Instruction (Archive) No. 6/2025

Instruction No. 6/2025 BO No. 5/2025 2nd Supplement • 2025/06/03 .................................................................................................................................................................................................. Topics Markets :: Money Markets Mod. 99999940/T – 01/14 Index Text of the Instruction Text of the Instruction Subject: Amending Instruction No. 7/2012 In exercise of the competence attributed to it by Articles 14, 15, 16, and 24 of its Organic Law, approved by Law No. 5/98 of January 31, the Bank of Portugal approves the following Instruction: Article 1 Object This Instruction amends Bank of Portugal Instruction No. 7/2012 of March 15. Article 2 Amendments

1. In Article 3, paragraph 5 shall have the following wording: "5. Whenever a credit assessment produced by a SIAC, of the Bank or of another NCB of the Eurosystem, is available, accepted in accordance with the criteria set out in Title V, Part IV, of Guideline (EU) 2015/510 (ECB/2014/60), the Bank shall use the SIAC as the primary source of credit assessment to determine the credit quality of the debtors and guarantors of additional individual credit rights."
2. Article 7 shall have the following wording: "Article 7 Mobilization of credit rights portfolios
3. Credit rights portfolios may be mobilized: a) Using an internal ratings method, also known as the IRB (Internal Ratings-Based approach) method, authorized by the Bank, in accordance with Article 14 of Decree-Law No. 104/2007 of April 3, or authorized by the home supervisory authority, in the case of branches of financial institutions with headquarters in another European Union (EU) Member State:

Instruction No. 6/2025 BO No. 5/2025 2nd Supplement • 2025/06/03 Topics Markets :: Money Markets .................................................................................................................................................................................................. Mod. 99999940/T – 01/14 i. Counterparties must use, for each of the credit rights included in the credit rights portfolios, the probability of default (Probability of Default – PD) for a 1-year horizon and the loss given default (Loss Given Default – LGD) from the IRB method. ii. If the Counterparties are branches of financial institutions with headquarters in another EU Member State, confirmation from the home country supervisory authority is required that the authorization granted for the use of the IRB method includes in its scope the rating systems implemented by the aforementioned branches. iii. These systems must also comply with the requirements set out in the Eurosystem Credit Assessment Framework (ECAF), established in Part IV of Bank Instruction No. 3/2015. iv. Revoked. b) Using the Bank's SIAC, including the extension mentioned in paragraph 3 of Article 3 of this Instruction: i. The Bank of Portugal applies, to each of the credit rights included in the credit rights portfolios, the probability of default (Probability of Default – PD) for a 1-year horizon assigned by the SIAC and the value of 60% for the loss given default (Loss Given Default – LGD). 2. Whenever a credit assessment produced by a SIAC, of the Bank or of another NCB of the Eurosystem, is available, accepted in accordance with the criteria set out in Title V, Part IV, of Guideline (EU) 2015/510 (ECB/2014/60), the Bank shall use, whenever possible without excessive operational costs, the SIAC as the primary source of credit assessment to determine the credit quality of the debtors of the additional aggregated credit rights." Article 3 Entry into force

1. This Instruction enters into force on June 16, 2025.
2. Bank of Portugal Instruction No. 7/2012, with the wording introduced by this Instruction, is republished in its entirety, and is available at https://www.bportugal.pt/instrucao/72012