Notice No. 07/2018 of 29 November on Requirements and Procedures for Authorizing Non-Bank Financial Institutions

Published in the Official Gazette, First Series, No. 180 of 29 November 2018

NOTICE NO. 07/2018

SUBJECT: FINANCIAL SYSTEM

• Requirements and Procedures for the Authorization of the Establishment of Non-Bank Financial Institutions

Given the need to adapt the procedure for processing authorization requests for the establishment of Non-Bank Financial Institutions;

In the exercise of the powers conferred by the combined provisions of Article 64 of Law No. 12/2015 of 17 June - Law of the Bases of Financial Institutions, and by the provisions of paragraph f) of paragraph 1 of Article 21 and paragraph d) of paragraph 1 of Article 51, both of Law No. 16/10 of 15 July - Law of the National Bank of Angola;

I DETERMINE:

CHAPTER I

GENERAL PROVISIONS

Article 1.
(Object)

1. This Notice establishes the requirements and procedures for the authorization of the establishment of Non-Bank Financial Institutions linked to currency and credit, subject to the supervision of the National Bank of Angola, established in paragraph 1 of Article 7 of Law No. 12/15 of 17 June, Law of the Bases of Financial Institutions, namely:
   a) Exchange houses; b) Credit Cooperative Societies; c) Financial Assignment Societies; d) Financial Leasing Societies; e) Brokerage Societies for the Money or Foreign Exchange Markets; f) Microcredit Societies; g) Payment Service Provider Societies; h) Payment Systems, Clearing or Clearing House Operator Societies, in accordance with the Angola Payment Systems Law; i) Credit Guarantee Societies; and, j) Other Companies that are qualified as such by law.
2. This Notice takes into account the provisions of Law No. 12/15 of 17 June, Law of the Bases of Financial Institutions, Presidential Decree No. 12/11 of 19 January on Credit Cooperative Societies, Presidential Decree No. 28/11 of 2 February on Microcredit Societies, Presidential Decree No. 65/2011 of 18 April on Financial Leasing Societies, and Presidential Decree No. 95/2011 of 28 April on Financial Assignment Societies.

Article 2.
(Scope)
This Notice applies to all interested parties wishing to establish a Non-Bank Financial Institution.

Article 3.
(Authorization for Establishment)

1. The establishment of Non-Bank Financial Institutions with headquarters in Angola depends on authorization to be granted on a case-by-case basis by the National Bank of Angola.
2. The request for authorization to establish Non-Bank Financial Institutions must be submitted with the information and documentation contained in Annexes I, II-A, II-B, and III of this Notice, adapted to the size and complexity of the intended business.

CHAPTER II

REQUIREMENTS FOR THE ESTABLISHMENT OF A NON-BANK FINANCIAL INSTITUTION

Section I

General Requirements

Article 4.
(General Requirements)
Non-Bank Financial Institutions with headquarters in Angola must satisfy the following requirements:
a) Have share capital not less than the legal minimum; b) Present solid corporate governance arrangements, including a clear organizational structure with well-defined, transparent, and coherent lines of responsibility; c) Organize effective processes for the identification, management, control, and communication of risks to which it is or may be exposed; d) Have adequate internal control mechanisms, including solid administrative and accounting procedures; and, e) Have remuneration policies and practices that promote and are consistent with sound and prudent risk management.

Section II

Specific Requirements - Administration and Supervision

Article 5.
(Adequacy of Members of Administrative and Supervisory Bodies)

1. Members of the administrative and supervisory bodies must possess the necessary adequacy requirements to exercise their respective functions.
2. The adequacy of members of the administrative and supervisory bodies of Non-Bank Financial Institutions is subject to evaluation by the National Bank of Angola during the institution's authorization process, with the final decision on such adequacy resting with it, taking into account, among others, the criteria referred to in Articles 6 to 8 of this Notice.
3. The lack of integrity, professional qualification, independence, or availability of members of the administrative and supervisory bodies constitutes grounds for refusing the respective authorization to exercise functions.

Article 6.
(Integrity)

1. In assessing integrity, consideration is given to how the person habitually conducts their business, professional or personal affairs, or practices their profession, particularly in aspects that reveal their capacity to make considered and careful decisions, or their tendency to punctually fulfill their obligations or to exhibit behavior compatible with preserving market confidence, considering all circumstances that allow an assessment of professional conduct for the functions in question.
2. The assessment of integrity is carried out based on objective criteria, supported by information as complete as possible regarding the applicant's past professional roles, the most salient characteristics of their behavior, and the context in which their decisions were made.
3. In the assessment referred to in the preceding paragraph, the following circumstances are also taken into account, with their respective degree of gravity:
   a) Indications that the proposed member of the administrative or supervisory body did not act transparently or cooperatively in their relations with any national or foreign supervisory or regulatory authorities; b) Refusal, revocation, cancellation, or cessation of registration, authorization, admission, or license to exercise a commercial, business, or professional activity by a supervisory authority, professional order, or analogous body, or dismissal from a public office; c) The reasons that motivated a dismissal, termination of an employment relationship, or dismissal from a position requiring a special relationship of trust; d) Prohibition, by a judicial authority, supervisory authority, professional order, or analogous body, from acting in a capacity analogous to that proposed; e) Inclusion of default records in the central credit risk information system or in any other analogous records; f) Results obtained, from a financial or business perspective, by entities managed by the person in question or in which they have been or are a holder of a qualifying participation, particularly taking into account any recovery, bankruptcy, or liquidation proceedings and how they contributed to the situation leading to such proceedings; g) Personal insolvency, regardless of its legal classification; h) Civil actions, administrative proceedings, or criminal proceedings, as well as any other circumstances that, given the specific case, may have a significant impact on the financial solidity of the person in question; i) Professional curriculum and potential conflicts of interest, when part of the professional career was carried out in an entity directly or indirectly related to the Financial Institution in question, through financial participation or commercial relationship.
4. In its evaluation, the National Bank of Angola, in addition to the previously described facts, must take into consideration any and all circumstances whose knowledge is legally accessible to it and that, due to their gravity, frequency, or any other relevant characteristics, allow for a judgment on the guarantees the person in question offers regarding the sound and prudent management of the Institution.
5. For the purposes of the preceding paragraph, the following situations must be taken into account, depending on their gravity, regardless of the geography of the ruling:
   a) Bankruptcy of the interested person or of a company they control or of which they were, de jure or de facto, an administrator, director, manager, or member of the supervisory body; b) The indictment, conviction, or sentencing for crimes against property, forgery and falsification crimes, crimes against the administration of justice, crimes committed in the exercise of public functions, tax crimes, crimes specifically related to the exercise of financial and insurance activities and the use of payment means, as well as crimes provided for in other applicable legislation; c) The indictment or conviction for breaches of the rules governing the activity of Financial Institutions, as well as the rules governing the securities market and insurance activity; d) Breaches of disciplinary, ethical, or professional conduct rules, within the scope of regulated professional activities; e) Facts that determined the judicial removal, or judicial confirmation of removal for just cause, of members of the administrative and supervisory bodies of any commercial company; f) Facts committed that determined a conviction for damages caused to the company, shareholders, corporate creditors, or third parties.
6. A conviction, even if final, for criminal, contraventional, or other unlawful acts does not necessarily result in the loss of integrity for exercising functions in the Institutions; its relevance must be weighed, among other factors, according to the nature of the unlawful act committed and its connection to financial activity, its occasional or repeated character, the level of personal involvement of the interested person, the benefit obtained by them or by persons directly related to them, the damage caused to the Institutions, their clients, their creditors, or the financial system, and any eventual violation of duties regarding the supervision of the National Bank of Angola.

Article 7.
(Professional Qualification)

1. Proposed members of the administrative body responsible for ensuring the day-to-day management of Non-Bank Financial Institutions, and members of the supervisory body, must demonstrate that they possess the necessary competencies and qualifications to exercise their functions, acquired through academic credentials, specialized training appropriate to the position to be held, and through professional experience of relevance, duration, and levels of responsibility adequate to the characteristics, complexity, and size of the Institution, as well as the risks associated with the activity it develops.
2. Previous training and experience must be sufficiently relevant to enable the holders of those positions to understand the functioning and activity of the Institution, assess its risks, and critically analyze decisions made.
3. The National Bank of Angola may carry out necessary consultations regarding the verification of the professional qualification requirement with the competent authority, which shall issue a reasoned opinion on the matter.
4. Members of the supervisory body and administrators who do not exercise executive functions must possess the competencies and qualifications that enable them to critically evaluate decisions made by the administrative body and effectively supervise its function.
5. The administrative and supervisory bodies must collectively possess knowledge, competencies, and experience adequate to the activity of the Non-Bank Financial Institution.

Article 8.
(Independence)

1. The independence requirement aims to prevent the risk of proposed members being subject to undue influence from other persons or entities, promoting conditions that allow them to exercise their functions with impartiality.
2. In the assessment, all situations likely to affect independence are taken into consideration, namely the following:
   a) Positions held or previously held by the applicant in the institution in question or in another institution; b) Family or analogous relations, as well as professional or economic relations maintained with other members of the administrative or supervisory body of the Institution, its parent company, or its subsidiaries; c) Family or analogous relations, as well as professional or economic relations maintained with a person holding a qualifying participation in the Institution, its parent company, or its subsidiaries;
3. The supervisory body must consist of a majority of independent members.

Section III

Specific Requirements - Share Capital

Article 9.
(Share Capital)
Non-Bank Financial Institutions must be established with the minimum legal share capital in force at the date of their approval, as stipulated in the Notice governing the matter.

CHAPTER III

PROCESSING AND ANALYSIS OF THE AUTHORIZATION REQUEST FOR THE ESTABLISHMENT OF A NON-BANK FINANCIAL INSTITUTION

Article 10.
(Processing of the Request)

1. The request for authorization to establish and operate a Non-Bank Financial Institution must be processed via an application addressed to the Governor of the National Bank of Angola, according to Annex I of this Notice, accompanied by all documents and information useful for its assessment, specified in the Annexes of this Notice.
2. The information to be provided according to the Annexes referred to in the preceding paragraph covers the following aspects:
   a) Company to be established - complete information, including the business plan and corporate governance and operational models; b) Partners or shareholders - identification and other relevant information; c) Corporate bodies, directors with relevant management functions - identification and other relevant information, including regarding their integrity, availability, and professional experience.
3. Applicants must designate among themselves, by power of attorney, a representative before the National Bank of Angola and indicate their domicile in Angola, for purposes of notification or correspondence.
4. The National Bank of Angola may request any complementary information from the applicants, carry out investigations it deems necessary or useful for the decision on the request, and summon proposed shareholders or partners and administrators for an interview.
5. The National Bank of Angola may waive the submission of the elements referred to in this article that it already possesses or has knowledge of.
6. If the request is inadequately processed, the National Bank of Angola, before refusing the authorization, shall formally notify the applicants through their technical officer to remedy the deficiencies within a timeframe it establishes.
7. Failure to provide information within the timeframe stipulated by the National Bank of Angola may result in the refusal of authorization to establish a Non-Bank Financial Institution.
8. Exceptionally, upon a reasoned request, the National Bank of Angola may decide to extend the timeframe stipulated in the aforementioned notification.
9. The National Bank of Angola may request any complementary information or procedures from the applicants, carry out investigations it deems necessary or useful for the decision on the request, and summon proposed founding shareholders, members of corporate bodies, directors, or managers of the institution.

Article 11.
(Analysis of the Request)
Authorization shall be refused whenever:
a) The authorization request is not processed with all necessary information and documents, after the timeframe established in paragraph 6 of Article 10 of this Notice; b) The processing of the request presents inaccuracies and/or falsities; c) The company to be established does not meet the requirements established in Article 4 of this Notice; d) The competent supervisory body demonstrates that, regarding some holders of qualifying participations, any of the circumstances set out in paragraph 2 of Article 25 of Law No. 12/15 of 17 June, Law of the Bases of Financial Institutions, is not met; e) The company lacks sufficient technical means and financial resources for the type and volume of operations it intends to carry out; f) Members of the administrative and supervisory bodies do not meet the requirements established in Articles 6 to 8 of this Notice; g) There are difficulties in supervising the authorized institution, notably as a result of proposed direct or indirect shareholders, or entities related to them, also participating in authorized Financial Institutions abroad; h) The legal, management, operational, and ownership structure of the Non-Bank Financial Institution to be established prevents the exercise of supervision on an individual or consolidated basis, as well as the application of corrective measures.

CHAPTER IV

EXPIRY OF AUTHORIZATION

Article 12.
(Expiry of Authorization)

1. The authorization to exercise the activity of Non-Bank Financial Institutions shall expire if:
   a) The applicants expressly renounce it; b) The company is not established within a period of 6 (six) months from the date of authorization; and, c) It does not commence activity within a period of 1 (one) year from the date of authorization.
2. In exceptional circumstances, upon a duly reasoned request by the Institution, the National Bank of Angola may extend, only once, the timeframe for commencing activity by up to 6 (six) months.
3. The authorization shall also expire if the company is dissolved, without prejudice to the performance of acts necessary for its respective liquidation.

CHAPTER V

FINAL PROVISIONS

Article 13.
(Documents)

1. Any official documents required in this Notice must have been issued less than 3 (three) months ago.
2. In the case of foreign or non-resident natural or legal persons, the demonstration of the truthfulness of the information provided must be proven by any document, means, or diligence considered valid, suitable, and sufficient, notably through an equivalent document issued by a competent entity in the country of origin.
3. All documents intended to process the authorization request drafted in a foreign language must be translated into Portuguese and duly certified.

Article 14.
(Sanctions)
Breaches of the provisions of this Notice are punishable in accordance with Law No. 12/15 of 17 June, Law of the Bases of Financial Institutions.

Article 15.
(Repealing Clause)
The following regulatory instruments are partially repealed, in matters concerning the authorization for the establishment of Non-Bank Financial Institutions: Notice No. 15/2012 of 03 April, Notice No. 18/2012 of 03 April, Notice No. 08/2012 of 30 March, Notice No. 09/2012 of 02 April, Notice No. 07/2013 of 22 April, and Notice No. 05/2014 of 01 October.

Article 16.
(Entry into Force)
This Notice enters into force on the date of its publication.

PUBLISH.
Luanda, 16 November 2018.
THE GOVERNOR
JOSÉ DE LIMA MASSANO

Section I – General Information

CONTINUATION OF NOTICE NO. 07/2018 Page 13 of 54

ANNEX I
Application for Authorization to Establish a Non-Bank Financial Institution

In order to verify compliance with the legal requirements established in Articles 19 and 22 of Law No. 12/15 of 17 June – Law of the Bases of Financial Institutions, and in accordance with Articles XX and XX of Notice No. XX/XX of XX of 2