Instruction No. 03/2021 of 12 February

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INSTRUCTION NO. 03/2021 of 12 February
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 the penalties applicable for non-compliance in the establishment and use of guarantees for balance settlement in the CCAA subsystems; Considering, equally, the negative impact resulting from the inability to settle payments due to insufficient guarantee by a participant, both on other participants and on users of the Payment System of Angola (SPA); In exercise of the competence conferred upon me under the combined provisions of Article 6 of Law No. 40/20, dated 16 December – Payment System Law, and Article 51 of Law No. 16/10, dated 15 July – Bank of Angola Law. I 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.

CONTINUATION OF INSTRUCTION NO. 03/2021 Page 2 of 7
1.2 The guarantees are established by each participant, in accordance with the provisions of this Instruction and supplementary regulation.
1.3 The value of the guarantees for the Credit Transfer Subsystem (STC), Cheque Clearing Subsystem (SCC) and Direct Debit Subsystem (SDD) must always be equal to or greater than the maximum amount permitted for the 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 in clearing. This action must occur by 12:00 hours on the settlement day.
1.6 For compliance 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 Bank of Angola's Liquidity Facility Services (Intraday or Overnight).

2. Composition
   Guarantees may be composed 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.

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 value resulting from applying the following formula:

CONTINUATION OF INSTRUCTION NO. 03/2021 Page 3 of 7 G_P^min = Max(k x A; Gm)

Where:
− G_P^min = minimum guarantee for participant P; − Max(k x A; Gm) = maximum between k x A and Gm; − k = multiplier factor; − A = maximum debtor balance of participant P, in the reference period (to be defined by Directive) resulting from the sum of balances of the clearing subsystems covered by the guarantee; − Gm = 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 value resulting from applying the following formula:
   G_P^min = Max(k x B; Gm)

Where:
− G_P^min = minimum guarantee for participant P; − Max(k x B; Gm) = maximum between k x B and Gm; − k = multiplier factor; − B = maximum debtor balance of participant P in the reference period (to be defined by Directive), resulting from the sum of Direct Debit Instructions (DDI) for each day of the reference period; − Gm = absolute minimum value for the guarantee of any participant.

5. Penalty for Non-Compliance with Establishment and Use of Guarantees
   At the opening of a clearing session, whenever a participant has a guarantee lower than the mandatory minimum, calculated with reference to points 2, 3 and 4 of this Instruction, the participant is penalized by the amount resulting from calculating the following formula:

CONTINUATION OF INSTRUCTION NO. 03/2021 Page 4 of 7 V_P = Max (x% × (G_P^min − G_P^actual); V_m)

Where:
− 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 Guarantee Below Mandatory Minimum
   6.1 In situations where the actual guarantee established by a participant is lower than the minimum guarantee, whenever operationally feasible, notably considering the operating hours of the SPTR and the existence of available 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 amount of the minimum guarantee.
   6.2 The provisions of the preceding point do not exempt the non-compliant participant from the penalty provided for in number 5 of this Instruction.

7. Settlement Failure

CONTINUATION OF INSTRUCTION NO. 03/2021 Page 5 of 7
7.1 Whenever a cheque cannot be cleared due to insufficient guarantee provided by the debited participant, it is subject to the following penalty:
− On the first day the cheque is not cleared – Pc; − On the second day the cheque is not cleared – 2 x Pc.

Where:
7.2 The value Pc is applicable to each cheque that cannot be cleared and is independent of its issuance value, being defined in supplementary regulation.

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 Bank of Angola.

9. Operational Rules
   9.1 The guarantee management process, notably the communication of minimum values to participants and their use in the clearing process, must be contained in a specific document prepared by the CCAA operator, which is common to the subsystems covered by the guarantee and approved by the Bank of Angola.
   9.2 The provisions of the preceding point do not prejudice the references that may be necessary in the Standards and Procedures Manuals of other systems, notably SPTR and SIGMA, due to the functionalities they should provide, notably in the creation, valuation, alteration and use of guarantees.
   9.3 The guarantee validity period and the reference period to determine the maximum debtor balance of each participant are defined in supplementary regulation.

CONTINUATION OF INSTRUCTION NO. 03/2021 Page 6 of 7
9.4 The values of parameters k and Gm defined in points 3 and 4 of this Instruction, as well as the values of parameters x% and V_m defined in point 5 of this Instruction are defined in supplementary regulation.

10. Exclusions
    Considering the nature of the Ministry of Finance's operations, notably the payment of public sector salaries and State payments to its suppliers, it is not subject to establishing a minimum guarantee; it must process payments based on the provided guarantee, i.e., the values made available in the reserve sub-account - 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 prescribed and punishable offence, in accordance with Law No. 40/20, dated 16 December, Payment System Law 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 Bank of Angola.

CONTINUATION OF INSTRUCTION NO. 03/2021 Page 7 of 7
14. Revocation
Instruction No. 03/2019, dated 03 April, and all regulation contrary to the provisions of this Instruction are revoked.

15. Entry into Force
    This Instruction enters into force on 01 March 2021.

PUBLISHED.
Luanda, 12 February 2021.

THE GOVERNOR
JOSÉ DE LIMA MASSANO

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