and settlement systems, information systems, and financial and contractual interconnections that may affect or be affected by the application of resolution measures.

2. Structure

The information collection models are divided into 10 categories: I. Organizational structure; II. Business and operational structures; III. Liability structure; IV. Guarantees; V. Contractual provisions; VI. Information systems; VII. Shared services; VIII. Off-balance sheet exposures; IX. Financial interconnections; X. Payment systems.

3. Accounting Standard

Banks must report accounting values according to the structure they use for financial information reporting.

4. Applicability

The level of application is generally at the level of the institution licensed in Mozambique. The Bank of Mozambique indicates the required request level.

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5. Instructions regarding the models

IMPORTANT NOTE: Some information elements require the submission of additional documents attached to the models. In these cases, the names of the attached files must be filled in the model fields where such information is requested. If a field does not accommodate the entire text, do not complete the sent text or if extra information is intended to be sent, such as diagrams or figures, these elements can be sent in attached files and the file names must be indicated in the respective fields.

5.1. Organizational, business, and operational information elements

Information Elements	Information Elements
I. Organizational Structure – This model presents the organizational and corporate structure of the institution or group, location, licensing jurisdiction, and shareholder structure.	Columns 10 to 120
II. Business and Operational Structure – The maps regarding information on the business and operational structure establish a mapping of critical functions and strategic business lines of the institution and group, the relevant assets and liabilities related to these business lines, taking into account the business lines that were assessed as "essential" in the recovery plan. These maps cover the identification and description of IT systems and applications, their providers and users, in the institution or group, their interconnections and interdependencies between critical functions and strategic business lines. The maps also aim to collect information on the management body member responsible for the information, as well as the managers for the different business lines.	Columns 130 to 260

5.2. Financial information elements

Map Name	Information Elements
III. Liability Structure - Aims to obtain a detailed description of the institution's liability components by counterparty type, with detail on debt types and amounts, by maturity intervals, short, medium, and long term.	280 to 370 – Counterparties. All categories are mutually exclusive, meaning no instrument or value should be reported in more than one column. Large non-financial enterprises - Any company that does not fit into other disaggregations must be included in this category.

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Map Name

Information Elements

secured, unsecured, and subordinated liabilities.

Government, central banks and supranational entities - Supranational counterparties must include international organizations. Others/undisclosed - If the identity of a liability holder is unknown, amounts must be assigned to this column and no further disaggregation is required. The reporting institution must make efforts to identify its counterparties and limit the use of this column to the minimum. Liability Components: I - EXCEPTIONS TO RESOLUTION POWERS – LICSF ART. 175 NO. 1 of Art. 175 (Exceptions to the power provided for in letter b) of Art. 174) P.101 - Secured deposits (LICSF Art. 175, nº1, letter a) – refers to liabilities arising from deposits guaranteed by the Deposit Guarantee Fund (FGD) up to the maximum insured value, under Article 7 of Decree No. 49/2010, of November 11: • On demand; • With prior notice; • At term. No. 2 of Art. 175 (Exceptions to the power provided for in letter i) of Art. 174) P. 104 - Credit institution funds < 7 days (LICSF Art. 175, nº2, b) - Interbank money market; • Very short-term funds: • Deposits; • Loans; • Sale with agreement to repurchase operations; • Other funds. Liabilities to national and foreign banks and investment companies, excluding entities comprising the same group, with initial maturity of less than seven days. II - RESOLUTION POWERS P. 208 - Central Bank Funds

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Map Name

Information Elements

• Bank of Mozambique funds; • Other central bank funds. P. 209 - Credit institution funds > 7 days • Interbank money market • Very short-term funds o Deposits o Loans • Sale with agreement to repurchase operations o Securities; o Granted Credit; o Other Operations • Other funds o Discount; o Rediscount; o Others. Customer funds and other loans - Liabilities arising from client asset management, including client assets or money held by the bank in resolution on behalf of investment and pension funds. P. 211 - Unsecured deposits not covered by FGD (Decree No. 49/2010, November 11, Article 6) – refers to liabilities arising from deposits not covered by Article 2 of the aforementioned Decree. P. 212 - Liabilities represented by securities; P. 213 - Hedging derivatives; P.214 - Financial liabilities held for trading; P. 215 - Financial liabilities at fair value through profit or loss; P. 216 - Deferred tax liabilities: For temporary differences; For tax credits; P.217 - Current tax liabilities. Tax and social security authority obligations o Value added tax - to be paid; o Withholding taxes; o Remaining taxes. P.218 - Capital representative instruments; P.219 - Subordinated liabilities; P.220 - Payable charges: o Interest and similar charges; o Commissions associated with amortized cost (postponed); o Other payable charges.

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Map Name	Information Elements
	P.221 - Other liabilities - This is a residual category. Thus, significant values are not expected to be reported on this line; however, it should be used to reconcile the sum of liabilities in this spreadsheet with the published financial statements. Own Funds FP.100=FP.101+FP.102 Total Liabilities and Own Funds, including derivative liabilities PT.100 =P.100+P.200+FP.100 PT.101 - Total Equity – Must be equal to the total reported on the balance sheet. PT.102 - Total Assets – Must be equal to the amount reported on the balance sheet.
IV. Guarantees – Covers the identification of processes necessary to determine to whom the institution offered a guarantee, the person holding the guarantee, and the jurisdiction where the guarantee is located.	410 – Entity – Name of the entity that is part of the financial transaction; 420 – Guarantor; 430 – Type of guarantee provided - Covers all types of pledge, including when there is an off-balance sheet liability; 440 – Guarantee holder; 450 – Amount; 460 – Currency - Identification according to ISO 4217; 470 - Law applicable to the guarantee holder (Indicate jurisdiction) - Law of the jurisdiction applicable to the guarantee holder identified in column 440 (e.g., German law).
V. Contractual Provisions - This model covers all agreements entered into by the bank or other group entities with third parties whose termination may be triggered by a decision of the authorities to apply a resolution instrument and whether the consequences of termination may	480 – Entity Name (To be reported or of the group); 490 – Third party; 500 – Contract type. 510 - Can resolution trigger contract termination? - This field identifies whether resolution can trigger contract termination with third parties. Select 'yes' or 'no' from the dropdown list.

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Map Name	Information Elements
affect the application of the resolution instrument.	520 – Comments. Banks must develop a methodology to determine "relevant" contracts with third parties, for example, establishing materiality thresholds that should consider the contract size, whether a contract is linked to a critical function, etc.
VI. Information Systems (I.T) - This model covers: • The detailed inventory and description of main information management systems, including risk management, accounting, and financial and regulatory reporting systems used by the institution, including a mapping of the institution's legal entities, critical operations, and main business lines; • The identification of system owners, service level agreements related