Instruction No. 2/2023 on the Opening and Operation of Euro Demand Deposit Accounts at the Bank of Portugal

Instruction No. 2/2023 BO No. 2/2023 Supplement • 2023/02/24 .................................................................................................................................................................................................. Topics Payment Systems :: Demand Deposit Accounts at the Bank of Portugal Mod. 99999940/T – 01/14 Index Text of the Instruction Text of the Instruction Subject: Rules on the opening and operation of euro demand deposit accounts with the Bank of Portugal

Considering that:

• Given the specific operating characteristics of TARGET, whose national component – TARGET-PT – is regulated by Instruction No. 16/2022 of 17 October and its access criteria, some entities may not meet the necessary conditions to be considered eligible to participate in the system.
• With the entry into force of Instruction No. 16/2022 of 17 October, from 20 March 2023, the Bank of Portugal will not be able to open, for the purpose of providing services covered by the scope of application of said Instruction, accounts other than TARGET accounts for participants eligible to participate in the system.
• According to Article 9(2) of Instruction No. 16/2022 of 17 October, the Bank of Portugal is permitted to implement local applications that allow Treasury Departments of central or regional governments and public sector entities to open euro demand deposit accounts for carrying out operations with this Bank. The opening of euro demand deposit accounts is also admitted for the intraday holding of funds for the exclusive purpose of carrying out cash deposits and withdrawals, the holding of pledged funds or funds pledged to a third party, or funds referred to in Article 3(1)(d) of Regulation (EU) 2021/378 of the European Central Bank (ECB/2021/1) and used by participants in systems operated by a National Central Bank to settle immediate payments in accordance with the SEPA instant transfer mechanism.
• Under Article 23, read in conjunction with Article 42-4, of the Statutes of the European System of Central Banks and of the European Central Bank, the European Central Bank and the national central banks of Member States whose currency is the euro may establish relations with central banks and financial institutions of third countries and, where appropriate, with international organizations, and carry out all types of banking operations with third countries and with international organizations. These services are provided in accordance with harmonized terms and conditions stipulated by ECB Guideline ECB/2021/09 of 17 March 2021 on the

Instruction No. 2/2023 BO No. 2/2023 Supplement • 2023/02/24 Topics Payment Systems :: Demand Deposit Accounts at the Bank of Portugal .................................................................................................................................................................................................. Mod. 99999940/T – 01/14 provision of euro reserve management services by the Eurosystem to central banks of countries not belonging to the euro area and to international organizations. The Bank of Portugal makes available to these entities, which it designates as “Central Bank Clients”, the possibility of maintaining a euro account with the Bank of Portugal for the settlement of central bank currency operations. The management of access to euro deposit accounts with the Bank of Portugal is carried out through the Market Infrastructure Link System (SLIM), which, for all purposes, will replace the Integrated Settlement Management Application (AGIL) from 20 March 2023. In this context, this Instruction fully replaces and revokes Bank of Portugal Instruction No. 2/2009 of 16 February regarding the rules on the opening and operation of demand deposit accounts at the Bank of Portugal. Thus, in accordance with the provisions of Article 14 of its Organic Law, approved by Law No. 5/98 of 31 January, in its current version, ECB Guideline ECB/2022/08 of 24 February 2022 on a new generation trans-European automated real-time gross settlement system (TARGET), and ECB Guideline ECB/2021/09 of 17 March 2021 on the provision of euro reserve management services by the Eurosystem to central banks and countries not belonging to the euro area and to international organizations, the Bank of Portugal determines the following:

I – SCOPE OF APPLICATION AND GENERAL PROVISIONS

1. Object 1.1. This Instruction regulates the opening and operation of euro demand deposit accounts with the Bank of Portugal for the settlement of central bank currency operations. 1.2. Entities that open, in accordance with this Instruction, a euro demand deposit account with the Bank of Portugal are designated as Central Bank Clients. 1.3. The Central Bank Client, when opening a euro demand deposit account with the Bank of Portugal, is obliged to comply with this Instruction and the Central Bank Client Manual, which specifies the technical conditions relating to the opening and operation of euro demand deposit accounts. 1.4. The Bank of Portugal may, if it deems appropriate, authorize the opening of special accounts, subject to specific protocols regarding their purposes and mode of operation, the terms of which shall prevail over the provisions of this Instruction.

2. Eligibility and conditions for account opening 2.1. The following are eligible for opening a euro demand deposit account at the Bank of Portugal: a) central banks of countries not belonging to the euro area, public authorities or central administration bodies of countries not belonging to the euro area, and international organizations, in accordance with the provisions of this Instruction and ECB Guideline ECB/2021/09 of 17 March 2021; b) treasury departments of central or regional governments of Member States of the European Union, public sector entities of Member States of the European Union, and other entities mentioned in paragraph 2 of Article 9 of ECB Guideline ECB/2022/08 of 24 February 2022; c) entities not eligible for participation in TARGET-PT; d) entities especially authorized to maintain euro demand deposit accounts with the Bank of Portugal.

II – OPENING OF EURO DEMAND DEPOSIT ACCOUNT WITH THE BANK OF PORTUGAL 3. Account opening process 3.1. To request the opening of a euro demand deposit account with the Bank of Portugal, eligible entities must submit to the Bank of Portugal an account opening request, duly justified and signed by someone with the authority to perform the act, in accordance with paragraphs 17.2 and 17.3 of this Instruction, which will only be considered valid after confirmation by the Bank of Portugal of the receipt of the request. 3.2. The communication referred to in the previous paragraph must accurately identify the requesting entity and clearly indicate the purpose for which the deposit account is intended. 3.3. The approval of the account opening request is conditional upon the Bank of Portugal’s assessment of its justification and the verification by the entity of compliance with eligibility criteria, as well as the operational requirements defined in this Instruction.

4. Conditions for account opening 4.1. After approval, which will be communicated by the Bank of Portugal to the requesting entity, the account opening will depend on: 4.1.1. Identification of persons with authority to operate the account and the conditions of such operation; and 4.1.2. Submission of the documentation requested by the Bank of Portugal, specifically documents identifying persons with authority to operate the account, as provided for in this Instruction.

5. Operational requirements for account opening and maintenance 5.1. Operational requirements for account opening are that the requesting entity: 5.1.1. Possesses a Business Identifier Code 11 (BIC 11) that identifies each of the accounts it holds; 5.1.2. Subscribes to access to the BPnet portal for at least two users, in accordance with the provisions of Bank of Portugal Instruction No. 21/2020 of 15 July; and 5.1.3. Subscribes to services related to the Market Infrastructure Link System (SLIM) for at least two users, in accordance with this Instruction. 5.2. After opening the euro demand deposit account with the Bank of Portugal, and as a condition for maintaining the account, Central Bank Clients undertake, without prejudice to the provisions of Bank of Portugal Instruction No. 21/2020 of 15 July, which regulates the BPnet system, to keep updated: 5.2.1. Information relating to the identification of the entity; 5.2.2. Information relating to persons authorized to operate the account under this Instruction; 5.2.3. Information relating to their respective users of the BPnet and SLIM portals; 5.2.4. The confidentiality of the password for accessing the BPnet portal; 5.2.5. Other information considered relevant by the Bank of Portugal and which is requested from them accordingly. 5.3. The Bank of Portugal may require Central Bank Clients to participate in regular or ad hoc business continuity and contingency procedure tests, training, or other preventive measures that the Bank of Portugal considers necessary.

6. Account remuneration 6.1. The remuneration of euro deposit accounts opened with the Bank of Portugal is defined in accordance with the guidelines and decisions of the European Central Bank. 6.2. The remuneration of euro deposit accounts opened with the Bank of Portugal will be communicated bilaterally to Central Bank Clients in writing, through the procedure described in paragraphs 17.2 and 17.3 of this Instruction.

7. Account closure 7.1. The Central Bank Client may request the closure of its account with the Bank of Portugal in writing, in accordance with paragraphs 17.2 and 17.3 of this Instruction, at any time, once all previously assumed obligations have been fulfilled, by giving notice at least 14 business days in advance, unless a shorter period has been agreed with the Bank of Portugal. 7.2. The Bank of Portugal reserves the right to close demand deposit accounts without prior notice, notably if the Central Bank Client fails to comply with its obligations under this Instruction.

III – SERVICE PROVIDED TO CENTRAL BANK CLIENTS 8. Service characterization 8.1. The Bank of Portugal enables Central Bank Clients to manage their euro deposit accounts through the Market Infrastructure Link System (SLIM). 8.2. Access to SLIM is carried out through the BPnet portal, where users duly authorized by Central Bank Clients can: 8.2.1. Insert operations, through a screen made available for this purpose, subject to the application of the four-eyes principle and dependent on technical and business validations performed automatically by SLIM; 8.2.2. Consult balances and operations debited and credited to their accounts; 8.2.3. Consult the daily account statement in XML ISO 20022 format (camt.053 - BankToCustomerStatement), with the possibility of downloading it.

9. Calendar and operating hours 9.1. SLIM will be available for the management of euro deposit accounts on the same operating calendar as TARGET-PT, which is established in Instruction No. 16/2022 of 17 October and made available on the Bank of Portugal website (www.bportugal.pt/). 9.2. Operations may be inserted on TARGET business days between 08:00 and 17:00, Portugal mainland time, on TARGET business days (except in exceptional cases, in which the Bank of Portugal will communicate the applicable hours). 9.3. Central Bank Clients should bear in mind that the connection between SLIM and the systems with which it interacts may affect the execution of the operation.

10. Conditions for account operation 10.1. Credit operations to demand deposit accounts must: 10.1.1. Be of the type pacs.008 - CustomerCreditTransfer or pacs.009 - FinancialInstitutionCreditTransfer; 10.1.2. Respect the standards available in the Technical Manual for Central Bank Clients. 10.2. Debit operations to demand deposit accounts must: 10.2.1. Be carried out by users of Central Bank Clients for whom the SLIM service has been subscribed on the BPnet portal and to whom the necessary permission has been granted; 10.2.2. Be of the type pacs.008 - CustomerCreditTransfer or pacs.009 - FinancialInstitutionCreditTransfer; 10.2.3. Respect the standards available in the Technical Manual for Central Bank Clients. 10.3. Central Bank Clients may insert operations with a value date of the current day or a future value date of up to 10 days. 10.4. Overdraft situations in the account are not permitted.

11. Processing of operations in contingency 11.1. The Bank of Portugal may process operations on behalf and at the request of the Central Bank Client in the event of impossibility of access to SLIM, the BPnet portal, and also in unexpected contingency situations, provided they are duly justified. 11.2. In contingency situations, duly justified, instructions for processing debit operations may be submitted to the Bank of Portugal between 09:30 and 16:00, Portugal mainland time, except in exceptional cases, in which the Bank of Portugal will communicate the applicable hours. These operations will be processed manually, on a first-come-first-served basis and on a best-effort basis. 11.3. The alternative means for issuing orders are, in order of priority: 11.3.1. Sending, to the email target@bportugal.pt, the template made available by the Bank of Portugal for this purpose, duly filled out and authenticated by those responsible for operating the account, with telephone validation by the account holders; 11.3.2. Hand delivery of the template made available by the Bank of Portugal for this purpose, duly filled out and signed by someone with the authority to perform the act.

12. Tariff 12.1. The tariff applied by the Bank of Portugal is composed of: a fixed monthly fee per account of 43 euros; a fee per message sent/received of 0.007 euros, adjusted accordingly if the tariff applied by SWIFT to the Bank of Portugal changes; a surcharge of 100 euros, for each account under which services not specified in this Instruction are provided. 12.2. The tariff is applied monthly, with payment of the monthly invoice being made by debiting the Central Bank Client’s account. 12.3. Exceptionally, the Bank of Portugal may agree on an alternative charging mechanism, provided this need is duly justified. 12.4. The defined tariff may be unilaterally revised by the Bank of Portugal whenever justified and will be communicated to Central Bank Clients 30 days in advance of the date on which it becomes applicable. 12.5. In addition to the tariff applicable to the service, each participant must bear the costs of subscribing to the BPnet portal, in accordance with the tariff established in Instruction No. 21/2020 of 15 July, in its current version.

IV – OTHER PROVISIONS 13. Liability 13.1. The Bank of Portugal shall not be liable for any damages or losses resulting from the non-execution or defective execution of credit or debit operations, instructions, or other notifications from the Central Bank Client, in cases where: 13.1.1. The damages or losses arise from transmission errors or technical deficiencies, or result from interference or illegitimate interceptions that occur during the transmission of information in contingency situations; 13.1.2. The Central Bank Client does not respect the operational requirements defined in this Instruction applicable to the said deposit account or the terms and conditions of authorization and operation of the deposit account; 13.1.3. Force majeure situations occur, including, notably, measures taken by public authorities, violent actions, breakdowns in service supplier companies to the Bank of Portugal, strikes, among others; 13.1.4. The transmission means used by the holders, namely letter, fax, electronic data transmission, or other permitted means, are used improperly or fraudulently; 13.1.5. Breakdowns or disruptions in the operation of TARGET services occur. 13.2. Liability for the non-execution or defective execution of credit or debit operations, instructions, or other notifications from the Central Bank Client, attributable to the Bank of Portugal on grounds of negligence, is limited to the amount of “lost interest” suffered by the respective Central Bank Client. 13.3. Liability arising from breakdowns or disruptions in the operation of the BPnet portal will be assessed in accordance with the provisions of Instruction No. 21/2020 of 15 July. 13.4. Without prejudice to the provisions of Instruction No. 21/2020 of 15 July, Central Bank Clients are responsible for keeping information regarding their interlocutors on the BPnet portal duly updated and for maintaining the confidentiality of the password for accessing the BPnet portal and its access to SLIM, with any improper use thereof by third parties being their exclusive responsibility.

14. Data protection 14.1. It is presumed that Central Bank Clients are aware of, comply with, and are in a position to demonstrate to the competent authorities compliance with all obligations incumbent upon them under data protection legislation. 14.2. In the exercise of its attributions and competences, notably as the monetary, statistical, macroprudential, supervisory, resolution, and payment systems superintendence authority, the Bank of Portugal processes the personal data of Central Bank Clients in accordance with the principles and rules arising from European and national legislation on personal data protection. 14.3. Central Bank Clients authorize the Bank of Portugal to obtain information about them from any financial or supervisory authority or commercial body, national or foreign, if such information is necessary to assess their eligibility. 14.4. Central Bank Clients must implement adequate security controls to protect against unauthorized access to the system by third parties, with the Bank of Portugal empowered to require additional security measures whenever it deems necessary.

15. Prevention of money laundering and terrorist financing It is presumed that Central Bank Clients know and comply with all obligations imposed upon them by legislation on the prevention of money laundering and terrorist financing, nuclear activities susceptible to proliferation, and the development of nuclear weapon vectors, especially regarding the adoption of adequate measures concerning any payments debited or credited to their respective accounts.

16. Jurisdiction 16.1. The opening, operation, and management of demand deposit accounts are subject to Portuguese law in general and, in particular, to the provisions of this Instruction. 16.2. For the benefit of the Bank of Portugal, for any dispute, notably regarding the validity, interpretation, and application of this Instruction, as well as the resolution of any conflicts, a voluntary Arbitral Tribunal is competent, to be constituted in accordance with the applicable law. 16.3. The Tribunal will operate in Lisbon and its object will be defined in the constitutive letters of the Tribunal, unless a restriction is decided by the arbitrators at the request of any of the parties, and the decision will be rendered according to equity and without appeal. 16.4. Nothing limits the right of the Bank of Portugal, at its exclusive discretion, to initiate any actions in any national or foreign jurisdiction.

Instruction No. 2/2023 Official Gazette No. 2/2023 Supplement • 2023/02/24

Topics Payment Systems :: Current Deposit Accounts at the Bank of Portugal

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Mod. 99999940/T – 01/14

17. Communications under this Instruction

17.1. Any clarifications regarding the content of this Instruction may be obtained from the Payment Systems Department of the Bank of Portugal, preferably via email: target@bportugal.pt.

17.2. Correspondence regarding the application of this Instruction addressed to the Bank of Portugal must be sent to: Directorate of the Payment Systems Department of the Bank of Portugal (Payments Infrastructure Area, Avenida Almirante Reis, 71, 7th floor, 1150 - 012 Lisbon).

17.3. All communications must be drafted in Portuguese or English.

18. Repealing Provision

18.1. This Instruction revokes and replaces Bank of Portugal Instruction No. 2/2009 of February 16, with effect from March 20, 2023.

18.2. Central Bank Clients who, as of March 17, 2023, hold a current deposit account with the Bank of Portugal, managed through the Integrated Liquidity Management Application (AGIL), shall become holders of a current deposit account with the Bank of Portugal managed through SLIM, to which their respective balance will be transferred, unless they communicate to the Bank of Portugal their intention to close the account or fail to comply with the provisions of this Instruction.

18.3. Central Bank Clients shall not incur losses nor obtain profits as a result of the balance transfer provided for in the preceding paragraph.

18.4. All current deposit accounts with the Bank of Portugal opened under Bank of Portugal Instruction No. 2/2009 of February 16 shall be closed on March 20, 2023.

19. Entry into Force

This Instruction enters into force on March 20, 2023, and may be amended at any time, after consulting entities deemed relevant by the Bank of Portugal, whenever this proves necessary.