Notice No. 09/2013 of June 10 on the Processing of Authorization Applications for the Establishment of Banking Financial Institutions

Published in the Official Gazette, Series I, No. 128 of July 8 NOTICE NO. 09/2013 of June 10 SUBJECT: PROCESSING OF AUTHORIZATION APPLICATIONS FOR THE ESTABLISHMENT OF BANKING FINANCIAL INSTITUTIONS Whereas it is necessary to align the regulation on the processing of authorization applications for the establishment of banking financial institutions with internationally accepted practices; Whereas it is desirable to define the requirements and procedures for authorizing the establishment of banking financial institutions; Pursuant to the provisions set forth in the Law of the National Bank of Angola and the Financial Institutions Law; I HEREBY DETERMINE:

CHAPTER I GENERAL PROVISIONS
Article 1 (Subject Matter)

1. This Notice establishes the requirements and procedures for authorizing the establishment of banking financial institutions, including the establishment of a branch, subsidiary, and representative office of a banking financial institution with its main seat and effective place of administration abroad.

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2. This Notice also establishes the requirements and procedures for authorizing the establishment abroad of branches, subsidiaries, and representative offices of banking financial institutions authorized by the National Bank of Angola.

Article 2 (Scope)
This Notice applies to:
a) all interested parties seeking to establish, within national territory, a banking financial institution or to set up a branch, subsidiary, or representative office of a banking financial institution headquartered in a foreign country; b) banking financial institutions authorized by the National Bank of Angola seeking to establish a branch, subsidiary, or representative office in a foreign country.

Article 3 (Definitions)
Without prejudice to the definitions established in the Financial Institutions Law, for the purposes of this Notice, the following terms are understood as:

1. "Director": an individual responsible for a function or organizational unit, who exercises significant influence over the management of the institution's current affairs, and reports directly to the Administrative Body, or depending on the organizational structure, to one of its members.
2. "Economic Group": a group comprising financial (banking or non-banking) and non-financial companies, in which a controlling relationship exists from one entity to the others.

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3. "Financial Group": a group comprising resident and non-resident companies with the nature of banking or non-banking financial institutions, excluding financial institutions linked to insurance and social security activities, in which a controlling relationship exists from a parent company supervised by the National Bank of Angola to the other constituent companies.
4. "Related Parties": partners or shareholders with qualified participations, entities belonging to the economic group, or persons related as spouse, descendant, or ascendant of the first and second degrees to members of the administrative and supervisory bodies of financial institutions, considered directly or as ultimate beneficiaries of transactions or assets.
5. "Controlling Relationship": "controlling relationship" as defined in the Financial Institutions Law.

CHAPTER II ACTIVITY IN ANGOLA
SECTION I (General authorization requirements for the establishment of a banking financial institution)
Article 4 (General principles of establishment authorization)

1. The establishment of banking financial institutions depends on authorization granted by the National Bank of Angola, except when they are branches and subsidiaries of banking financial institutions whose main effective place of administration is in a foreign country or which are under a controlling relationship with a foreign entity, in which case authorization is granted by the Head of the Executive Power, upon a favorable opinion from the National Bank of Angola.

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2. The requirements for obtaining authorization to establish a banking financial institution, including the establishment or setting up of a branch, subsidiary, or representative office of an institution with its effective headquarters in a foreign country, in Angola, must be adapted to the size and complexity of the institution's activity, its risk profile, and its importance for the stability of the financial system.
3. The authorization application must be adequately supported by the documentation required under this Notice, notwithstanding requests for additional information and documents when deemed necessary for a proper analysis and verification of the establishment process.
4. The authorization of the banking financial institution depends on compliance with the following requirements:
a) suitability of founding shareholders; b) compatibility of the economic and financial capacity of founding shareholders considered individually, according to the size, nature, and objective of their participation, as well as the intended project; c) knowledge of the origin and control of funds forming part of the share capital, as well as ultimate beneficial owners; d) demonstration in the business plan of compliance with legal and regulatory requirements and the viability of the plan itself, particularly regarding:
i. financial resources;
ii. human resources;
iii. information and communication systems;
iv. internal control and risk management;

CONTINUATION OF NOTICE NO. 09/2013 Page 5 of 13 e) allowing the exercise of prudential supervision on an individual or consolidated basis, as well as the application of future corrective measures; f) objective demonstration of all obligations and financial interests of the economic group to which the institution will belong, in the case of subsidiaries, or when one or more corporate shareholders hold a qualified participation.

Article 5 (Application for establishment authorization)

1. The application for authorization to establish a banking financial institution and the establishment of branches and subsidiaries of a banking financial institution with its main seat and effective headquarters in a foreign country must be submitted with the information and documentation set out in the Annexes of this Notice.
2. Without prejudice to the preceding paragraph, in the case of establishing subsidiaries within national territory, Annex II of Notice No. 11/2013 of June 3 regarding special registration inscription for proposed managers or directors must be completed.
3. If the proposed shareholder is a non-legal-person collective interest center (trusts) or any other entity without legal personality, the completion of Annex II of this Notice shall apply with due adaptations.
4. The information and documentation requested in Annex III of this Notice must be consistent with the size and complexity of the intended business.

SECTION II (Specific requirements for the establishment of a subsidiary and representative office)
Article 6 (Requirements for establishing a subsidiary)

1. For the establishment of a subsidiary in Angola by a banking financial institution with its main seat and effective place of administration in a foreign country, the applicant must submit to the National Bank of Angola the following elements, issued by the supervisory authority of the country of origin:
   a) proof that the operations to be carried out by the subsidiary are covered by the banking financial institution's authorization; b) the amount of regulatory own funds of the banking financial institution; c) the solvency ratio of the banking financial institution; d) a detailed description of the deposit guarantee system in which the banking financial institution participates and ensures protection for the subsidiary's depositors; e) a detailed description of the investor compensation system in which the banking financial institution participates and ensures protection for the subsidiary's investor clients.
2. Whenever the legal and regulatory requirements applicable in the applicant's country of origin do not mandate compliance with the elements referred to in letters a), d), and e) above, the authority of the applicant's country of origin must expressly state this fact in its communication to the National Bank of Angola, and failure to do so shall not constitute grounds for refusing the authorization application for establishing the subsidiary.

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Article 7 (Representative offices)
Without prejudice to the conditions for opening representative offices in Angola set forth in Decree No. 37/92 of August 7, the application for authorization to establish a representative office must be submitted to the National Bank of Angola with at least the information and documentation set out in Annex I of this Notice, and complementary elements deemed relevant by the National Bank of Angola for processing the application may be requested.

SECTION III (Processing of the authorization application)
Article 8 (Processing of the establishment authorization application)

1. Applicants must designate a technical manager, via power of attorney, who will represent them before the competent authorities for evaluating the authorization application and indicate a domicile in Angola for notification or correspondence purposes.
2. The National Bank of Angola notifies the designated technical manager regarding the receipt of the authorization application and its accompanying documentation, and assigns a Unique Reference Number (URN) to the institution, which must be explicitly indicated in all future communications with the National Bank of Angola.
3. If information and/or documentation is missing, the National Bank of Angola reserves the right to determine that it is indispensable for assessing the legal requirements established in the Financial Institutions Law and other legislation.
4. In the circumstance described in the preceding paragraph, the National Bank of Angola notifies the designated technical manager regarding the non-compliance with the legal and regulatory prerequisites of the establishment authorization application, thereby suspending the deadlines established for its processing.

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Article 9 (Analysis of the establishment authorization application)

1. At any time during the process analysis, if it is found that the authorization application for establishing a banking financial institution is inadequately documented, the National Bank of Angola formally notifies the technical manager to remedy the identified deficiencies, under conditions and deadlines set by itself.
2. Submitting information/documentation beyond the deadline stipulated by the National Bank of Angola may result in the refusal of authorization to establish a banking financial institution.
3. Under exceptional circumstances, and upon a reasoned request, the National Bank of Angola may decide to extend the deadline stipulated in the aforementioned notification.
4. The National Bank of Angola may request any complementary information or procedures from the applicant(s), conduct investigations it deems necessary or useful for deciding on the application, and summon proposed founding shareholders, members of corporate bodies, directors, or managers for interviews.

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Article 10 (Decision)

1. The decision must be notified to the applicants within 6 (six) months from the notification of receipt of the application by the applicants or, if applicable, from the receipt of complementary information requested from the applicants, but never later than 12 (twelve) months after the date of initial submission.
2. Failure to notify within the deadlines referred to in the preceding paragraph constitutes a presumption of tacit refusal of the application.

Article 11 (Deadlines)
Following authorization of the banking financial institution, the deadlines are 3 (three) months for establishment and 12 (twelve) months for commencing operations, without prejudice to the provisions of the Financial Institutions Law.

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Article 12 (Business plan compliance)

1. The operations of the authorized banking financial institution must take into account what is provided in the submitted business plan.
2. The institution must, during its first 3 (three) financial years, demonstrate in its annual report and accounts the alignment of carried-out operations with the strategic objectives defined in the authorization application.
3. If, during the first 3 (three) financial years, alignment of operations with strategic objectives is not verified, the institution must submit a reasoned justification to the National Bank of Angola, which may establish additional conditions for its operational continuity, setting a deadline for this purpose.

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Article 14 (Branches, subsidiaries, and representative offices)

1. The establishment abroad of a branch, subsidiary, or representative office by a banking financial institution authorized by the National Bank of Angola depends on prior authorization from the National Bank of Angola.
2. The establishment of a subsidiary abroad depends on the banking financial institution's compliance with the following requirements:
   a) meeting operational and prudential limits established in current regulations; b) demonstrating compliance with paid-up share capital and regulatory own funds limits, considering the operations the subsidiary intends to conduct in a foreign country.

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Article 15 (Authorization for branch, subsidiary, and representative office)

1. The authorization to establish a branch, subsidiary, or representative office abroad by a banking financial institution under the supervision of the National Bank of Angola depends on submitting the information and documentation set out in Annex I, and, in the case of branches and subsidiaries, with the information contained in Sections I, II, V, and VI of Annex III of this Notice, with due adaptations.
2. For assessing compliance with the suitability and professional experience requirements established in the Financial Institutions Law, regarding managers or directors of subsidiaries and representative offices, Annex II of Notice No. 11/2013 of June 3 regarding special registration inscription must be completed and submitted.
3. The granting of authorization provided for in paragraph 1 of this article depends on submitting the information, data, and documents necessary to evaluate the active and passive operations of those foreign investments in order to ensure consolidated basis supervision.

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Article 16 (Commencement and closure of operations)
The commencement and closure of operations by a subsidiary or representative office located abroad must be communicated to the National Bank of Angola within a maximum period of 30 (thirty) days from the date of their respective occurrence.

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Article 17 (Application for establishment)

1. The institution has a maximum period of 12 (twelve) months, from the date of authorization granted by the National Bank of Angola, to establish the subsidiary or representative office.
2. Failure to comply with the deadline set forth in this article must be justified to the National Bank of Angola, which may, at its discretion, extend the granted authorization once.

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Article 18 (Foreign authorities)
Banking financial institutions under the supervision of the National Bank of Angola that have a subsidiary or representative office abroad must send to the National Bank of Angola reports, inquiries, or requests for clarification issued by foreign regulatory or supervisory authorities, as well as their respective responses.

CHAPTER IV FINAL PROVISIONS
Article 19 (Documents)

1. The official documents required by this Notice must have a validity period not exceeding 3 (three) months.
2. In the case of foreign or non-resident natural or legal persons, proof of the accuracy of the provided information must be demonstrated through any document, means, or procedure considered valid, appropriate, and sufficient, notably through an equivalent document issued by a competent authority of the country of origin.
3. All documents intended to support the authorization application drafted in a foreign language must be translated into Portuguese and duly certified by the consular services of the country of origin.

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Article 20 (Transitional provision)
Pending processes as of the effective date of this regulation must be aligned within 12 (twelve) months.

Article 21 (Repealing provision)
All provisions contrary to this Notice are hereby repealed, notably Notice No. 13/07 of September 12 regarding authorization for the establishment of financial institutions.

Article 22 (Entry into force)
This Notice enters into force after the date of its publication.
PUBLISHED
Luanda, June 10, 2013.
THE GOVERNOR
JOSÉ DE LIMA MASSANO