Region

Jurisdiction

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2022-10-17

Added 2026-08-24

Instruction No. 16/2022

The Bank of Portugal revokes Instruction No. 54/2012 and establishes the regulatory framework for TARGET-PT, the national component of the TARGET system, which replaces TARGET2 as of November 21, 2022. The instruction defines the types of accounts available for euro settlement, establishes a tripartite governance structure, and sets out operational rules including support services, participation conditions, and intraday credit provisions for participants in the Portuguese payment system.

Portugal

Banco de Portugal

Instruction No. 16/2022

BO No. 10/2022 • 2022/10/17 ..................................................................................................................................................................................................

Topics

Payment Systems :: Large-Value Payment System Mod. 99999911/T – 01/14

Index

Text of the Instruction Annex I to the Instruction HARMONIZED CONDITIONS FOR PARTICIPATION IN TARGET-PT

GENERAL PROVISIONS
FEES APPLICABLE TO PRIMARY ACCOUNT HOLDERS
FEES APPLICABLE TO DEDICATED ACCOUNT HOLDERS FOR LBTR
FEES APPLICABLE TO SPs USING LBTR SETTLEMENT PROCEDURES
FEES APPLICABLE TO DEDICATED ACCOUNT HOLDERS FOR LBTR
FEES APPLICABLE TO DEDICATED ACCOUNT HOLDERS FOR TIPS
FEES APPLICABLE TO SPs USING TIPS SETTLEMENT PROCEDURES Annex II to the Instruction TARGET GOVERNANCE MECHANISM Annex III to the Instruction DEFINITIONS

Text of the Instruction

Subject: TARGET-PT Regulation

The ECB Guideline (EU) 2022/912 of 24 February 2022¹, relating to a new generation trans-European automated real-time gross settlement transfer system (TARGET), has implemented the consolidation project of the TARGET2 and TARGET2-Securities systems, benefiting from cutting-edge approaches and technological innovation, allowing for a reduction in their operational costs and an improvement in liquidity management across their various services.

As is already the case for TARGET2, TARGET shall be legally structured as a multiplicity of payment systems, in which all its component systems are harmonized to the maximum extent.

TARGET replaces TARGET2 as of 21 November 2022. The ECB Guideline 2012/27, which established TARGET2, must therefore be repealed.

¹ Guideline (EU) 2022/912 of the European Central Bank of 24 February 2022.

Instruction No. 16/2022 BO No. 10/2022 • 2022/10/17 Topics: Payment Systems :: Large-Value Payment System Mod. 99999911/T – 01/14

In this context, acting in accordance with ECB Guideline 2022/8, the Bank of Portugal, in order to regulate the functioning of the national component system of TARGET – TARGET-PT, and using the competence attributed by Article 14 of the Organic Law of the Bank of Portugal, approved by Law No. 5/98 of 31 January, which confers powers to regulate, supervise and promote the proper functioning of payment systems, notably within the scope of its participation in the ESCB, hereby revokes Instruction No. 54/2012 of 15 January 2013, which regulates TARGET2-PT, and determines the following:

SECTION I

GENERAL PROVISIONS

Article 1. Object and scope of application

TARGET provides the following accounts for settlement in euros in central bank money: a) Primary cash accounts (PCA) for the settlement of operations with central banks; b) Dedicated cash accounts for real-time gross settlement (DCA LBTR) and sub-accounts for interbank and customer payments in real time and settlement of operations with peripheral systems (PS); c) Technical accounts for peripheral systems of real-time gross settlement (technical PS LBTR accounts), technical accounts for the peripheral system of the TARGET immediate payment settlement service (TIPS) (technical PS TIPS accounts) and guarantee fund accounts for peripheral systems (PS guarantee fund accounts) for the settlement of operations with PS; d) Dedicated cash accounts of TARGET2-Securities (DCA T2S) for cash payments related to securities transactions; and e) Dedicated cash accounts of the TARGET immediate payment settlement service (DCA TIPS) for the settlement of immediate payments.

Article 2. Definitions

For the purposes of this Instruction, each of the following terms has the meaning attributed to it in Annex III:

"Account monitoring group";
"Addressable BIC holder";
"Peripheral system" (PS);
"Peripheral system guarantee fund account" (PS guarantee fund account);
"Settlement procedure for peripheral systems" (PS settlement procedure);
"Peripheral system transfer order" (PS transfer order);
"Self-guarantee";
"Automated liquidity transfer order";
"Available liquidity";
"Banking group";
"Branch";
"General broadcast message";
"Business day" or "TARGET business day";
"Business Identifier Code (BIC)";
"Capacity opinion";
"Cash transfer order";
"Central bank" (CB);
"Central bank operation";
"Connected CB";
"Contingency Solution";
"Credit institution";
"Credit memorandum balance (CMB)";
"Inter-system settlement";
"Dedicated cash account" (DCA);
"Deposit facility rate";
"Deposit facility";
"Euro area CB";
"European Payments Council SEPA Instant Transfer Mechanism" or "SEPA instant transfer mechanism";
"Eurosystem CB";
"Default situation";
"Guarantee funds";
"Insolvency proceedings";
"Immediate payment order";
"Party with power to give instructions";
"Intraday credit";
"Investment firm";
"Level 3 CB";
"Liquidity transfer order";
"Liquidity lending facility rate";
"Liquidity lending facility";
"Mobile proxy consultation service (MPL)";
"Near-instant payment";
"Network service provider";
"Unsettled cash transfer order";
"Participant";
"Beneficiary";
"Payer";
"Payment order";
"Positive response to revocation request";
"Public sector entity";
"Contactable party";
"Settlement procedure in a peripheral system of the real-time gross settlement system" (LBTR PS settlement procedure);
"Technical account of a peripheral system of the real-time gross settlement system";
"Revocation request";
"Rule-based liquidity transfer order";
"Settlement bank account group";
"Settlement bank";
"Suspension";
"TARGET account";
"TARGET component system";
"TARGET Coordinator";
"Settlement procedure in the peripheral system of the TARGET immediate payment settlement service (TIPS)" (TIPS PS settlement procedure);
"Technical account of the peripheral system of the TARGET immediate payment settlement service (TIPS)" (TIPS PS technical account);
"TARGET Settlement Manager";
"TARGET2-Securities" (T2S);
"TARGET breakdown".

Article 3. Component systems of TARGET

TARGET is legally structured as a set of payment systems that constitute the component systems of TARGET.
Each CB of the Eurosystem shall operate its own component system of TARGET.
Each component system of TARGET shall be a system designated as such under the relevant national legislation transposing Directive 98/26/EC².
The designations of the component systems of TARGET may only include "TARGET" and the name or abbreviated designation of the CB of the Eurosystem in question, or of the Member State to which it belongs. The TARGET component system of the Bank of Portugal shall be designated TARGET-PT.
The provisions of Guideline ECB/2022/8, further detailed in the following articles, apply to TARGET-PT.

Article 4. Connection of CBs of Member States whose currency is not the euro

CBs of Member States whose currency is not the euro may only connect to TARGET on condition that they conclude an agreement with the CBs of the Eurosystem for this purpose. The aforementioned agreement shall specify that connected CBs are subject to compliance with the provisions of Guideline ECB/2022/8, without prejudice to any appropriate specifications and modifications mutually agreed upon.

Article 5. Intra-ESCB operations

Intra-ESCB operations shall be processed through TARGET, with the exception of payments that CBs bilaterally agree to process through correspondent accounts, where applicable.

Article 6. Intra-Eurosystem rights and obligations

Any settlement of cash transfer orders between participants in different component systems of TARGET shall be automatically aggregated and netted so as to form part of a single obligation or credit of each CB of the euro area vis-à-vis the ECB, as provided for in the agreement established between the CBs of the Eurosystem. Any obligation or credit of each CB of the euro area vis-à-vis the ECB shall be adjusted daily for accounting purposes, using the delta value of the end-of-day balances of all TARGET accounts in the accounting records of the respective CB of the euro area.

² Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166 of 11.6.1998, p. 45).

Instruction No. 16/2022 BO No. 10/2022 • 2022/10/17 Topics: Payment Systems :: Large-Value Payment System Mod. 99999911/T – 01/14

For accounting and reporting purposes, each CB of the euro area maintains an account for the recording of its obligations or credits vis-à-vis the ECB resulting from the settlement of cash transfer orders between its own and other component systems of TARGET.
The ECB shall open in its accounting records an account in the name of each CB of the euro area to reflect, at the end of the day, the aforementioned obligations or credits of each CB of the euro area vis-à-vis the ECB.

SECTION II

GOVERNANCE

Article 7. Governance levels

Without prejudice to the provisions of Article 8 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter "ESCB Statutes"), the management of TARGET shall be based on a tripartite governance structure. The functions entrusted to the Governing Council of the ECB (Level 1), to the Level 2 technical and operational management body, and to Level 3 CBs are set out in Annex II of Guideline ECB/2022/8.
The Governing Council of the ECB is responsible for the direction, management and control of TARGET. The functions entrusted to Level 1 are exclusively the competence of the Governing Council of the ECB.
In accordance with Article 12-1, third paragraph, of the ESCB Statutes, the CBs of the Eurosystem are responsible for the functions entrusted to Level 2, within the general framework defined by the Governing Council of the ECB. The Governing Council of the ECB has created a Level 2 body, to which the CBs of the Eurosystem have entrusted certain technical and operational management functions related to TARGET.
The CBs of the Eurosystem organize themselves through the conclusion of the necessary agreements.
In accordance with Article 12-1, third paragraph, of the ESCB Statutes, Level 3 CBs are responsible for the functions entrusted to Level 3, within the general framework defined by the Governing Council of the ECB.
Level 3 CBs must conclude agreements with the CBs of the Eurosystem regulating the services to be provided by Level 3 CBs. Such agreements must also include, where applicable, connected CBs.
The Eurosystem, as the T2S service provider, and the CBs of the Eurosystem, as operators of their respective national component systems of TARGET, must conclude an agreement to regulate the services to be provided by the Eurosystem to the CBs of the Eurosystem regarding the movement of DCA T2S. Such agreements must also be concluded, where applicable, by connected CBs.

SECTION III

OPERATION OF TARGET

Article 8. System support service

Each CB of the Eurosystem establishes and maintains a system support service to provide assistance to participants in its respective national component system of TARGET. The support service is provided at least between 7:00 a.m. Central European Time (CET) and 6:15 p.m. CET. This schedule will be extended until 6:30 p.m. CET on the last day of the Eurosystem reserve maintenance period.

Article 9. Harmonized Conditions for Participation in TARGET

CBs of the euro area must adopt implementing measures for the Harmonized Conditions for Participation in TARGET provided for in Annex I of Guideline ECB/2022/8, so that the terms used and defined therein in Annex III of Guideline ECB/2022/8 have the meaning attributed to them herein. Such measures must govern exclusively the relationship between the CB of the euro area in question and its participants regarding the opening and operation of TARGET accounts. The relationships between the Bank of Portugal and participants in TARGET-PT regarding the opening of accounts in TARGET-PT are governed by the provisions of Annex I to this Instruction, which adopts the Harmonized Conditions for Participation in TARGET provided for in Annex I of Guideline ECB/2022/8.
With effect from 20 November 2023, CBs of the Eurosystem shall not open any other accounts besides TARGET accounts to participants eligible to participate in TARGET, for the purposes of providing services covered by the scope of Guideline ECB/2022/8, with the following exceptions: a) Accounts for participants listed in Annex I of Guideline ECB/2022/8, Part I, Article 4(2)(a) and (b) of the Harmonized Conditions for Participation in TARGET; b) Accounts for intraday holding of funds with the exclusive purpose of carrying out cash deposits and withdrawals; c) Accounts used for the holding of pledged funds or funds given as collateral to a third party or funds referred to in Article 3(1)(d) of ECB Regulation (EU) 2021/378 (ECB/2021/1)³; d) Accounts used by participants in systems operated by a CB to settle immediate payments in accordance with the SEPA instant transfer mechanism.

³ Regulation (EU) 2021/378 of the European Central Bank of 22 January 2021 on the application of minimum reserve requirements (ECB/2021/1) (OJ L 73 of 3.3.2021, p. 1).

Instruction No. 16/2022 BO No. 10/2022 • 2022/10/17 Topics: Payment Systems :: Large-Value Payment System Mod. 99999911/T – 01/14

The ECB shall adopt the TARGET-ECB Terms and Conditions through the application of the Harmonized Conditions for Participation in TARGET established in Annex I of Guideline ECB/2022/8, with the following exceptions: a) TARGET-ECB shall only provide clearing and settlement services to clearing and settlement entities, including entities established outside the European Economic Area (EEA), provided that they are subject to the supervision of a competent authority and that their access to TARGET-ECB has been approved by the Governing Council of the ECB; b) TARGET-ECB shall not grant intraday credit or self-guarantees.
The standardized measures adopted by the CBs of the Eurosystem to implement the Harmonized Conditions for Participation in TARGET shall be made public.
The CBs of the Eurosystem may request derogations from the Harmonized Conditions for Participation in TARGET based on national legal constraints. The Governing Council of the ECB shall assess such requests on a case-by-case basis and grant the appropriate derogations.
Subject to the relevant monetary agreement, the ECB may set the appropriate conditions for the participation in TARGET of the entities referred to in Annex I of Guideline ECB/2022/8, Part I, Article 4(2)(e).
The CBs of the Eurosystem shall not allow any entity to be an addressable BIC holder or contactable party in their respective component systems of TARGET if the entity in question acts through a TARGET account holder that is a CB of a Member State, but is not a CB of the Eurosystem nor a connected CB.
The CBs of the Eurosystem shall not register addressable BIC holders who meet the TARGET participation conditions established in Annex I of Guideline ECB/2022/8, Part I, Article 4, with the exception of their own branches and the entities listed in Annex I of Guideline ECB/2022/8, Part I, Article 4(2)(a) and (b).
Except for the rules relating to PS, the CBs of the Eurosystem shall not apply any other rules regarding participation in TARGET beyond those established in the Harmonized Conditions for Participation in TARGET. No fees shall be charged for the use of TARGET, or related to it, beyond those provided for in Annex I of Guideline ECB/2022/8, Appendix VI, with the exception of fees charged for services related to the co-management of a PCA by a CB (in accordance with Annex I of Guideline ECB/2022/8, Part II, Article 2), if such services are offered by a CB of the Eurosystem. The CB of the Eurosystem offering PCA co-management services shall apply the principle of full cost recovery when setting its fees for these services and shall pass on, at a minimum, the total costs arising from such services.
By way of derogation from paragraph 9, the CBs of the Eurosystem may establish complementary rules regarding TARGET accounts opened to hold funds made available as cash collateral assets or that form part of a hedging portfolio.

Article 10. Intraday credit — Self-guarantee

CBs of the euro area may grant intraday credit to participants. Intraday credit may only be granted in primary PCAs and in accordance with the implementation modalities of the intraday credit granting rules established in Annex I of Guideline ECB/2022/8, Part II. Intraday credit cannot be granted to participants whose eligibility as counterparties for Eurosystem monetary policy operations has been suspended or revoked.
At the request of a participant with access to intraday credit, CBs of the euro area must make available a self-guarantee facility on DCA T2S, provided that this is done in accordance with the conditions applicable to self-guarantee operations established in Annex I of Guideline ECB/2022/8, Part IV.
Participants subject to restrictive measures adopted by the Council of the European Union or by Member States under Article 65(1)(b), Article 75 or Article 215 of the Treaty, the application of which, in the opinion of the relevant CB of the euro area and after informing the ECB, is incompatible with the proper functioning of TARGET, are not eligible for the granting of intraday credit or for self-guarantees.
CBs of the euro area may grant intraday credit to PS in accordance with Annex I of Guideline ECB/2022/8, Part II, Article 10(2)(d), provided that the relevant provisions have been previously submitted to and approved by the Governing Council of the ECB.
CBs of the euro area may grant overnight credit to certain eligible central counterparties (CCPs), under the conditions provided for in Annex I of Guideline ECB/2022/8, Part II, Article 10(5), provided that the request has been previously submitted to and approved by the Governing Council of the ECB.
The Governing Council of the ECB may, on the proposal of the interested CB of the euro area, exempt the treasury departments and public sector entities referred to in Annex I of Guideline ECB/2022/8, Part II, Article 10(2)(b), from the requirement to provide adequate collateral before they can obtain intraday credit.
Whenever a CB of the euro area decides to suspend, limit or revoke a participant's access to intraday credit or self-guarantee for prudential reasons based on Annex I of Guideline ECB/2022/8, Part II, Article 13(1)(c), or Annex I of Guideline ECB/2022/8, Part IV, Article 11, respectively, it must immediately notify the ECB, the other CBs of the euro area and connected CBs in writing of this fact. If necessary, the Governing Council of the ECB shall decide on the uniform application of the measures taken to all component systems of TARGET.
If a counterparty's access to monetary policy instruments is suspended, limited or revoked for prudential or other reasons, in accordance with national provisions

Instruction No. 16/2022 BO No. 10/2022 • 2022/10/17 Topics: Payment Systems :: Large-Value Payment System Mod. 99999911/T – 01/14

Instruction No. 16/2022 BO No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14

application of Article 158 of Guideline (EU) 2015/510 (ECB/2014/60) 4, the competent Euro area NCB must, with regard to intraday credit access, apply that decision in accordance with the contractual or regulatory provisions applied by itself.

Whenever a Euro area NCB decides to suspend, limit or terminate the access of a Eurosystem monetary policy counterparty to intraday credit or to auto-collateralisation facilities, in accordance with Annex I to Guideline ECB/2022/8, Part II, Article 13(3), or with Annex I to Guideline ECB/2022/8, Part IV, Article 11, respectively, that decision shall not take effect unless it has been approved by the Governing Council of the ECB.
By way of derogation from paragraph 9, in urgent situations a Euro area NCB may suspend access to intraday credit and/or to auto-collateralisation facilities of a Eurosystem monetary policy counterparty with immediate effect. In such cases, the Euro area NCB concerned shall notify the Governing Council of the ECB in writing of that fact immediately. The Governing Council of the ECB may revoke the decision of the Euro area NCB. However, if the Governing Council of the ECB does not send to the Euro area NCB the communication of that cancellation within ten working days from receipt of its notification, it shall be presumed that the Governing Council of the ECB has approved the decision.
The Governing Council of the ECB may decide to waive the pecuniary sanctions provided for in Annex I to Guideline ECB/2022/8, Part II, Article 12(4), or to reduce them, if the debtor balance of the entity in question at the end of the day is attributable to force majeure and/or to a TARGET failure, as defined by that expression in Annex III to Guideline ECB/2022/8.

Article 11 Additional conditions for SPs

In addition to those set out in Article 9(1) to (9), the following provisions shall apply to the relations between the Eurosystem NCBs and the SPs, including SPs operated by Eurosystem NCBs.
The Eurosystem NCBs provide fund transfer services in central bank money to SPs acting in that capacity. These services must be made available: a) Through the settlement procedures for SPs TIPS only to support the settlement of immediate payments under the SEPA Instant Credit Transfer mechanism or of near-instant payments in the records of the SPs; or b) Through the settlement procedures for SPs LBTR for all other cases.
The Eurosystem NCBs may, on an exceptional basis and after approval by the Level 2 body referred to in Annex II to Guideline ECB/2022/8, approve the use of CND LBTR by an SP, except with regard to the settlement of immediate payments under the SEPA Instant Credit Transfer mechanism. The SP’s application for authorisation must be justified. If the application

4 Guideline (EU) 2015/510 of the European Central Bank of 19 December 2014 on the framework for the implementation of the monetary policy of the Eurosystem (General Documentation Guideline) (ECB/2014/60) (OJ L 091 of 2.4.2015, p. 3).

is granted, the prices set out in Annex I to Guideline ECB/2022/8, Appendix VI, point 4 shall apply.

Each Eurosystem NCB shall open a sub-account at the request of any settlement bank for which it holds a CND LBTR, if the settlement bank’s SP participates in the TARGET component system of that Euro area NCB or in another TARGET component system.
In addition to the conditions set out in Annex I to Guideline ECB/2022/8, the Eurosystem NCBs may establish conditions for SP participation in TARGET related to: a) Contingency and business continuity procedures; b) The nature of the right to funds held in a TARGET account when they do not form part of the SP’s assets; c) The exercise of pledge and set-off rights by the NCBs over TARGET accounts held by or on behalf of SPs; d) The collection and distribution of accrued interest; e) Regulatory requirements (including supervision) applicable to SPs or to SP settlement banks (including those applied by foreign regulators); f) The exchange of information to verify compliance with a Eurosystem policy.
The Eurosystem NCBs shall exchange information among themselves on all significant facts occurring during the settlement process in the SP.

Article 12 Financing and cost calculation method

The Governing Council of the ECB determines the rules applicable to the financing of TARGET.
The Governing Council of the ECB sets the TARGET pricing structure using a common Eurosystem cost methodology.

Article 13 Security standards

The Eurosystem NCBs must comply with the measures specified by the Governing Council of the ECB that establish the security policy and the security requirements and controls applicable to TARGET, notably with regard to cyber-resilience and information security.

Article 14 Audit rules

Audits shall be carried out in accordance with the principles and provisions set out in the SEBC Audit Policy established by the Governing Council of the ECB.

Article 15 Obligations in case of suspension or termination of participation

The Eurosystem NCBs must, with immediate effect, cancel or suspend the participation of a participant in the relevant TARGET component system if: a) Insolvency proceedings are initiated against that participant; or if b) The participant fails to comply with the participation conditions in the relevant TARGET component system.
If a Eurosystem NCB suspends or terminates the TARGET participation of a participant in accordance with paragraph 1, or for prudential reasons in accordance with Article 17, it shall immediately notify all other Eurosystem NCBs of that fact, providing all of the following information: a) The name and BIC of the participant; b) The information on which the Euro area NCB based its decision, including any information or opinion obtained from the competent supervisory authority; c) The measure taken and the proposed temporal application thereof. Each of the Eurosystem NCBs shall exchange information relating to that participant, including data on payment orders for which it is the beneficiary, with any other Eurosystem NCB that so requests.
A Eurosystem NCB that has cancelled or suspended the participation of a participant in its TARGET component system in accordance with paragraph 1 shall assume responsibility towards the other Eurosystem NCBs if: a) It subsequently authorises the settlement of payment orders in favour of the participant whose participation has been suspended or cancelled; or if b) It fails to comply with the obligations set out in paragraphs 1 and 2.
A Eurosystem NCB that has suspended the participation of a participant in its relevant TARGET component system in accordance with paragraph 1(a) may only process payment orders from that participant upon instructions from its representatives, including representatives appointed by a competent authority or by a judicial body, such as the participant’s insolvency administrator, or in accordance with an enforceable decision of a competent authority or judicial body containing instructions on how the payments must be processed. The Eurosystem NCBs shall reject all payment orders issued by the CND TIPS of a suspended participant.

Article 16 Procedures for rejecting a TARGET participation application based on prudential considerations

If, in accordance with Annex I to Guideline ECB/2022/8, Part I, Article 5(5)(c), a Eurosystem NCB rejects a TARGET participation application based on prudential considerations, it must promptly inform the ECB of that rejection.

Article 17 Procedures for the suspension, restriction or cancellation for prudential reasons of TARGET participation and access to intraday credit and auto-collateralisation

If, for prudential reasons, a Euro area NCB suspends, restricts or cancels a participant’s access to intraday credit in accordance with Annex I to Guideline ECB/2022/8, Part II, Article 13(1)(c), or to auto-collateralisation in accordance with Annex I to Guideline ECB/2022/8, Part IV, Article 11, or if a Eurosystem NCB suspends or cancels a participant’s TARGET participation in accordance with Annex I to Guideline ECB/2022/8, Part I, Article 25(2)(e), such decision shall take effect simultaneously, as far as possible, in all TARGET component systems.
The Euro area NCB must promptly provide the information set out in Article 15(2) to the competent supervisory authorities of the Member State to which it belongs, accompanied by a request that they share the information with the supervisory authorities of other Member States in which the participant has a branch or subsidiary. In light of the decision referred to in paragraph 1, the other Euro area NCBs must take appropriate measures and promptly inform the ECB thereof.
The Executive Board of the ECB may propose to the Governing Council of the ECB to adopt the necessary measures to ensure the uniform application of measures taken in accordance with paragraphs 1 and 2.
The Euro area NCBs of the Member States in which the decision is to be implemented must inform the participant of the decision and take the necessary implementation measures.

Article 18 Procedures for cooperation by Eurosystem NCBs related to administrative or restrictive measures

With regard to the application of Annex I to Guideline ECB/2022/8, Part I, Article 29(3):

The Eurosystem NCBs must promptly share with all potentially affected NCBs all information they receive relating to the proposed payment order, with the exception of liquidity transfer orders between different accounts of the same participant;
A Eurosystem NCB that receives proof from a participant that notification has been made to any competent authority, or that consent has been received from any competent authority, shall promptly communicate such proof to any other NCB acting as the payer’s or payee’s payment service provider, as the case may be;

The Eurosystem NCB acting as the payer’s payment service provider must promptly inform the payer that it may introduce the corresponding payment order into TARGET.

Article 19 Contingency and business continuity procedures

If any event affects the normal functioning of TARGET, the Eurosystem NCB concerned must immediately notify the TARGET Coordinator, who shall decide, jointly with the TARGET Settlement Manager of that Eurosystem NCB, on additional measures to be taken.
The Eurosystem NCBs shall report to the TARGET Coordinator any failures relating to a participant referred to in Annex I to Guideline ECB/2022/8, Appendix IV, points 2.4, 3.3 or 4.2, no later than 30 minutes after the start of the failure, or at the first opportunity after the failure is detected, if that failure is likely to affect the functioning of TARGET or cause systemic risk, or if the participant has been designated as a critical participant by the Eurosystem NCBs based on criteria periodically updated and published on the ECB website.
In exceptional circumstances, the Eurosystem NCBs may decide to alter the TARGET operating schedule for reasons including, among others, a failure affecting an SP. This decision shall be taken collectively by the Eurosystem NCBs.
In the event of any other occurrences likely to affect the normal functioning of TARGET, the Eurosystem NCB concerned shall monitor and manage those occurrences with the aim of avoiding any impact on the proper functioning of TARGET.
The Eurosystem NCBs must remain connected to the Contingency Solution.

Article 20 Handling of compensation claims under the TARGET compensation scheme

Unless the Governing Council of the ECB decides otherwise, the compensation procedure established in Annex I to Guideline ECB/2022/8, Appendix II shall be managed in accordance with the provisions of this Article.
The NCB of the participant that submitted the compensation claim must carry out a preliminary assessment of it and communicate it to the participant. Whenever necessary for the assessment of compensation claims, the NCB in question shall be assisted by other affected NCBs. The NCB in question must inform the ECB and all other affected NCBs as soon as it becomes aware that compensation claims have been submitted.
Within nine weeks from the occurrence of the TARGET technical failure, the NCB of the participant submitting the compensation claim must prepare a preliminary assessment report containing the assessment of the compensation claims received and submit it to the ECB and all other interested NCBs.
Within five weeks from the date of receipt of the preliminary assessment report, the Governing Council of the ECB shall assess all compensation claims received and decide on the compensation proposals to be presented to the interested participants. Within five working days from the date of completion of the final assessment, the ECB communicates the result of the assessment to the affected NCBs. Those NCBs must promptly inform their respective participants of the result of the final assessment and, if applicable, communicate the details of the compensation proposal, together with the acceptance letter template.
Within two weeks from the expiry of the period provided for in the last sentence of Annex I to Guideline ECB/2022/8, Appendix II, point 4(c), the NCB communicates to the ECB and to all other interested NCBs the compensation proposals that have been accepted and the compensation proposals that have been rejected.
The NCBs shall inform the ECB of any compensation claims submitted to them by their respective participants not included in the scope of the TARGET compensation scheme, but related to a TARGET technical failure.

Article 21 Treatment of losses caused by TARGET failure

In the event of a TARGET failure: a) On the payer side, any NCB in which the payer has made a deposit benefits from certain financial proceeds corresponding to the difference between the interest rate on the Eurosystem main refinancing operations and the deposit rate applied to the amount of the marginal increase in the use of the Eurosystem deposit facility during the period of the TARGET failure and up to the amount of unsettled payment orders. If the payer retains unremunerated excess funds, the financial proceeds correspond to the interest rate on the Eurosystem main refinancing operations, applied to the amount of the unremunerated excess funds during the period of the TARGET failure and up to the amount of unsettled payment orders. b) On the payee side, the payee’s NCB that has obtained credit using the permanent lending facility benefits from the financial proceeds corresponding to the difference between the interest rate of the permanent lending facility and the interest rate on the Eurosystem main refinancing operations, applied to the amount of the marginal increase in the use of the permanent lending facility during the period of the TARGET failure and up to the amount of unsettled payment orders.
The ECB’s financial proceeds correspond to: a) The revenues from linked NCBs resulting from the remuneration difference of end-of-day balances between those linked NCBs and the ECB; and b) The amount of penalty interest that the ECB receives from linked NCBs whenever one of those NCBs imposes a pecuniary sanction on a participant for the late repayment of intraday credit, as provided for in the agreement between the Eurosystem NCBs and the linked NCBs.

The financial proceeds referred to in paragraphs 1 and 2 shall be aggregated by the NCBs and the resulting amount shall be used to reimburse the NCBs that incur the compensation costs of their respective participants. Any residual costs or financial proceeds incurred by the NCBs with the compensation of their respective participants shall be shared among the Eurosystem NCBs, in accordance with the distribution table for the subscription of the ECB’s capital.

Article 22 Security rights in relation to funds deposited in sub-accounts and intra-Eurosystem collateral

For the purposes of settling payment instructions related to the settlement procedure C for SPs of LBTR, any Eurosystem NCB that has opened sub-accounts for their holders of CND LBTR must ensure that the balances of those sub-accounts (including the increase or decrease in the value of that balance by crediting or debiting the sub-account with the value of inter-system settlement payments or still by crediting settlement transfers to the sub-account) at the moment when the SP starts a processing cycle can only be used for the settlement of payment orders of the SP relating to procedure C in an SP of LBTR. The provisions of this paragraph apply notwithstanding the opening of insolvency proceedings against a holder of CND LBTR and despite any individual enforcement measure regarding the sub-account of that holder of CND LBTR.
Each time liquidity is transferred to the sub-account of a holder of CND LBTR and the Eurosystem NCB is not the SP’s NCB, that Eurosystem NCB must, after receiving communication from the SP (via a “start of cycle” message), confirm to the relevant SP the balance of the sub-account and, in doing so, guarantee to the SP’s NCB the execution of payments up to the amount of that balance. The confirmation of the balance to the SP also implies a legally binding declaration of intent by the peripheral system NCB that such NCB guarantees to the SP the execution of payments up to the amount of the confirmed balance. By confirming the increase or decrease of that balance by crediting or debiting the sub-account with the value of inter-system SP settlement transfer orders to or from the sub-account, or still by crediting settlement transfers to the sub-account, both the Eurosystem NCB that is not the SP’s NCB and the SP’s NCB declare an increase or reduction of the collateral by the value of the payment. Both guarantees shall be irrevocable, unconditional and payable on demand. Both guarantees shall expire after communication by the SP that settlement has been completed (via a “end of cycle” message).

SECTION IV FINAL AND TRANSITIONAL PROVISIONS

Article 23 Dispute resolution and applicable law

In the event of a dispute between Eurosystem NCBs arising from Guideline ECB/2022/8, the affected parties shall seek to resolve the conflict in accordance with the provisions of the Memorandum of Understanding on the Internal Dispute Resolution Procedure in the SEBC.

Instruction No. 16/2022 BO No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14

In derogation of paragraph 1, if a dispute regarding the allocation of responsibilities between Level 2 and Level 3 cannot be resolved by agreement between the parties involved, the Governing Council of the ECB shall decide the matter.
In the case of conflicts of the type referred to in paragraph 1, the rights and duties of each of the parties shall be determined, first of all, by the rules and procedures established in ECB Guideline 2022/8. In disputes between TARGET component systems regarding cash transfer orders, the law of the Member State in which the seat of the Eurosystem NCB of the beneficiary is located shall apply subsidiarily, provided it is compatible with the provisions of ECB Guideline 2022/8.

Article 24 Repeal of Banco de Portugal Instruction No. 54/2012

This Instruction repeals Banco de Portugal Instruction No. 54/2012 of 15 January 2013.
References to the repealed Instruction shall be construed as references to this Instruction.

Article 25 Entry into force and application

This Instruction shall enter into force on 20 March 2023.

Text amended by Instruction No. 17/2022, published in BO No. 11/2022 Supplement, of 21 November.

Article 26 Miscellaneous and transitional provisions

With regard to participants, on the date specified in Article 25:

a) The balances of TARGET2 MP accounts shall be transferred to the relevant CNPs indicated by the participants; b) TARGET2 TIPS CNDs shall become TIPS CNDs; c) TARGET2 T2S CNDs shall become T2S CNDs; d) The TARGET2 technical accounts, the TARGET2 SP TIPS technical accounts and the TARGET2 guarantee fund accounts for SP settlement procedures shall become, respectively, SP LBTR technical accounts, SP TIPS technical accounts and SP guarantee fund accounts; e) The balances of participants' domestic accounts shall be transferred to the relevant CNPs indicated by the participants;

Participants shall not suffer losses nor obtain profits as a result of the balance transfer provided for in paragraph 1.
Intra-Eurosystem obligations arising from the settlement of payments between participants in different TARGET2 component systems in accordance with Article 6 of ECB Guideline 2012/27 shall continue to be recorded in TARGET in accordance with Article 6 of ECB Guideline 2022/8.

Without prejudice to the provisions of Annex I, Part I, Article 5(1)(d) and (e) of ECB Guideline 2022/8, the national legal opinions and opinions regarding legal capacity requested by Eurosystem NCBs in accordance with Article 13 of ECB Guideline 2012/27 or Annex II, Article 8(2), Annex II-A, Article 6(2) and Annex II-B, Article 6(2) of ECB Guideline 2012/27, respectively, shall remain valid for the purposes of ECB Guideline 2022/8.
Without prejudice to the provisions of Annex I, Part II, Article 10(2)(d) of ECB Guideline 2022/8, the intraday credit access granted by the Governing Council in accordance with Annex III, point 2(e) of ECB Guideline 2012/27 shall remain valid.
Groups recognized by the Governing Council in accordance with the definition of 'group' in Annex II, Article 1 of ECB Guideline 2012/27 shall continue to be recognized and considered as banking groups for the purposes of ECB Guideline 2022/8.

Article 27 Addressees

The addressees of this Instruction are the TARGET-PT Participants.

Annex to the Instruction HARMONIZED CONDITIONS FOR PARTICIPATION IN TARGET-PT PART I GENERAL TERMS AND CONDITIONS

Article 1 Scope

The terms and conditions established in this Part I regulate the relationships between Banco de Portugal and its respective participants in TARGET-PT. The terms and conditions established in the following Parts II, III, IV, V, VI and VII apply to the extent that participants opt for, and obtain one or more accounts described in those Parts. The terms and conditions established in Parts I to VII of this Annex are collectively referred to in this Instruction as the 'Harmonized Conditions' or 'Conditions'.

Article 2 Appendices

The following appendices form an integral part of these Conditions:

Appendix I: Technical specifications for the processing of cash transfer orders Appendix II: TARGET clearing scheme Appendix III: Terms of reference for national legal opinions and opinions regarding legal capacity Appendix IV: Contingency and business continuity procedures Appendix V: TARGET operating hours Appendix VI: Price list Appendix VII: Requirements relating to information security management and business continuity management

In the event of conflict or incompatibility between the content of an appendix and the content of any other provision of these Conditions, the latter shall prevail.

Article 3 General description of TARGET

In legal terms, TARGET is composed of a multiplicity of payment systems — the TARGET component systems — each of which is designated as a 'system' under national laws transposing Directive 98/26/EC.
TARGET includes euro payment systems that carry out settlements in central bank money and provide centralized liquidity management services, real-time gross settlement services for payments and settlement services for SP, and allow for cash payments related to the settlement of securities and the settlement of instant payments.
TARGET provides:

a) CNPs for the settlement of central bank operations; b) LBTR CNDs for real-time gross settlement of large-value payments, and sub-accounts, if necessary for settlement in SP; c) T2S CNDs for cash payments related to the settlement of securities; d) TIPS CNDs for the settlement of instant payments; and e) The following SP settlement accounts: i) SP LBTR technical accounts; ii) SP guarantee fund accounts; and iii) SP TIPS technical accounts.

Each account in TARGET-PT shall be identified by a unique account number consisting of the elements described in Appendix I, point 2.

Article 4 Access criteria

The following types of entities are eligible to become participants in TARGET-PT upon application:

a) Credit institutions established in the Union or in the EEA, even when operating through a branch established in the Union or in the EEA; b) Credit institutions established outside the EEA, provided they operate through a branch established in the Union or in the EEA; c) NCBs of Member States and the ECB;

provided that the entities referred to in points (a) and (b) are not subject to restrictive measures adopted by the Council of the European Union or by Member States in accordance with Article 65(1)(b), Article 75 or Article 215 of the Treaty, the application of which, in the opinion of Banco de Portugal, which informs the ECB of this fact, is incompatible with the proper functioning of TARGET.

Banco de Portugal may also, if it deems appropriate, admit as participants the following entities:

a) Treasury departments of central or regional governments of Member States; b) Public sector entities of Member States authorized to maintain accounts on behalf of clients; c) i) investment firms established in the Union or in the EEA, even when operating through a branch established in the Union or in the EEA; and ii) investment firms established outside the EEA, provided they operate through a branch established in the Union or in the EEA; d) SP management entities acting in that capacity; and e) Credit institutions or any entities of the types listed in points (a) to (d), in both cases if established in a country with which the Union has concluded a monetary agreement allowing any of these entities access to Union payment systems, subject to the conditions established in the monetary agreement and provided that the legal regime of that country and the applicable Union legislation are equivalent.

Article 5 Application process

To become a participant in TARGET-PT, an entity eligible within the meaning of Article 4(1) or an entity that may be admitted by Banco de Portugal in accordance with Article 4(2) must meet the following requirements:

a) Install, manage, operate, control and ensure the security of the computer infrastructure necessary to connect and submit cash transfer orders to TARGET-PT. Candidates may involve third parties in this process, but the responsibility shall be solely and exclusively that of the former; b) Have passed the tests required by Banco de Portugal; c) If it is a candidate for an LBTR CND, a T2S CND or a TIPS CND, it must also possess or open a CNP at Banco de Portugal; d) Submit an opinion regarding its legal capacity, in accordance with the model set out in Appendix III, unless the information and declarations to be contained in said opinion have already been obtained by Banco de Portugal in another context; e) The entities referred to in Article 4(1)(b) and Article 4(2)(c)(ii) must submit a national legal opinion according to the model set out in Appendix III, unless the information and declarations to be contained in said opinion have already been obtained by Banco de Portugal in another context; f) If it is a candidate for a TIPS CND, it must have adhered to the SEPA instant credit transfers mechanism and subscribed to the agreement for adherence to the SEPA instant credit transfers mechanism; g) If it is a candidate for an SP TIPS technical account, it must have provided evidence that it has submitted to the European Payments Council a letter of information demonstrating its intention to be a Clearing and Settlement Mechanism (CSM) that meets the requirements of the SEPA instant credit transfers mechanism.

Candidates must submit their application for participation to Banco de Portugal accompanied, at a minimum, by the following documentation/information:

a) Reference data collection forms provided by Banco de Portugal duly completed; b) Opinion regarding its legal capacity, if required by Banco de Portugal and national legal opinion, if required by Banco de Portugal; c) If it is a TIPS CND candidate, evidence of adherence to the SEPA instant credit transfers mechanism; d) If the candidate requests the use of the SP TIPS settlement procedure, evidence that it has submitted to the European Payments Council a letter of information demonstrating its intention to be a clearing and settlement mechanism in accordance with the SEPA instant credit transfers mechanism; e) If the candidate designates a paying agent, evidence that the same has accepted to act in that capacity.

Candidates who are already participants in TARGET and apply for a new account under:

i) Part III (LBTR CND); ii) Part IV (T2S CND); iii) Part V (TIPS CND); iv) Part VI (SP LBTR technical account); and/or v) Part VII (SP TIPS technical account), must comply with the provisions of paragraphs 1 and 2 to the extent necessary for the new account to which they apply.

Banco de Portugal may also require any additional information that it deems necessary to decide on the application for the opening of a TARGET account.
Banco de Portugal shall reject the application for participation if:

a) The candidate is not an entity eligible within the meaning of Article 4(1), nor an entity that may be admitted by Banco de Portugal in accordance with Article 4(2); b) One or more of the participation requirements referred to in paragraph 1 have not been met; and/or c) In the opinion of Banco de Portugal, such participation could compromise the overall stability, solidity and security of TARGET-PT or any other TARGET component system, prejudice the performance of the duties of Banco de Portugal as described in Article 14 of the Organic Law of Banco de Portugal, approved by Law No. 5/98 of 31 January, and in the Statutes of the European System of Central Banks and of the European Central Bank or constitute a prudential risk of any nature.

Banco de Portugal shall communicate its decision to the candidate within one month from receipt of the application to become a participant in TARGET-PT. Whenever Banco de Portugal requests additional information in accordance with paragraph 4, the decision shall be communicated within one month from receipt, by the same, of the information sent by the candidate. Any decision of rejection must be reasoned.

Article 6 Participants

Participants that are not SP must hold at least one CNP with Banco de Portugal and may also be holders of one or more LBTR CNDs, T2S CNDs and/or TIPS CNDs with Banco de Portugal.
SPs that use the settlement procedures for SP LBTR or the settlement procedure for SP TIPS shall be subject to the terms and conditions established in this Part, as well as in Part VI or Part VII, respectively. They may hold one or more CNPs, T2S CNDs and, exceptionally, and if approved by Banco de Portugal, one or more LBTR CNDs, except with regard to the clearing of instant payments under the SEPA instant credit transfers mechanism. If an SP holds an LBTR CND or a T2S CND, it must also be the holder of at least one CNP with Banco de Portugal. In the case of an SP being the holder of one or more CNPs, LBTR CNDs, or T2S CNDs, the relevant Parts of these Conditions shall also apply to them.

Article 7 Access to a participant's account by other entities

To the extent technically possible, a participant may provide access to its TARGET accounts to one or more entities designated by it, for the purpose of submitting cash transfer orders and performing other acts.
Cash transfer orders submitted or funds received by the entities designated by a participant referred to in paragraph 1 shall be considered as orders submitted or funds received by the participant itself.
The participant shall be bound by the cash transfer orders in question and by any other acts performed by the entity or entities referred to in paragraph 1, regardless of their content or any eventual breach of provisions, contractual or otherwise, between the participant and such entities.

Article 8 Billing

Banco de Portugal shall identify the items subject to billing in accordance with Appendix VI and assign each of them to the participant who originated them.
Any fee payable for a cash transfer order submitted by an SP or for a cash transfer received by an SP, regardless of whether it uses the SP LBTR settlement procedures or an LBTR CND, shall be charged exclusively to that SP.
The items subject to billing generated by the acts performed by the entities designated referred to in Article 7, as well as by central banks acting on behalf of a participant, shall be attributed to that participant.
Banco de Portugal shall issue separate invoices to the participant regarding the relevant services referred to: i) Part III (LBTR CND); ii) Part IV (T2S CND); iii) Part V (TIPS CND); iv) Part VI (SP LBTR settlement procedures); and v) Part VII (SP TIPS settlement procedure).
Banco de Portugal shall settle each invoice by direct debit from a CNP held by the participant, unless the participant has designated another participant in TARGET (TARGET-PT or another TARGET component system) as a paying agent and has given instructions to Banco de Portugal to debit the CNP of that third-party payer. Such instructions do not exonerate the participant from its obligation to pay each invoice.
If it has designated a paying agent, the participant shall provide Banco de Portugal with proof that the paying agent has accepted to act in that capacity.
For the purposes of this Article, each SP shall be treated separately, even if two or more SPs are operated by the same legal entity, and regardless of whether the SP has been designated as such under Directive 98/26/EC. An SP that has not been designated under Directive 98/26/EC shall be considered as an SP with reference to the following parameters: a) existence of a formal agreement, based on a contractual or legislative instrument (for example, an agreement between participants and the system operator); b) plurality of members; c) existence of common rules and standardized agreements; and d) purpose of clearing,

clearing with novation (netting) and/or settlement of payments and/or securities between participants.

Article 9 Billing groups

At the request of the participant, Banco de Portugal shall create a billing group to allow its members to benefit from the progressive prices applicable to LBTR CNDs. The billing group may only include holders of LBTR CNDs belonging to the same banking group, of one or more TARGET component systems.
At the request of the holder of an LBTR CND, Banco de Portugal shall include that holder of an LBTR CND in a billing group that may be located in TARGET-PT or in any other TARGET component system, or remove it from the same. The holder of an LBTR CND must inform all other members of the billing group of this request before submitting it.
Holders of LBTR CNDs included in a billing group shall be sent individual invoices, in accordance with the provisions of Article 8.

Article 10 Obligations of Banco de Portugal and participants

Banco de Portugal shall offer the services described in Parts II, III, IV, V, VI and VII of these Conditions, in the event that the participant has opted for one of the accounts to which those Parts refer and that same account has been granted to it. Unless otherwise provided by these Conditions or by legal imperative, Banco de Portugal shall use all reasonable means at its disposal to fulfill the obligations incumbent upon it by virtue of these Conditions, but without guarantee of result.
Banco de Portugal is the service provider under these Conditions. The acts and omissions of Level 3 NCBs are considered acts and omissions of Banco de Portugal, for which it assumes responsibility in accordance with Article 22. Participation under these Conditions does not generate any contractual relationship between participants and Level 3 NCBs when any of them acts in this capacity. Instructions, messages or information that a participant receives from, or sends to, TARGET related to the services provided under these Conditions shall be presumed to be received from, or sent to, Banco de Portugal.
The participant shall pay fees to Banco de Portugal in accordance with the provisions of Article 8.
The participant must ensure that it is technically connected to TARGET-PT in accordance with the TARGET operating schedule established in Appendix V. This obligation may be fulfilled through an entity designated in accordance with Article 7.
The participant declares and guarantees to Banco de Portugal that the fulfillment of its obligations arising from these Conditions does not infringe any law, regulation or statutes applicable to it, nor any agreement by which it is bound.
The participant shall pay any stamp duties or other taxes or taxes on documents, if applicable, as well as any other costs incurred with the opening, maintenance or closure of its TARGET account.

Article 11. Cooperation and exchange of information

Banco de Portugal and participants shall cooperate closely to ensure the stability, solidity and security of TARGET-PT by fulfilling their obligations and exercising their rights under these Conditions. They shall mutually provide any information or documents relevant for the fulfilment of their respective obligations and the exercise of their respective rights under these Conditions, without prejudice to any duties of bank secrecy.
Banco de Portugal shall establish and maintain a system support service to assist participants with difficulties related to system operations.
The TARGET Information System (TIS) provides up-to-date information on the operational status of each service on a dedicated page of the ECB website.
Banco de Portugal may communicate relevant system messages to participants via a general broadcast message or, if this means is not available, by any other suitable means of communication.
Participants must timely update existing reference data collection forms and submit new reference data collection forms to Banco de Portugal. Participants shall verify the accuracy of the information concerning them that Banco de Portugal has entered into TARGET-PT.
Participants authorize Banco de Portugal to communicate to Level 3 NCBs any information regarding participants that these banks may need, in accordance with the agreements between Level 3 NCBs and Eurosystem NCBs governing the provision of services under the responsibility of the Level 3 NCB.
Participants must inform Banco de Portugal without unjustified delay of any change in their legal capacity and of relevant legislative changes affecting issues covered by the national legal opinion, as set out in the terms of reference contained in Appendix III.
Banco de Portugal may at any time request an update or renewal of the national legal opinions or the opinions regarding legal capacity referred to in Article 5(1)(d) and (e).
Participants must immediately inform Banco de Portugal if a default situation affecting them occurs or if they are subject to crisis prevention measures or crisis management measures within the meaning of Directive 2014/59/EU of the European Parliament and of the Council 1 or any other applicable equivalent legislation.

1 Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council (OJ L 173 of 12.6.2014, p. 190).

Article 12. Remuneration of accounts

NCA, NCA and MP accounts and sub-accounts shall be remunerated at a rate of zero percent or at the deposit facility rate, whichever is lower, unless they are used for the holding of: a) Minimum reserves; or b) Excess reserves; or c) Deposits of public administrations, as defined in Article 2(5) of Guideline (EU) 2019/671 (ECB/2019/7) 2. In the case of minimum reserves, the calculation and payment of remuneration for held minimum reserves shall be governed by the provisions of Council Regulation (EC) No 2531/98 3 and European Central Bank Regulation (EU) 2021/378 (ECB/2021/1). In the case of excess reserves, the calculation and payment of remuneration for held reserves shall be governed by the provisions of Decision (EU) 2019/1743 (ECB/2019/31) 4. In the case of deposits of public administrations, the remuneration of held deposits shall be governed by the provisions relating to deposits of public administrations established in Article 4 of Guideline (EU) 2019/671 (ECB/2019/7).
Overnight balances held in a TIPS technical account or an LBTR technical account for settlement procedure D and guarantee funds, including those held in a SP guarantee fund account, shall be remunerated at the deposit facility rate.

Article 13. Account management

Participants shall monitor and manage the liquidity of their accounts in accordance with the TARGET operating calendar set out in Appendix V and reconcile transactions at least once per day. This obligation may be fulfilled through an entity designated under Article 7.
The participant shall use the instruments provided by Banco de Portugal for the purpose of account reconciliation, namely the daily account statement made available to each participant. This obligation may be fulfilled through an entity designated under Article 7.
Participants must immediately inform Banco de Portugal of any discrepancy in any of their accounts.

2 Guideline (EU) 2019/671 of the European Central Bank of 9 April 2019 on domestic asset and liability management operations by national central banks (ECB/2019/7) (OJ L 113 of 29.04.2019, p. 11). 3 Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum reserves by the European Central Bank (OJ L 318 of 27.11.1998, p. 1). 4 Decision (EU) 2019/1743 of the European Central Bank of 15 October 2019 on the remuneration of excess reserves and certain deposits (ECB/2019/31) (OJ L 267 of 21.10.2019, p. 12).

Article 14. Minimum reserves

At the request of a participant subject to minimum reserves, Banco de Portugal shall designate one or more NCA or NCA belonging to that participant in TARGET-PT as held for the purpose of meeting minimum reserve requirements.
For the purpose of meeting minimum reserve requirements, if applicable to the participant, the sum of the end-of-day balances of all accounts held by that participant at Banco de Portugal and designated for this purpose shall be taken into account.

Article 15. Minimum and maximum amounts

The participant may set minimum and maximum amounts for its NCA or its NCA.
The participant may opt to receive a notification in case of non-compliance with the minimum or maximum amount. Furthermore, with regard to LBTR NCA, the participant may opt for non-compliance to trigger a liquidity transfer order based on rules.
The settlement of the liquidity transfer order shall not trigger a check for non-compliance with the minimum or maximum amount.

Article 16. Account monitoring group

The holder of an NCA may create one or more account monitoring groups with the aim of monitoring the liquidity of several NCA or NCA and shall be the leader of any account monitoring group it creates.
A participant may add any of its NCA or NCA opened in TARGET-PT or any other system component of TARGET to one or more account monitoring groups, thereby becoming a member of those groups. A member of an account monitoring group may initiate the removal of its account from that group at any time. The participant must inform the leader of the account monitoring group before adding an account to or removing an account from that group.
Only the leader of an account monitoring group may view the balances of all accounts included in that group.
The leader may delete the account monitoring group and must inform the other members of that group before such deletion.

Article 17. Acceptance and rejection of cash transfer orders

Cash transfer orders submitted by participants shall only be presumed to have been accepted by Banco de Portugal if: a) The transfer message meets the technical requirements of TARGET described in Appendix I; b) The message complies with the formatting rules and conditions described in Appendix I;

Article 18. Entry of cash transfer orders into the system and irrevocability

For the purposes of the first sentence of Article 3(1) and Article 5 of Directive 98/26/EC and also Articles 3 and 4 of Decree-Law No. 221/2000 of 9 September a) All cash transfer orders, except those provided for in points (b), (c) and (d) of this paragraph, are presumed to be entered into TARGET-PT and irrevocable at the moment the relevant participant's TARGET account is debited; b) Instant payment orders are considered entered into TARGET-PT and irrevocable at the moment the necessary funds are reserved in the participant's TIPS NCA or its relevant TIPS technical account; c) In the case of operations settled in TIPS NCA and subject to the existence of matching between two distinct transfer orders: i) except in the cases provided for in sub-point (ii) of this point, such transfer orders are considered to have been entered into TARGET-PT at the moment T2S declared them compliant with T2S technical rules, and they became irrevocable at the moment the operation was assigned the 'matched' status on the T2S platform; ii) in the case of operations involving a participant CDT with a separate matching component, whenever the transfer orders are sent directly to that participant CDT for determination of the matching in its separate matching component, such transfer orders are considered to have been entered into TARGET-PT at the moment the participant CDT declared them compliant with T2S technical rules, and they became irrevocable from the moment the operation was assigned the 'matched' status on the T2S platform. The list of CDTs referred to in this sub-point (ii) is available on the ECB website;

Article 19. Contingency and business continuity procedures

If an abnormal external event or any other situation affecting transactions in TIPS NCA occurs, the contingency and business continuity procedures described in Appendix IV shall apply.
In exceptional circumstances, the TARGET operating calendar may be altered, in which case Banco de Portugal shall inform participants.
In exceptional circumstances, an SP may request Banco de Portugal to alter the TARGET operating calendar.
The Eurosystem provides a Contingency Solution to be applied in the event of the situations described in paragraph 1. Connection to and use of the Contingency Solution is mandatory for participants considered of paramount importance by Banco de Portugal and for participants settling very critical transactions under Appendix IV. Other participants may, upon request, connect to the Contingency Solution.

Article 20. Security requirements

Participants shall implement appropriate security measures to protect their systems against unauthorized access and use. Participants are solely responsible for the adequate protection of the confidentiality, integrity and availability of their systems.
Participants shall immediately inform Banco de Portugal of any security incidents occurring in their technical infrastructures and also, if applicable, in the technical infrastructures of third-party suppliers. Banco de Portugal may request additional information about the incident and, if necessary, ask the participant to take appropriate measures to prevent recurrence of such a situation.
Banco de Portugal may impose additional security requirements on all participants and/or on participants considered of paramount importance by Banco de Portugal, particularly with regard to cybersecurity or fraud prevention.
Participants must provide Banco de Portugal with: i) permanent access to their declaration of adherence to the security requirements of the terminal of the chosen network service provider; and ii)

Annex to Instruction No. 16/2022 BO No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 annually, the TARGET self-certification declaration required for the types of accounts they hold as published in English on the Banco de Portugal website and on the ECB website. 5. Banco de Portugal evaluates the participant's self-certification declaration(s) based on the level of compliance with each of the requirements established for the purpose of TARGET self-certification. These requirements are listed in Appendix VII. 6. The participant's level of compliance with the TARGET self-certification requirements shall be classified as follows, in increasing order of severity: 'full compliance'; 'minor non-compliance'; or 'major non-compliance'. The following criteria apply: 'full compliance' is achieved whenever participants satisfy 100% of the requirements; 'minor non-compliance' occurs whenever the participant satisfies less than 100% but at least 66% of the requirements and 'major non-compliance' occurs whenever the participant satisfies less than 66% of the requirements. If a participant demonstrates that a specific requirement is not applicable to it, it shall be considered compliant with the requirement in question for the purpose of classification. A participant that fails to achieve 'full compliance' must submit an action plan demonstrating how it intends to achieve full compliance. Banco de Portugal must inform the competent supervisory authorities about the participant's compliance status. 7. If the participant refuses permanent access to its declaration of adherence to the security requirements of the terminals of the chosen network service providers or fails to provide the TARGET self-certification, the participant's compliance level shall be classified as 'major non-compliance'. 8. Banco de Portugal must re-evaluate participant compliance annually. 9. Banco de Portugal may impose the following remedial measures on participants whose compliance level has been assessed as minor or major non-compliance, in increasing order of severity: a) Enhanced monitoring: the participant must submit a monthly report to Banco de Portugal, signed by a senior manager, on the progress made in resolving the non-compliance. In addition, the participant incurs a monthly penalty of 1,000 EUR for each affected account. This remedial measure may be imposed if the participant receives a second consecutive minor non-compliance assessment or a major non-compliance assessment; b) Suspension: participation in TARGET-PT may be suspended under the circumstances described in Article 25(2)(b) and/or (c). In derogation of Article 25, the participant must be notified of the suspension three months in advance. The participant incurs a monthly penalty of 2,000 EUR for each suspended account. This remedial measure may be imposed if the participant receives a second consecutive major non-compliance assessment; c) Termination: participation in TARGET-PT may be revoked under the circumstances described in Article 25(2)(b) and/or (c). In derogation of Article 25, the participant must be notified of the termination three months in advance. The participant incurs an additional penalty of 1,000 EUR for each closed account. This measure of

Participants who allow third parties access to their TARGET account, as provided for in Article 7, paragraphs 2, 3 and 4, and participants who have registered addressable BIC holders under Part III, Article 2, must manage the risk arising from such access in accordance with the security requirements defined in paragraphs 1 to 9.

Article 21. Clearing Scheme If a cash transfer order cannot be settled on the same business day it was accepted due to a TARGET failure, the Banco de Portugal will offer to clear the affected direct participants, according to the special procedure provided for in Appendix II.

Article 22. Liability Regime

The Banco de Portugal and the participants are bound by a mutual duty of diligence in fulfilling their respective obligations arising from these Conditions.
The Banco de Portugal shall be liable to its participants for any damage resulting from the operation of TARGET-PT in cases of fraud (including, but not exclusively, intentional misconduct) or gross negligence. In cases of simple negligence or mere fault, the liability of the Banco de Portugal is limited to the direct damages suffered by the participant, namely the amount of the transaction in question and/or the loss of profits thereon, excluding any indirect damages.
The Banco de Portugal shall not be liable for any damages resulting from a failure or malfunction of the technical infrastructure (including, but not exclusively, the IT infrastructure of the Banco de Portugal), programs, data, computer applications or networks, if such failure or malfunction occurs despite the Banco de Portugal having adopted the reasonably necessary measures to avoid and resolve them (including, in this latter type of measures, but not exclusively, the initiation and completion of contingency and business continuity procedures referred to in Appendix IV).
The Banco de Portugal shall not be liable: (a) To the extent that the participant caused the losses; or (b) If the losses result from external events outside the reasonable control of the Banco de Portugal (force majeure).
Notwithstanding the provisions of the Legal Regime of Payment Services and Electronic Money (RJSPME), published as an annex to Decree-Law No. 91/2018 of November 12, paragraphs 1 to 4 are applicable to the extent that the liability of the Banco de Portugal can be excluded.
The Banco de Portugal and the participants shall take all reasonable and practicable measures to mitigate the losses or damages referred to in this article.
If necessary to comply with all or part of the obligations arising from these Conditions or from market practices, the Banco de Portugal may, in its own name, entrust third parties (especially telecommunications providers or other network service providers or other entities) with the execution of some of the tasks incumbent upon it. The obligation and, consequently, the liability of the Banco de Portugal, are limited to the selection and contracting of these third parties in accordance with the applicable rules. For the purposes of this paragraph, Level 3 CBs shall not be considered third parties.

Article 23. Means of Proof

Unless otherwise provided in these Conditions, all cash transfer orders and related messages, such as debit or credit confirmations or account statement messages, exchanged between the Banco de Portugal and the participants, must be effected through the relevant network service provider.
Electronic or written records of messages kept by the Banco de Portugal or by the relevant network service provider shall be accepted as means of proof of payments processed through the Banco de Portugal. The archived or printed version of the original message from the relevant network service provider shall be accepted as a means of proof, regardless of the form of the original message.
If there is a failure in the connection of a participant to the network service provider, the participant shall use the alternative message transmission method agreed with the Banco de Portugal. In this case, the archived or printed version of the message provided by the Banco de Portugal shall have the same probative force as the original message, regardless of the form it takes.
The Banco de Portugal shall keep complete records of the cash transfer orders submitted by participants, as well as payments received by them, for a period of 10 years, from the moment the cash transfer orders and payments were respectively submitted or received, it being established that such records shall cover a minimum of 5 years in relation to all TARGET participants subject to continuous supervision by virtue of restrictive measures adopted by the Council of the European Union or by Member States, or a longer period, if specific regulations so require.
The books and records of the Banco de Portugal shall be accepted as means of proof of the obligations of the participants and of the facts and occurrences on which the parties rely.

Article 24. Duration and Normal Cancellation of Participation and Closure of Accounts

Without prejudice to the provisions of Article 25, participation in TARGET-PT has an indefinite duration.
A participant may, at any time, with 14 business days' prior notice, unless a shorter period has been agreed with the Banco de Portugal, cancel: a) Its general participation in TARGET-PT; b) One or more of its NCA, LBTR PSP technical accounts and/or TIPS PSP technical accounts; c) One or more of its NCP, provided they continue to comply with the provisions of Article 5.
The Banco de Portugal may, at any time, with 14 business days' prior notice, unless a shorter period has been agreed with the participant concerned, cancel: a) The general participation of the participant in TARGET-PT; b) One or more of the participant's NCA, LBTR PSP technical accounts and/or TIPS PSP technical accounts; c) One or more of the participant's NCP, provided that it maintains at least one NCP.
In the event of cancellation of participation, the confidentiality duties established in Article 28 shall remain in force for the five years following the date of termination of participation.
Upon cancellation of participation, the Banco de Portugal shall close all TARGET accounts of the participant concerned in accordance with Article 26.

Article 25. Suspension and Extraordinary Cancellation of Participation

A participant's participation in TARGET-PT shall be cancelled immediately and without prior notice, or suspended, if any of the following non-compliance situations occur: a) Opening of insolvency proceedings; and/or b) The participant ceases to meet the access criteria established in Article 4. For the purposes of this paragraph, the adoption of a prevention or crisis management measure within the meaning of Directive 2014/59/EU of the European Parliament and of the Council against a participant is not automatically considered as the commencement of insolvency proceedings.
The Banco de Portugal may cancel without prior notice or suspend the participant's participation in TARGET-PT if: a) One or more non-compliance situations occur (distinct from those mentioned in paragraph 1); b) The participant substantially infringes these Conditions; c) The participant fails to fulfill a significant obligation towards the Banco de Portugal; d) The participant ceases to maintain a valid agreement with a Network Service Provider (NSP) to provide the necessary connection to TARGET; e) Any other occurrence related to the participant occurs, in the opinion of the Banco de Portugal, that could threaten the overall stability, solidity and security of TARGET-PT or any other system component of TARGET, or impair the performance of the duties of the Banco de Portugal as described in Article 14 of the Organic Law of the Banco de Portugal, approved by Law No. 5/98 of January 31, and in the Statutes of the European System of Central Banks and of the European Central Bank or constitute a prudential risk nature; and/or f) A CB suspends or cancels the participant's access to intraday credit, including self-collateralization, under Part II, Article 13; and/or g) The participant has been excluded from a Closed User Group of the NSP or, for any other reason, has ceased to belong to it.

5 Directive 2014/59/EU of the European Parliament and of the Council of May 15, 2014, establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU and Regulations (EU) No. 1093/2010 and (EU) No. 648/2012 of the European Parliament and of the Council (OJ L 173 of 12.6.2014, p. 190).

In exercising the discretionary power attributed to it by paragraph 2, the Banco de Portugal shall take into account, among other aspects, the seriousness of the situation or situations of non-compliance referred to in points (a) to (c) of paragraph 2.
If the Banco de Portugal suspends or cancels the participation of a participant in TARGET-PT under the provisions of paragraphs 1 or 2, the Banco de Portugal must give immediate notice of such suspension or cancellation — by means of a general broadcast message or, if such is not available, by another adequate means of communication — to that participant, to other central banks and to participants in all systems component of TARGET. Such message shall be considered as having been issued by the CB of origin of the participant concerned.
As soon as the message issued under paragraph 4 is received by the participants, it shall be presumed that they have been informed of the suspension or cancellation of the participation of the participant concerned in TARGET-PT or in another system component of TARGET. Participants shall bear the losses resulting from the submission of cash transfer orders to participants whose participation has been suspended or cancelled, if such orders are introduced into TARGET-PT after receipt of the message.

Article 26. Closure of TARGET Accounts by the Banco de Portugal upon Cessation of Participation Cancelled the participation of a participant in TARGET-PT, under either Article 24 or Article 34, the Banco de Portugal shall close the TARGET accounts of the participant concerned, after having settled or rejected any cash transfer orders in queue and after having exercised its rights of enforcement of pledge and set-off under Article 27.

Article 27. Rights of Enforcement of Pledge and Set-off of the Banco de Portugal

The Banco de Portugal shall be a secured creditor of the credit balances of the participant's TARGET accounts, present and future, which shall serve as financial collateral for any current or future credit rights resulting from the legal relationship between the parties. a) Current or future credit rights against the Banco de Portugal arising from a credit balance in the TARGET accounts shall be transferred to the Banco de Portugal as financial collateral (i.e., by way of fiduciary title) of any current or future credit right of the Banco de Portugal over the participant arising from this Instruction. The constitutive fact of such financial collateral shall be the credit of funds in the participant's TARGET accounts. b) The Banco de Portugal shall be the holder of a floating charge over the existing and future credit balances of the participant's TARGET accounts, which shall serve as financial collateral for any credit rights resulting from the legal relationship between the parties.
The Banco de Portugal shall have the right referred to in paragraph 1 even if its credit rights are conditional or not yet due.
The participant, in its capacity as holder of a TARGET account, hereby accepts the constitution of a pledge in favor of the Banco de Portugal, in which the said account was opened; this acceptance constitutes the delivery of the pledged assets to the Banco de Portugal, in accordance with Decree-Law No. 105/2004 of May 8, relating to financial pledge. Any amounts credited to the TARGET accounts whose balance is subject to pledge become, by the mere fact of being credited, unconditionally and irrevocably given in pledge to guarantee the full compliance of the guaranteed obligations.
Upon the occurrence of: a) A non-compliance situation referred to in Article 25, paragraph 1; or b) Any other non-compliance situation or situation referred to in Article 25, paragraph 2, which has led to the cancellation or suspension of the participant's participation, and notwithstanding the opening of insolvency proceedings against a participant and despite any alleged assignment, judicial or extrajudicial attachment or other provision regarding its rights, all obligations of the participant shall become automatically and immediately due, becoming immediately enforceable without prior notice and without the need for prior approval or authorization from any authorities. Furthermore, the reciprocal obligations of the participant and the Banco de Portugal shall be automatically offset against each other, and the party owing a larger amount shall pay the difference to the other.
The Banco de Portugal must promptly inform the participant of any set-off carried out under paragraph 4 after it has occurred.
The Banco de Portugal may, without need for summons, debit the TARGET accounts of the participant any amount that this owes it by virtue of the legal relationship existing between the participant and the Banco de Portugal.
The provisions of this article do not constitute a right, pledge, credit or compensation regarding the following TARGET accounts used by the PSP: a) TARGET accounts used in conformity with the settlement procedures for PSP provided for in Part VI or Part VII; b) TARGET accounts held by the PSP under Parts II to V, when the funds deposited therein do not belong to the PSP, but are held on behalf of its clients or used to settle cash transfer orders on behalf of its clients.

Article 28. Confidentiality

The Banco de Portugal shall keep confidential all confidential or secret information, including when it refers to information about payments or technical or organizational aspects belonging to the participant, to participants members of the same group or to clients of the participant, unless the participant or its client has given written consent for its disclosure, or if its disclosure is permitted or mandatory by virtue of Portuguese law.
By derogation from the provisions of paragraph 1, the participant accepts that information relating to any measure adopted under Article 25 is not considered confidential.
By derogation from the provisions of paragraph 1, the participant accepts that the Banco de Portugal may disclose information about payments, of a technical or organizational nature, relating to the participant, to participants of the same group or to its own clients, obtained during the operations of TARGET-PT, to: a) Other CBs or third parties involved in the functioning of TARGET-PT to the extent necessary for the proper functioning of TARGET or for the monitoring of the exposure of the participant or its banking group; b) Other CBs, for the purpose of carrying out the analyses necessary for market operations, monetary policy functions, financial stability or financial integration; or c) Supervisory, resolution and supervisory authorities of Member States and the Union, including CBs, to the extent necessary for the performance of their public duties, and provided that, in all cases, the disclosure is not contrary to applicable legislation.
The Banco de Portugal shall not be liable for the financial and commercial consequences of the disclosure made in accordance with paragraph 3.
By derogation from paragraph 1, and provided that this does not make it possible to identify, directly or indirectly, the participant or its clients, the Banco de Portugal may use, disclose or publish information about payments relating to the participant or its clients for statistical, historical, scientific or other purposes in the performance of its public duties or the duties of other public entities to whom this information is communicated.
Information regarding the functioning of TARGET-PT to which participants have access may only be used for the purposes established in these Conditions. Participants shall keep this information confidential, unless the Banco de Portugal has expressly consented in writing to its disclosure. Participants must ensure that third parties to whom they outsource, delegate or subcontract tasks that may affect the fulfillment of their obligations arising from these Conditions are bound by the confidentiality obligations provided for in this article.
The Banco de Portugal is authorized to process and transmit to the network service provider the data necessary for the settlement of payment orders.

Article 29. Data Protection, Anti-Money Laundering, Administrative or Restrictive Measures and Related Issues

It is presumed that participants are aware of, comply with and are able to demonstrate to the competent authorities compliance with all obligations incumbent upon them by virtue of legislation on data protection. It is presumed that participants know and comply with all obligations imposed upon them by virtue of legislation on anti-money laundering and counter-financing of terrorism, nuclear proliferation activities and the development of nuclear weapon vectors, especially with regard to the adoption of appropriate measures regarding any payments debited or credited to their respective TARGET accounts. Participants

Annex to Instruction No. 16/2022 Official Journal No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 must ensure they are informed about the FSR's data recovery policy before establishing a contractual relationship with it. 2. Participants authorize Banco de Portugal to obtain, from any national or foreign financial or supervisory authorities or trade bodies, any information concerning them, whenever such information is necessary for participation in TARGET-PT. 3. Participants, when acting as payment service providers for a payer or beneficiary, must comply with all requirements resulting from administrative or restrictive measures applied under Articles 75 or 215 of the Treaty to which they are subject, including those regarding notification or obtaining consent from a competent authority regarding transaction processing. Furthermore: a) When Banco de Portugal is the payment service provider for a participant that is a payer: i) the participant carries out the required notification or obtains consent on behalf of the central bank initially obliged to carry out the notification or obtain consent and provides Banco de Portugal with proof that the notification was carried out or consent was received; ii) the participant may not introduce into TARGET any cash transfer order transferring funds to an account held by an entity other than the participant until it receives confirmation from Banco de Portugal that the necessary notification was carried out, or that consent was obtained by the payment service provider of the beneficiary, or on its behalf; b) When Banco de Portugal is a payment service provider for a participant that is a beneficiary, the participant carries out the required notification or obtains consent on behalf of the central bank initially obliged to carry out the notification or obtain consent and provides Banco de Portugal with proof that the notification was carried out or consent was received. For the purposes of this paragraph, the terms "payment service provider", "payer" and "beneficiary" have the meaning attributed to them in the applicable administrative or restrictive measures.

Article 30 Communications

Unless otherwise provided in these Conditions, all notices or notifications required or permitted by these Conditions shall be sent by registered mail, or other electronically agreed bilateral means, or by any other written means. Notifications to Banco de Portugal are sent to the Direction of the Payment Systems Department (DPG) of Banco de Portugal, via the email address target@bportugal.pt or to Av. Almirante Reis, n.º 71, 7th floor, 1150-012 Lisbon, or addressed to the BIC address of Banco de Portugal BGALPTTGXXX. Notices and notifications intended for participants shall be sent to their address, or by other electronically agreed bilateral means, or to the BIC address that the participant has communicated to Banco de Portugal.

Article 31 Contractual relationship with the network service provider

To send or receive instructions and messages from TARGET, participants: a) Enter into a contract with an FSR within the framework of the concession contract with that provider, in order to establish a technical connection to TARGET-PT; or b) Establish a connection through another entity that has entered into a contract with an FSR within the framework of the concession contract with that provider.
The legal relationship between a participant and the FSR is governed exclusively by the terms and conditions of the contract concluded between them.
The services to be provided by the FSR do not form part of the services to be executed by Banco de Portugal in relation to TARGET.
Banco de Portugal is not responsible for any acts, errors or omissions of the FSR (including its directors, staff and subcontractors), nor for any acts, errors or omissions of third parties selected by participants to have access to the FSR's network.

Article 32 Amendment procedure Banco de Portugal may at any time unilaterally amend these Conditions, including the appendices. The amendments introduced into the Conditions, including the appendices, will be announced by means of an email to be sent to TARGET interlocutors communicated to Banco de Portugal. The amendments shall be deemed accepted unless the participant expressly opposes them within 14 days of being informed thereof. In the event that a participant opposes the amendments, Banco de Portugal has the right to immediately cancel the participant's participation in TARGET-PT and to close all its TARGET accounts.

Article 33 Third-party rights

Participants may not assign, pledge or transfer any rights, interests, obligations, liabilities or credits arising from or related to these Conditions to any third party without the written consent of Banco de Portugal.
These Conditions do not confer rights or impose obligations on any entity other than Banco de Portugal and the participants in TARGET-PT.

Article 34 Applicable legislation, competent court and place of performance of the service

The bilateral relationship between Banco de Portugal and the participants in TARGET-PT shall be governed by Portuguese law.
Without prejudice to the jurisdiction of the Court of Justice of the European Union, any dispute arising from the bilateral relationship referred to in paragraph 1 shall be under the exclusive jurisdiction of the competent courts of the district of Lisbon.
The place of performance of the service object of the legal relationship between Banco de Portugal and the participants is Lisbon.

Article 35 Severability The nullity or voidability of any of the provisions contained in these Conditions does not affect the validity of the remaining ones.

Article 36 Entry into force and binding nature

These Conditions shall take effect from March 20, 2023.
By applying for participation in TARGET-PT, applicant participants automatically accept the application of these Conditions to the relationship between them and with Banco de Portugal.

PART II SPECIAL TERMS AND CONDITIONS OF THE MAIN CASH ACCOUNTS

Article 1 Opening and management of main cash accounts

Banco de Portugal shall open and manage at least one main cash account (MCA) in the name of each participant, unless the participant is a PSP that only uses the settlement procedures for PSP LBTR or TIPS, in which case the use of an MCA is at the discretion of the PSP.
For the purposes of settling monetary policy operations, as established in Instruction No. 3/2015 of Banco de Portugal, and the settlement of interest on those operations, the participant shall designate a primary MCA with Banco de Portugal.
The main cash account designated pursuant to paragraph 2 shall also be used for the following purposes: a) The remuneration provided for in Part I, Article 12, unless the participant has designated another participant in TARGET-PT for this purpose; b) The granting of intraday credit, if applicable.
Any negative balance of a primary MCA should not be lower than the credit line (if granted). There should be no debit balance in an MCA that is not a primary MCA.

Article 2 Co-management of MCA

At the request of the holder of an MCA, Banco de Portugal shall allow an MCA held by that holder to be co-managed by one of the following entities: a) Another holder of an MCA in TARGET-PT; b) The holder of an MCA in another system component of TARGET; c) Banco de Portugal If the holder of an MCA is the holder of more than one MCA, each of them may be co-managed by a different co-manager. The co-manager shall have the same rights and privileges regarding the MCA co-managed by it as it has regarding its own MCA.
The holder of the MCA shall provide Banco de Portugal with proof that it has given its consent to the co-manager to act in that capacity. Proof of consent to act is not required if the co-manager is Banco de Portugal.
The holder of an MCA acting as a co-manager shall comply with the obligations of the holder of the co-managed MCA provided for in Part I, Article 5, paragraph 1, letter a), Article 10, paragraph 4, and Article 31, paragraph 1.
The holder of an MCA of a co-managed MCA shall comply with the obligations of a participant provided for in Parts I and II regarding the co-managed MCA. If the holder of the MCA does not have a direct technical connection to TARGET, the provisions of Part I, Article 5, paragraph 1, letter a), Article 10, paragraph 4, and Article 31, paragraph 1 shall not apply.

Article 3 Liquidity transfer group between MCAs

At the request of the holder of an MCA, Banco de Portugal shall create a liquidity transfer group between MCAs, with the aim of allowing the processing of liquidity transfer orders from MCA to MCA.
At the request of the holder of an MCA, Banco de Portugal shall add or remove one of the MCAs of that holder to a liquidity transfer group between MCAs created in TARGET-PT or in another system component of TARGET. Before submitting this request, the holder of the MCA shall inform all other holders of the MCAs of this liquidity transfer group between MCAs.

Article 4 Operations processed through MCA

The following operations shall be processed through an MCA in TARGET-PT: a) Central bank operations; b) Liquidity transfer orders to and from overnight deposit accounts opened by Banco de Portugal in the name of the participant; c) Liquidity transfer orders to another MCA of the same liquidity transfer group between MCAs; d) Liquidity transfer orders to a T2S MCA, TIPS MCA or LBTR MCA, or to sub-accounts thereof.
The following operation may be processed through an MCA in TARGET-PT: a) cash transfer orders resulting from deposits and withdrawals.

Article 5 Liquidity transfer orders

The holder of an MCA may submit a liquidity transfer order in one of the following forms: a) Immediate liquidity transfer order, which constitutes an instruction for immediate execution; b) Standing liquidity transfer order, which constitutes an instruction for the periodic execution of the transfer of a certain amount upon the occurrence of a predefined event on each business day.

Article 6 Rule-based liquidity transfer orders

The holder of an MCA may specify a minimum amount and a maximum amount for its MCA.
By establishing a maximum amount and opting for a rule-based liquidity transfer order, if, following the settlement of a payment order, the maximum amount is not met, the holder of the MCA instructs Banco de Portugal to execute a rule-based liquidity transfer order that credits an LBTR MCA or another MCA of the same liquidity transfer group between MCAs designated by that holder of the MCA. The LBTR MCA or the credited MCA may be in TARGET-PT or in another system component of TARGET.
By establishing a minimum amount and opting for a rule-based liquidity transfer order, if, following the settlement of a payment order, the minimum amount is not met, a rule-based liquidity transfer order is issued that debits an LBTR MCA or another MCA of the same liquidity transfer group between MCAs designated by that holder of the MCA. The LBTR MCA or the MCA to be debited may be in TARGET-PT or in another system component of TARGET. The holder of the LBTR MCA or the MCA to be debited must authorize that its account be debited in this manner.
The holder of an MCA may authorize that it be debited in the event of non-compliance with the minimum limit in one or more specified LBTR MCAs or MCAs of the same liquidity transfer group in TARGET-PT or in another system component of TARGET. By authorizing the debit of its account, the holder of the MCA instructs Banco de Portugal to execute a rule-based liquidity transfer order by which the LBTR MCAs or MCAs are credited whenever the minimum limit is not met.
The holder of an MCA may authorize the debit of the same in case there is insufficient liquidity in a designated LBTR MCA for the purposes of automated liquidity transfer orders provided for in Part III, Article 1, paragraphs 5 and 6, in order to settle urgent payment orders, PSP transfer orders or high-priority payment orders. By authorizing the debit of its account, the holder of the MCA gives Banco de Portugal instructions to execute a rule-based liquidity transfer order that credits its LBTR MCA.

Article 7 Processing of cash transfer orders

Cash transfer orders, once accepted, must be settled immediately, provided that there is available liquidity in the payer's MCA.
In the event that there are insufficient funds in an MCA to effect settlement, the relevant rule established in letters a) to e) [depending on the type of cash transfer order] shall apply. a) Payment order in the MCA: the instruction shall be rejected if initiated by Banco de Portugal and will trigger both a change in the participant's intraday credit line and the corresponding debit or credit in its MCA. All other instructions shall be queued.

Article 8 Liquidity reservation orders

The holder of an MCA may instruct Banco de Portugal to reserve a certain amount of liquidity in its MCA for the purposes of settling central bank operations or liquidity transfer orders to overnight deposit accounts using one of the following procedures: a) A current liquidity reservation order, which shall take effect immediately on the current TARGET business day; b) A standing liquidity reservation order, to be made at the beginning of each TARGET business day.
If the unreserved liquidity amount is insufficient to meet the current or standing liquidity reservation order, Banco de Portugal shall partially execute the reservation order. Banco de Portugal is tasked with executing new reservation orders until the amount to be reserved is reached. Pending reservation orders shall be rejected at the end of the business day.
Central bank operations shall be settled using the liquidity reserved pursuant to paragraph 1; other cash transfer orders shall only be settled using the available liquidity after deducting the reserved amount.
Without prejudice to the provisions of paragraph 3, if the unreserved liquidity in the primary MCA of the holder of the MCA is insufficient to reduce the intraday credit line of said holder, Banco de Portugal shall use the reserved liquidity.

Article 9 Processing of cash transfer orders in the event of suspension or cancellation

After the cancellation of a participant's participation in TARGET-PT, Banco de Portugal shall not accept new cash transfer orders from that participant. Orders

Article 10. Eligible entities for intraday credit

Banco de Portugal shall grant intraday credit to credit institutions established in the Union or in the EEA that are eligible counterparties for Eurosystem monetary policy operations and have access to the liquidity lending facility, including cases where such credit institutions act through a branch established in the Union or in the EEA, and cases of branches located in the Union or in the EEA of credit institutions that have their head office outside the EEA, provided that such branches are established in the same country as the NCB of the euro area concerned. Intraday credit shall not be granted to entities subject to restrictive measures adopted by the Council of the European Union or by the Member States under Article 65(1)(b), Article 75 or Article 215 of the Treaty, the application of which, in the opinion of Banco de Portugal, is incompatible with the proper functioning of TARGET.
Banco de Portugal may also grant intraday credit to the following entities: a) Credit institutions established in the Union or in the EEA that are not eligible counterparties for Eurosystem monetary policy operations and/or do not have access to the liquidity lending facility, including cases where such credit institutions act through a branch established in the Union or in the EEA, and the case of branches located in the Union or in the EEA of credit institutions that have their head office outside the EEA; b) Treasury departments of central or regional administrations of Member States active in money markets, and public sector entities of Member States authorised to maintain accounts for their clients; c) Investment firms established in the Union or in the EEA, on condition that they have concluded an agreement with a participant with access to intraday credit, as established in paragraph 1, to ensure that any residual debit balance at the end of the day is covered; and

Article 11. Eligible collateral assets for intraday credit Intraday credit is based on eligible collateral assets. Assets identical to those eligible for Eurosystem monetary policy operations are eligible as collateral, subject to the same valuation and risk control rules as those established in Part IV of Instruction No. 3/2015 of Banco de Portugal.

Article 12. Procedure for granting intraday credit

Intraday credit is granted interest-free.
The non-repayment of intraday credit at the end of the day by any of the entities referred to in Article 10(1) shall be automatically considered as a request for recourse to the permanent lending facility by that entity. If any of the entities referred to in Article 10(1) holds an NCD, any end-of-day balance of its NCDs shall be taken into account for the purpose of calculating the amount of automatic recourse to the permanent lending facility by the entity. This fact shall not trigger a corresponding release of assets previously deposited to secure the pending intraday credit.

Article 13. Suspension, limitation or revocation of intraday credit

Banco de Portugal shall suspend or revoke access to intraday credit if any of the following non-compliance situations occur: a) The participant's primary NCA with the NCB of the euro area is suspended or closed; b) The participant in question ceases to meet any of the conditions for the granting of intraday credit set out in Article 10; c) The competent, judicial or other authority decides to initiate liquidation or similar proceedings against the participant, or the appointment of a liquidator or similar official entity; d) The participant becomes subject to the freezing of funds and/or other measures imposed by the Union that restrict its capacity to use its funds. e) The participant's eligibility as a counterparty for Eurosystem monetary policy operations is suspended or revoked;
Banco de Portugal may suspend or revoke access to intraday credit if an NCB suspends or revokes the participant's participation in TARGET under the application by that NCB of the provisions of Part I, Article 25(2).
Banco de Portugal may decide to suspend, limit or revoke access to intraday credit by a participant if it is considered that this poses prudential risks.

PART III SPECIAL TERMS AND CONDITIONS OF CASH ACCOUNTS DEDICATED TO REAL-TIME GROSS SETTLEMENT (CND LBTR)

Article 1. Opening and management of CND LBTR

Banco de Portugal shall, at the request of an NCA holder, open and operate one or more CND LBTRs and one or more sub-accounts, if this is necessary for settlement purposes in the SP. If the NCA holder has joined the SEPA Instant Credit Transfer mechanism by subscribing to the SEPA Instant Credit Transfer mechanism membership agreement, the CND LBTR(s) (and any sub-accounts) shall not be opened or operated, unless the NCA holder is and remains contactable at all times, either as the holder of a TIPS CND or as a contactable party through the holder of a TIPS CND.
Banco de Portugal shall, at the request of the holder of an account opened under paragraph 1 (holder of a CND LBTR), add the CND LBTR or its respective sub-account to a group of settlement bank accounts for settlement in the SP. The holder of a CND LBTR shall provide Banco de Portugal with all relevant documents, duly signed by that holder of a CND LBTR and by the SP.
There shall be no debit balance in an NCA LBTR or in its sub-accounts.
Sub-accounts must have an overnight balance of zero.
A holder of a CND LBTR shall designate one of its CND LBTRs in TARGET-PT for the processing of automated liquidity transfer orders. With this designation, the holder of a CND LBTR gives instructions to Banco de Portugal to execute an automated liquidity transfer by which NCAs are credited, if there are insufficient funds in its primary NCA for the settlement of payment orders that are central bank operations.
A participant holding two or more CND LBTRs and two or more NCAs shall designate one of its CND LBTRs in TARGET-PT, which has not yet been designated as its primary NCA, for the processing of automated liquidity transfer orders in the event that there are insufficient funds in one of its other NCAs for the settlement of payment orders that are central bank operations.

Article 2. Holders of addressable BICs

Holders of CND LBTRs that are credit institutions within the meaning of Part I, Article 4(1)(a) or (b), or Article 4(2)(e), may register holders of addressable BICs. Holders of CND LBTRs may only designate holders of addressable BICs that have joined the SEPA Instant Credit Transfer mechanism by subscribing to the SEPA Instant Credit Transfer mechanism membership agreement if such entities are contactable, either as holders of a TIPS CND or as contactable parties through the holder of a TIPS CND.
Holders of CND LBTRs that are entities within the meaning of Part I, Article 4(2)(a) to (d), may only register as a holder of an addressable BIC a BIC that belongs to the same legal entity.
A holder of an addressable BIC may submit and receive cash transfer orders through a holder of a CND LBTR.

Article 3. Access for multiple recipients

A holder of a CND LBTR that is a credit institution provided for in Part I, Article 4(1)(a) or (b), may authorise the following credit institutions and branches to use its CND LBTR for the purpose of submitting and/or receiving cash transfer orders directly through access for multiple recipients: a) Credit institutions provided for in Part I, Article 4(1)(a) or (b), that belong to the same banking group as the holder of the CND LBTR; b) Branches of that holder of a CND LBTR; c) Other branches or the head office of the same legal entity as the holder of the CND LBTR.
The authorisation to use a CND LBTR through access for multiple recipients, as provided for in paragraph 1, shall only be granted to the entities referred to in paragraph 1, point (a), that have joined the SEPA Instant Credit Transfer mechanism by subscribing to the SEPA Instant Credit Transfer mechanism membership agreement if such entities are contactable, either as holders of a TIPS CND or as contactable parties through the holder of a TIPS CND.
The provisions of Part I, Article 7, apply to holders of CND LBTRs that provide access to their CND LBTRs through access for multiple recipients.

Article 4. Liquidity transfer group for LBTR

At the request of the holder of a CND LBTR, Banco de Portugal shall create a liquidity transfer group for LBTR, with the aim of allowing the processing of liquidity transfer orders from CND LBTRs to CND LBTRs.
At the request of the holder of a CND LBTR, Banco de Portugal shall add or remove one of the CND LBTRs of that holder to a liquidity transfer group for LBTR created in TARGET-PT in another component system of TARGET. Before submitting this request, the holder of the CND LBTR shall inform all other holders of CND LBTRs in that liquidity transfer group for LBTR.

Article 5. Operations processed in a CND LBTR and its sub-accounts

Payment orders to other CND LBTRs and cash transfer orders to SP guarantee fund accounts shall be processed through a CND LBTR in TARGET-PT.

Article 6. Liquidity transfer orders

The holder of an NCA may submit liquidity transfer orders in one of the following ways: a) Immediate liquidity transfer order, which constitutes an instruction for immediate execution; b) Standing liquidity transfer order, which constitutes an instruction for the periodic execution of the transfer of a certain amount upon the occurrence of a predefined event on each business day.
A standing liquidity transfer order may be introduced or amended by the holder of a CND LBTR at any time during a business day and shall enter into force from the following business day.
An immediate liquidity transfer order may be introduced by the holder of a CND LBTR at any time during a business day. An immediate liquidity transfer order for processing in accordance with procedures C or D of LBTR for the SP may also be introduced by the relevant SP on behalf of the settlement bank.

Article 7. Rule-based liquidity transfer orders

The holder of a CND LBTR may specify a minimum amount and a maximum amount for its respective CND LBTR. a) By establishing a maximum amount and opting for a rule-based liquidity transfer order, if, following the settlement of a payment order or an SP transfer order, the maximum amount is not met, the holder of the CND LBTR gives instructions to Banco de Portugal to execute a rule-based liquidity transfer order that credits an NCA designated by that holder of a CND LBTR. The credited NCA may belong to another participant in TARGET-PT or to another component system of TARGET. b) By establishing a minimum amount and opting for a rule-based liquidity transfer order, if, following the settlement of a payment order or an SP transfer order, the minimum amount is not met, a rule-based liquidity transfer order is issued that debits an NCA authorised by the holder of the NCA. The debited NCA may belong to another participant in TARGET-PT or to another component system of TARGET. The holder of the debited NCA must authorise that its NCA be debited in this way.
The holder of a CND LBTR may authorise that it be debited in the event of non-compliance with the minimum limit in one or more NCAs specified in TARGET-PT or in another component system of TARGET. By authorising the debit of its CND LBTR, its holder gives instructions to Banco de Portugal to execute a rule-based liquidity transfer order by which NCAs are credited whenever the minimum limit is not met.
The holder of a CND LBTR may authorise that its NCA designated for the purposes of automated liquidity transfer orders under Articles 1(5) and (6) be debited if there is insufficient liquidity in the CND LBTR to settle urgent payment orders, SP transfer orders or high-priority payment orders.

Article 8. Priority rules

The order of priority for the processing of cash transfer orders, in terms of decreasing urgency, is as follows: a) Urgent; b) High; c) Normal.
The 'urgent' priority is automatically assigned to the following orders: a) SP transfer orders; b) Liquidity transfer orders, including automated liquidity transfer orders; c) Cash transfer orders to an SP technical account for the execution of procedure D for LBTR SP.
All cash transfer orders not listed in paragraph 2 are automatically assigned 'normal' priority, except for payment orders to which the holder of a CND LBTR has, at its discretion, assigned 'high' priority.

Article 9. Processing of cash transfer orders in CND LBTR

Cash transfer orders in CND LBTR shall be settled as soon as they are accepted, or at the latest, as indicated by the holder of the CND LBTR under Articles 16 or 17, provided that, in all cases: a) There is available liquidity in the CND LBTR; b) There are no cash transfer orders in the waiting queue with equal or higher priority;

Annex to Instruction No. 16/2022 Official Gazette No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 c) The debit limits established in accordance with Article 15 are respected. 2. If the conditions established in paragraph 1, letters a) to c), are not met regarding a cash transfer order, the following shall apply: a) In the case of an automated liquidity transfer order, the Bank of Portugal receives instructions to partially execute the order and to execute subsequent liquidity transfers whenever liquidity is available, up to the amount of the initial automated liquidity transfer order. b) In the case of an immediate liquidity transfer order, the order must be rejected without partial settlement or other settlement attempts, unless the order is initiated by a Payment System (SP), in which case it will be partially settled without other settlement attempts. c) In the case of a standing liquidity transfer order or a rule-based liquidity transfer order, the order must be partially settled without other settlement attempts. A standing liquidity transfer order triggered by the mandatory settlement procedures C or D for LBTR SPs and for which there are insufficient funds in the LBTR NCA will be settled following a proportional reduction of all orders. A standing liquidity transfer order triggered by the optional settlement procedure C in the LBTR SP and for which there are insufficient funds in the LBTR NCA must be rejected. 3. Cash transfer orders in the LBTR NCA, other than those referred to in paragraph 2, must be queued and processed according to the rules established in Article 10.

Article 10. Queue management and settlement optimization

Cash transfer orders in the LBTR NCA that are queued under the terms of Article 9, paragraph 3, must be processed according to their priority. Under paragraphs 2 to 5, the "first come, first served" principle applies to cash transfer orders of each priority category or subcategory, as follows: a) Urgent liquidity transfer orders: automated liquidity transfer orders are placed first in the queue. SP transfer orders and other urgent cash transfer orders must be placed immediately next in the queue; b) High-priority cash transfer orders must not be settled while urgent cash transfer orders are queued; c) Normal-priority cash transfer orders must not be settled while urgent or high-priority cash transfer orders are queued.
The payer may change the priority of their cash transfer orders that are not urgent orders.
The payer may change the position of their cash transfer orders in the queue. The payer may move these cash transfer orders behind the automated liquidity transfer orders in the queue or to the end of the queue, with immediate effect at any time during the customer and interbank payment settlement window, as specified in Appendix V.
In order to optimize the settlement of queued cash transfer orders, the Bank of Portugal may: a) Use the optimization procedures set out in Appendix I; b) Settle low-priority cash transfer orders (or those with equal priority but accepted later) before higher-priority cash transfer orders (or those with equal priority but accepted earlier), if the lower-priority cash transfer orders are eligible for multilateral netting with payments receivable and thereby result in a balance that represents an increase in liquidity for the payer; c) Settle normal-priority cash transfer orders before other normal-priority payments queued earlier, provided that sufficient funds are available and notwithstanding the contravention of the "first come, first served" principle.
Other queued cash transfer orders will be rejected if they cannot be executed within the time limits for the message type in question, as specified in Appendix V.
The provisions regarding the settlement of cash transfer orders established in Appendix I apply.

Article 11. Liquidity reservation orders

The holder of an LBTR NCA may instruct the Bank of Portugal to reserve a specific amount of liquidity in the LBTR NCA using one of the following procedures: a) A current liquidity reservation order, which will take effect immediately on the TARGET business day in progress; b) A standing liquidity reservation order, to be made at the start of each TARGET business day.
The holder of an LBTR NCA must assign one of the following statuses to a current or standing liquidity reservation order: a) High priority: allows the use of liquidity for urgent or high-priority cash transfer orders; b) Urgent priority: allows the use of liquidity only for urgent cash transfer orders.
If the unreserved liquidity amount is insufficient to fulfill the current or standing liquidity reservation order, the Bank of Portugal will partially execute the reservation order and will be instructed to execute subsequent reservation orders until the amount to be reserved is reached. Pending reservation orders will be rejected at the end of the business day.

Article 12. Request for revocation and response

The holder of an LBTR NCA may submit a request for revocation to obtain the return of a settled payment order.
The revocation request is forwarded to the beneficiary of the settled payment order, who may give a positive or negative response. A positive response does not initiate the return of funds.

Article 13. SLBTR Directory

The SLBTR directory is a list of BICs used for routing information and includes the BICs of: a) Holders of LBTS NCAs; b) Any entity that has access for multiple recipients; c) Holders of addressable BICs.
The SLBTR directory is updated daily.
Unless otherwise requested by LBTR NCA holders, their BICs will be published in the SLBTR directory.
LBTR NCA holders may only distribute the LBTR directory to their branches and entities with access for multiple recipients.
LBTR NCA holders accept that the Bank of Portugal and other CBs may publish their names and respective BICs. In addition, names and BICs of holders of addressable BICs or entities with access for multiple recipients may be published, and LBTR NCA holders must ensure that holders of addressable BICs or entities with access for multiple recipients have consented to such publication.

Article 14. Processing of cash transfer orders in case of suspension or cancellation

After the cancellation of an LBTR NCA holder's participation in TARGET-PT, the Bank of Portugal will not accept new cash transfer orders from that LBTR NCA holder. Queued cash transfer orders, stored cash transfer orders, or new cash transfer orders in favor of that LBTR NCA holder will be rejected.
If an LBTR NCA holder's participation in TARGET-PT is suspended for reasons other than those specified in Part I, Article 25, paragraph 1, letter a), the Bank of Portugal will store all cash transfer orders to be received and made by that LBTR NCA holder in their LBTR NCA and will only present them for settlement after they have been expressly accepted by the CB of the suspended LBTR NCA holder.
If an LBTR NCA holder's participation in TARGET-PT is suspended on the grounds specified in Part I, Article 25, paragraph 1, letter a), the cash transfer orders to be debited from that LBTR NCA holder's LBTR NCA will only be processed based on instructions from their representatives, including representatives appointed by a competent authority or a judicial body, such as the insolvency administrator of the LBTR NCA holder, or based on an enforceable decision from a competent authority or judicial body containing instructions on how the cash transfer orders should be processed. All cash transfer orders in their favor will be processed in accordance with paragraph 2.

Article 15. Debit limits

LBTR NCA holders may limit the use of available liquidity for payment orders in their individual LBTR NCAs with respect to other LBTR NCA holders, with the exception of CBs, by specifying bilateral or multilateral limits. Such limits may only be defined with respect to normal-priority payment orders.
When specifying a bilateral limit, the LBTR NCA holder will give instructions to the Bank of Portugal that an accepted payment order shall not be settled if the total sum of their normal-priority payment orders to be credited to the LBTR NCA of another LBTR NCA holder, minus the sum of all urgent, high, and normal-priority payments originating from that LBTR NCA (the bilateral net position), exceeds the said bilateral limit.
The LBTR NCA holder may establish a multilateral limit for any relationship that is not subject to a bilateral limit. The LBTR NCA holder may only establish a multilateral limit if they have already imposed at least one bilateral limit. If an LBTR NCA holder specifies a multilateral limit, they will give instructions to the Bank of Portugal that an accepted payment order shall not be settled if the sum of their normal-priority payment orders to be credited to the LBTR NCAs of all LBTR NCA holders with respect to whom no bilateral limit has been specified, minus the sum of all urgent, high, and normal-priority payments originating from those LBTR NCAs (the multilateral net position), exceeds the said multilateral limit.
Limits may be changed in real time, with immediate effect or from the next business day. If a limit is changed to zero, it cannot be changed again on the same business day. The definition of a new bilateral or multilateral limit will only become effective from the next business day.

Article 16. Participant instructions regarding settlement timing

An LBTR NCA holder may indicate the time before which a payment order cannot be settled or the time from which the payment order will be rejected, using the debit start date indicator or the debit end date indicator, respectively, or may indicate a time interval during which the payment order will be settled, using both indicators. An LBTR NCA holder may also use the debit end date indicator only as a warning signal. In this case, the payment order in question will not be rejected.
If the payment order has not been settled 15 minutes before the indicated debit end date, the LBTR NCA holder concerned must be notified accordingly.

Article 17. Advance submitted payment orders

Payment orders may be submitted with a maximum advance of 10 days relative to the date specified for settlement (stored payment orders).
Stored payment orders will be accepted and submitted for processing on the date specified by the LBTR NCA holder at the start of the settlement window for that day for customer and interbank payments, as referred to in Appendix V. They will take precedence over other payment orders with equal priority.

Article 18. Direct debit

An LBTR NCA holder (payer) may authorize another LBTR NCA holder (beneficiary) in TARGET-PT or in another system component of TARGET to effect direct debits on the payer's LBTR NCA.
For this purpose, the payer will give prior authorization to the Bank of Portugal enabling it to debit their LBTR NCA upon receipt of a valid direct debit instruction.
If the beneficiary receives the authorization referred to in paragraph 1, they may submit direct debit instructions on the payer's LBTR NCA for the amount specified in each instruction.
The holder of an LBTR NCA who requests to be added to a bank settlement account group of an SP is considered to have given authorization to the Bank of Portugal enabling it to debit their LBTR NCA and respective sub-account upon receipt of a valid direct debit instruction by that SP.

Article 19. Backup payment functionality In the event of failure of their respective payment infrastructure, the holder of an LBTR NCA may request the Bank of Portugal to activate the backup payment functionality, which allows the LBTR NCA holder to enter certain payment orders using the Graphical User Interface (GUI).

Article 20. Security rights regarding funds deposited in sub-accounts

The Bank of Portugal will be the holder of a pledge right over the balance of the sub-account of the holder of an LBTR NCA opened under the contractual provisions between the SP in question and its CB for the settlement of payment instructions related to SPs under procedure C of LBTR in SP. Such balance will serve as financial collateral for the fulfillment of the obligation of the LBTR NCA holder referred to in paragraph 7 vis-à-vis the Bank of Portugal regarding that settlement.
Upon receipt of a "start of cycle" message, the Bank of Portugal will ensure that the balance of the LBTR NCA holder's sub-account (including increases or decreases in that balance resulting from the credit or debit of inter-system settlement payments to or from the sub-account, or the credit of liquidity transfers to the sub-account) at the moment the SP starts a cycle can only be used for the settlement of SP transfer orders related to that settlement procedure C. Upon receipt by the Bank of Portugal of an "end of cycle" message, the sub-account balance will be available for use by the LBTR NCA holder.
By confirming the balance of the LBTR NCA holder's sub-account, the Bank of Portugal guarantees the SP the execution of payments up to the amount of that balance. By confirming, if applicable, the increase or decrease in the value of the balance through the credit or debit of the sub-account for the value of inter-system settlement payments or through the credit of settlement transfers to the sub-account, the guarantee is automatically reinforced or reduced by the value of these payments. Without prejudice to any possible reinforcement or reduction of the guarantee, it will be irrevocable, unconditional, and payable on demand. If the Bank of Portugal is not the CB of the SP, it will be presumed that it has received instructions to provide the said guarantee to the CB of the SP.
If no insolvency proceedings have been opened against the LBTR NCA holder, the SP's transfer orders to fulfill the LBTR NCA holder's settlement obligation will be settled without activating the guarantee and without recourse to the security right over the balance of the LBTR NCA holder's sub-account.
In the event of insolvency of the LBTR NCA holder, the SP's transfer orders to fulfill the participant's settlement obligation will constitute a demand for payment under the guarantee, so that the debit of the amount indicated in the instruction in the LBTR NCA holder's sub-account (and the corresponding credit in the SP LBTR technical account) will imply the exoneration of the Bank of Portugal from fulfilling the guarantee and the realization of its financial guarantee over the balance of the LBTR NCA holder's sub-account.
The guarantee will expire upon receipt by the Bank of Portugal of an end-of-cycle message confirming that the settlement has been completed.
The LBTR NCA holder is obliged to reimburse the Bank of Portugal for any payment made by it under the said guarantee.

PART IV SPECIAL TERMS AND CONDITIONS OF TARGET2-SECURITIES (T2S) DEDICATED CASH ACCOUNTS (NCA T2S)

Article 1. Opening and management of NCA T2S

The Bank of Portugal will, at the request of an NCP holder, open and manage one or more NCA T2S.
There will be no debit balance in the NCA T2S.
The holder of an NCA T2S designates an NCP for the purpose of processing liquidity transfer orders between NCA T2S, as referred to in Article 3, paragraph 1, letter c). The designated NCP may be held in TARGET-PT or in another system component of TARGET and may belong to a different participant.

Article 2. Association between securities accounts and NCA T2S

An NCA T2S holder may request the Bank of Portugal to associate their NCA T2S with one or more securities accounts held in their name, or in the name of their clients who maintain securities accounts open in one or more participating CDTs.
NCA T2S holders who associate their NCA T2S with securities account(s) in the name of clients, under paragraph 1, are responsible for drawing up and updating the list of associated securities accounts and, where applicable, for creating the client collateralisation feature.
As a result of the request referred to in paragraph 1, it is considered that the holder of the NCA T2S has conferred upon the CDT in which the securities accounts associated with a mandate to debit the NCA T2S for the amounts related to securities transactions executed in those securities accounts.
Paragraph 3 applies regardless of any agreements that the holder of the NCA T2S has concluded with the CDT and/or with the holders of the securities accounts.

Article 3. Operations processed in NCA T2S

The following operations will be processed through an NCA T2S in TARGET-PT: a) Cash settlement instructions from T2S, on condition that the holder of the NCA T2S has designated the relevant securities accounts, under paragraph 2; b) Liquidity transfer orders to an NCA LBTR, an NCA TIPS, or an NCP; c) Liquidity transfer orders between NCA T2S belonging to the same participant or for which the same NCP has been designated under Article 1, paragraph 3; d) Cash transfer orders between the NCA T2S and the NCA T2S of the Bank of Portugal in the specific context of Article 10, paragraphs 2 and 3.
Payments related to corporate actions may be processed through NCA T2S.

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Article 4. Liquidity transfer orders The holder of a T2S NCA may submit liquidity transfer orders in one of the following ways: a) Immediate liquidity transfer order, which constitutes an instruction for immediate execution; b) Standing liquidity transfer order, which shall be an instruction for periodic execution i) of the transfer of a specified amount, or ii) of a transfer to reduce the T2S NCA balance to a predefined level, with the reduction amount transferred to an LBTR NCA, a TIPS NCA or an NCP, upon the occurrence of a predefined event on each business day; c) Predefined liquidity transfer order, which shall be an instruction for single execution i) of the transfer of a specified amount, or ii) of a transfer to reduce the T2S NCA balance to a predefined level, with the reduction amount transferred to an LBTR NCA, a TIPS NCA or an NCP, upon the occurrence of a predefined event on each business day.

Article 5. Liquidity reservation and freezing

Participants may reserve and freeze liquidity in their respective T2S NCAs. Such operations do not constitute a guarantee of settlement towards any third party.
By requesting the reservation or freezing of a certain amount of liquidity, the participant instructs the Bank of Portugal to decrease the available liquidity by that amount.
A reservation request is an instruction that results in a fund reservation if the available liquidity is equal to or greater than the amount to be reserved. If the available liquidity is lower, the reservation is effected and the shortfall may be filled with liquidity inflows until the total reservation amount is completed.
A freezing request is an instruction that results in a fund freeze if the available liquidity is equal to or greater than the amount to be frozen. If the available liquidity is lower, no amount is frozen and the freezing request must be submitted again until the total requested freeze amount can be covered by the available liquidity.
The participant may instruct the Bank of Portugal to cancel the reservation or freezing at any time during the business day on which the liquidity reservation or freezing request was processed. Partial cancellation is not permitted.
All liquidity reservation or freezing requests provided for in this article expire at the end of the business day.

Article 6. Processing of liquidity transfer orders in T2S NCAs

For processing purposes, liquidity transfer orders are timestamped according to the order of receipt.
All liquidity transfer orders entered into TARGET-PT are processed on a first-come, first-served basis, without prioritization or reordering.
After acceptance of a liquidity transfer order to a TIPS NCA, an NCP, an LBTR NCA or a T2S NCA as described in Part I, Article 17, TARGET-PT verifies whether sufficient funds are available in the payer's T2S NCA to effect settlement. If sufficient funds are available, the liquidity transfer order is settled immediately. If sufficient funds are not available, the following provisions shall apply: a) In the case of an immediate liquidity transfer order, the order must be rejected without partial settlement or other settlement attempts, unless initiated by a third party designated under Part I, Article 7, in which case it shall be partially settled without other settlement attempts; b) In the case of a predefined or standing liquidity transfer order, the order must be partially settled without other settlement attempts.

Article 7. Processing of cash transfer orders in the event of suspension or cancellation

After the cancellation of a T2S NCA holder's participation in TARGET-PT, the Bank of Portugal will not accept new cash transfer orders from that T2S NCA holder.
If a T2S NCA holder is suspended from TARGET-PT for reasons other than those specified in Part I, Article 25(1)(a), the Bank of Portugal shall store all cash transfer orders to be received and made by that participant in its T2S NCA and only present them for settlement after they have been expressly accepted by the central bank of the suspended T2S NCA holder.
If a T2S NCA holder is suspended from TARGET-PT for the reasons specified in Part I, Article 25(1)(a), the cash transfer orders to be debited from that holder's T2S NCA shall only be processed based on instructions from their representatives, including representatives appointed by a competent authority or a judicial body, such as the insolvency administrator of the T2S NCA holder, or based on an enforceable decision from a competent authority or judicial body containing instructions on how the cash transfer orders should be processed. All cash transfer orders to their credit shall be processed in accordance with paragraph 2.

Article 8. Eligible entities for self-collateral facilities

The Bank of Portugal shall offer self-collateral facilities, upon request, to T2S NCA holders to whom it grants intraday credit under Part II, Article 10, provided that these participants are not subject to restrictive measures adopted by the Council of the European Union or by the Member States under Article 65(1)(b), Article 75 or Article 215 of the Treaty, the application of which, in the opinion of the Bank of Portugal, is incompatible with the proper functioning of TARGET.
Self-collateral shall only be granted on a TARGET business day, shall be limited to that day, and conversion to overnight credit shall not be possible.

Article 9. Eligible collateral assets for self-collateral operations

Self-collateral is based on eligible collateral assets. Assets identical to those eligible for Eurosystem monetary policy operations are eligible as collateral, subject to the same valuation and risk control rules as those established in Part IV of Bank of Portugal Instruction No. 3/2015.
In addition, the eligible collateral assets for self-collateral operations: a) May be limited by the Bank of Portugal through the prior exclusion of potential collateral assets from companies with close relationships; b) Are subject to certain discretionary options regarding the exclusion of collateral assets, as authorized to Euro area NCBs by decisions of the ECB Governing Council;

Article 10. Credit provision and recovery procedure

Credit obtained through self-collateral operations does not accrue interest.
Self-collateral operations may be repaid by the T2S NCA holder at any time during the day.
Self-collateral operations must be repaid no later than the time defined in Appendix V, and according to the following procedure: a) The Bank of Portugal issues the repayment instruction, which shall be settled provided there are sufficient funds to repay the pending self-collateral operations; b) If, after executing the step referred to in point (a), the balance in the T2S NCA is insufficient to repay the pending self-collateral operations, the Bank of Portugal checks the other T2S NCAs opened in its books in the name of the same T2S NCA holder and transfers cash from any or all of them to the T2S NCA regarding which the repayment instructions are pending; c) If, after executing the steps referred to in points (a) and (b), the balance in the T2S NCA is insufficient to repay the pending self-collateral operations, it shall be presumed that the T2S NCA holder has instructed the Bank of Portugal to transfer the collateral assets that were used to obtain the self-collateral to the Bank of Portugal's collateral asset account. Thereafter, the Bank of Portugal shall cede the necessary liquidity to repay the self-collateral operations and debit the primary NCP of the T2S NCA holder without delay; d) The Bank of Portugal shall apply a monetary penalty of 1,000 EUR for each business day on which one or more reallocations of collateral assets occur under point (c). The monetary penalty shall be debited from the primary NCP of the T2S NCA holder referred to in point (c).

Article 11. Suspension, limitation or revocation of self-collateral facilities

The Bank of Portugal may suspend or revoke a T2S NCA holder's access to self-collateral facilities if it has suspended or revoked that holder's access to intraday credit under Part II, Article 13.
The Bank of Portugal may limit a T2S NCA holder's access to self-collateral facilities if it has limited that holder's access to intraday credit under Part II, Article 13. In that case, the limit set shall apply to the total of self-collateral and intraday credit combined, and not to each separately.

PART V SPECIAL TERMS AND CONDITIONS OF THE DEDICATED CASH ACCOUNTS OF THE TARGET INSTANT PAYMENT SETTLEMENT SERVICE (TIPS NCA)

Article 1. Opening and management of TIPS NCAs

The Bank of Portugal shall, upon request by an NCP holder, open and manage one or more TIPS NCAs.
There shall be no debit balance in the TIPS NCAs.

Article 2. Sending and receiving messages

The TIPS NCA holder may send messages: a) Directly, and/or b) Through one or more parties with authority to give instructions.
The TIPS NCA holder receives messages: a) Directly, or b) Through a party with authority to give instructions.
The provisions of Part I, Article 7, apply to the TIPS NCA holder who sends or receives messages through a party with authority to give instructions, as if the TIPS NCA holder sent or received messages directly.

Article 3. Contactable parties

The holder of a TIPS NCA may designate one or several contactable parties. Contactable parties must have adhered to the SEPA Instant Credit Transfer scheme by subscribing to the SEPA Instant Credit Transfer scheme membership agreement.
TIPS NCA holders must provide proof to the Bank of Portugal of adherence to the SEPA Instant Credit Transfer scheme for each designated contactable party.
TIPS NCA holders must inform the Bank of Portugal if any designated contactable party ceases to adhere to the SEPA Instant Credit Transfer scheme, and take prompt measures to prevent that party from accessing the TIPS NCA.
TIPS NCA holders may grant access to their designated contactable parties through one or more parties with authority to give instructions.
The provisions of Part I, Article 7, apply to TIPS NCA holders who designate contactable parties.
TIPS NCA holders who have designated a contactable party must ensure that this party is available at all times to receive messages.

Article 4. Operations processed in TIPS NCAs

The following operations shall be processed through a TIPS NCA in TARGET-PT: a) Instant payment orders; b) Positive responses to recall requests; c) Liquidity transfer orders to SP TIPS technical accounts, to NCPs, to T2S NCAs or to LBTR NCAs; d) Liquidity transfer orders to sub-accounts; e) Liquidity transfer orders to overnight deposit accounts.

Article 5. Immediate liquidity transfer orders Holders of TIPS NCAs may submit immediate liquidity transfer orders.

Article 6. Processing of cash transfer orders in TIPS NCAs

For processing purposes, cash transfer orders are timestamped according to the order of receipt.
All cash transfer orders entered into TARGET-PT are processed on a first-come, first-served basis, without prioritization or reordering.
After acceptance of an instant payment order under Part I, Article 17, TARGET-PT verifies whether sufficient funds are available in the payer's TIPS NCA to effect settlement and the following shall apply: a) If sufficient funds are not available, the instant payment order is rejected; b) If sufficient funds are available, the corresponding amount is reserved while awaiting the beneficiary's response. If the beneficiary accepts the payment, the instant payment order is settled and the reservation is simultaneously lifted. If the beneficiary rejects the payment or does not respond in due time, within the meaning of the SEPA Instant Credit Transfer scheme, the instant payment order is cancelled and the reservation is simultaneously lifted.
Funds reserved in accordance with paragraph 3(b) are no longer available for the settlement of subsequent payment orders.
Without prejudice to paragraph 3(b), TARGET-PT rejects instant payment orders whose amount exceeds the applicable credit memorandum balance (CMB).
After acceptance of an immediate liquidity transfer order as described in Part I, Article 17, TARGET-PT verifies whether sufficient funds are available in the payer's TIPS NCA. If sufficient funds are not available, the liquidity transfer order is rejected.
After acceptance of a positive response to a recall request as described in Part I, Article 17, TARGET-PT verifies whether sufficient funds are available in the TIPS NCA to be debited. If sufficient funds are not available, the positive response to the recall request is rejected. If sufficient funds are available, the positive response to the recall request is executed immediately.
Without prejudice to paragraph 7, TARGET-PT rejects positive responses to cancellation requests whose amount exceeds any applicable CMB.

Article 7. Recall request

Holders of TIPS NCAs may submit a recall request.
The recall request is forwarded to the beneficiary of the settled instant payment order, who may respond by means of a positive response or a negative response to the recall request.

Article 8. TIPS Directory

The TIPS directory is a list of BICs used for routing information and includes the BICs of: a) TIPS NCA holders; b) Contactable parties.
The TIPS directory is updated daily.
TIPS NCA holders may only distribute the TIPS directory to their respective branches, designated contactable parties and parties with authority to give instructions. Contactable parties may only distribute the TIPS directory to their respective branches.
Each BIC may appear only once in the TIPS directory.
TIPS NCA holders accept that the Bank of Portugal and other central banks may publish their designations and respective BICs. Furthermore, the Bank of Portugal and other central banks may publish the designations and BICs of contactable parties designated by TIPS NCA holders, provided that these holders ensure that the contactable parties in question have authorized such publication.

Article 9. MPL Repository

The central Mobile Proxy Lookup (MPL) repository contains the proxy — IBAN mapping framework for the purposes of the MPL service.
Each proxy may be linked to only one IBAN. An IBAN may be linked to one or more proxies.
Article 29 applies to the data contained in the MPL repository.

Article 10. Processing of cash transfer orders in the event of suspension or cancellation

After the cancellation of a TIPS NCA holder's participation in TARGET-PT, the Bank of Portugal will not accept new cash transfer orders destined for or originating from that TIPS NCA holder.
If a TIPS NCA holder's participation in TARGET-PT is suspended on grounds other than those specified in Part I, Article 25(1)(a), the Bank of Portugal must: a) Reject all its cash transfer orders to be received; b) Reject all its cash transfer orders to be made; or c) Reject both its cash transfer orders to be made and to be received.
If a TIPS NCA holder's participation in TARGET-PT is suspended on the grounds listed in Part I, Article 25(1)(a), the Bank of Portugal must reject all its payment orders to be received and to be made.
The Bank of Portugal processes the instant payment orders of a TIPS NCA holder whose participation in TARGET-PT was suspended or cancelled under Part I, Articles 25(1) or (2) and for which the Bank of Portugal has reserved funds in a TIPS NCA, under Article 6(3)(b), before the suspension or cancellation.

PART VI SPECIAL TERMS AND CONDITIONS FOR PERIPHERAL SYSTEMS (PS) USING REAL-TIME GROSS SETTLEMENT PROCEDURES FOR PS (PS LBTR)

Article 1. Opening and management of PS technical accounts and use of LBTR procedures in PS

The Bank of Portugal may, upon request by a PS, open and operate one or more PS LBTR technical accounts to support LBTR procedures in PS.
There should be no debit balance in a PS LBTR technical account.
PS LBTR technical accounts are not published in the SLBTR directory.
The PS must select at least one of the following settlement procedures for the purpose of processing PS transfer orders: a) Settlement Procedure A for PS LBTR; b) Settlement Procedure B for PS LBTR; c) Settlement Procedure C for PS LBTR; d) Settlement Procedure D for PS LBTR; e) Settlement Procedure E for PS LBTR.
The rules established in Articles 3, 4, 5, 6 and 7 apply, respectively, to Settlement Procedures A, B, C, D and E for PS LBTR.
The settlement procedures for PS LBTR must be operational during the hours established in Appendix V.
The PS shall request the Bank of Portugal to create a group of settlement bank accounts.
The PS only sends PS transfer orders to accounts included in the group of settlement bank accounts referred to in paragraph 7.

Article 2. Priority of PS transfer orders The priority 'urgent' is automatically assigned to PS transfer orders.

Article 3. Settlement Procedure A for PS LBTR

The PS must request a dedicated PS LBTR technical account to support the processing of PS transfer orders using Settlement Procedure A. The balance of that account shall be zero at the end of the day.
The PS may request the opening of a PS collateral fund account to support settlement within the 'settlement period' service. The balances of the PS collateral fund account shall be used to settle PS transfer orders if there is insufficient liquidity available in the settlement bank's LBTR NCA. The PS collateral fund account may be maintained by the

The SP must submit SP transfer orders in batch form in a single file in which the sum of the debits must correspond to the sum of the credits.
Banco de Portugal will first seek to settle SP transfer orders by which the LBTR NCOs of the settlement banks are debited and the SP's LBTR technical account is credited. Only after all such SP transfer orders have been settled (including any financing of the SP's LBTR technical account from the SP's guarantee fund account) will Banco de Portugal seek to settle SP transfer orders by which the SP's LBTR technical account is debited and the LBTR NCOs of the settlement banks are credited.
If an SP transfer order to debit the LBTR NCO of a settlement bank is in the queue, Banco de Portugal will inform the settlement bank by means of a broadcast message.
If an SP guarantee fund account has been opened and a settlement bank does not have sufficient funds in the LBTR NCO, the SP may instruct Banco de Portugal to activate the guarantee fund mechanism by requesting a debit to the SP's guarantee fund account and a credit to the SP's LBTR technical account. If the SP guarantee fund account does not have sufficient funds to complete the settlement, the settlement process will fail.
If the settlement process fails for any reason, including that referred to in paragraph 6, Banco de Portugal will reject all unsettled SP transfer orders from the single file referred to in paragraph 3 and cancel any SP transfer orders that have already been settled.
The SPs will be notified of the successful or unsuccessful execution of the settlement.
The SP may opt for the following services: a) The "information period" service, as referred to in Article 8, paragraph 1; b) The "settlement period" service, as referred to in Article 8, paragraph 3;

Article 4 Settlement Procedure B for SP LBTR

The SP must request a dedicated SP LBTR technical account to support the processing of SP transfer orders using settlement procedure B. The balance of this account will be zero at the end of the day.
The SP may request the opening of an SP guarantee fund account to support settlement under the "settlement period" service. The balances of the SP guarantee fund account will be used to settle SP transfer orders if there is not sufficient liquidity available in the LBTR NCO of a settlement bank. The SP guarantee fund account may be maintained by Banco de Portugal, by the SP, or by an eligible participant. The SP guarantee fund account will not be published in the SLBTR directory.
The SP must submit SP transfer orders in batch form, in a single file in which the sum of the debits must correspond to the sum of the credits.

Settlement procedure B operates on the "all-or-nothing" principle. Banco de Portugal will seek to simultaneously settle all SP transfer orders that debit the LBTR NCOs of the settlement banks and credit the SP's LBTR technical account, as well as all SP transfer orders that debit the SP's LBTR technical account and credit the LBTR NCOs of the settlement banks. If one or more SP transfer orders cannot be settled, all SP transfer orders will be placed in the queue and included in an optimization algorithm; the settlement banks will be informed.
If an SP guarantee fund account has been opened and a settlement bank does not have sufficient funds in the LBTR NCO, the SP may instruct Banco de Portugal to activate the guarantee fund mechanism by requesting a debit to the SP's guarantee fund account and a credit to the SP's LBTR technical account. If the SP guarantee fund account does not have sufficient funds to complete the settlement, the settlement process will fail.
If the settlement process fails for any reason, including that referred to in paragraph 5, Banco de Portugal will reject all unsettled SP transfer orders from the single file referred to in paragraph 3.
The SPs will be notified of the successful or unsuccessful execution of the settlement.
The SP may opt for the following services: a) The "information period" service, as referred to in Article 8, paragraph 1; b) The "settlement period" service, as referred to in Article 8, paragraph 3.

Article 5 Settlement Procedure C for SP LBTR

Settlement procedure C supports settlement using dedicated liquidity in subaccounts. The SP must request a dedicated SP LBTR technical account to support the processing of SP transfer orders using settlement procedure C. The balance of this account will be zero at the end of the day. This SP LBTR technical account may also be used to support the processing of SP transfer orders through settlement procedure E.
The SP must ensure that each settlement bank opens at least one subaccount that is to be used only by the SP for the purposes of this settlement procedure.
Banco de Portugal will automatically initiate a mandatory settlement procedure C on each TARGET business day, according to the calendar established in Appendix V, which will trigger the settlement of permanent liquidity transfer orders created for the mandatory settlement procedure C, debiting the LBTR NCOs of the settlement banks and crediting the subaccount referred to in paragraph 2.
Settlement procedure C will be closed by means of an end-of-procedure message, which may be sent by the SP at any time before the cut-off time for interbank payments, as established in Appendix V. If the SP does not send the end-of-procedure message by that cut-off time, Banco de Portugal will close the procedure at that cut-off time.
The closure of the mandatory settlement procedure C gives rise to an automatic liquidity transfer from the subaccount referred to in paragraph 2 to the LBTR NCO.

If the mandatory settlement procedure C is closed, the SP may initiate an optional procedure at any time before the cut-off time for interbank payments, as established in Appendix V, which will trigger the settlement of those permanent liquidity transfer orders created for the optional settlement procedure C, debiting the LBTR NCO of the settlement bank and crediting its LBTR subaccount. The SP may initiate and close one or more successive optional procedures before the cut-off time for interbank payments. The closure of the optional settlement procedure C leads to an automatic liquidity transfer from the subaccount referred to in paragraph 2 to the LBTR NCO.
The mandatory settlement procedure C and any subsequent optional settlement procedure C may consist of one or more cycles.
The SP may, at any time after the start of a mandatory or optional settlement procedure C, initiate a cycle by means of a "cycle start" message. After the start of the cycle, no liquidity transfers may be made from the subaccount referred to in paragraph 2 until the SP sends a "cycle end" message. The balance may be changed during the cycle as a result of inter-system settlement payments or if a settlement bank transfers liquidity to its own subaccount. Banco de Portugal will notify the SP of the reduction or increase in liquidity in the subaccount as a result of inter-system settlement payments. If the SP so requests, Banco de Portugal will also notify it of the increase in liquidity in the subaccount as a result of liquidity transfer orders from the settlement bank.
The SP may submit SP transfer orders in batch form in one or more files while the cycle is open. Cash transfer orders may be intended for the following operations: a) Debit of the settlement banks' subaccounts and credit of the SP's LBTR technical account; b) Debit of the SP's LBTR technical account and credit of the settlement banks' subaccounts; c) Debit of the SP's LBTR technical account and credit of the settlement banks' LBTR NCOs.
Banco de Portugal will immediately settle the SP transfer orders that can be settled. SP transfer orders that cannot be settled immediately will be placed in the queue and included in an optimization algorithm. SP transfer orders that remain unsettled at the time of the closure of the cycle must be rejected.
The SP must be notified, no later than the end of the cycle, of the status of the different SP transfer orders.

Article 6 Settlement Procedure D for SP LBTR

Settlement procedure D supports settlement with the use of pre-financing. The SP must request a dedicated SP LBTR technical account to support the processing of SP transfer orders using settlement procedure D.
SP LBTR technical accounts may only have a zero or positive balance. Liquidity may remain in the SP's LBTR technical account during the overnight period, being then remunerated in accordance with Part I, Article 12, paragraph 2.

Banco de Portugal will notify the SP of liquidity transfers by which the LBTR NCOs of the settlement banks are debited and the SP's LBTR technical account is credited. These liquidity transfers may be made on all TARGET business days, according to the calendar established in Appendix V. The SP may introduce immediate liquidity transfer orders by which the SP's LBTR technical account is debited and the LBTR NCOs of the settlement banks are credited.

Article 7 Settlement Procedure E for SP LBTR

Settlement procedure E for SP LBTR supports bilateral settlement and individual processing of SP transfer orders. The SP may use settlement procedure E without an SP LBTR technical account for bilateral settlement. The SP must request an SP LBTR technical account to support the processing of SP transfer orders using settlement procedure E, if it opts for individual processing of SP transfer orders. The balance of this SP LBTR technical account is zero at the end of the day. This SP LBTR technical account may also be used for settlement procedure C.
The SP may submit SP transfer orders, in batch form in one or more files, between: a) The LBTR NCOs of the settlement banks and the SP's LBTR technical account, if used; and b) The LBTR NCOs of the settlement banks. The SP is responsible for ensuring the correct sequencing of the SP transfer orders contained in the file, in order to guarantee the regular processing of settlement.
Banco de Portugal will immediately settle the SP transfer orders that can be settled. SP transfer orders that cannot be settled immediately will be placed in the queue. If an SP transfer order to debit the LBTR NCO of a settlement bank is in the queue, the settlement bank must be informed of the fact by means of a broadcast message.
The SP may opt for the following services: a) The "information period" service, as referred to in Article 8, paragraph 1; b) The "settlement period" service, as referred to in Article 8, paragraph 3.
The SP must be notified of the status of the different SP transfer orders submitted.

Article 8 Information Period and Settlement Period

The "information period" service allows the SP to inform its settlement banks of the liquidity required to ensure the successful execution of settlement. This optional service allows the SP to define a period prior to the start of the settlement of SP transfer orders. During that period, and at the request of the settlement bank, the SP may revoke either individual SP transfer orders (for settlement procedure E for SP LBTR) or files (for settlement procedures A and B for SP LBTR). The SP may also request Banco de Portugal to carry out this revocation on its behalf.

If an SP or, on its behalf, Banco de Portugal, revokes individual SP transfer orders (for settlement procedure E for SP LBTR) or files (for settlement procedures A and B for SP LBTR) during the "information period", the processing of the SP transfer orders will be cancelled.
The "settlement period" service allows the SP to define a period during which the settlement of SP transfer orders may be carried out. This service constitutes an indispensable condition for the use of a guarantee fund account, but is optional regarding the use of SP technical accounts.
During the "settlement period", the SP or, on its behalf, Banco de Portugal, may revoke either individual SP transfer orders (for settlement procedure E for SP LBTR) or files (for settlement procedures A and B for SP LBTR) whose status is not definitive, subject to the following: a) If settlement procedure E for SP LBTR is used for bilateral settlement, the relevant SP transfer orders are cancelled; b) If settlement procedure E for SP LBTR is not used for bilateral settlement, or if settlement fails entirely with settlement procedure A, all transfer orders contained in the file will be cancelled, and all settlement banks and the SP will be informed of the fact by means of a general broadcast message. c) If settlement procedure B for SP LBTR is used, settlement will fail entirely and all settlement banks and the SP must be informed by means of a general broadcast message.

Article 9 Inter-system Settlement

Inter-system settlement allows an SP to credit the LBTR technical account of another SP or the subaccount of a settlement bank of another SP, and is available for SPs using settlement procedures C or D for SP LBTR.
At the request of an SP, Banco de Portugal will authorize inter-system settlement between that SP and another SP in TARGET-PT or in another component system of TARGET. The requesting SP must provide Banco de Portugal with the authorization of the other SP.
Inter-system settlement may only be initiated if both SPs have opened a settlement procedure. Furthermore, if inter-system settlement is initiated by an SP using settlement procedure C for SP LBTR, that SP must also have opened a settlement cycle.
An SP using settlement procedure C for SP LBTR in the context of inter-system settlement will only individually submit SP transfer orders by which the subaccount of one of its settlement banks is debited. These SP transfer orders will credit the subaccount of the beneficiary SP's settlement bank if it uses settlement procedure C for SP LBTR, or credit the LBTR technical account of the beneficiary SP if it uses settlement procedure D for SP LBTR.
An SP using settlement procedure D for SP LBTR in the context of inter-system settlement will only individually submit SP transfer orders by which its LBTR technical account is debited. These SP transfer orders will credit the subaccount

Article 10 Effects of Suspension or Cancellation

If the suspension or cessation of use by an SP of its settlement procedures occurs during the settlement cycle of that SP's transfer orders, Banco de Portugal may conclude the settlement cycle.

PART VII SPECIAL TERMS AND CONDITIONS FOR PERIPHERAL SYSTEMS (SP) USING THE SETTLEMENT PROCEDURE OF THE TARGET INSTANT PAYMENT SETTLEMENT SERVICE (TIPS) (TIPS AS SETTLEMENT PROCEDURE)

Article 1 Opening and Management of a TIPS CND Technical Account

Banco de Portugal may, at the request of an SP that settles instant payments under the SEPA instant transfer mechanism or near-instant payments in its own records, open and operate one or more SP TIPS technical accounts.
There will be no debit balance in the SP TIPS technical accounts.
The peripheral system must use an SP TIPS technical account to collect the liquidity required reserved by its clearing members to finance their positions.
The peripheral system may opt to receive notifications of credits and debits in its SP TIPS technical account. If the peripheral system opts for this service, the notification is carried out immediately after the debit or credit of the SP TIPS technical account.
The peripheral system may send instant payment orders and positive responses to revocation requests to any TIPS CND holder or to the SP TIPS. The peripheral system must receive and process instant payment orders, revocation requests, and positive responses to revocation requests from any TIPS CND holder or from the SP TIPS.

Article 2 Sending and Receiving Messages

The TIPS CND holder may send messages: a) Directly; b) Through one or more parties with authority to give instructions.
The TIPS CND holder receives messages: a) Directly, or b) Through a party with authority to give instructions.
The provisions of Part I, Article 7, apply to the holder of an SP TIPS technical account who sends or receives messages through a party with authority to give instructions, as if the holder of an SP TIPS technical account sent or received messages directly.

Article 3 Immediate Liquidity Transfer Orders

The holder of an SP TIPS technical account may submit immediate liquidity transfer orders.

Article 4. Processing of cash transfer orders in SP TIPS technical accounts

For processing purposes, a date and time stamp is assigned to cash transfer orders according to the order of receipt.
All cash transfer orders entered into TARGET-PT are processed on a first-come-first-served basis, without prioritization or reordering.
After acceptance of an instant payment order in accordance with Part I, Article 17(1), the Bank of Portugal verifies whether sufficient funds are available in the payer’s SP TIPS technical account to effect settlement, and the following shall apply: a) If sufficient funds are not available, the instant payment order is rejected; b) If sufficient funds are available, the corresponding amount is reserved while awaiting the beneficiary’s response. If the beneficiary accepts the payment, the instant payment order is settled and the reservation is simultaneously released. If the beneficiary rejects the payment or does not respond in due time, within the meaning of the SEPA instant credit transfer mechanism, the instant payment order is cancelled and the reservation is simultaneously released.
Funds reserved in accordance with paragraph 3(b) cease to be available for the settlement of subsequent payment orders.
Without prejudice to paragraph 3(b), TARGET-PT rejects instant payment orders whose amount exceeds the applicable credit memorandum balance (CMB).
After acceptance of a liquidity transfer order from an SP TIPS technical account to a CND TIPS as described in Part I, Article 17(1), the Bank of Portugal verifies whether sufficient funds are available in the payer’s SP TIPS technical account. If sufficient funds are not available, the liquidity transfer order is rejected. If sufficient funds are available, the liquidity transfer order is immediately settled.
After acceptance of a positive response to a revocation request as described in Part I, Article 17, the Bank of Portugal will verify whether sufficient funds are available in the SP TIPS technical account to be debited. If sufficient funds are not available, the positive response to the revocation request is rejected. If sufficient funds are available, the positive response to the revocation request is immediately executed.
Without prejudice to paragraph 7, the Bank of Portugal will reject positive responses to a revocation request whose amount exceeds any applicable CMB.

Article 5. Revocation request

The holder of an SP TIPS technical account may submit a revocation request.
The revocation request is forwarded to the beneficiary of the settled instant payment order, who may respond by means of a positive response or a negative response to the revocation request.

Article 6. Settlement procedure for SP TIPS

The settlement procedures for SP TIPS must be operational during the hours established in Appendix V.

Article 7. Opening and management of an SP TIPS technical account

The holder of an SP TIPS technical account may designate one or more contactable parties. Contactable parties must have adhered to the SEPA instant credit transfer mechanism by subscribing to the SEPA instant credit transfer mechanism adherence agreement.
Holders of SP TIPS technical accounts must provide proof to the Bank of Portugal of adherence to the SEPA instant credit transfer mechanism for each designated contactable party.
Holders of SP TIPS technical accounts must inform the Bank of Portugal if any designated contactable party ceases to adhere to the SEPA instant credit transfer mechanism, and take rapid measures to prevent the same from accessing the SP TIPS technical account.
Holders of SP TIPS technical accounts may grant access to their designated contactable parties through one or more parties with authority to give instructions.
The provisions of Part I, Article 7, apply to SPs that have designated contactable parties.
Holders of SP TIPS technical accounts who have designated a contactable party must ensure that this party is available at all times to receive messages.

Article 8. Operations processed in SP TIPS technical accounts

The following operations shall be processed through an SP TIPS technical account in TARGET-PT: a) Instant payment orders; b) Positive responses to revocation requests; c) Liquidity transfer orders to CND TIPS.

Article 9. TIPS Directory

The TIPS directory is a list of BICs used for routing information and includes the BICs of: a) Holders of CND TIPS; b) Contactable parties.
The TIPS directory is updated daily.
Holders of SP TIPS technical accounts may only distribute the TIPS directory to their respective branches, designated contactable parties, and parties with authority to give instructions. Contactable parties may only distribute the TIPS directory to their respective branches.
Each BIC may appear only once in the TIPS directory.

Holders of SP TIPS technical accounts accept that the Bank of Portugal and other central banks may publish the names and BICs of contactable parties designated by holders of SP TIPS technical accounts, and these holders must ensure that the contactable parties in question authorized such publication.

Article 10. MPL Repository

The central Mobile Proxy Lookup (MPL) repository contains the proxy-IBAN correspondence framework for the purposes of the MPL service.
Each proxy may be linked to only one IBAN. An IBAN may be linked to one or more proxies.
Part I, Article 29, applies to the data contained in the MPL repository.

Article 11. Processing of cash transfer orders in the event of suspension or extraordinary cancellation

After the cancellation of the participation of an SP TIPS technical account holder in TARGET-PT, the Bank of Portugal will not accept new cash transfer orders intended for or originating from that SP TIPS technical account holder.
If the participation of an SP TIPS technical account holder in TARGET-PT is suspended on grounds other than those specified in Part I, Article 25(1)(a), the Bank of Portugal must: a) Reject all its cash transfer orders to receive; b) Reject all its cash transfer orders to make; or c) Reject both its cash transfer orders to make and to receive.
If the participation of an SP TIPS technical account holder in TARGET-PT is suspended on the grounds listed in Part I, Article 25(1)(a), the central bank of the suspended SP TIPS technical account holder must reject all its cash transfer orders to receive and to make.
The Bank of Portugal processes instant payment orders from an SP TIPS technical account holder whose participation in TARGET-PT was suspended or cancelled in accordance with Part I, Articles 25(1) or (2), and for which the Bank of Portugal has reserved funds in an SP TIPS technical account in accordance with Article 4(3)(b) before the suspension or cancellation.

Appendix I TECHNICAL SPECIFICATIONS FOR THE PROCESSING OF CASH TRANSFER ORDERS

In addition to the Harmonized Conditions, the following rules apply to the processing of cash transfer orders:

Testing requirements for participation in TARGET-PT

Before participating in TARGET-PT, each participant must successfully carry out a series of tests intended to demonstrate their operational and technical fitness.

Account numbers

The account of each participant is identified by a unique account number consisting of a maximum of 34 characters composed of the following five sections:

Section	Number of characters	Content
Account Type	1	M = Main Cash Account (MCA)
	R = Dedicated Cash Account (DCA) of LBTR
	C = DCA T2S
	I = DCA TIPS
	T = SP Technical Account LBTR
	U = Subaccount
	A = SP Technical Account TIPS
	G = SP Guarantee Fund Account
	D = Overnight Deposit Account
	X = Contingency Account
Central Bank Country Code	2	ISO 3166-1 country code
Currency Code	3	EUR
BIC Code	11	BIC of the account holder
Account Name	Max. 17	Free text 6

6 For subaccounts, this section must start with the 3-character SP code, as defined by the central bank.

Message transmission rules in TARGET

a) Participants must comply with the structure and field specifications of messages described in Part 3 of the relevant User Detailed Functional Specifications (UDFS).

b) An Operational Application Header (BAH) must be applied to all types of messages processed in MCA, DCA LBTR (including subaccounts), SP Technical Accounts LBTR, SP Guarantee Fund Accounts, and DCA T2S.

Message Type	Description
head.001	Business application header
head.002	Business file header

Message types processed in TARGET

a) The following message types are processed in MCA:

Message Type	Description
Administration (admi)	admi.004 SystemEventNotification
admi.005 ReportQueryRequest
admi.007 ReceiptAcknowledgement
Cash Management (camt)	camt.003 GetAccount
camt.004 ReturnAccount
camt.005 GetTransaction
camt.006 ReturnTransaction
camt.018 GetBusinessDayInformation
camt.019 ReturnBusinessDayInformation
camt.025 Receipt
camt.046 GetReservation
camt.047 ReturnReservation
camt.048 ModifyReservation
camt.049 DeleteReservation
camt.050 LiquidityCreditTransfer
camt.053 BankToCustomerStatement
camt.054 BankToCustomerDebitCreditNotification
Payments clearing and Settlement (pacs)	pacs.009 FinancialInstitutionCreditTransfer
pacs.010 FinancialInstitutionDirectDebit

b) The following message types are processed in DCA LBTR and, if applicable, in LBTR technical accounts and SP Guarantee Fund Accounts:

Message Type	Description
Administration (admi)	admi.004 SystemEventNotification
admi.005 ReportQueryRequest
admi.007 ReceiptAcknowledgement
Cash Management (camt)	camt.003 GetAccount
camt.004 ReturnAccount
camt.005 GetTransaction
camt.006 ReturnTransaction
camt.007 ModifyTransaction
camt.009 GetLimit
camt.010 ReturnLimit
camt.011 ModifyLimit
camt.012 DeleteLimit
camt.018 GetBusinessDayInformation
camt.019 ReturnBusinessDayInformation
camt.021 ReturnGeneralBusinessInformation
camt.025 Receipt
camt.029 ResolutionOfInvestigation
camt.046 GetReservation
camt.047 ReturnReservation
camt.048 ModifyReservation
camt.049 DeleteReservation
camt.050 LiquidityCreditTransfer
camt.053 BankToCustomerStatement
camt.054 BankToCustomerDebitCreditNotification
camt.056 FIToFIPaymentCancellationRequest
Payments clearing and Settlement (pacs)	pacs.002 PaymentStatusReport
pacs.004 PaymentReturn
pacs.008 CustomerCreditTransfer
pacs.009 FinancialInstitutionCreditTransfer
pacs.010 FinancialInstitutionDirectDebit
Payments Initiation (pain)	pain.998 ASInitiationStatus
pain.998 ASTransferNotice
pain.998 ASTransferInitiation

c) The following message types are processed in DCA T2S:

Message Type	Description
Administration (admi)	admi.005 ReportQueryRequest
admi.006 ResendRequestSystemEventNotification
admi.007 ReceiptAcknowledgement
Cash Management (camt)	(camt.003) GetAccount
(camt.004) ReturnAccount
(camt.005) GetTransaction
(camt.006) ReturnTransaction
(camt.009) GetLimit
(camt.010) ReturnLimit
(camt.011) ModifyLimit
(camt.012) DeleteLimit
(camt.018) GetBusinessDayInformation
(camt.019) ReturnBusinessDayInformation
(camt.024) ModifyStandingOrder
(camt.025) Receipt
(camt.050) LiquidityCreditTransfer
(camt.051) LiquidityDebitTransfer
(camt.052) BankToCustomerAccountReport
(camt.053) BankToCustomerStatement
(camt.054) BankToCustomerDebitCreditNotification
(camt.064) LimitUtilisationJournalQuery
(camt.065) LimitUtilisationJournalReport
(camt.066) IntraBalanceMovementInstruction
(camt.067) IntraBalanceMovementStatusAdvice
(camt.068) IntraBalanceMovementConfirmation
(camt.069) GetStandingOrder
(camt.070) ReturnStandingOrder
(camt.071) DeleteStandingOrder
(camt.072) IntraBalanceMovementModificationRequest
(camt.073) IntraBalanceMovementModificationRequestStatusAdvice
(camt.074) IntraBalanceMovementCancellationRequest
(camt.075) IntraBalanceMovementCancellationRequestStatusAdvice
(camt.078) IntraBalanceMovementQuery
(camt.079) IntraBalanceMovementQueryResponse
(camt.080) IntraBalanceModificationQuery
(camt.081) IntraBalanceModificationReport
(camt.082) IntraBalanceCancellationQuery
(camt.083) IntraBalanceCancellationReport
(camt.084) IntraBalanceMovementPostingReport
(camt.085) IntraBalanceMovementPendingReport

d) The following message types are processed in DCA TIPS and SP TIPS technical accounts:

Message Type	Description
Administration (admi)	pacs.002 FIToFIPayment Status Report
pacs.004 PaymentReturn
pacs.008 FIToFICustomerCreditTransfer
pacs.028 FIToFIPaymentStatusRequest
Cash Management (camt)	camt.003 GetAccount
camt.004 ReturnAccount
camt.011 ModifyLimit
camt.019 ReturnBusinessDayInformation
camt.025 Receipt
camt.029 ResolutionOfInvestigation
camt.050 LiquidityCreditTransfer
camt.052 BankToCustomerAccountReport
camt.053 BankToCustomerStatement
camt.054 BankToCustomerDebitCreditNotification
camt.056 FIToFIPaymentCancellationRequest
acmt.010 AccountRequestAcknowledgement
acmt.011 AccountRequestRejection
acmt.015 AccountExcludedMandateMaintenanceRequest
Reference data (reda)	reda.016 PartyStatusAdviceV01
reda.022 PartyModificationRequestV01

Duplicate control

All liquidity transfer orders are subject to duplicate control, the purpose of which is to reject payment orders that have been submitted more than once by mistake. For more information, see Part I, Section 3, of the relevant UDFS.

Validation rules and error codes

Message validation is carried out in accordance with the High Value Payments Plus (HVPS+) guidelines regarding message validations set out in the ISO 20022 standard and the specific validations of TARGET. The validation rules and error codes are described in detail in the following parts of the UDFS:

a) For MCAs, in Chapter 14 of the UDFS relating to Central Liquidity Management (CLM); b) For DCA LBTR, in Chapter 13 of the UDFS relating to LBTR; c) For DCA T2S, in Chapter 4.1 of the UDFS relating to T2S.

If an instant payment order or a positive response to a revocation request is rejected for any reason, the holder of the DCA TIPS receives a payment status report (pacs.002) as described in Chapter 4.2 of the TIPS UDFS. If a liquidity transfer order is rejected for any reason, the holder of the DCA TIPS receives a rejection message (camt.025) as described in Chapter 1.6 of the TIPS UDFS.

Predetermined settlement times and events

DCA LBTR

a) With regard to payment orders using the "Debit Start Date" Indicator, the message element "/FromTime/" will be used. b) With regard to payment orders using the "Debit End Date" Indicator, two options are available: i) Message element "RejectTime": if the payment order cannot be settled by the indicated debit time, the cash transfer order will be rejected. ii) Message element "TillTime": if the payment order cannot be settled by the indicated debit time, the cash transfer order will not be rejected and will be kept in the corresponding queue.

In both cases, if a payment order with a "Debit End Date" Indicator is not settled by 15 minutes before the time indicated therein, a notification is automatically sent via GUI.

DCA T2S

a) For immediate liquidity transfer orders, no specific XML tag is required; b) The settlement of predefined liquidity transfer orders and permanent liquidity transfer orders can be triggered by a specific time or situation on the settlement day: i) For settlement at a pre-fixed time, the XML tag "Time(/ExctnTp/Tm/)" must be used; ii) For settlement upon verification of a specific event, the XML tag "(EventType/ExctnTp/Evt/)" must be used. c) The validity period of permanent liquidity transfer orders is determined by the following XML tags: "FromDate/VldtyPrd/FrDt/" and "ToDate/VldtyPrd/ToDt/".

Netting of cash transfer orders in DCA LBTR

To facilitate settlement, cash transfer orders are subject to netting checks and, if necessary, extended netting checks (both expressions are defined in letters a) and b)).

a) The netting check will determine whether the beneficiary's cash transfer orders at the front of the queue of "urgent" cash transfer orders or, if not applicable, "high priority" cash transfer orders, are available for netting with the payer's cash transfer order (hereinafter "netting cash transfer orders"). If a netting cash transfer order does not provide sufficient funds to net the payer's cash transfer order, it will be determined whether there is sufficient liquidity in the payer's DCA LBTR. b) If the netting check yields no result, the Bank of Portugal may carry out an extended netting check. The extended netting check will determine whether netting cash transfer orders are available in any of the beneficiary's queues, regardless of when they were added to the queue. However, if there are higher priority cash transfer orders in the beneficiary's payment queue intended for other participants, the "first-come-first-served" principle may only be disregarded if the settlement of a netting cash transfer order results in an increase in liquidity for the beneficiary.

Optimization algorithms in DCA and LBTR subaccounts

Four algorithms are applied to facilitate the settlement of payment flows. More information is available in Part 2 of the UDFS relating to LBTR.

a) Based on the "partial optimization" algorithm, the Bank of Portugal must: i) calculate and verify the liquidity positions, limits, and reserves of each DCA LBTR; and

ii) if the total liquidity position of one or more of the CND LBTRs in question is negative, withdraw individual payment orders until the total liquidity position of each CND LBTR in question is positive. After that, the Bank of Portugal and the other CBs involved must, provided there are sufficient funds, simultaneously settle the remaining cash transfer orders in question (with the exception of the payment orders withdrawn under sub-paragraph ii)) in the CND LBTRs of the participants concerned. When withdrawing payment orders, the Bank of Portugal will start with the CND LBTR of the participant having the highest negative total liquidity position and with the payment order at the end of the queue having the lowest priority. The selection process must be executed only for a short period, to be determined by the Bank of Portugal according to its own criteria. b) Based on the "multiple optimization" algorithm, the Bank of Portugal must: i) compare pairs of CND LBTRs of participants to determine if the payment orders in the waiting queue can be settled with the liquidity available in the two CND LBTRs of the participants involved, within the limits set by them (starting with the pair of CND LBTRs with the smallest difference between mutually addressed payment orders), and the CBs involved must simultaneously launch these payments into the CND LBTRs of these two participants; and ii) if, with regard to the pair of CND LBTRs described in sub-paragraph i), the liquidity is insufficient to finance the bilateral position, withdraw individual payment orders until there is sufficient liquidity. In this case, the CBs involved must simultaneously settle the remaining payments, with the exception of those that have been withdrawn, in the CND LBTRs of these two participants. After carrying out the checks specified in sub-paragraphs i) and ii), the Bank of Portugal will check the multilateral settlement positions (between the CND LBTR of one participant and the CND LBTRs of other participants with respect to whom multilateral limits have been established). For these purposes, the procedure described in sub-paragraphs i) to ii) shall apply, with the necessary adaptations. c) Based on the "partial optimization with SP" algorithm, which supports procedure C settlement, the Bank of Portugal will adopt the procedure provided for the partial optimization algorithm, but without withdrawing SP transfer orders (for SP that proceed to simultaneous settlements on a multilateral basis, i.e., according to procedure B settlement of SP LBTR). d) The "sub-account optimization" algorithm is used to optimize the settlement of SP transfer orders with an urgent priority level in the participants' sub-accounts. When using this algorithm, the Bank of Portugal will calculate the total liquidity position of the sub-account of each participant, determining whether the aggregate value of all SP transfer orders to be made and received that are pending execution in the waiting queue is positive or negative. If the result of these calculations and checks is positive for each sub-account in question, the Bank of Portugal and the other CBs involved in the process will simultaneously settle all cash transfers in the participants' sub-accounts.

in question. If the result of these calculations and checks is negative, no settlement will be carried out. Furthermore, this algorithm will not take into account any limits or reserves. The total position of each settlement bank is calculated, and if all positions of all settlement banks are covered, all transactions are settled. Transactions that are not covered are placed back in the waiting queue. e) However, payment orders introduced after the multiple optimization algorithm, the partial optimization algorithm, or the partial optimization with SP algorithm has started, can be settled immediately if the positions and limits of the CND LBTRs of the participants in question are compatible with both the settlement of these orders and the settlement of the cash transfer orders included in the ongoing optimization procedure. f) The partial optimization algorithm and the multiple optimization algorithm must be executed sequentially in this order. They must not be executed if procedure B settlement of SP LBTR is in progress. g) The algorithms will be executed flexibly, and a certain period must be established between the application of different algorithms to allow a minimum interval between the execution of two algorithms. The temporal sequence will be controlled automatically. Manual intervention must be possible. h) Payment orders included in an algorithm that is being executed cannot be reordered (change of position in the waiting queue) or revoked. Requests for reordering or revocation of a payment order will be placed in the waiting queue until the end of the execution of the algorithm. If the payment order in question is settled during the execution of the algorithm, any request for reordering or revocation will be rejected. If the payment order is not settled, the participant's requests will be attended to immediately.

Connectivity Participants must connect to TARGET using one of the following modes: a) The user-to-application (U2A) mode: in U2A mode, participants connect through a GUI that allows users to execute operational functions based on their access rights. It allows users to enter and maintain operational data and retrieve operational information. The relevant User Handbook (UHB) provides exhaustive information on each of the operational functions that the respective GUI provides. b) The application-to-application (A2A) mode: in A2A mode, computer applications communicate with TARGET through the exchange of messages and individual files based on their access rights, as well as on their message subscription and routing configuration. A2A communication is based on XML messages, using the ISO 20022 standard, where applicable, for both received and sent communication.

The connection modes are described in more detail in the UDFS on the Eurosystem Single Market Infrastructure Gateway (ESMIG) Portal.

The UDFS and the User Handbook Additional details and explanatory examples of the above rules are contained in the respective UDFS and the User Handbook, in the version in force, published in English on the ECB website.

Appendix II TARGET COMPENSATION SCHEME

General principles a) In the event of a TARGET failure, direct participants have the right to submit claims for compensation under the TARGET compensation scheme established in this appendix. b) Unless decided otherwise by the ECB Governing Council, the TARGET compensation scheme will not apply if the TARGET failure was due to external causes beyond the reasonable control of the CBs involved or is the result of acts or omissions by third parties. c) The compensations provided for in the TARGET compensation scheme will be the only means of redress offered in the event of a TARGET failure. Participants may, however, resort to other legal means to claim compensation for their losses. The acceptance of a compensation proposal under the TARGET compensation scheme by a participant will constitute an irrevocable waiver by that participant of any further claims against any CB with respect to the cash transfer orders for which compensation is accepted (including for indirect damages), and the acknowledgment that, upon receiving the corresponding payment, they give full discharge. The participant will indemnify the CBs involved, up to the limit of the amount received under the TARGET compensation scheme, with respect to any claim for compensation claimed by another participant or third party regarding the same cash transfer order or the same cash transfer. d) The compensation proposal does not constitute an admission of liability for any TARGET failure by the Bank of Portugal or any other CB.
Conditions for compensation a) A payer may claim the reimbursement of the administrative fee and the payment of compensatory interest if, due to a TARGET failure, their payment order is not settled on the same business day it was accepted. b) A beneficiary may claim an administrative fee if, due to a TARGET failure, they have not received a cash transfer they expected to receive on a certain business day. The beneficiary may also claim compensatory interest whenever one or more of the following conditions are met: i) for participants who have access to the liquidity lending facility: a beneficiary has had to resort to the liquidity lending facility due to a TARGET failure; and/or ii) for all participants: if it was technically impossible to resort to the money market or if such financing proved unviable for other concrete justified reasons.
Calculation of compensation a) Compensation of payers:

i) the administrative fee will be 50 EUR for the first unsettled cash transfer order, 25 EUR for each of the four subsequent cash transfers after that, and from then on, 12.50 EUR for each cash transfer order. The administrative fee will be calculated separately with respect to each beneficiary; ii) compensatory interest will be determined by applying a reference rate to be fixed daily. This reference rate will be the lower of the Euro Short-Term Rate (€STR) and the rate of the permanent lending facility. The reference rate will be applied to the amount of the cash transfer order not settled as a result of the TARGET failure, for each day of the period between the date it was introduced or, with respect to the cash transfer orders referred to in point 2, letter b), sub-paragraph ii), the date on which it was intended to be introduced, and the date on which that cash transfer order was, or could have been, successfully settled. Any interest or charges resulting from the deposit in the Eurosystem of any unsettled cash transfer orders will be deducted from or charged to the amount of any compensation, as the case may be; iii) no compensatory interest will be paid if the funds from unsettled payment orders have been placed in the market or used to meet mandatory minimum reserve requirements. b) Compensation of beneficiaries: i) the administrative fee will be 50 EUR for the first unsettled cash transfer order, 25 EUR for each of the four subsequent cash transfers after that, and from then on, 12.50 EUR for each cash transfer order. The administrative fee will be calculated separately with respect to each payer; ii) the same calculation method as provided for in letter a), sub-paragraph ii), applies to compensatory interest, except that interest will be paid at a rate equal to the difference between the rate of the permanent lending facility and the reference rate, and calculated on the amount that was financed by this facility as a result of the TARGET failure.

Procedural rules a) Claims for compensation must be submitted in English, using the form available on the Bank of Portugal website. Payers must submit a separate claim for compensation with respect to each beneficiary, and beneficiaries must submit a separate claim for compensation with respect to each payer. The claim for compensation must be accompanied by sufficient additional information and supporting documents. With respect to each specific payment or payment order, only one claim for compensation may be submitted. b) Participants must submit their claim forms to the Bank of Portugal within four weeks from the failure. Any additional information or evidence required by the Bank of Portugal must be provided within two weeks from the date it is requested. c) The Bank of Portugal will examine the claims for compensation and forward them to the ECB. Unless decided otherwise by the ECB Governing Council communicated to the participants, all claims for compensation received will be assessed within a maximum of 14 weeks from the date of the TARGET failure. d) The Bank of Portugal will communicate the results of the assessment referred to in letter c) to the relevant participants. If the result of the assessment includes a compensation proposal, the interested participants must, within four weeks from the communication of the proposal, accept or reject it, with respect to each individual cash transfer order corresponding to each claim for compensation, by signing a standard acceptance letter according to the model available on the Bank of Portugal website. If the Bank of Portugal does not receive the said letter within four weeks, it will be presumed that the interested participants have rejected the compensation proposal. e) Compensation payments will be made by the Bank of Portugal when it receives from the participant the letter of acceptance of the proposed compensation. No interest will be due on any compensation payment.

Appendix III TERMS OF REFERENCE FOR LEGAL OPINIONS REGARDING LEGAL CAPACITY AND NATIONAL OPINIONS

Terms of reference for opinions regarding the legal capacity of TARGET participants Bank of Portugal [Address] Participation in [name of system] [place] [date]

Ex. Mr / Ex. Ms,

In our capacity as [own or external] legal consultants of [specify the name of the participant or the participant's branch], we have been asked to issue this opinion on the issues that arise under the legal order of [jurisdiction in which the participant is established] (hereinafter "jurisdiction") related to the participation of [specify the name of the participant] (hereinafter "Participant") in [name of the TARGET component system] (hereinafter "System").

The assessment contained in this Opinion is limited to the [jurisdiction] legislation in force on the date of issuance of the opinion. We have not conducted any investigation into the laws of other jurisdictions as a basis for our opinion, and we do not express or imply any opinion on this matter. Each of the statements and opinions set out below is equally correct and valid under the legislation of [jurisdiction], regardless of whether the Participant acts through its headquarters or one or more branches established in or outside [jurisdiction] when submitting cash transfer orders and receiving cash transfers.

I. DOCUMENTS EXAMINED For the purposes of this opinion, we have examined:

a certified copy of [specify the relevant documents regarding the constitution] of the Participant as in force on the date of this;
[if applicable] A certificate from [specify the competent Commercial Register] and [if applicable] [the register of credit institutions or similar];
[to the extent applicable] a copy of the license or other proof of authorization to provide banking, investment, fund transfer, or other financial services in accordance with the access criteria for participation in TARGET in [jurisdiction];
[if applicable] a copy of the board of directors' decision or other competent body of the Participant dated [insert date], proving the Participant's agreement to adhere to the System Documentation, as defined below; and
[specify all powers of attorney and other constituent documents or proof of the necessary powers of the person or persons authorized to sign the System Documentation (as defined below) on behalf and in the name of the Participant];

and also all other documents regarding the constitution, powers, and necessary or appropriate authorizations for the issuance of this opinion (hereinafter "Participant Documents").

For the purposes of this Opinion, we have also examined:

the [insert reference to the document containing the implementing measures of the Harmonized Conditions for participation in TARGET] regarding the System, dated [insert date] (hereinafter "Rules"); and
[...]. The Rules and […] will hereinafter be referred to as "System Documentation" (and, when together with the Participant Documents, as "Documents").

II. PRESUMPTIONS For the purposes of this opinion and with respect to the Documents, we proceed from the principle that:

The System Documentation provided to us consists of originals or certified copies;
The terms of the System Documentation, as well as the rights and obligations created by them, are valid and legally binding under the legislation of [insert reference to the Member State of the System], under which they are expressly governed, and that the choice of law of [insert reference to the Member State of the System] to govern the System Documentation is accepted by the legislation of [insert reference to the Member State of the System];
The Participant Documents were issued by persons duly authorized to do so and were authorized, adopted, and properly formalized (and, if necessary, delivered) by the interested parties; and also that
The Participant Documents bind their recipient parties, and there has been no breach of any of their terms.

III. OPINIONS REGARDING THE PARTICIPANT A. The Participant is a company duly established and registered or duly constituted or organized under the legislation of [jurisdiction]. B. The Participant has all necessary corporate powers to assume and exercise the rights and comply with the obligations arising for it from the System Documentation of which it is a party. C. The adoption or formalization by the Participant, as well as the exercise of the rights and compliance with the obligations arising for it from the System Documentation of which it is a party, does not in any way infringe any legal or regulatory provision of [jurisdiction] applicable to Participants or to the Participant Documents. D. The Participant does not need to obtain any other authorization, approval, consent, notation, registration, notarial certification, or other certificate from any competent court or governmental, judicial, or public authority in [jurisdiction] regarding the adoption, validity, or legal force of any of the documents of the System Documentation, nor for the exercise of the rights and obligations provided therein.

Reference Terms for National Opinions Regarding TARGET Participants Not Belonging to the EEA Bank of Portugal [Address] [System Name] [Place], [date] Dear Sir/Madam, In our capacity as [external] legal advisors to [specify the name of the participant or the participant's branch] (hereinafter "Participant"), we have been requested to issue this opinion on the issues arising under the legal order of [jurisdiction in which the Participant is established] (hereinafter "Jurisdiction") related to the participation of the Participant in a system that is part of TARGET (hereinafter "System"). References herein to the legislation of [Jurisdiction] include all applicable regulation of that same Jurisdiction. In this opinion, we pronounce ourselves, in light of the legislation of [Jurisdiction], especially on the rights and obligations arising from participation in the System for the Participant established outside the [insert reference to the Member State of the System], as described in the System Documentation defined below. The assessment contained in this Opinion is limited to the legislation of [Jurisdiction] in its wording at the date of issuance thereof. We have not conducted any investigation into the laws of other jurisdictions as a basis for our opinion, and we do not express, expressly or implicitly, any opinion on this matter. We proceed on the assumption that nothing in the law of other jurisdictions affects the content of this Opinion.

the [insert reference to the document containing the measures for implementing the Harmonized Conditions for participation in TARGET] relating to the System, dated [insert date] (hereinafter "Rules"); and
Any other document governing the System and/or the relationship between the Participant and the other participants in the System, as well as between the participants in the System and the Bank of Portugal. The Rules and […] shall hereinafter be designated as "System Documentation". II. PRESUMPTIONS In formulating this opinion and in relation to the System Documentation, we proceed on the principle that:
The System Documentation was issued by the competent authority and validly authorized, adopted, or formalized and, when necessary, delivered by the relevant parties;
The terms of the System Documentation, as well as the rights and obligations created by them, are valid and legally binding under Portuguese law, by which they are expressly governed, and the choice of Portuguese law to govern the System Documentation is recognized by Portuguese law;
The participants in the System through which any payment orders are sent or payments received, or through which the rights provided for in the System Documentation are exercised or the obligations fulfilled, hold a license to provide fund transfer services in all relevant jurisdictions; and also that
Copies or specimens of the documents presented to us conform to their respective originals. III. OPINION In view of the foregoing and subject, in each case, to the points set out below, we are of the opinion that: 3.1 Specific legal aspects of the country [to the extent applicable] The following characteristics of Portuguese legislation are compatible with and do not preclude in any way the obligations of the Participant arising from the System Documentation: [list of specific legal aspects of the country]. 3.2 General Issues Related to Insolvency 3.2.a. Types of Insolvency Proceedings The only types of insolvency proceedings (including creditor agreements or company recovery) that, for the purposes of this opinion, will include all proceedings concerning the assets of the Participant or any branch it may have in [Jurisdiction] to which the Participant may become subject in [Jurisdiction], are the following: [List the proceedings in the original language, with English translation] (hereinafter collectively designated "Insolvency Proceedings"). In addition to the Insolvency Proceedings, the Participant, any of its assets, or any branch it may possess in [Jurisdiction] may become subject in [Jurisdiction] to [enumerate possible moratoriums, submission to judicial administration, or other proceedings resulting from which payments intended for, or originating from, the Participant may be suspended, or restrictions imposed on such payments, or similar procedures, in the original language with English translation] (hereinafter collectively designated "Proceedings"). 3.2.b. Insolvency Conventions [Jurisdiction] or certain political subdivisions of [Jurisdiction], as specified, is/is party/parties to the following insolvency conventions: [specify, if applicable, those that have or may have influence on this opinion]. 3.3 Enforceability of the System Documentation All provisions of the System Documentation shall be valid and enforceable according to their precise terms, under the legislation of [Jurisdiction], especially in the event of the initiation of an Insolvency Proceeding or Proceedings against the Participant, subject to the points set out below. In particular, it is our opinion that: 3.3.a. Processing of Cash Transfer Orders The provisions regarding the processing of cash transfer orders [cite the relevant implementation provisions of Articles 17 and 18 of Part I of Annex I, Articles 4 to 7 and 9 of Part II of Annex I, Articles 5 to 10 and 14 to 17 of Part III of Annex I, Articles 4, 6 and 7 of Part IV of Annex I, Articles 6 and 10 of Part V of Annex I] of the Rules are valid and enforceable. In particular, all cash transfer orders processed in accordance with the cited provisions are valid, binding, and enforceable under the legislation of [Jurisdiction]. The provision contained in the Rules specifying the exact moment when cash transfer orders are submitted by the Participant to the System becomes executable and irrevocable [cite the implementation provision of Part I, Annex 1, Article 18] is valid, binding, and enforceable under the legislation of [Jurisdiction]. 3.3.b. Empowerment of the Bank of Portugal to Perform Its Functions The opening of an Insolvency Proceeding or Proceedings against the Participant shall not affect the competences and powers of the Bank of Portugal arising from the System Documentation. [Specify [to the extent necessary] that the same opinion is equally valid in relation to any other entity that provides the Participant with services directly and necessarily required for participation in the System (e.g., the provider of the TARGET network service)]. 3.3.c. Remedies in Case of Default [When applicable to the Participant, the provisions contained in [cite the articles] of the Rules regarding the acceleration of unmatured credits, the offsetting of credits by using the Participant's deposits, the enforcement of pledge, the suspension and termination of participation, the claim for default interest, and the cancellation of agreements and operations [insert other relevant provisions of the Rules or the System Documentation]] are valid and enforceable under Portuguese legislation. 3.3.d. Suspension and Termination When applicable to the Participant, the provisions contained in [cite the articles] of the Rules (regarding the suspension and termination of the Participant's participation in the System due to the initiation of an Insolvency Proceeding or Proceedings or other situations of default, as defined in the System documentation, or if the Participant represents any kind of systemic risk or presents serious operational problems) are valid and enforceable under the legislation of [Jurisdiction]. 3.3.e. Monetary Penalties When applicable to the Participant, the provisions contained in [cite the articles] of the Rules regarding monetary penalties imposed on a Participant unable to repay the intraday or overnight credit, if applicable, in due time, are valid and enforceable under the legislation of [Jurisdiction]. 3.3.f. Assignment of Contractual Position The rights and obligations of the Participant cannot be assigned, modified, or transferred to third parties by the Participant without the prior written consent of the Bank of Portugal. 3.3.g. Applicable Law and Competent Forum The provisions contained in [cite the articles] of the Rules, and notably those regarding applicable law, dispute resolution, competent courts, and service of process, are valid and enforceable under the legislation of [Jurisdiction]. 3.4 Avoidance of Preferential Rights It is our opinion that, under the legislation of [Jurisdiction], no obligation arising from the System Documentation, or from the fulfillment and observance thereof, before the initiation of any Insolvency Proceeding or Proceedings against the Participant, can be avoided in said proceedings on the grounds of being considered an undue preferential treatment, a voidable disposition, or another analogous concept. Without prejudice to the foregoing, we are of this opinion especially in relation to any cash transfer orders submitted by any participant of the System. It is our opinion, in particular, that, under the legislation of [Jurisdiction], the provisions [cite the articles] of the Rules establishing the enforceability and irrevocability of payment orders will be valid and enforceable, and that a payment order presented by any participant and processed in accordance with the [cite the articles] of the Rules cannot be avoided in any Insolvency Proceeding or Proceedings on the grounds of being considered an undue preferential treatment, a voidable disposition, or another analogous concept. 3.5 Precautionary Measures If the creditor of a Participant requests a precautionary measure (including any request for freezing or confiscation of assets or any other procedure of public or private law intended to protect the public interest or the rights of the Participant's creditors) – hereinafter "precautionary measure" – under Portuguese legislation to a court or other competent governmental, judicial, or public authority of Portugal, it is our opinion that [insert analysis and justification]. 3.6 Financial Guarantees [if applicable] 3.6.a. Assignment of Rights or Deposit of Assets for Purposes of Financial Guarantee, Pledge, and/or Repurchase Agreements Assignments for the purpose of providing financial guarantees shall be valid and enforceable under the legislation of [Jurisdiction]. More specifically, the constitution and enforceability of a pledge or a repurchase agreement under the [insert reference to the relevant agreement with the CB] shall be valid and under Portuguese law. 3.6.b. Priority of Rights of the Assignee, Pledge Creditor, or Purchasing Party in a Repurchase Agreement over the Rights of Other Creditors In the event that an Insolvency Proceeding or other Proceedings are opened against the Participant, the rights or duties assigned for purposes of financial guarantee, or pledged by the Participant in favor of the Bank of Portugal or other participants in the System, shall enjoy priority of repayment with respect to the claims of other creditors of the Participant, without subordination to credit privileges or preferential creditor rights. 3.6.c. Enforcement of the Guarantee Even if an Insolvency Proceeding or Proceedings are opened against the Participant, the other participants in the System and the Bank of Portugal in the capacity of [assignees, pledge creditors, or purchasing parties in a repurchase agreement, as the case may be] shall still be free to execute their guarantee and collect from the assets of the Participant through the Bank of Portugal in accordance with the provisions of the Rules. 3.6.d. Formal and Registration Requirements There are no formal requirements for assignments for purposes of financial guarantee, nor for the constitution and enforcement of a pledge or repurchase agreement over the rights or assets of the Participant, and it is not necessary for the [assignment for purposes of financial guarantee, pledge, or repurchase agreement, as the case may be], that they be registered or delivered to any court or competent governmental, judicial, or public authority of [Jurisdiction]. III.7 Branches [to the extent necessary] 3.7.a. This Opinion Applies to Operations Through Branches The statements and opinions expressed above regarding the Participant are equally correct and valid under the legislation of [Jurisdiction] in situations where the Participant operates through one or more of its branches located outside the territory of [Jurisdiction]. 3.7.b. Compliance with the Law Neither the exercise of rights and the fulfillment of obligations arising from the System Documentation, nor the presentation, transmission, or receipt of payment orders through a branch of the Participant, constitute any form of infringement of the legislation of [Jurisdiction]. 3.7.c. Necessary Authorizations Neither the exercise of rights and the fulfillment of obligations arising from the System Documentation, nor the presentation, transmission, or receipt of payment orders through a branch of the Participant, shall require any authorization, approval, consent, annotation, registration, notarial certification, or other attestations from any court or competent governmental, judicial, or public authority in [Jurisdiction]. This opinion is formulated on the date stated therein and is exclusively addressed to the Bank of Portugal and to [Participant]. No other person may invoke it, nor may its content be disclosed to anyone else save to its recipient and legal advisor without our prior written consent, except to the European Central Bank and the national central banks of the European System of Central Banks [and [the national central bank/competent regulatory authorities] of [Jurisdiction]]. Yours faithfully, [signature]

GENERAL PROVISIONS This appendix contains the provisions applicable to the relationship between the Bank of Portugal and the participants or peripheral systems, if TARGET or one or more network service providers suffer a failure or are affected by an abnormal external event, or if the failure affects a participant. All specific hourly references in this appendix are made in the local time of the ECB headquarters. The provisions of this Section 1 apply to CNP, CND LBTR and respective subaccounts, technical SP LBTR accounts, CND T2S, CND TIPS, and technical SP TIPS accounts. 1.1. Business Continuity Protection Measures and Contingency Processing Measures a) In the event of an abnormal external event and/or failure of TARGET and/or one or more network service providers that affects the normal functioning of TARGET, the Bank of Portugal has the right to adopt business continuity protection measures and contingency processing measures. b) TARGET will make available the following main business continuity protection measures and contingency processing measures: i) relocation of TARGET operation to an alternative location; ii) alteration of the TARGET operating schedule. c) The Bank of Portugal enjoys full discretion regarding the need to adopt and the determination of business continuity protection measures and contingency processing measures. 1.2. Incident Communication If one of the situations described in paragraph 1.1, letter a), occurs, it will be communicated to participants via the ECB website; if available, via GUIs and, if applicable, via national communication channels. Communications to participants must, in particular, include the following information: i) a description of the situation and its impact on TARGET; ii) the time at which the situation is expected to be resolved (if known); iii) information on measures already taken; and iv) advice to participants (if applicable); v) the timestamp of the communication and indication of when an update will be provided. 1.3. Alteration of Operating Hours a) When altering the operating hours of TARGET, as provided for in Part I, Article 19, Paragraph 2, of these Conditions, the Bank of Portugal may delay the TARGET cut-off times

on a given business day, delay the start of the following business day, or alter the schedule of any other event listed in Appendix V. b) The TARGET cut-off times on a given business day may be postponed if a TARGET failure occurring during that day is resolved before 18:00 hours. The extension of the closing time will normally not exceed two hours, and must be announced to participants as early as possible. c) Once announced, the extension of TARGET cut-off times cannot be cancelled.

1.4. Other provisions a) In the event of a failure of the Bank of Portugal, some or all of its technical functions related to TARGET-PT may be performed on its behalf by other Eurosystem NCBs or Level 3 NCBs. b) The Bank of Portugal may require participants to participate in regular or ad hoc tests of contingency and business continuity procedures, training sessions, or any other preventive measures that the Bank of Portugal deems necessary. Any costs incurred by participants as a result of these tests or other provisions shall be borne exclusively by the participants.

CONTINGENCY AND BUSINESS CONTINUITY PROCEDURES (PROCEDURES FOR LBTR CND AND LBTR SP) In addition to the provisions in section 1, the provisions of this section 2 apply specifically to holders of LBTR CND and SPs that use the settlement procedures for LBTR SP.

2.1. Shift of TARGET operation to an alternative location a) In accordance with point 1.1, letter b), sub-letter i), the operation of TARGET may be shifted to an alternative location, in the same or another region. b) In the event that the operation of TARGET is shifted to another region, participants must: i) refrain from sending new cash transfer orders in TARGET; ii) at the request of the Bank of Portugal, carry out a reconciliation exercise; iii) resend cash transfer orders that they have detected as missing; and iv) provide the Bank of Portugal with all information necessary for this purpose. c) The Bank of Portugal may take any other measures, including debiting and crediting participants' accounts, aimed at returning these participants' accounts to their situation prior to the shift.

2.2. Change of operating hours a) If the Bank of Portugal delays the closing of TARGET as provided for in point 1.3 before 16:50, the minimum one-hour period between the cut-off time for customer and interbank payment orders will, in principle, continue to apply. b) SPs must establish ways to handle cases where the daily session cannot be started on time due to a TARGET failure occurring the previous day.

2.3. Contingency processing a) If it deems necessary, the Bank of Portugal will activate contingency processing of cash transfer orders using the TARGET Contingency Module or other means. In such cases, contingency processing must be carried out on a best-efforts basis. The Bank of Portugal will inform the respective participants of the start of contingency processing through any available means of communication. b) In contingency processing using the TARGET Contingency Solution, cash transfer orders will be submitted by holders of LBTR CND and authorized by the Bank of Portugal. The Bank of Portugal may also, exceptionally, manually enter cash transfer orders on behalf of participants. Furthermore, SPs may submit files containing payment instructions in accordance with the settlement procedure A of LBTR SP, which the SP authorizes the Bank of Portugal to load into the Contingency Solution. c) The following cash transfer orders will be considered "very critical," and the Bank of Portugal must make every effort to process them in contingency situations without unjustified delay: i) payments related to the settlement of CLS Bank International operations processed through CLSSettlement; ii) additional margin calls from central counterparties. d) Cash transfer orders other than those listed in letter c) that are necessary to avoid systemic risk will be considered "critical," and the Bank of Portugal may decide to initiate contingency treatment for these orders. Cash transfer orders must include, without limitation: i) cash transfer orders related to the settlement of other systemically important payment systems, as defined in European Central Bank (ECB) Regulation (EU) No 795/2014 (ECB/2014/28) 7; ii) liquidity transfer orders for T2S CND or TIPS CND; iii) liquidity transfer orders indispensable for the execution of very critical cash transfer orders, as established in letter c), or for other critical cash transfer orders. e) Cash transfer orders that have been submitted via TARGET-PT but are waiting in queue may also be subject to contingency processing. In such cases, the Bank of Portugal will seek to avoid duplication of cash transfer order processing, but if this happens, the risk will be borne by the participants.

7 European Central Bank Regulation (EU) No 795/2014 of 3 July 2014 on the oversight requirements for systemically important payment systems (ECB/2014/28) (OJ L 217 of 23.7.2014, p. 16).

f) Participants must provide eligible assets as collateral assets for the contingency processing of payment orders. During contingency processing, received cash transfer orders may be used to finance executed cash transfer orders.

2.4. Failures related to participants a) In the event that a participant encounters a problem preventing them from issuing cash transfer orders in TARGET, they must resolve the problem using their own means. The participant may, in particular, resort to internal solutions or the GUI functionality to process liquidity transfers and payment orders, or use the backup functionality available in the GUI. b) If the means, solutions, or functionalities used by the participant referred to in letter a) are exhausted or prove insufficient, the participant may request support from the Bank of Portugal, which will provide such support on a best-efforts basis. It is at the discretion of the Bank of Portugal to decide what support to provide to the participant. c) Other detailed contingency measures regarding the SP will be set out in additional agreements between the Bank of Portugal and the relevant SP.

CONTINGENCY AND BUSINESS CONTINUITY PROCEDURES (CNP) In addition to the provisions of section 1, the provisions of this section 3 apply specifically to CNP holders.

3.1. Shift of TARGET operation to an alternative location a) In accordance with point 1.1, letter b), sub-letter i), the operation of TARGET may be shifted to an alternative location, in the same or another region. b) In the event that the operation of TARGET is shifted to another region, participants must: i) refrain from sending new cash transfer orders in TARGET; ii) at the request of the Bank of Portugal, carry out a reconciliation exercise; iii) resend cash transfer orders that they have detected as missing; and iv) provide the Bank of Portugal with all information necessary for this purpose. c) The Bank of Portugal may take any other measures, including debiting and crediting participants' accounts, aimed at returning these participants' accounts to their situation prior to the shift.

3.2. Contingency processing a) If it deems necessary, the Bank of Portugal will activate contingency processing of cash transfer orders using the TARGET Contingency Module or other means. In such cases, contingency processing must be carried out on a best-efforts basis. The Bank of Portugal will inform the respective participants of the start of contingency processing through any available means of communication.

b) In contingency processing using the TARGET Contingency Solution, cash transfer orders will be submitted by CNP holders and authorized by the Bank of Portugal. The Bank of Portugal may also, exceptionally, manually enter cash transfer orders on behalf of participants. c) Cash transfer orders necessary to avoid systemic risk will be considered "critical," and the Bank of Portugal may decide to initiate contingency processing for them. d) Cash transfer orders that have been submitted via TARGET-PT but are waiting in queue may also be subject to contingency processing. In such cases, the Bank of Portugal will seek to avoid duplication of cash transfer order processing, but if this happens, the risk will be borne by the participants. e) Participants must provide eligible assets as collateral assets for the contingency processing of payment orders. During contingency processing, received cash transfer orders may be used to finance executed cash transfer orders.

3.3 Failures related to participants a) In the event that a participant encounters a problem preventing them from issuing cash transfer orders in TARGET, they must resolve the problem using their own means. In particular, a participant may use any internal solutions or the GUI functionality to process liquidity transfer orders. b) If the means, solutions, or functionalities used by the participant referred to in letter a) are exhausted or prove insufficient, the participant may request support from the Bank of Portugal, which will provide such support on a best-efforts basis. It is at the discretion of the Bank of Portugal to decide what support to provide to the participant.

CONTINGENCY AND BUSINESS CONTINUITY PROCEDURES (T2S CND) In addition to the provisions of section 1, the provisions of this section 4 apply specifically to T2S CND holders.

4.1. Shift of TARGET operation to an alternative location a) In accordance with point 1.1, letter b), sub-letter i), the operation of TARGET may be shifted to an alternative location, in the same or another region (if available). b) In the event that the operation of TARGET is shifted to another region, participants must: i) refrain from sending new cash transfer orders in TARGET; ii) at the request of the Bank of Portugal, carry out a reconciliation exercise; iii) resend instructions that they have detected as missing; and iv) provide the Bank of Portugal with all information necessary for this purpose.

c) The Bank of Portugal may take any other measures, including debiting and crediting participants' accounts, aimed at returning these participants' account balances to their situation prior to the shift.

4.2. Failures related to participants a) In the event that a T2S CND holder encounters a problem preventing them from settling cash transfer orders in TARGET-PT, they must resolve the problem using their own means. b) If the means referred to in letter a) are exhausted or prove insufficient, the participant may request support from the Bank of Portugal, which will provide such support on a best-efforts basis. It is at the discretion of the Bank of Portugal to decide what support to provide to the participant.

Appendix V TARGET OPERATING HOURS

The value date of operations settled in TARGET is always the value date on which the system operates.
All days, except Saturday, Sunday, New Year's Day, Good Friday 1, Easter Monday 2, May 1st, Christmas Day, and December 26th, are TARGET business days and, therefore, may be value dates for settlement purposes in TARGET.
TIPS CNDs and TIPS SP technical accounts operate every day. All other types of accounts operate every day, except Saturday, Sunday, New Year's Day, Good Friday 3, Easter Monday 4, May 1st, Christmas Day, and December 26th.
A business day begins on the night of the previous business day.
The system reference time is the local time at the ECB headquarters.
The different phases of the TARGET business day and the significant operational events relevant for CNP, LBTR CND 5, T2S CND, and TIPS CND 6 are presented in the following table:

HH: MM	CNP	LBTR CND 7	T2S CND	TIPS CND 8
18:45 (D-1)	Start of business day: Change of value date	Start of business day: Change of value date	Start of business day: Change of value date	Preparation of overnight settlement
	Processing of immediate payment orders and liquidity transfer orders to/from TIPS SP technical accounts. No liquidity transfers between TIPS CND and other accounts
19:00 (D-1)	Settlement of central bank operations (CBO)	Refund of permanent liquidity facility	Cut-off time for acceptance of data from the Collateral Management System (CMS) (19:00)
		Refund of overnight deposits	Processing of automated and rule-based liquidity transfer orders	Preparation of overnight settlement
19:30 (D-1)	Settlement of central bank operations; Processing of permanent liquidity transfer orders	Processing of immediate liquidity transfer orders	Settlement of SP orders	Processing of permanent liquidity transfer orders
				Processing of immediate payment orders and liquidity transfer orders to/from CNP and LBTR CND
20:00 (D-1)	Nightly settlement cycles	Processing of liquidity transfer orders to/from T2S CND
2:30 (calendar day after D-1)	Non-optional maintenance window on — business days after closing, including business Mondays	Optional maintenance window (if necessary) from 3:00 to 5:00 on other days	Non-optional maintenance window on — business days after closing, including business Mondays	Optional maintenance window (if necessary) from 3:00 to 5:00 on other days 9
				Optional maintenance window (if necessary) from 3:00 to 5:00 on other days
				Processing of immediate payment orders and liquidity transfer orders to/from TIPS SP technical accounts. No liquidity transfer orders between TIPS CND and other accounts
Reopening time* (D)	Settlement of CBO	Processing of automated, rule-based, and immediate liquidity transfer orders	Settlement of SP orders	Processing of automated, rule-based, and immediate liquidity transfer orders


5:00 (D)	Daytime processing/Real-time settlement: Preparation of real-time settlement	Partial settlement windows 10
16:00 (D)	Cut-off time for Delivery versus Payment (DvP) orders
16:30 (D)	Automatic refund of self-collateral operations, followed by optional cash drainage
17:00 (D)	Cut-off time for customer payment orders
17:40 (D)	Cut-off time for bilaterally agreed treasury management (BATM) and CBO operations
17:45 (D)	Cut-off time for liquidity transfer orders to T2S CND	Cut-off time for entry of liquidity transfer orders	Blocking of liquidity transfer orders from TIPS CND to T2S CND. During this period, no liquidity transfer orders are processed between T2S CND and TIPS CND
18:00 (D)	Cut-off time for: - Liquidity transfer orders - CBO, except permanent facilities - Credit line changes	Cut-off time for: — Interbank payment orders and — Liquidity transfer orders — SP orders	Cut-off time for free of payment (FOP) settlements	End of T2S settlement processes



Shortly after 18:00:	Change of business day (after receiving the message

1 According to the calendar applicable at the ECB headquarters. 2 According to the calendar applicable at the ECB headquarters. 3 According to the calendar applicable at the ECB headquarters. 4 According to the calendar applicable at the ECB headquarters. 5 Also applies to LBTR SP technical accounts, sub-accounts, and SP guarantee fund accounts. 6 Also applies to TIPS SP technical accounts. 7 Also applies to LBTR SP technical accounts, sub-accounts, and SP guarantee fund accounts. 8 Also applies to TIPS SP technical accounts.

9 For T2S CND: for the purpose of the maintenance window, May 1st is considered a business day.

10 Partial settlement windows take place at 8:00, 10:00, 12:00, 14:00, and 15:30 (or 30 minutes before the start of the Delivery versus Payment (DvP) cut-off time, whichever is earlier).

HH: MM CNP LBTR CND 7 T2S CND TIPS CND 8 bilaterally (bilaterally agreed treasury management – BATM) and CBO 17:45 (D) Cut-off time for liquidity transfer orders to T2S CND Cut-off time for entry of liquidity transfer orders Blocking of liquidity transfer orders from TIPS CND to T2S CND. During this period, no liquidity transfer orders are processed between T2S CND and TIPS CND 18:00 (D) Cut-off time for:

Liquidity transfer orders
CBO, except permanent facilities
Credit line changes Cut-off time for: — Interbank payment orders and — Liquidity transfer orders — SP orders Cut-off time for free of payment (FOP) settlements End of T2S settlement processes Recycling and purging End-of-day reports and statements Processing of immediate payment orders and liquidity transfer orders to/from TIPS SP technical accounts. Blocking of liquidity transfer orders from TIPS CND to CNP/LBTR and T2S CND. During this period, no liquidity transfer orders are processed between TIPS CND and other accounts Shortly after 18:00: Change of business day (after receiving the message

GENERAL PROVISIONS
The following services are not included in the offer of the Bank of Portugal and will be invoiced by the respective providers, according to their respective terms and conditions: a) Services offered by FSR; b) T2S services not related to cash.
The participant wishing to change its choice of pricing determination system must communicate this to the Bank of Portugal by the twentieth day of the month, so that it can be taken into account in the following month.
FEES APPLICABLE TO CNP HOLDERS
CNPs and operations settled in these accounts are not subject to fees.
FEES APPLICABLE TO CND LBTR HOLDERS
CND LBTR holders must choose one of the following two pricing determination options: a) A monthly fee, plus a fixed transaction fee per payment order (direct debit). Monthly fee 150 EUR Transaction fee per payment order 0.80 EUR b) A monthly fee, plus a transaction fee based on the volume of payment orders (direct debit) and calculated on a cumulative basis, as established in the following table. For participants included in a billing group, the monthly payment orders (direct debit) of all participants must be aggregated.

1 10,000 0.60
10,001 25,000 0.50
25,001 50,000 0.40
50,001 75,000 0.20
75,001 100,000 0.125
100,001 150,000 0.08
Above 150,000 0.05
Liquidity transfer orders from CND LBTR to subaccounts, CNP, overnight deposit accounts or CND LBTR held by the same participant or by participants belonging to the same banking group are free of charge.
Liquidity transfer orders from CND LBTR to CNP or CND LBTR held by participants who do not belong to the same banking group incur a fee of 0.80 EUR per transaction (direct debit).
Liquidity transfer orders from CND LBTR to CND T2S or CND TIPS are free of charge.
Cash transfer orders from a CND LBTR to a PS account 1 will not be debited to the holder of the CND LBTR.
The following fees apply to CND LBTR holders: Service Monthly fee (EUR) Addressable BIC holder (correspondents 2) 20 Unpublished BIC 30 Access for multiple recipients (based on 8-digit BIC) 80

1 Regardless of whether it is a CND LBTR, an LBTR PS technical account or an SP guarantee fund account. 2 Addressable BIC holders are available for different types of participants: addressable BIC holder – Correspondent; addressable BIC holder – Participant branch; and addressable BIC holder – Correspondent branch. Only the addressable BIC holder — Correspondent is subject to the fee. The fee is charged for each different 11-digit BIC.

PS that use the LBTR PS settlement procedures to which a derogation has been granted allowing them to settle in a CND LBTR must choose one of the following two pricing determination options: a) A monthly fee, plus a fixed transaction fee per cash transfer order. Monthly fee 300 EUR Transaction fee per cash transfer order 1.60 EUR b) A monthly fee, plus a transaction fee based on the volume of cash transfer orders and calculated on a cumulative basis, as established in the following table. Monthly fee 3,750 EUR Monthly volume of cash transfer orders Band From To Transaction fee per cash transfer order (EUR)
1 5,000 1.20
5,001 12,500 1.00
12,501 25,000 0.80
25,001 50,000 0.40
Above 50,000 0.25 Cash transfer orders between a CND LBTR and a PS account 3 must be invoiced to the respective SP according to the pricing option chosen by the SP.
In addition to the above fees, each SP is subject to two fixed fees contained in the following table.

3 Regardless of whether it is a CND LBTR, an LBTR PS technical account or an SP guarantee fund account.

4 The "underlying gross value" is the total amount of gross monetary obligations that are fulfilled through a PS after settlement in a CND LBTR or a subaccount. With regard to central counterparties, the underlying gross value is the total notional value of futures contracts or the market value of futures contracts, at values to be settled when the contracts expire and commissions are applied.

The following fees will be charged for the operation of CND T2S: Item Rule applied Fee per item (EUR) Liquidity transfer orders between CND T2S Per transfer to the CND T2S debited. 0.141 Intra-balance movement Any intra-balance movement executed successfully (e.g., blocking, unblocking of funds, liquidity reservation, etc.) 0.094 Information requests A2A Per business item included in each information request generated in A2A mode 0.007 A2A Reports Per business item included in each report generated in A2A mode, including A2A reports resulting from A2A information requests. 0.004 Messages grouped in a file Per message in each file containing grouped messages 0.004 Transmission Per transmission by a party in T2S (both incoming and outgoing) will be counted and charged (except for technical acknowledgment messages). 0.012 U2A Information Requests Any search performed 0.100 Fee per CND T2S Any CND T2S existing at any time during the monthly billing period Currently free, subject to regular review. 0.000 Self-guarantee Issuance or return of self-guarantee 0.000
Liquidity transfer orders from CND T2S to CND LBTR, CND TIPS or CNP are free of charge.
FEES APPLICABLE TO CND TIPS HOLDERS
The operating fees of CND TIPS are charged to the parties indicated in the following table: Item Rule applied Fee per item (EUR) Immediate payment order settled To be invoiced to the holder of the CND TIPS to be debited 0.002 Immediate payment order not settled To be invoiced to the holder of the CND TIPS to be debited 0.002 Positive response to revocation request settled To be invoiced to the holder of the CND TIPS to be credited 0.002 Positive response to revocation request not settled To be invoiced to the holder of the CND TIPS to be credited 0.002

Fees for the use, by a PS, of the TIPS PS settlement procedure will be invoiced to the parties indicated in the following table: Item Rule applied Fee per item (EUR) Immediate payment order settled To be invoiced to the holder of the SP TIPS technical account to be debited 0.002 Immediate payment order not settled To be invoiced to the holder of the SP TIPS technical account to be debited 0.002 Positive response to revocation request settled To be invoiced to the holder of the SP TIPS technical account to be credited 0.002 Positive response to revocation request not settled To be invoiced to the holder of the SP TIPS technical account to be credited 0.002
Liquidity transfer orders from SP TIPS technical accounts to CND TIPS are free of charge
In addition to the above fees, each SP is subject to a monthly fee based on the underlying gross volume of immediate payments, quasi-immediate payments and positive responses to revocation requests settled on its own platform and allowed by the pre-funded positions in the SP TIPS technical account. The fee will be 0.0005 for each immediate payment settled, quasi-immediate payment and positive response to revocation request settled. For each month, each SP must communicate, no later than the third working day of the following month, the underlying gross volume of its immediate payments, quasi-immediate payments and positive revocation responses settled, rounded down to the nearest ten thousand. The Bank of Portugal will use the communicated underlying gross volume to calculate the fee for the following month.

Information security management Requirement 1.1: Information security policy Management must define a clear policy orientation, consistent with the objectives of the activity, and demonstrate support and commitment to information security through the issuance, approval and maintenance of an information security policy intended to manage information security and cyber-resilience throughout the organization in terms of identifying, assessing and treating risks regarding information security and cyber-resilience. The policy must contain, at a minimum, the following sections: objectives, scope (including domains such as organization, human resources, asset management, etc.), principles and assignment of responsibilities. Requirement 1.2: Internal organization An information security regime is established to implement the information security policy within the organization. Management must coordinate and review the creation of the information security framework to ensure the implementation of the information security policy (in accordance with

Annex to Instruction No. 16/2022 Official Journal No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 requirement 1.1) throughout the organization, including the allocation of sufficient resources and the assignment of security responsibilities for this purpose. Requirement 1.3: External parties The information security of the organization and its information processing facilities must not be compromised by the use of one or more external parties or products/services provided by them or by dependence on them or their products/services. Any access to the organization's information processing facilities by external parties must be controlled. Whenever external parties or external party products/services need to have access to the organization's information processing facilities, a risk assessment must be carried out to determine the implications for security and control requirements. Controls must be agreed upon and defined in an agreement with each external party concerned. Requirement 1.4: Asset management All information assets, operational processes and underlying information systems, such as operating systems, infrastructures, operational applications, standard products, services and user-developed applications, covered by the payment transaction chain must be accounted for and have a designated owner («nominated owner»). Responsibility must be assigned for maintaining and operating appropriate controls over operational processes and their IT components with a view to protecting information assets. Note: the owner may, if necessary, delegate the implementation of specific controls, but remains responsible for the adequate protection of assets. Requirement 1.5: Classification of information assets Information assets must be classified according to their critical importance for the adequate provision of service by the participant. The classification must indicate the need, priorities and degree of protection required in the handling of the information asset in the operational processes concerned and must also take into account the underlying IT components. An information asset classification system approved by management must be used to define a suitable set of protection controls throughout the entire life cycle of information assets (including the removal and destruction of information assets) and to communicate the need for specific treatment measures. Requirement 1.6: Human resource security Security responsibilities must be defined before recruitment, through the adequate description of job positions and employment conditions. All job candidates, contractors and third-party users must be subject to adequate control, especially with regard to sensitive job positions. Employees, contractors and third-party users of information processing facilities must sign an agreement regarding their functions and security responsibilities. An adequate level of awareness must be ensured for all workers, contractors and third-party users, and training and instruction on security procedures and correct use

Annex to Instruction No. 16/2022 Official Journal No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 of information processing facilities must be ensured to minimize possible security risks. A formal disciplinary process must be instituted for dealing with security breaches by workers. Responsibilities must be defined to ensure the management of the departure of an employee, contractor or third-party user from the organization or their transfer within the same, as well as the return of all equipment and the revocation of all access rights. Requirement 1.7: Physical and environmental security Critical or sensitive information processing facilities must be located in secure zones, protected by defined security perimeters, with adequate barriers and entry controls. They must be physically protected against unauthorized access and damage and interference. Access is exclusively granted to persons covered by requirement 1.6. Procedures and standards will be established to protect physical media containing information assets during their transport. Equipment is protected against physical and environmental threats. Protection of equipment (including equipment used off-site) and protection against removal of goods is necessary to reduce the risk of unauthorized access to information and to protect against loss or damage to equipment or information. Special safeguard and protection measures against physical threats to support facilities, such as power supply and cabling infrastructure, may be necessary. Requirement 1.8: Operational management Responsibilities and procedures must be established for the management and operation of information processing facilities covering all underlying systems of the payment transaction chain, from end to end. With regard to operational procedures, including the technical administration of computer systems, separation of duties must be implemented whenever necessary, in order to reduce the risk of intentional or negligent misuse of the system. If separation of duties cannot be implemented for documented objective reasons, compensating controls must be introduced following a formal risk analysis. Controls must be established to prevent and detect the introduction of malicious code into the systems of the payment transaction chain. Controls (including user awareness) must also be established to prevent, detect and remove malicious code. Only mobile code from trusted sources (for example, Microsoft signed COM components and Java Applets) should be used. Browser program configuration (for example, the use of extensions and plug-ins) must be strictly controlled. Management must implement data safeguard and recovery policies; such data recovery policies must include a restoration process plan that must be tested at least annually. Systems critical to payment security must be monitored and events relevant to information security must be recorded. Logs must be used

Annex to Instruction No. 16/2022 Official Journal No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 operation (operator logs) to ensure the identification of computer system problems. The operation logs must be examined regularly by sampling, taking into account the critical importance of the operations. System monitoring must be used to verify the effectiveness of controls identified as critical for payment security and to verify compliance with an access policy model. Information exchanges between organizations must be based on a formal exchange policy, executed in accordance with the exchange agreements concluded between the parties involved, and respect all relevant legislation. Third-party software components used in the information exchange with TARGET (such as software received from a service bureau) must be used under a formal agreement with the third party. Requirement 1.9: Access Control Access to information assets must be justified based on operational needs (need-to-know 26) and in accordance with the company's policy framework established (including the information security policy). Clear access control rules must be defined based on the principle of least privilege 27, in order to faithfully reflect the needs of the corresponding operational and computer processes. Where applicable (for example, regarding backup management), logical access control must be consistent with physical access control, unless adequate compensating controls exist (e.g., encryption and anonymization of personal data). There must be formal and documented procedures to control the assignment of access rights to computer systems and services covered by the scope of the payment operation chain. The procedures must cover all phases of the user access lifecycle, from initial registration of new users to final cancellation of registration of users who no longer require access. Special attention must be given, where applicable, to the assignment of access rights of such critical importance that their abuse could have serious negative repercussions on the operations of the participant (for example, access rights that allow system administration, the neutralization of system controls or direct access to operational data). Adequate controls must be adopted to identify, authenticate and authorize users at specific points in the organization's network, for example, regarding local and remote access to systems in the payment operation chain. Personal accounts are not shared to ensure accountability. Regarding passwords, rules must be established and applied through specific controls to ensure that they cannot be easily deduced, for example, rules relating to

26The 'need-to-know' principle refers to the identification of the set of information that a person needs to have access to in order to perform their functions. 27The 'least privilege' principle refers to adapting the subject's access profile to the computer system, so that it corresponds to the corresponding professional function.

Annex to Instruction No. 16/2022 Official Journal No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 their complexity and limited temporal validity. A secure protocol for password recovery and/or reinitialization must be established. A policy regarding the use of cryptographic controls must be developed and implemented to protect the confidentiality, authenticity and integrity of information. A key management policy must be established in support of the use of cryptographic controls. There must be a policy on the viewing of confidential information on screen or on paper, for example, a clear screen or clear desk policy, in order to reduce the risk of unauthorized access. Regarding remote work, the risks of working in an unprotected environment must be taken into account and appropriate technical and organizational controls must be applied. Requirement 1.10: Acquisition, development and maintenance of computer systems Security requirements must be identified and agreed upon before the development and/or implementation of computer systems. Appropriate controls must be incorporated into applications, including applications developed by users, in order to ensure correct processing. These controls must include validation of input data, internal processing and output data. Additional controls may be necessary for systems that process or have an impact on sensitive, valuable or critical information. Such controls will be determined based on security requirements and risk assessment in accordance with established policies (for example, information security policy, cryptographic control policy). The operational requirements of new systems must be established, documented and tested before their acceptance and use. Regarding network security, appropriate controls must be implemented, including segmentation and secure management, based on the critical importance of data flows and the level of risk of the organization's network areas. Specific controls must exist to protect confidential information circulating on public networks. Access to system files and program source code must be controlled and computer projects and support activities must be carried out securely. Exposure of sensitive data in test environments should be avoided. Design and support environments must be strictly controlled. The introduction of changes into production must be strictly controlled. An assessment of the risks of major changes to be introduced into production must be carried out. Regular security testing activities of production systems must also be carried out in accordance with a predefined plan based on the results of a risk assessment, and security tests must include, at least, vulnerability assessments. All deficiencies detected during security testing activities must be assessed and action plans must be drawn up to close any identified gaps, which must be followed up in a timely manner.

Annex to Instruction No. 16/2022 Official Journal No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 Requirement 1.11: Information security in relationships with suppliers 28 In order to ensure the protection of the participant's internal computer systems accessible to suppliers, the information security requirements to mitigate the risks associated with supplier access must be documented and formally agreed with the supplier. Requirement 1.12: Management of information security incidents and improvements in this regard In order to ensure a consistent and effective approach to the management of information security incidents, including the reporting of occurrences and weaknesses in security matters, the functions, responsibilities and procedures must be established and tested, at the operational and technical level, in order to ensure rapid, effective, orderly and safe recovery following information security incidents, including scenarios relating to a cyber cause (for example, fraud committed by an external attacker or by an insider). Personnel involved in these procedures must receive adequate training. Requirement 1.13: Technical compliance verification A participant's internal computer systems (for example, back-office systems, internal networks and external network connectivity) must be regularly evaluated for compliance with the policy framework adopted by the organization (for example, information security policy, cryptographic control policy). Requirement 1.14: Virtualization Guest virtual machines must comply with all security controls established for physical hardware and physical systems (for example, hardening and logging). Controls relating to hypervisors must include: hypervisor and host operating system hardening, regular application of patches, strict separation of different environments (for example, production and development). Centralized management, logging and monitoring, as well as access rights management, especially privileged accounts, must be implemented based on a risk assessment. Guest virtual machines managed by the same hypervisor must have a similar risk profile Requirement 1.15: Cloud computing The use of public and/or hybrid cloud computing solutions in the payment operation chain must be based on a formal risk assessment, taking into account technical controls and contractual clauses relating to the cloud computing solution.

28In the context of this exercise, 'supplier' means any third party (and its personnel) that has concluded a contract (agreement) with the institution to provide a service and that has access, under the service provision agreement, remotely or locally, to information and/or computer systems and/or information processing facilities of the institution covered by the scope of the TARGET self-certification exercise or associated with it.

Annex to Instruction No. 16/2022 Official Journal No. 10/2022 • 2022/10/17 Topics Payment Systems :: Large-Value Payment System .................................................................................................................................................................................................. Mod. 99999911/T – 01/14 If hybrid cloud computing solutions are used, it is understood that the level of criticality of the overall system is the highest of the linked systems. All components of hybrid solutions on-site must be separated from other existing systems on-site. 2. BUSINESS CONTINUITY MANAGEMENT The following requirements relate to business continuity management. Each participant in TARGET classified by the Eurosystem as critical for the proper functioning of the TARGET system must have a business continuity strategy that meets the following requirements. Requirement 2.1: Business continuity plans have been developed and procedures are in place for their maintenance. Requirement 2.2: An alternative operational site must be available. Requirement 2.3: The risk profile of the alternative site must be different from the risk profile of the main site, in order to avoid both sites being affected by the same event at the same time. For example, the alternative site must fall within a different electrical grid and central telecommunications circuit than those of the company's main location. Requirement 2.4: In the event of a major operational disruption that makes the main site and/or critical personnel inaccessible, the critical participant must be able to resume normal operations from the alternative site, where it must be possible to properly close the business day and open the business day or days following. Requirement 2.5: Procedures must exist to ensure that transaction processing is resumed at the alternative site within a reasonable time after the initial service interruption and proportional to the critical importance of the activity that suffered disruptions. Requirement 2.6: The ability to cope with operational disruptions must be tested at least once a year and critical personnel must receive adequate training. The maximum interval between tests must not exceed one year. Annex amended by Instruction No. 17/2022, published in Official Journal No. 11/2022 Supplement, of November 21.

Annex II to the Instruction TARGET GOVERNANCE MECHANISM Level 1 — ECB Governing Council Level 2 — Technical and Operational Management Body Level 3 — Level 3 NCB

General Provisions Competent as the final court for all TARGET issues, especially for decision-making rules in TARGET, and is also responsible for safeguarding the public function of this. Execution of technical, functional, operational and financial management tasks relating to TARGET and applies the governance rules decided by Level 1 Decision on the daily operation of TARGET based on the levels of service defined in the agreement referred to in Article 7(6) of this Instruction.
Price determination policy

Decision on the price determination structure/policy
Decision on tariff envelopes
Regular review of the price determination structure/policy
Preparation and monitoring of tariff envelopes (Not applicable)

Financing

Decision on the rules applicable to the TARGET financial regime
Decision on financial envelopes
Preparation of proposals on the main elements of the financial regime, in conformity with Level 1 decisions.
Preparation and monitoring of financial envelopes
Approval and/or unlocking of periodic payments due from Eurosystem NCs to Level 3 for the provision of services
Approval and/or unlocking of fee refunds to Eurosystem NCs Provision to Level 2 of data relating to costs of services provided

Service level Decision on the service level Verification that the service was provided in conformity with the agreed service level Provision of the service in conformity with the agreed service level
Operation

Decision on rules applicable to incidents and crisis situations
Monitoring of activity evolution Administration of the system based on the agreement referred to in Article 7(6) of this Instruction

Change and version management Final decision - Approval of change requests

Approval of release scoping Assessment of change requests

Approval and execution of the release plan Execution of changes in conformity with the agreed plan

Risk management

Approval of the TARGET risk management framework and risk tolerance and acceptance of residual risks
Assumption of final responsibility for first and second line of defense activities.
Establishment of the organizational structure of functions and responsibilities related to risk and control
Effective risk management
Analysis and monitoring of risks
Maintenance and updating of all risk management mechanisms
Approval and review of the business continuity plan, as provided for in the relevant operational documentation Provision of information necessary for risk analyses requested by Levels 1 and 2.

System rules

Establishment and guarantee of proper application of the legal framework of the European System of Central Banks relating to TARGET, including the Harmonized Conditions for Participation in TARGET (Not applicable) (Not applicable)

Annex III to the Instruction DEFINITIONS

'Account monitoring group': a group of two or more CNP and/or CND relative to which a participant, the leading party, can view the balance of each of the TARGET accounts of the group;
'Addressable BIC holder': an entity: a) to which a Business Identifier Code (BIC) has been assigned and b) that is a correspondent or client of a LBTR CND holder, or of a branch of a LBTR CND holder, and is able to submit payment orders to, and receive payments from, a system component of TARGET through that LBTR CND holder;
'Ancillary system' (AS): system managed by an entity established in the Union or in the EEA subject to supervision and/or oversight by a competent authority and which observes the oversight requirements relating to the location of infrastructure providing services in euros, as periodically amended and published on the ECB website, and in which payments and/or financial instruments are cleared and/or exchanged or recorded with a) monetary obligations resulting from transfer orders that are settled in TARGET and/or b) funds held in TARGET, in accordance with ECB Guideline/2022/8;
'Ancillary system guarantee funds account': a technical account used for the purpose of holding guarantee funds to support Settlement Procedures A and B for LBTR AS;
'Ancillary system settlement procedure': a settlement procedure for TIPS AS or a settlement procedure for LBTR AS;
'Ancillary system transfer order': any cash transfer order initiated by an ancillary system for the purpose of a settlement procedure in an LBTR ancillary system;
'Auto-collateralisation': intraday credit granted by the national central bank (NCB) of the euro area in central bank money that is triggered when the holder of a T2S CND does not have sufficient funds to settle securities transactions, and this intraday credit is secured either by the acquired securities (collateral on the flow) or by the securities already held by the T2S CND holder in favor of the euro area NCB (collateral on the stock). An auto-collateralisation operation is composed of two distinct transactions, namely: one for the granting of the auto-collateralisation and one for its repayment. It may include a third transaction, relating to the eventual reallocation of collateral assets. For the purposes of Article 18 of Part I of Annex I, all three transactions are presumed to be introduced into the system and irrevocable from the same instant as the auto-collateralisation grant operation,

Anexo à Instrução n. o 16/2022 BO n. o 10/2022 • 2022/10/17 Temas Sistemas de Pagamentos :: Sistema de Pagamentos de Grandes Transações .................................................................................................................................................................................................. Mod. 99999911/T – 01/14

“Automated liquidity transfer order”: an automated liquidity transfer order generated to transfer funds from a designated LBTR DCA to the participant’s CCA, in the event that the funds available in that CCA are insufficient for the settlement of central bank operations;
“Available liquidity”: the credit balance of a participant’s account, plus, if applicable, any intraday credit line granted to that participant’s CCA by the relevant euro area NCB but not yet used, or reduced, if applicable, by the amount of any liquidity reserves processed or funds blocked in the CCAs or LBTAs;
“Banking group”: a) The set of credit institutions included in the consolidated financial statements of a parent undertaking that is required to prepare consolidated financial statements under International Accounting Standard No. 27 (IAS 27) adopted pursuant to Commission Regulation (EC) No. 1126/2008, and which may be composed either: i) by a parent undertaking and one or more subsidiaries; or ii) by two or more subsidiaries of a parent undertaking; or b) A set of credit institutions as referred to in point (a), subpoints (i) or (ii), whose parent undertaking is not required to prepare consolidated financial statements in accordance with IAS 27, but which is found to meet the criteria defined in that standard for inclusion in consolidated financial statements, subject to verification by the participant’s CB; or c) A bilateral or multilateral network of credit institutions that: i) is organized in a legal structure that determines the affiliation of the credit institutions in that network; or ii) is characterized by self-organized cooperation mechanisms (promoting, supporting and representing the commercial interests of its members) and/or by economic solidarity that goes beyond the usual cooperation between credit institutions, where such cooperation and solidarity are permitted by the articles of association or memorandum and articles of association of the credit institutions or established in a separate agreement and, in each case to which subpoints (i) and (ii) of point (c) refer, the Governing Council of the ECB has approved a request that such network be considered as constituting a group;
“Branch”: a branch within the meaning of Article 4(1), point 17, of Regulation (EU) No 575/2013 of the European Parliament and of the Council or Article 4(1), point 30, of Directive 2014/65/EU;
“Broadcast message”: information made available simultaneously to all or to a selected group of participants;
“Business day” or “TARGET business day”: any day on which the CCA, LBTR DCA, or T2S DCA are available for the settlement of cash transfer orders;
“Business Identifier Code (BIC)”: a code within the meaning of ISO Standard No. 9362;

“Capacity opinion”: an opinion regarding a specific participant, containing an assessment of its legal capacity to assume and comply with its obligations;
“Cash transfer order”: any instruction given by a participant or by a party acting on its behalf to make funds available to a beneficiary by means of an accounting entry in another account, which may take the form of a peripheral system transfer order, liquidity transfer order, instant payment order, positive recall answer, or payment order;
“Central bank (CB)”: a CB of the Eurosystem and/or a connected NCB;
“Central bank operation”: any payment order or liquidity transfer order initiated by a CB in a CCA opened in any component system of TARGET;
“Connected NCB”: an NCB, other than a euro area NCB, that is connected to TARGET under a specific agreement;
“Contingency Solution”: the functionality that allows CBs and participants to process cash transfer orders in the event that normal operation of the CCAs and/or LBTR DCAs and/or TIPS technical accounts is not possible;
“Credit institution”: refers to either a) a credit institution within the meaning of Article 4(1), point 1, of Regulation (EU) No 575/2013 (and the national provisions implementing Article 2(5) of Directive 2013/36/EU of the European Parliament and of the Council applicable to the credit institution), which is subject to supervision by a competent authority; or b) another credit institution within the meaning of Article 123(2) of the Treaty which is subject to a standard of control comparable to that of supervision exercised by a competent authority;
“Credit memorandum balance (CMB)”: the limit established by the holder of the TIPS DCA for the use of liquidity in the TIPS DCA by a specific reachable party;
“Cross-system settlement”: the settlement of cash transfer orders from a PS that debit the TIPS technical account or a subaccount of a settlement bank of a PS using settlement procedure C or D for PS and that credit the TIPS technical account or a subaccount of a settlement bank of another PS using settlement procedure C or D for PS;
“Dedicated cash account (DCA)”: an LBTR DCA, a T2S DCA, or a TIPS DCA;
“Deposit facility rate”: the interest rate applicable to the deposit facility within the meaning of Article 2, point 22, of Guideline (EU) 2015/510 (ECB/2014/60);
“Deposit facility”: the “deposit facility” within the meaning of Article 2, point 21, of Guideline (EU) 2015/510 (ECB/2014/60);

“Euro area NCB”: the national central bank (NCB) of a Member State whose currency is the euro;
“European Payments Council’s SEPA Instant Credit Transfer (SCT Inst) scheme or SCT Inst scheme”: the automatic open-rules mechanism providing a set of interbank rules to be complied with by their respective participants, which allows payment service providers in the Single Euro Payments Area (SEPA) to offer an automatic euro instant credit transfer product at SEPA level;
“Eurosystem CB”: the ECB or a euro area NCB;
“Event of default”: any situation, imminent or actual, the occurrence of which could jeopardize the compliance by a participant with its obligations arising from the Conditions in Annex I, Part I, or any other rules applicable to the relations between that participant and the participant’s CB or any other CB, including cases where: a) The participant fails to meet the access criteria established in the national implementing provisions of Part I, Annex I, Article 4, or the requirements established in the relevant national implementing provisions of Part I, Annex I, Article 5(1)(a); b) Insolvency proceedings are initiated against the participant; c) An application relating to the proceedings referred to in point (b) is submitted; d) The participant declares in writing its inability to pay all or part of its debts or to comply with its obligations related to intraday credit; e) The participant enters into an arrangement or composition with its creditors; f) The participant is insolvent or unable to pay its debts, or is considered as such by its CB; g) The credit balance of any of the TARGET accounts or all or a substantial part of the participant’s assets is subject to an order of freezing, attachment, seizure, or any other procedure intended to protect the public interest or the rights of the participant’s creditors; h) The participant’s participation in another component system of TARGET and/or in a PS has been suspended or cancelled; i) Any guarantee or important pre-contractual statement, express or implied, made by the participant under applicable law proves to be false or incorrect; j) There is a transfer of all or a substantial part of the participant’s assets;
“Guarantee funds”: funds made available by participants in a PS, to be used in the event that one or more participants fail, for any reason, to comply with their payment obligations in the PS;

“Insolvency proceedings”: the bankruptcy proceedings within the meaning of Article 2(j) of Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems;
“Instant payment order”: in the context of the European Payments Council’s SEPA Instant Credit Transfer (SCT Inst) scheme, a cash transfer order that can be executed at any time of the day, on any day of the year, with instant or near-instant settlement and notification to the payer, and which includes: i) instant payment orders from TIPS DCA to TIPS DCA; ii) instant payment orders from TIPS DCA to TIPS PS technical account; iii) instant payment orders from TIPS PS technical account to TIPS DCA; and iv) instant payment orders from TIPS PS technical account to TIPS PS technical account;
“Instructing party”: an entity that has been designated as such by a holder of a TIPS DCA or a holder of a TIPS PS technical account and which is allowed to submit instant payment orders or liquidity transfer orders and/or receive instant payment orders or liquidity transfer orders on behalf of that account holder or a reachable party thereof;
“Intraday credit”: credit granted for a period of less than one business day;
“Investment firm”: an investment firm within the meaning of point (r) of Article 2-A of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law No. 298/92 of 31 December, with successive amendments, provided that the investment firm in question: a) Has been authorized and is supervised by a recognized competent authority, designated as such under Directive 2014/65/EU; and b) Is authorized to carry out the activities referred to in Article 290 of the Securities Code, approved by Decree-Law No. 486/99 of 13 November, and republished by Law No. 35/2018, which transposes Directive 2014/65/EU;
“Level 3 NCBs”: the Deutsche Bundesbank, the Banque de France, the Banca d’Italia, and the Banco de España in their capacity as builder and operator CBs of TARGET for the benefit of the Eurosystem;
“Liquidity transfer order”: an instruction to transfer a specified amount of funds for liquidity management purposes;
“Marginal lending facility rate”: the rate of the marginal lending facility within the meaning of Article 2, point 57, of Guideline (EU) 2015/510 (ECB/2014/60);
“Marginal lending facility”: the “marginal lending facility” within the meaning of Article 2, point 56, of Guideline (EU) 2015/510 (ECB/2014/60);

“Mobile proxy look-up (MPL) service”: a service that allows holders of TIPS DCAs, PSs using TIPS PS technical accounts, and reachable parties, who receive from their clients a request to execute an instant payment order in favor of a beneficiary identified by a proxy (for example, a mobile phone number), to obtain from the central MPL repository the corresponding beneficiary IBAN and BIC to be used to credit the relevant account in the TARGET Instant Payment System (TIPS);
“Near instant payment”: a cash transfer order that complies with the Dutch standard applicable to the immediate processing of SEPA credit transfers of the additional optional SEPA credit transfer services (SEPA Credit Transfer Additional Optional Services (SCT AOS) NL Standard) of the European Payments Council;
“Network service provider (NSP)”: a company that has obtained a concession from the Eurosystem to provide connectivity services through the Eurosystem Single Portal for Market Infrastructures to the TARGET services;
“Non-settled cash transfer order”: a cash transfer order that is not settled on the same business day on which it was accepted;
“Participant”: a) an entity that is the holder of at least one CCA and may additionally be the holder of one or more DCAs in TARGET; or b) a PS;
“Payee”: except as used in Annex I, Part I, Article 29, a participant whose CCA or DCA is credited as a result of the settlement of a cash transfer order;
“Payer”: except as used in Annex I, Part I, Article 29, a participant whose CCA or DCA is debited as a result of the settlement of a cash transfer order;
“Payment order”: an instruction from a participant or a party acting on its behalf to make a certain monetary amount available to a recipient by means of an accounting entry in another account, which is not a PS transfer order, a liquidity transfer order, an instant payment order, or a positive recall answer;
“Positive recall answer”: in the context of the European Payments Council’s SEPA Instant Credit Transfer (SCT Inst) scheme, a payment order initiated by the recipient of a recall request, in response to that request, in favor of the sender of said recall request;
“Public sector body”: an entity belonging to the public sector within the meaning of Article 3 of Council Regulation (EC) No 3603/93;
“Reachable party”: an entity: a) holding a Business Identifier Code (BIC); b) designated as a reachable party by a holder of a TIPS DCA or by a peripheral system holding a TIPS PS technical account; c) correspondent, client, or branch of the holder of a TIPS DCA or participant in a peripheral system, or correspondent, client, or branch of the participant in a peripheral system holding a TIPS PS technical account; and d) that can be contacted through TIPS and is in a position to submit or receive cash transfer orders, either through the holder of the TIPS DCA or the peripheral system holding a TIPS PS technical account, or directly, if such is authorized by the holder of the TIPS DCA or by a peripheral system holder of a TIPS PS technical account;

“Real-time gross settlement ancillary system settlement procedure (RTGS AS settlement procedure)”: one of the special and predefined services for the submission and settlement of payment instructions in the ancillary system related to settlement in PS in LBTR DCA, subaccounts, and LBTR PS technical accounts;
“Real-time gross settlement ancillary system technical account (RTGS AS technical account)”: the account held by a PS or by the CB in its respective TARGET component system on behalf of the ancillary system and used in the context of an RTGS AS settlement procedure;
“Recall request”: a message from a holder of an LBTR DCA or a holder of a TIPS DCA requesting the refund of a payment order already settled or an instant payment order, respectively;
“Rule-based liquidity transfer order”: a liquidity transfer order triggered as a result of: a) the balance of a CCA or an LBTR DCA not meeting a predefined minimum or maximum limit; or b) insufficient available funds to cover orders waiting in queue in an LBTR DCA that are urgent payment orders, PS transfer orders, or high-priority payment orders;
“Settlement bank account group”: list of LBTR DCAs and/or subaccounts established in the context of settlement in an ancillary system using RTGS AS settlement procedures;
“Settlement bank”: holder of an LBTR DCA whose DCA or LBTR subaccount is used to settle PS transfer orders submitted by a PS using the RTGS AS settlement procedures;
“Suspension”: the temporary freezing of the rights and obligations of a participant for a period of time to be determined by the participant’s CB;
“TARGET account”: an account opened in a TARGET component system;
“TARGET component system”: any of the CB systems that make up TARGET;
“TARGET coordinator”: a person appointed by the ECB to ensure the daily operational management of TARGET, manage and coordinate activities in the event of an abnormal situation, and coordinate the dissemination of information to participants;

“TARGET Instant Payment Settlement (TIPS) ancillary system settlement procedure (TIPS AS settlement procedure)”: the predefined service for the submission and settlement of transfer orders and instant payment orders within a PS in TIPS DCA and TIPS PS technical accounts;
“TARGET Instant Payment Settlement (TIPS) ancillary system technical account (TIPS AS technical account)”: the account held by a PS or by the CB in its respective TARGET component system on behalf of the PS for use by the PS for the purposes of instant payment settlement in its own records;
“TARGET settlement manager”: the person designated by a Eurosystem CB to control the operation of its TARGET component system;
“TARGET2-Securities (T2S)”: the set of equipment, software applications, and other technical infrastructure components through which the Eurosystem provides basic, neutral, and borderless services to CSDs and Eurosystem CBs that allow the settlement, in central bank money, of securities transactions on a delivery versus payment basis;
“Technical malfunction of TARGET”: difficulties, defects, or failures of the technical infrastructure and/or computer systems used by the TARGET component system or any other occurrence that makes it impossible to execute and finalize cash transfer orders in accordance with the different parts of this Instruction in the relevant TARGET component system.