Notice No. 08/2018 of November 29 on Minimum Social Capital and Regulatory Own Funds for Non-Bank Financial Institutions

Published in the Official Gazette of the Republic, First Series, No. 180, on November 29, 2018

NOTICE NO. 08/2018 SUBJECT: FINANCIAL SYSTEM

• Adjustment of Minimum Social Capital and Regulatory Own Funds of Non-Bank Financial Institutions Considering the need to adjust the minimum value of social capital and regulatory own funds of Non-Bank Financial Institutions subject to the supervision of the Bank of Angola to the current macroeconomic and financial context; Pursuant to the combined provisions of letters d) and f) of paragraph 1 of Article 21.º and paragraph 1 of Article 51.º, both of Law No. 16/10, dated July 15 - Bank of Angola Law, combined with the provisions of paragraph 1 of Article 16.º of Law No. 12/2015, dated June 17 - Framework Law of Financial Institutions. HEREBY DETERMINES:

Article 1.º (Subject and Scope) This Notice establishes the minimum social capital and regulatory own funds applicable to Non-Bank Financial Institutions linked to currency and credit, subject to the supervision of the Bank of Angola, referred to in paragraph 1 of Article 7.º of Law No. 12/15, dated June 17 - Framework Law of Financial Institutions, namely: a) Exchange houses; b) Credit cooperative societies; c) Financial factoring companies; d) Leasing companies;

CONTINUATION OF NOTICE NO. 08/2018 Page 2 of 4 e) Money or foreign exchange market intermediary companies; f) Microcredit companies; g) Payment service provider companies; h) Companies operating payment, clearing or clearing house systems, in accordance with the Angolan Payment System Law; i) Credit guarantee companies; and, j) Other companies qualified as such by law.

Article 2.º (Social Capital and Regulatory Own Funds)

1. Non-Bank Financial Institutions must have their social capital fully paid up and maintain regulatory own funds at a minimum value of: a) Kz 70.000.000,00 (seventy million Kwanzas) for Payment Service Provider companies; b) Kz 50.000.000,00 (fifty million Kwanzas) for Exchange houses; c) Kz 100.000.000,00 (one hundred million Kwanzas) for Financial factoring companies; d) Kz 100.000.000,00 (one hundred million Kwanzas) for Leasing companies; e) Kz 25.000.000,00 (twenty-five million Kwanzas) for Credit cooperative companies; and, f) Kz 25.000.000,00 (twenty-five million Kwanzas) for Microcredit companies.
2. Exchange houses authorized to provide remittance services must adjust their social capital and own funds to the minimum provided for in letter a) of paragraph 1 of this Article.
3. Payment Service Provider companies must establish special reserves intended to strengthen the net position or cover losses that the profit and loss account cannot absorb.

CONTINUATION OF NOTICE NO. 08/2018 Page 3 of 4 4. Compliance with the established minimum social capital, as well as Regulatory Own Funds, is an indispensable condition for the operation of Non-Bank Financial Institutions authorized by the Bank of Angola.

Article 3.º (Adjustment of Social Capital)

1. Non-Bank Financial Institutions may increase their social capital through one or both of the following options: a) Issuance and subscription of new shares; and, b) Incorporation into social capital of legal reserves, free reserves or current year results, provided they are audited.
2. Non-Bank Financial Institutions that cannot meet the minimum social capital requirements through the provisions of paragraph 1 of this Article must consider other alternatives, including merger or transfer of their activity to one or more Non-Bank Financial Institutions authorized to carry out the relevant activity.

Article 4.º (Transitional Provision) Non-Bank Financial Institutions in operation, whose fully paid-up social capital or regulatory own funds are below the minimums established in this Notice, must: a) Adjust them by June 30, 2019; and, b) Submit to the Bank of Angola within 120 (one hundred twenty) days after publication of this Notice, a detailed action plan describing the measures they intend to implement to achieve compliance as provided in this Notice.

Article 5.º (Offences) Non-compliance with the provisions of this Notice constitutes an offense provided for and punishable under Law No. 12/15, dated June 17, Framework Law of Financial Institutions.

CONTINUATION OF NOTICE NO. 08/2018 Page 4 of 4 Article 6.º (Doubts and Omissions) Doubts and omissions arising from the interpretation and application of this Notice are clarified by the Bank of Angola.

Article 7.º (Repealing Provision) The following regulatory instruments are partially repealed, regarding matters concerning the minimum social capital and regulatory own funds (ROF) of Non-Bank Financial Institutions: Notice No. 15/2012, dated April 3, Notice No. 18/2012, dated April 3, Notice No. 08/2012, dated March 30, Notice No. 09/2012, dated April 2, Notice No. 07/2013, dated April 22, and Notice No. 05/2014, dated October 1.

Article 8.º (Entry into Force) This Notice enters into force on the date of its publication. PUBLISHED. Luanda, November 16, 2018.

THE GOVERNOR JOSÉ DE LIMA MASSANO