Instruction No. 3/2023

Instruction No. 3/2023 BO No. 2/2023 Supplement • 2023/02/23 .................................................................................................................................................................................................. Topics Payment Systems :: Large Value Payment System Mod. 99999940/T – 01/14

Index Text of the Instruction Text of the Instruction Subject: Main Cash Account (MCA) co-management service provided by the Banco de Portugal

On 6 December 2017, the Governing Council of the ECB approved the TARGET2 and TARGET2-Securities consolidation project. ECB Guideline ECB/2022/81, relating to a new generation trans-European automated transfer system for real-time gross settlement (TARGET), materialized the consolidation project, allowing euro payments to be settled in central bank money by TARGET, and was implemented in Portugal by Instruction No. 16/2022, of 17 October.

According to the stipulated in point c) of paragraph 1 of Article 2, of Part II, of Annex I of Instruction No. 16/2022, of 17 October, Main Cash Accounts (MCAs) for the settlement of operations with central banks may be co-managed by the Banco de Portugal (MCAs are considered to be accounts opened in the TARGET centralized liquidity management service).

Under paragraph 9 of Article 9 of the same Instruction, the Banco de Portugal shall apply the principle of full cost recovery when setting its rates for the co-management services it deems fit to provide and shall pass on, at a minimum, the total costs arising from such services.

In this context, the Banco de Portugal decided to make the MCA co-management service available to TARGET-PT participants who are holders of an MCA.

Thus, the Banco de Portugal, in the exercise of the competence attributed to it, under Article 14 of its Organic Law, approved by Law No. 5/98 of 31 January, in its current version, and by point c) of paragraph 1 of Article 2, of Part II, of Annex I of Instruction No. 16/2022, of 17 October, determines the following:

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

Instruction No. 3/2023 BO No. 2/2023 Supplement • 2023/02/23 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999940/T – 01/14

I – SCOPE OF APPLICATION AND GENERAL PROVISIONS

1. Object This Instruction regulates the Main Cash Account (MCA) co-management service (hereinafter, the service) provided by the Banco de Portugal, in accordance with the provisions of paragraph 9 of Article 9, Section I, and point c) of paragraph 1 of Article 2, of Part II, of Annex I of Instruction No. 16/2022, of 17 October, relating to the operation of the national component of the TARGET system – TARGET-PT.

2. Eligibility All institutions that participate in TARGET-PT and hold at least one MCA in euros, and do not intend to establish their own connection to the centralized liquidity management service through one of the network service providers, are eligible to join the service.

II – SERVICE PROVIDED BY THE BANCO DE PORTUGAL

3. Service characterization The service is provided through the Market Infrastructure Link System (SLIM), an application of the Banco de Portugal that allows connection to TARGET services and is available on the BPnet portal.

4. Form of adherence 4.1. Candidates wishing to join the service must submit a request to the Banco de Portugal, signed by whoever has the powers to perform the act, in accordance with paragraphs 16.2 and 16.3 of this Instruction, which will only be considered valid after confirmation by the Banco de Portugal of receipt of the request. 4.2. The approval of the request is conditional upon compliance with the eligibility criteria and compliance with the operational requirements established in this Instruction. 4.3. The approval of the request presupposes the correct completion of the TARGET-PT Participation Form, where candidates wishing to join must indicate their intention to join the Banco de Portugal's MCA co-management service. 4.4. By requesting the provision of the service by the Banco de Portugal, candidates wishing to join are obliged to comply with this Instruction and the Technical Manual, in which the technical conditions relating to the provision of the service and the relationships between them and the Banco de Portugal are specified.

Instruction No. 3/2023 BO No. 2/2023 Supplement • 2023/02/23 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999940/T – 01/14

5. Operational requirements for access to the service 5.1. The operational requirements for access to the service are that the candidate wishing to join: 5.1.1. Possesses a Business Identifier Code (BIC) that identifies each of the MCAs of which it is the holder; 5.1.2. Contracts access to the BPnet portal for at least two users, in accordance with the provisions of Banco de Portugal Instruction No. 21/2020, of 15 July; 5.1.3. Subscribes to the SLIM services, for at least two users, in accordance with this Instruction; and 5.1.4. Successfully completes the adherence tests proposed by the Banco de Portugal. 5.2. After joining the service, and as a condition for its maintenance, participants are obliged to keep up to date, without prejudice to what is stated in Banco de Portugal Instruction No. 21/2020, of 15 July, which regulates the BPnet system: 5.2.1. Information relating to the identification of the participant; 5.2.2. Information relating to their respective users of the BPnet portal and SLIM; 5.2.3. The confidentiality of the password to access the BPnet portal; 5.2.4. Other information considered relevant by the Banco de Portugal and which, to that extent, is requested of them. 5.3. The Banco de Portugal may require participants in the service to participate in regular or sporadic business continuity and contingency procedure tests, training, or other preventive measures that the Banco de Portugal considers necessary.

6. Functionalities inherent to the service 6.1. Participants will have access in User-to-Application (U2A) mode, via the BPnet portal, in SLIM, to the following functionalities: 6.1.1. Insertion of liquidity transfers, through a screen made available for this purpose, subject to the application of the four-eyes principle, dependent on technical and business validations performed automatically by SLIM; 6.1.2. Consultation of debit and credit operations processed in their account(s); 6.1.3. Consultation of the balance(s) of their account(s); 6.1.4. Consultation of the daily account statement, in XML ISO 20022 format (camt.053 - BankToCustomerStatement), with the possibility of downloading it.

Instruction No. 3/2023 BO No. 2/2023 Supplement • 2023/02/23 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999940/T – 01/14

7. Functions of the Banco de Portugal 7.1. The Banco de Portugal, as co-manager of the participant's MCA in the service, has its own connection to the centralized liquidity management service and may, on behalf of the participant, carry out the following activities: 7.1.1. Obtain information relating to the account(s); 7.1.2. Receive credit and debit movements in the account(s) and send debit movements in the account(s). 7.2. The Banco de Portugal will have, with regard to the MCA co-managed by it, the same rights and privileges that the participant has with regard to its own MCA in the centralized liquidity management service.

8. Schedule and processing time of operations 8.1. The service calendar is the same as the TARGET services calendar, so all TARGET business days are considered working days: Monday to Friday, except for closing days established in Instruction No. 16/2022, of 17 October, and published on the Banco de Portugal website (www.bportugal.pt/). 8.2. The insertion of liquidity transfers may be carried out between 8:00 and 17:00, Portugal mainland time, on TARGET business days (except in exceptional cases, in which the Banco de Portugal will communicate the applicable schedule). 8.3. Participants in the service should bear in mind that the connection between SLIM and the systems with which it interacts may affect the execution of liquidity transfers.

9. Procedures between the Banco de Portugal and the participant in a contingency situation 9.1. The Banco de Portugal may process operations on behalf of and at the request of the participant, in the event of impossibility of access to SLIM, the BPnet portal, and also in unexpected contingency situations, provided they are duly justified. 9.2. The processing of payments in a contingency situation will be ensured between 9:30 and 16:00, Portugal mainland time, except in exceptional cases, in which the Banco de Portugal will communicate the applicable schedule. These operations will be processed manually, on a first-come, first-served basis and on a best-effort basis. 9.3. Communications between the Banco de Portugal and the participant in contingency situations will be carried out through the following alternative means, in order of priority: 9.3.1. Sending, to the email target@bportugal.pt, the template made available by the Banco de Portugal for this purpose, duly completed and digitally authenticated by those responsible for the movement of the account, with telephone validation by those responsible for account management;

Instruction No. 3/2023 BO No. 2/2023 Supplement • 2023/02/23 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999940/T – 01/14

9.3.2. Hand delivery of the template made available by the Banco de Portugal for this purpose, duly completed and signed by whoever has the powers to perform the act.

10. Duties of participants in the service 10.1. Participants are obliged to: a) Comply with what is established in this Instruction and abstain from actions that may put at risk the integrity and security of the systems underlying the service in question; b) Respond, in accordance with the law, for damages caused to the Banco de Portugal, by acts or omissions that are not consistent with the rules emanating from this Instruction. 10.2. Without prejudice to the provisions of Instruction No. 21/2020, of 15 July, participants are responsible for keeping information relating to their respective interlocutors on the BPnet portal duly updated and for maintaining the confidentiality of the password to access the BPnet portal and safeguarding access to SLIM, with any improper use thereof by third parties being their exclusive responsibility. 10.3. Non-compliance with the duties established in this Instruction may jeopardize the maintenance of the service by the Banco de Portugal and lead to the Banco de Portugal, after assessing the seriousness of the facts attributable to the holders, unilaterally cancelling the service.

11. Cessation of the service 11.1. The participant may request the cessation of the service at any time, by written request sent to the Banco de Portugal in accordance with paragraphs 16.2 and 16.3 of this Instruction, made with a notice of 14 TARGET business days prior to the expected date of cessation of the service provision by the Banco de Portugal, except in exceptional cases where a shorter notice is authorized. 11.2. The communication referred to in the above point will only be considered valid after confirmation by the Banco de Portugal of receipt of the request. 11.3. The Banco de Portugal reserves the right to cease the provision of the service, unilaterally, whenever it considers necessary, notably in cases of non-compliance with the duties established in point 10 of this Instruction.

III – OTHER PROVISIONS

12. Liability 12.1. The Banco de Portugal will not be liable for any damages or losses resulting from the non-execution or defective execution of operations, in cases where:

Instruction No. 3/2023 BO No. 2/2023 Supplement • 2023/02/23 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999940/T – 01/14

a) The participant does not respect the technical and operational requirements defined in this Instruction; b) 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; c) The means of information transmission are used improperly or fraudulently by the participant or by third parties; d) Force majeure situations occur, including, notably, measures taken by public authorities, violent actions, breakdowns in companies providing services to the Banco de Portugal, strikes, among others; e) Malfunctions or disruptions in the operation of TARGET services occur. 12.2. Liability for the non-execution or defective execution of credit or debit operations, instructions, or other notifications of the participant attributable to the Banco de Portugal by reason of negligence, is limited to the amount of "lost interest". 12.3. Liability arising from malfunctions 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. Data protection and prevention of money laundering and terrorist financing Participants, in their capacity as participants in TARGET-PT, are obliged to comply with the provisions of Instruction No. 16/2022, of 17 October, relating to data protection and prevention of money laundering and terrorist financing, notably the provisions of Article 29 of Part 1 of its Annex I.

14. Jurisdiction 14.1. The provision of the co-management service by the Banco de Portugal and the execution of operations by the Banco de Portugal as co-manager of participants' MCAs are subject to Portuguese law in general and, in particular, to the provisions of the Instructions of the Banco de Portugal. 14.2. 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, constituted in accordance with the applicable law, is competent. 14.3. The Tribunal will operate in Lisbon and its object will be defined in the arbitration agreement, unless a restriction is imposed which the arbitrators shall decide at the request of any of the parties, and the decision will be rendered according to equity and without appeal. 14.4. Nothing limits the right of the Banco de Portugal, at its exclusive discretion, to bring any actions in any national or foreign jurisdiction.

Instruction No. 3/2023 BO No. 2/2023 Supplement • 2023/02/23 Topics Payment Systems :: Large Value Payment System .................................................................................................................................................................................................. Mod. 99999940/T – 01/14

IV – PRICING

15. Pricing 15.1. The pricing to be applied by the Banco de Portugal for the provision of the service complies with the provisions of paragraph 9 of Article 9, as well as Appendix VI of Annex I of Instruction No. 16/2022, of 17 October, and consists of: a) A fixed monthly rate per account, of 25 euros; and b) A rate per message sent/received, of 0.007 euros. 15.2. The defined pricing may be unilaterally revised by the Banco de Portugal whenever justified and will be communicated to participants in the service with a notice of 30 days prior to the date on which it becomes applicable. 15.3. The pricing is applied monthly, with the payment of the monthly invoice being made by debit to the participant's MCA. Exceptionally, the Banco de Portugal may agree on an alternative charging mechanism, if there are reasons justifying it. 15.4. In addition to the pricing to be applied to the service, each participant must bear the costs of joining the BPnet portal, in accordance with the pricing established in Instruction No. 21/2020, of 15 July, in its current version.

V – FINAL PROVISIONS

16. Communications under this Instruction 16.1. Any clarifications regarding the content of this Instruction may be obtained from the Payment Systems Department of the Banco de Portugal, preferably via email: target@bportugal.pt. 16.2. Correspondence that, within the scope of the application of this Instruction, is addressed to the Banco de Portugal must be sent to: Direction of the Payment Systems Department of the Banco de Portugal (Payments Infrastructure Area, Avenida Almirante Reis, 71, 7th floor, 1150 - 012 Lisbon). 16.3. All communications must be drafted in Portuguese or English. 16.4. Participants are bound by all forms and documents of the Banco de Portugal completed and signed by them, including, without exclusive character, the TARGET-PT participation forms and the service configuration forms.

17. Final provisions This Instruction enters into force on 20 March 2023, and may be amended at any time, after consulting the entities considered relevant by the Banco de Portugal, whenever this proves necessary.