Instruction No. 01/2019 of January 3, 2019: Payment System – Automated Clearing House of Angola – Guarantees for Balance Settlement

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INSTRUCTION NO. 01/2019 of January 3, 2019
SUBJECT: PAYMENT SYSTEM

• Automated Clearing House of Angola (CCAA)
• Guarantees for Balance Settlement
  Whereas it is necessary to implement risk containment processes for settlement within the subsystems of the Automated Clearing House of Angola (CCAA) and to define penalties for non-compliance regarding the constitution and use of guarantees for balance settlement in CCAA subsystems; Whereas, considering equally, the negative impact resulting from the inability to settle payments due to insufficient guarantees by a participant, both on other participants and on users of the Angola Payment System (SPA); In exercise of the competence conferred upon me under the combined provisions of Article 7 of Law No. 5/05, dated July 29 – Payment System Law, and Article 51 of Law No. 16/10, dated July 15 – National Bank of Angola Law; I HEREBY DETERMINE:

1. Guarantees for Settlement of Debtor Positions
   1.1. The settlement of debtor positions of participants in the subsystems of the Automated Clearing House of Angola (CCAA), corresponding to the sum of their respective clearing balances, must be secured by guarantees.
   1.2. Guarantees are constituted by each participant, in accordance with the provisions of this Instruction and complementary regulation.
   1.3. The value of guarantees for the Credit Transfer Subsystem (STC), Check Clearing Subsystem (SCC), and Direct Debit Subsystem (SDD) must always be equal to or greater than the maximum amount permitted for debtor positions referred to in point 1.1.
   1.4. The CCAA operator must ensure that payment instructions from the SCC, STC, and SDD that determine a debtor position exceeding the guarantee constituted by the paying participant are not accepted for clearing.
   1.5. In the Multicaixa (MCX) subsystem, debtor balances exceeding the provided guarantee may be admitted; in this case, the participant must fund the settlement account with sufficient funds to settle the amount calculated during clearing. This action must occur by 12:00 hours on the settlement day.
   1.6. To comply with the preceding point, participants whose debtor position exceeds the provided guarantee may fund the settlement account by obtaining liquidity in the Interbank Money Market (MMI) or through the National Bank of Angola's Liquidity Facilities (Intraday or Overnight).

CONTINUATION OF INSTRUCTION NO. 01/2019 Page 2 of 7
2. Composition
2.1. Guarantees consist of funds deposited in a specific reserve account to settle cleared balances in the SPTR.
2.2. The funds deposited in the SPTR account referred to in the preceding point do not count toward compliance with Mandatory Reserves.

3. Constitution of Guarantees for STC, SCC, and MCX
   Each participant must constitute a specific guarantee for the STC and SCC, and another specific guarantee for the MCX, both with a value equal to or greater than the result of applying the following formula:

CONTINUATION OF INSTRUCTION NO. 01/2019 Page 3 of 7 G_min_P = Max(k × A, G_m) Where:
− G_min_P = minimum guarantee for participant P; − Max(k × A, G_m) = maximum between k × A and G_m; − k = multiplier factor; − A = maximum debtor balance of participant P, within the reference period (to be defined by Directive), resulting from the sum of balances in clearing subsystems covered by the guarantee; − G_m = absolute minimum value for any participant's guarantee.

4. Constitution of Guarantees for SDD
   Each Participant must constitute a specific guarantee for the SDD with a value equal to or greater than the result of applying the following formula:
   G_min_P = Max(k × B, G_m)
   Where:
   − G_min_P = minimum guarantee for participant P; − Max(k × B, G_m) = maximum between k × B and G_m; − k = multiplier factor; − B = maximum debtor balance of participant P within the reference period (to be defined by Directive), resulting from the sum of Direct Debit Instructions (DDI) for each day of the reference period; − G_m = absolute minimum value for any participant's guarantee.

CONTINUATION OF INSTRUCTION NO. 01/2019 Page 4 of 7
5. Penalty for Non-Compliance Regarding Constitution and Use of Guarantees
Upon opening a clearing session, whenever a participant holds a guarantee lower than the mandatory minimum, calculated with reference to points 2 and 3 of this Instruction, the participant is penalized by an amount resulting from the following formula:
V_P = Max(x% × (G_min_P − G_real_P); V_m)
Where:
− V_P = penalty value applicable to participant P; − Max(x% × (G_min_P − G_real_P); V_m) = maximum between ‘x% × (G_min_P − G_real_P)’ and V_m; − x% = multiplier factor; − G_min_P = minimum guarantee to which participant P is obligated; − G_real_P = actual guarantee constituted by participant P; − V_m = absolute minimum value for the penalty of any participant in a similar situation.

6. Strengthening of Guarantees Below the Mandatory Minimum
   6.1. In situations where the actual guarantee constituted by a participant is lower than the minimum guarantee, whenever operationally feasible, particularly considering SPTR operating hours and available funds in the participant's settlement account (PSA), the CCAA operator is authorized to debit the PSA, crediting its respective reserve account for clearing balance settlement up to the minimum guarantee amount.
   6.2. The preceding point does not exempt a non-compliant participant from the penalty stipulated in number 5 of this Instruction.

CONTINUATION OF INSTRUCTION NO. 01/2019 Page 5 of 7
7. Settlement Failure
7.1. Whenever a check cannot be cleared due to insufficient guarantee provided by the debited participant, it is subject to the following penalty:
− On the first day the check is not cleared – Pc; − On the second day the check is not cleared – 2 × Pc.
Where:
Pc = Value corresponding to the penalty per check; 2×Pc = Value corresponding to the penalty per check, multiplied by 2, due to recurrence of non-compliance (second day).
7.2. The Pc value applies to each check that cannot be cleared and is independent of its issuance amount, as defined in complementary regulation.

8. Settlement of Penalties
   Penalties must be settled daily, with reference to the previous business day, through the STC Interbank Tariff Clearing file, in favor of the National Bank of Angola.

9. Operational Rules
   9.1. The guarantee management process, particularly the communication of minimum values to participants and their use in the clearing process, must be contained in a dedicated document prepared by the CCAA operator, common to all subsystems covered by the guarantee and approved by the National Bank of Angola.
   9.2. The preceding point does not prejudice necessary references in the Standards and Procedures Manuals of other systems, namely SPTR and SIGMA, due to functionalities they must provide, particularly regarding the creation, valuation,

CONTINUATION OF INSTRUCTION NO. 01/2019 Page 6 of 7 alteration, and use of guarantees.
9.3. The guarantee validity period and the reference period to determine each participant's maximum debtor balance are defined in complementary regulation.
9.4. The values of parameters k and G_m defined in numbers 3 and 4 of this Instruction, as well as the values of parameters x% and V_m defined in number 5, are defined in complementary regulation.

10. Exclusions
    Considering the nature of operations by the Ministry of Finance, particularly public sector salary payments and state payments to suppliers, it is not subject to constituting a minimum guarantee; it must process payments based on the provided guarantee, i.e., values made available in the reserve subaccount – CCAA of the CUT for this purpose.
11. Subsystem Adaptation
    The CCAA operator must ensure compliance with this Instruction within a maximum period of 30 (thirty) days after its entry into force.
12. Non-Compliance
    Non-compliance with the provisions of this Instruction constitutes a defined and punishable offense, in accordance with Law No. 05/05, dated July 29, the Angola Payment System Law.
13. Doubts and Omissions
    Doubts arising from the interpretation and application of this Instruction are resolved by the Payment System Department of the National Bank of Angola.

CONTINUATION OF INSTRUCTION NO. 01/2019 Page 7 of 7
14. Repeal
Instruction No. 06/15, dated May 26, and Instruction No. 03/16, dated April 25, are repealed, along with any regulation contrary to the provisions of this Instruction.
15. Entry into Force
This Instruction enters into force on the date of its publication.
PUBLISHED:
Luanda, January 3, 2019
THE GOVERNOR
JOSÉ DE LIMA MASSANO