Notice No. 09/2020 of April 3 on the Authorization for the Establishment of Banking Financial Institutions

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PUBLISHED IN THE OFFICIAL GAZETTE, 1ST SERIES, NO. 42, OF APRIL 3 NOTICE NO. 09/2020 SUBJECT: FINANCIAL SYSTEM

• Authorization for the Establishment of Banking Financial Institutions

Considering the need to adapt the rules regarding the procedure for authorizing the establishment, operation, and revocation of Banking Financial Institutions, as well as to harmonize current regulations within the Angolan Financial System with international standards; Exercising the competence attributed by item f) of paragraph 1 of Article 21 and item d) of paragraph 1 of Article 51, both of Law No. 16/10 of July 15, the Law of the National Bank of Angola, combined with Article 64 of Law No. 12/2015 of June 17, the Framework Law on Financial Institutions; I DETERMINE:

CHAPTER I General Provisions Article 1. (Object)

1. This Notice establishes the requirements and procedures for authorizing the establishment of Banking Financial Institutions, including the establishment of a Branch, Subsidiary, and Representation Office of a foreign-based Banking Financial Institution.
2. This Notice also establishes the requirements and procedures for authorizing the establishment abroad of a Branch, Subsidiary, and Representation Office 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 a Banking Financial Institution or set up a Branch, Subsidiary, or Representation Office of a foreign-based Banking Financial Institution; and b) Banking Financial Institutions authorized by the National Bank of Angola interested in establishing a Branch, Subsidiary, or Representation Office in a foreign country.

Article 3. (Definitions) For the purposes of this Notice, the following terms are understood as: a) Director: The person responsible for a function or organizational unit, who exercises significant influence over the day-to-day management of the Institution with direct hierarchical reporting to the administrative body, or, depending on the organizational structure, to one of the members of the administrative body. b) Economic Group: A set of Financial Institutions, whether banking or non-banking, and Non-Financial Companies, in which a controlling relationship exists from one to the others. c) Financial Group: A set of resident and non-resident entities with the nature of Banking and Non-Banking Financial Institutions, excluding Financial Institutions linked to insurance and social security activities, in which a controlling relationship exists by a parent company supervised by the National Bank of Angola over the other constituent entities. d) Related Parties: Partners or shareholders with qualified participations, entities belonging to the economic group, or persons related as spouse, descendant, or ascendant to members of the administrative and supervisory bodies of Financial Institutions, considered directly or as ultimate beneficiaries of transactions or assets. e) Controlling Relationship: As defined in the Framework Law on Financial Institutions.

CHAPTER II Activity in Angola SECTION I General Authorization Requirements for Establishment Article 4. (General Principles of Establishment Authorization)

1. The requirements for obtaining authorization to establish a Banking Financial Institution, including the establishment or setting up of a Branch, Subsidiary, or Representation Office of an institution with effective headquarters in a foreign country, in Angola, must be adapted to the size, nature, and complexity of the institution's activity, its risk profile, and its importance to the stability of the Financial System.
2. The authorization request must be adequately supported by the documentation required under this Notice, notwithstanding the request for additional information and documentation whenever deemed necessary for a thorough analysis and verification of the establishment process.

Article 5. (Request for Establishment Authorization)

1. The request for authorization to establish a Banking Financial Institution and the establishment of a Branch, Subsidiary, or Representation Office of a foreign-based Banking Financial Institution must be submitted with the information and documentation contained in Annexes I and II of this Notice, which form an integral part thereof.
2. Without prejudice to the preceding paragraph, additional documentation regarding the proposed managers or directors of the subsidiary to be established must be submitted, in accordance with the provisions on Special Registration.
3. If the proposed shareholder is a collective interest center without legal personality (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, nature, and complexity of the intended business.

SECTION II Specific Requirements for Establishing a Subsidiary and Representation Office Article 6. (Requirements for Establishing a Subsidiary)

1. For establishing a Subsidiary in Angola with its main and effective administrative headquarters in a foreign country, the supervisory authority of the applicant's home country must send to the National Bank of Angola a communication containing: a) The activity program, indicating, among other things, the type of operations to be conducted and the organizational structure of the Subsidiary, as well as a certificate stating that such operations 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; and 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 applicable legal and regulatory requirements in the applicant's home country do not mandate compliance with the elements referred to in items a), d), and e) of the preceding paragraph, the home country authority must expressly indicate this fact in the communication to the National Bank of Angola, and failure to do so shall not be a condition for refusing the authorization request.

SECTION III Processing of Authorization Request Article 7. (Processing of Establishment Authorization Request)

1. Applicants must designate a technical manager, via power of attorney, who represents them before the competent authority for evaluating the authorization request and indicate an address in Angola for notification or correspondence purposes.
2. The National Bank of Angola notifies the designated technical manager upon receipt of the authorization request and its documentation, and assigns a Unique Reference Number (URN) to the Institution, which must be expressly indicated in all future communications with the National Bank of Angola.
3. If information and/or documentation are missing, the National Bank of Angola reserves the right to decide that such missing elements are indispensable for verifying the legal requirements established in the Framework Law on Financial Institutions.
4. In the circumstance referred to in the preceding paragraph, the National Bank of Angola notifies the designated technical manager regarding the absence of legal and regulatory prerequisites for the establishment authorization, thereby suspending the deadlines established for processing the request.

Article 8. (General Requirements for Processing Establishment Authorization)

1. The authorization request shall be processed with the following elements: a) Characterization of the type of Financial Institution to be established and draft articles of association; b) Business plan, indicating the type of operations to be conducted, geographical implementation, organizational structure, and human, technical, and material resources used, as well as projected accounts for each of the first three years of operation; c) Identification of founding shareholders, specifying the capital subscribed by each; d) Justified statement on the adequacy of the shareholder structure to the stability of the Banking Financial Institution; e) Declaration of commitment that, at the time of establishment and as a condition thereof, the legally required social capital amount will be deposited in a Credit Institution; f) Robust corporate governance provisions; g) Identification of members of the administrative and supervisory bodies, with justification by the proponents regarding their adequacy to ensure sound and prudent management of the Banking Financial Institution. h) Robust corporate governance provisions must include: i. A clear organizational structure with well-defined, transparent, and coherent lines of responsibility; ii. Effective processes for identifying, managing, controlling, and communicating risks to which the institution is or may be exposed; and iii. Adequate internal control mechanisms, including solid administrative and accounting procedures, and remuneration policies and practices that promote and are consistent with sound and prudent risk management.
2. The provisions, processes, procedures, mechanisms, policies, and practices referred to in the preceding paragraph must be complete and proportional to the risks inherent to the business model and the nature, level, and complexity of each Banking Financial Institution's activities.

Article 9. (Analysis of Establishment Authorization Request)

1. At any time during the process analysis, if the authorization request for establishing a Banking Financial Institution is found to be insufficiently processed, the National Bank of Angola formally notifies the technical manager to remedy the identified deficiencies, under conditions and deadlines set by itself.
2. Providing information beyond the deadline stipulated by the National Bank of Angola may result in the refusal of authorization for establishing a Banking Financial Institution.
3. In exceptional circumstances, and upon justified 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 the request, and summon proposed founding shareholders, members of corporate bodies, directors, or managers of the Institution for interviews.

Article 10. (Deadlines) After authorization of the Banking Financial Institution, it has 3 (three) months to establish itself and 12 (twelve) months to commence operations, without prejudice to the provisions of the Framework Law on Financial Institutions.

Article 11. (Compliance with Business Plan)

1. The activity of the authorized Banking Financial Institution must take into account the provisions in the submitted business plan.
2. The Banking Financial Institution must, during the first 3 (three) economic years, demonstrate in its annual report and accounts the adequacy of operations conducted to the strategic objectives defined in the authorization request.
3. If during the first 3 (three) economic years, the adequacy of operations to strategic objectives is not verified, the Institution must submit a justified explanation to the National Bank of Angola.
4. The aforementioned justification must follow the processing procedure established in Article 8 of this Notice.

CHAPTER III Activity Abroad Article 12. (Subsidiary, Branch, and Representation Office)

1. The establishment of a Subsidiary, Branch, or Representation Office abroad by a Banking Financial Institution 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) Compliance with operational and prudential limits established in current regulations; and b) Demonstration of compliance with paid-up social capital and regulatory own funds limits, considering the operations the subsidiary intends to conduct in a foreign country.

Article 13. (Authorization for Subsidiary, Branch, and Representation Office)

1. The authorization to establish a Subsidiary, Branch, or Representation Office abroad for a Banking Financial Institution under the supervision of the National Bank of Angola depends on submitting the information and documentation contained in Annex I, and, for Subsidiaries and Branches, with the information contained in Sections I, II, V, and VI of Annex II of this Notice, with due adaptations.
2. For assessing compliance with the legal requirements regarding managers or directors of subsidiaries and representation offices, Annex II of the Notice on Special Registration must be completed and submitted.
3. The granting of authorization provided for in paragraph 1 depends on submitting the information, data, and documents necessary to evaluate active and passive operations of foreign investments in a manner that ensures supervision on a consolidated basis.

Article 14. (Commencement and Closure of Activities) The commencement and closure of activities of a Subsidiary or Representation Office located abroad must be communicated to the National Bank of Angola within a maximum period of 30 (thirty) days from the date of occurrence.

Article 15. (Request for Installation)

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 Representation Office.
2. Failure to comply with the deadline in this article must be justified to the National Bank of Angola, which may extend the granted authorization by an additional 6 (six) months, only once.

Article 16. (Foreign Authorities) Banking Financial Institutions under the supervision of the National Bank of Angola that have a Subsidiary or Representation Office abroad must send to the National Bank of Angola reports, inquiries, or requests for clarification made by foreign regulatory or supervisory entities, as well as their respective responses.

Article 17. (Inspection) The commencement of operations, within the deadline provided in Article 10 of this Notice, is conditional upon the outcome of the inspection of the Banking Financial Institution's premises.

CHAPTER IV Final Provisions Article 18. (Documents)

1. Any official documents required under this Notice must have been issued within the last 3 (three) months.
2. For foreign or non-resident natural or legal persons, the demonstration of the veracity of provided information must be proven through any document, means, or procedure considered valid, appropriate, and sufficient, notably through an equivalent document issued by the competent authority of the home country.
3. All documents intended to process the authorization request drafted in a foreign language must be translated into Portuguese and duly certified.

Article 19. (Sanctions) Violations of the provisions of this Notice are punishable, under the terms of Law No. 12/2015 of June 17, the Framework Law on Financial Institutions.

Article 20. (Repealing Clause) All provisions contrary to this Notice are repealed, notably Notice No. 09/2013 of July 8.

Article 21. (Entry into Force) This Notice enters into force on the date of its publication. PUBLISHED. Luanda, March 16, 2020. THE GOVERNOR JOSÉ DE LIMA MASSANO

ANNEX I Application for Authorization to Establish a Banking Financial Institution To verify compliance with the legal requirements established in Articles 19 and 22 of Law No. 12/15 of June 17 – Framework Law on Financial Institutions, and in accordance with Articles 5 and 15 of the Notice on processing authorization requests for Banking Financial Institutions, the applicant(s) seeking to establish a Banking Financial Institution must submit the following information and documentation: ► General Information of the Financial Institution to be established (Section I); ► Authorization request for establishing a financial institution by the applicant(s), duly signed by all founding shareholders or by the legal representative of a financial institution in case of opening a subsidiary or representation office (Section II); ► Identification of the technical manager responsible for conducting the establishment authorization process (Section III).

This Annex must be completed in Word format and sent to the email of the Financial Institutions Supervision Department (dsb@lda.bna.ao), until conditions are created for submission via other electronic means. Notwithstanding the preceding paragraph, the authorization request will only be considered formally delivered upon receipt of this document, in duplicate, duly completed in PORTUGUESE and signed by the applicant(s), at the following address: National Bank of Angola Av. 4 de Fevereiro n.º 151, Luanda - Angola | P.O. Box 1243 Luanda (+244) 222 339 125 http://www.bna.ao/

Unique Reference Number (URN): (For use by BNA) Date of delivery of Annex: (For use by BNA)

Section I – General Information

1. The applicant must only complete the fields applicable to the type of Banking Financial Institution it intends to establish: 1.1 Financial Institution Intending to Operate in Angola A Type of Financial Institution to be established: i. Financial Institution established in Angola; ii. Subsidiary in Angola of a foreign financial institution; iii. Representation office in Angola of a foreign financial institution B If option ii or iii is checked, indicate the corporate name of the Financial Institution with headquarters abroad C If option ii or iii is checked, indicate the main and effective administrative headquarters of the Financial Institution D If option ii or iii is checked, indicate the name of the supervisory authority of the Financial Institution E Intended address in Angola

1.2 Authorized Financial Institution Intending to Operate Abroad A Type of Financial Institution to be established: i. Subsidiary abroad; ii. Branch abroad; iii. Representation office abroad B Corporate name of the applicant C Registration number of the applicant D Country where it intends to establish the Financial Institution E Name of the supervisory authority of the country where it intends to establish

Section II – Identification of Technical Manager To the Honorable Governor of the National Bank of Angola, In accordance with paragraph 1 of Articles 18, 19, 39, 42, 49, and 54 of Law No. 12/15 of June 17, the undersigned below, in their capacity as [fill if proposed founding shareholder(s) or legal representative(s)] of the Banking Financial Institution [fill with corporate name], with headquarters at [fill with address], hereby request from the National Bank of Angola approval for the project of [fill if establishment or setting up] of [fill if financial institution, subsidiary, branch, or representation office] in [fill country where intended to be established].

The undersigned declare, under oath of honor, that the provided information corresponds to the truth and has not omitted any facts relevant to evaluating their project. They further declare that they are aware that non-compliance with information, communication, or clarification duties towards the National Bank of Angola may lead to refusal of the establishment authorization request, and that providing false declarations constitutes a legally punishable offense under Articles 151 and 152 of Law No. 12/05 of June 17, without prejudice to applicable criminal sanctions. They further commit to immediately communicating to the National Bank of Angola any facts likely to modify any of the information provided above. Finally, the undersigned, in their capacity as [fill if proposed founding shareholder(s) or legal representative(s)] of the authorized Financial Institution, authorize the National Bank of Angola to access information regarding them, contained in any public or private registration and information systems for the purposes of analyzing this request. For these reasons, they request and expect approval, Place and date: Signature(s) of applicant(s): (Signature as per ID document)

(Note: The application must be signed by the proposed shareholder(s) or their legal representative(s), with a certified copy of the power of attorney granted to the representative(s) attached for due effect.) 2. Attached to the Authorization Request for Establishing a Banking Financial Institution are the following signed documents: 2.1 Draft articles of association 2.2 Feasibility study 2.3 Proof of prior deposit 2.4 Document proving no objection to the establishment of the institution by the parent company's supervisor 2.5 If applicable, copy of the usufruct contract regarding corporate participations 2.6 If applicable, proposal for ancillary agreements 2.7 If applicable, certificate of admissibility for the designation or corporate name of the institution to be established 2.8 If applicable, copy of the articles of association of the foreign-based Financial Institution duly authenticated