Notice No. 03/2013 (March 22) on Prudential Consolidated Supervision

BANCO NACIONAL DE ANGOLA
Governor's Office

NOTICE NO. 03/2013
of March 22

SUBJECT: PRUDENTIAL SUPERVISION ON A CONSOLIDATED BASIS

Whereas it is necessary to define the terms and conditions for exercising consolidated basis supervision, in accordance with the powers granted to Banco Nacional de Angola by Article 72(2) of Law No. 13/05 of September 30 – Financial Institutions Law;

Considering the importance of consolidated basis prudential supervision for the accurate assessment of own funds and risks at the financial group level;

In accordance with the provisions of the Banco Nacional de Angola Law and the Financial Institutions Law;

IT IS HEREBY DETERMINED:

Article 1.
(Scope)

1. The provisions of this Notice apply to financial institutions authorized by Banco Nacional de Angola, under the terms and conditions set forth in the Financial Institutions Law, hereinafter referred to as "institutions".

2. Financial holding companies subject to the supervision of Banco Nacional de Angola, as provided in the Financial Institutions Law, are also covered by this Notice.

Article 2.
(Subject Matter)

This Notice establishes the scope of consolidated basis supervision for prudential purposes, in accordance with the powers assigned to Banco Nacional de Angola by the Financial Institutions Law.

Article 3.
(Definitions)

Without prejudice to the definitions established in the Financial Institutions Law, for the purposes of this Notice, the following shall apply:

1. "Parent company": a legal entity that exercises control over another legal entity, designated as a subsidiary, when one of the following situations occurs:
   a) financial institutions authorized by Banco Nacional de Angola; b) financial holding companies subject to the supervision of Banco Nacional de Angola under the Financial Institutions Law.

2. "Financial group": a set of resident and non-resident entities that are banking or non-banking financial institutions, excluding those linked to insurance and social security activities, in which a parent company supervised by Banco Nacional de Angola exercises control over the other constituent entities; and

3. "Control relationship or group": "control relationship" as defined in the Financial Institutions Law;

4. "Special purpose vehicle": an entity with activities restricted to a single purpose, typically located in a country or territory characterized by lower requirements regarding:
   a) obtaining authorization to exercise financial activities; b) the special banking secrecy regime; and c) obtaining tax advantages.

Article 4.
(Applicability)

Without prejudice to individual basis supervision, parent companies of financial groups are subject to consolidated basis prudential supervision in accordance with this Notice.

Article 5.
(Consolidated Basis Supervision)

Within the scope of consolidated basis supervision, Banco Nacional de Angola shall define, through specific regulations, the requirements and information reporting reports regarding:
a) elements that may constitute consolidated own funds, considering the Financial Institutions Law; b) prudential ratios and limits provided in the Financial Institutions Law, which must be observed on a consolidated basis; c) rules regarding the consistency of policies and processes within corporate governance and internal control systems.

Article 6.
(Supervision Perimeter)

1. The consolidated basis supervision perimeter for prudential purposes encompasses entities belonging to the same financial group.

2. Banco Nacional de Angola may extend the supervision perimeter in the following situations:
   a) an entity belonging to the financial group exercises significant influence over another entity despite not holding a participation therein; b) two or more institutions have similar shareholder structures or administrative and supervisory bodies composed predominantly of the same persons; and c) the inclusion of an entity is appropriate for supervisory objectives, including special purpose vehicles.

3. Banco Nacional de Angola may exclude a subsidiary from the supervision perimeter in the following situations:
   a) if it is located in a territory that places significant barriers to information transmission or capital export; or b) if it is of reduced interest for supervisory purposes.

Article 7.
(Control with Accounting Information)

Without prejudice to Notice No. 14/07 of September 12 regarding consolidation for accounting purposes, parent companies must prepare financial statements corresponding to the set of entities belonging to the financial group, as provided in the preceding article, when deemed necessary by Banco Nacional de Angola for controlling prudential ratios and limits on a consolidated basis.

Article 8.
(Penalties)

Violation of the mandatory provisions of this Notice constitutes an offense, punishable by a fine in accordance with the Financial Institutions Law.

Article 9.
(Regulation)

Banco Nacional de Angola may establish additional requirements or issue technical instructions for the implementation of this Notice.

Article 10.
(Repeal)

All legislation contrary to this Notice is hereby repealed.

Article 11.
(Interpretation and Omissions)

Doubts and omissions arising in the interpretation and application of this Notice shall be resolved by the Prudential Supervision Department for Financial Institutions of Banco Nacional de Angola.

Article 12.
(Entry into Force)

This Notice enters into force on the date of its publication.

PUBLISH

Luanda, March 22, 2013.

THE GOVERNOR
JOSÉ DE LIMA MASSANO