Instruction No. 03/19 of April 3, 2019

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INSTRUCTION NO. 03/19 of April 3, 2019
SUBJECT: PAYMENT SYSTEM

• Automated Clearing House of Angola (CCAA)
• Guarantees for Balance Settlement

Whereas it is necessary to implement liquidity risk containment processes in the subsystems of the Automated Clearing House of Angola (CCAA) and to define penalties applicable for non-compliance in the establishment and use of guarantees for balance settlement within the CCAA subsystems; Considering, likewise, 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 the exercise of the powers conferred upon me under the combined provisions of Article 7 of Law No. 5/05 of July 29 – Payment System Act, and Article 51 of Law No. 16/10 of July 15 – Act of the Banco Nacional de Angola;

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 established by each participant, in accordance with the provisions of this Instruction and supplementary regulation.

Continuation of Instruction No. 03/2019 Page 2 of 6
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 allowed 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 established 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 Liquidity Lending Facilities (Intraday or Overnight) of the Banco Nacional de Angola.

2. Composition
   2.1. Guarantees may consist of funds deposited in a specific reserve account to settle cleared balances in the SPTR and/or eligible assets as provided for in the monetary policy regulatory framework, in accordance with eligibility criteria defined in supplementary regulation.
   2.2. The funds deposited in the SPTR account referred to in the preceding point are eligible for fulfilling Mandatory Reserve requirements.

3. Establishment of Guarantees for STC, SCC, and MCX
   Each participant must establish 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:
   G_P_min = Max(k × A; G_m)

Continuation of Instruction No. 03/2019 Page 3 of 6 Where:
− G_P_min = 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, during the reference period (to be defined by Directive), resulting from the sum of balances of clearing subsystems covered by the guarantee; − G_m = absolute minimum value for the guarantee of any participant.

4. Establishment of Guarantees for SDD
   Each Participant must establish a specific guarantee for the SDD with a value equal to or greater than the result of applying the following formula:
   G_P_min = Max(k × B; G_m)
   Where:
   − G_P_min = 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 during 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 the guarantee of any participant.

5. Penalty for Non-Compliance with Establishment 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, 3, and 4 of this Instruction, the participant is penalized by an amount resulting from the following formula:
   V_P = Max (x% × (G_P_min − G_P_actual); V_m)
   Where:

Continuation of Instruction No. 03/2019 Page 4 of 6 − V_P = penalty value applicable to participant P; − Max (x% × (G_P_min − G_P_actual); V_m) = maximum between ‘x% × (G_P_min − G_P_actual)’ and V_m; − x% = multiplier factor; − G_P_min = minimum guarantee to which participant P is obligated; − G_P_actual = actual guarantee established by participant P; − V_m = absolute minimum value for the penalty of any participant in an identical situation.

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

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 remains uncleared – Pc; − On the second day the check remains uncleared – 2 × Pc.
   Where:
   7.2. The value Pc applies to each check that cannot be cleared and is independent of its issuance value, being defined in supplementary regulation.

Continuation of Instruction No. 03/2019 Page 5 of 6
8. Settlement of Penalties
The settlement of penalties must be carried out daily, with reference to the previous business day, through the STC Interbank Tariff Clearing file, in favor of the Banco Nacional de Angola.

9. Operational Rules
   9.1. The guarantee management process, including 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, which is common to all subsystems covered by the guarantee and approved by the Banco Nacional de Angola.
   9.2. The preceding provision 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, modification, and use of guarantees.
   9.3. The guarantee validity period and the reference period for determining the maximum debtor balance of each participant are defined in supplementary 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 of this Instruction, are defined in supplementary regulation.

10. Exclusions
    Considering the nature of operations by the Ministry of Finance, particularly the payment of public sector salaries and state payments to suppliers, it is not subject to establishing a minimum guarantee, and must process payments based on the provided guarantee, i.e., the 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.

Continuation of Instruction No. 03/2019 Page 6 of 6
12. Non-Compliance
Failure to comply with the provisions of this Instruction constitutes a prescribed and punishable offense, in accordance with Law No. 05/05 of July 29, the Payment System Act of Angola.
13. Doubts and Omissions
Doubts arising from the interpretation and application of this Instruction are resolved by the Payment System Department of the Banco Nacional de Angola.
14. Repeal
Instruction No. 01/2019 of January 3 is repealed, along with any regulation that contradicts the provisions of this Instruction.
15. Entry into Force
This Instruction enters into force on June 3, 2019.
PUBLISHED.
Luanda, April 3, 2019.
THE GOVERNOR
JOSÉ DE LIMA MASSANO