Notice No. 06/2020, dated March 10: Credit Concessions to Holders of Qualified Participations

PUBLISHED IN THE OFFICIAL GAZETTE, FIRST SERIES, NO. 27, OF MARCH 10 NOTICE NO. 06/2020 SUBJECT: FINANCIAL SYSTEM

• Credit Concessions to Holders of Qualified Participations

Whereas it is necessary to define limits regarding the granting of credit by Banking Financial Institutions to holders of qualified participations, within the framework of preventing and managing conflicts of interest risks; Under the combined provisions of paragraph (f) of paragraph 1 of Article 21 and paragraph (d) of paragraph 1 of Article 51 of Law No. 16/10, dated July 15 – National Bank of Angola Law, as well as the provisions contained in paragraph 7 of Article 83 and Article 90 of Law No. 12/15, dated June 17 – Framework Law on Financial Institutions; In the exercise of the competence conferred upon me by paragraph (f) of paragraph 1 of Article 51 of Law No. 16/10, dated July 15 – National Bank of Angola Law;

I HEREBY DETERMINE:

Article 1.
(Object)
This Notice establishes the terms and conditions for granting credit by Banking Financial Institutions, in any form or modality, including the provision of guarantees, to persons holding qualified participations therein, as well as to companies that these same persons directly or indirectly control or with which they are in a group relationship.

Article 2.
(Scope)

1. This Notice applies to Banking Financial Institutions under the supervision of the National Bank of Angola, hereinafter abbreviated as Institutions.
2. The provisions of this Notice do not apply when the related party, beneficiary of the credit, is:
   a) The State; b) A Financial Institution, or an investment company holding equity interests, included in the consolidated supervision perimeter of the institution in question; or c) Pension fund management companies, insurance companies, brokers and other insurance intermediaries that control or are controlled by any entity included in the consolidated supervision perimeter of the institution in question.

Article 3.
(Definitions)
For the purposes of this Notice, the following definitions apply:
a) Credit – an act by which a Banking or Non-Banking Financial Institution, acting for consideration, places or promises to place funds at the disposal of an individual or legal entity, against the promise that it will repay on the due date, or incurs, in the interest of the same, an obligation by signature, such as a guarantee. b) Related Parties – holders of qualified participations, entities that are directly or indirectly in a relationship of control or group relationship, members of the administrative and supervisory bodies of Financial Institutions and their spouses, descendants or ascendants up to the second degree in the direct line, considered ultimate beneficiaries of the transactions or assets. c) Qualified Participation – holding in a company, directly or indirectly, a percentage not less than 10% of the share capital or voting rights of the participated company, or that, for any reason, enables exercising significant influence over the management of the participated institution. d) Group Companies – affiliated companies among themselves under the terms in which the Commercial Companies Law characterizes this type of relationship, regardless of whether their registered offices are located in Angola or abroad.

Article 4.
(Identification of Holders of Qualified Participations)

1. Institutions must obtain from their shareholders, holders of qualified participations, a list of companies that these directly or indirectly control or with which they are in a group relationship.
2. Institutions must establish procedures to ensure that they are informed about all changes in the information provided by shareholders, as per the preceding paragraph, and that the information they hold regarding each shareholder holding a qualified participation is updated at all times.

Article 5.
(Credit to Holders of Qualified Participations)

1. The total amount of credit to be granted, in any form or modality, including the provision of guarantees, directly or indirectly, to holders of qualified participations must not exceed 20% (twenty percent) of the institution's basic own funds, calculated in accordance with Notice No. 02/2016, dated June 15, minus the value of participations held in institutions authorized to operate by the National Bank of Angola, as well as branches and subsidiaries of Financial Institutions abroad, subject to the following maximum individual limits:
   a) 5% (five percent) for credit contracted by an individual; and, b) 10% (ten percent) for credit contracted by a legal entity, including entities in a group relationship.
2. Credits covered by the provisions of this Notice must be granted based on a risk assessment and under conditions identical to those applied to unrelated parties.
3. The operations referred to in the preceding paragraphs of this article depend on approval by a qualified majority of at least two-thirds of the members of the administrative body and a favorable opinion from the supervisory body of the Institution.

Article 6.
(Records and Reporting)

1. Institutions must maintain records identifying all holders of qualified participations for a minimum period of 10 (ten) years, after the date each party ceases to be considered related.
2. Institutions must report to the National Bank of Angola, monthly, the total amount of credits to holders of qualified participations, as defined in specific regulations.

Article 7.
(Transitional Provision)

1. Credits granted or approved by the date of publication of this Notice, in amounts exceeding the defined limits, may remain in force under the approved or contracted terms and amounts, provided that the value or term cannot be increased, nor can the credit be renewed, after said publication date.
2. The due date of short-term credits must in no case exceed 12 (twelve) months from the publication date of this Notice.

Article 8.
(Sanctions)
Non-compliance with the rules established in this Notice constitutes an administrative offense punishable under Law No. 12/15, dated June 17, Framework Law on Financial Institutions.

Article 9.
(Doubts and Omissions)
Doubts and omissions resulting from the interpretation and application of this Notice are resolved by the National Bank of Angola.

Article 10.
(Entry into Force)
This Notice enters into force on the date of its publication.

PUBLISHED.
Luanda, March 3, 2020.
THE GOVERNOR
JOSÉ DE LIMA MASSANO