Notice No. 10/2013 of July 9 on the Acquisition or Increase of Qualified Participations in Financial Institutions

Published in the Official Gazette, Series I, No. 129 of July 9

NOTICE No. 10/2013 of July 9

SUBJECT: ACQUISITION OR INCREASE OF QUALIFIED PARTICIPATIONS IN FINANCIAL INSTITUTIONS

Given the need to align the regulation on the acquisition or increase of qualified participations in financial institutions with international practices;

It is necessary to establish the requirements and procedures for the acquisition or increase of participations, as well as for the merger or demerger of institutions under the supervision of the Bank of Angola;

Under the terms of the provisions contained in the Bank of Angola Law and the Financial Institutions Law;

I DETERMINE:

CHAPTER I
GENERAL PROVISIONS

Article 1.
(Object)
This Notice establishes the requirements and procedures relating to the acquisition and increase, direct or indirect, of participation, as well as the merger or demerger of financial institutions under the supervision of the Bank of Angola.

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Article 2.
(Definitions)
Without prejudice to the definitions established in the Financial Institutions Law, for the purposes of this Notice, the following are understood:

1. "Demerger": an operation by which a company transfers all or part of its assets to one or more companies. The demerger may take place:
   a) by simple demerger; b) by demerger-dissolution; or c) by demerger-merger.

2. "Demerger-dissolution": an operation by which the company is dissolved and its assets are divided, with each resulting part intended to constitute a new company.

3. "Demerger-merger": an operation by which parts of its assets are detached or it is dissolved, dividing its assets into two or more parts, to merge them with existing companies or with parts of the assets of other companies, separated by identical processes and with the same purpose.

4. "Merger": the joining of two or more companies, even of different types, as defined in the Commercial Companies Law. The merger may take place:
   a) by incorporation; or b) by simple merger.

5. "Merger by incorporation": the joining of two or more companies through the global transfer of the assets of one or more companies to another company, including the attribution to the shareholders of those companies of shares, stock, or quotas of the latter.

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6. "Simple merger": the joining of two or more companies through the constitution of a new company to which the assets of the merging companies are globally transferred, with shares, stock, or quotas of the new company being attributed to the shareholders of the former.

CHAPTER II
PARTICIPATIONS

SECTION I
(Acquisition and increase of participation)

Article 3.
(Authorization for acquisition and increase of financial participations)

1. The following depend on the prior authorization of the Bank of Angola:
   a) the acquisition, isolated or joint, direct or indirect, of qualified participations in financial institutions under the supervision of the Bank of Angola, by natural or legal persons; b) the increase of qualified participation whenever it may result in a percentage that reaches or exceeds any of the thresholds of 20% (twenty percent), 33% (thirty-three percent), and 50% (fifty percent) of the capital or voting rights in the participated institution, or when it becomes a subsidiary of the acquiring institution; c) transactions between residents of blocks of participations that, isolated or jointly, represent more than 10% (ten percent) of the share capital; d) transactions of participations of institutions under the supervision of the Bank of Angola in which non-residents in the foreign exchange market intervene, regardless of the percentage to be acquired.

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2. Without prejudice to the provisions of letters a) and b) of the previous paragraph, if the increase of qualified participation results in the transformation of the participated institution into a subsidiary, or if a relationship of control is established with a financial institution that has its main seat and effective administration in a foreign country, the authorization depends on the Head of the Executive, upon a favorable opinion of the Bank of Angola.

3. For the purposes of the provisions of this article, in the calculation of qualified participations, in addition to direct participations, the following participations must be considered:
   a) of companies that are in a relationship of control or group with the participant; b) by third parties, but on behalf of the participant; c) by third parties with whom the participant has entered into an agreement for the exercise of associated rights, except in cases where, under the same agreement, the participant is bound to follow the instructions of the third party; d) by members of the governing bodies of the participant, in cases where the participant is a company; e) that may be acquired by the participant through an agreement previously entered into with the respective holders; f) relating to shares delivered as security to the participant, in cases where voting rights have been attributed to them; g) for which the holders have conferred discretionary powers of exercise to the participant; h) by persons who have entered into some agreement with the participant for the concerted exercise of influence over the participated company; and i) attributable to the persons referred to in letters a) to h) of this article by the articulated and joint application of the criteria described therein.

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Article 4.
(General requirements)

1. The requests made under the provisions of the previous article must be accompanied by Annexes I and II of this Notice, without prejudice to the presentation of complementary elements.

2. The filling out of Annex II with the due alterations is also applicable if the proposed shareholder is a collective interest center without legal personality (trusts) or any other entities without legal personality.

3. In the case of acquisitions of indirect participations, the presentation of the elements provided for in the previous article must be made not only by the proposed direct acquirers, but also by the person at the top of the chain of indirect participations.

4. The Bank of Angola informs the financial institution, in writing, of the receipt of the request, and of the date of the end of the period for opposition to the project.

5. Whenever the request for acquisition or increase of participations is not properly documented, the Bank of Angola will notify, in writing, of the missing elements or information, suspending the periods established for its processing.

6. The exemption from presenting the elements and information referred to in paragraph 1 of this article may occur when the Bank of Angola states that it already has knowledge of them.

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Article 5.
(Decision)

1. Within a maximum period of 30 (thirty) days from the request for acquisition or increase of qualified participation under Article 3 of this Notice, or from the receipt of complementary information requested from the financial institution, the Bank of Angola will oppose the transaction if it is demonstrated that the conditions guaranteeing sound and prudent management of the financial institution are not met.

2. The period established in the previous paragraph 1 may be extended if the Bank of Angola considers that it assumes special complexity.

3. The lack of opposition to the request within the period referred to in the previous number constitutes a presumption of tacit approval of the request.

4. When no opposition is raised, the financial institution must carry out the planned operation within a period of 3 (three) months, after which a new request must be presented.

Article 6.
(Participations in financial institutions with headquarters abroad)

1. The Bank of Angola reserves the right to refuse requests for the acquisition of participations in financial institutions with effective headquarters in countries or territories that may hinder the exercise of consolidated supervision, notably those characterized by lower requirements regarding:
   a) the obtaining of authorization for the exercise of financial activity; or b) the special regime of bank secrecy.

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2. The provisions of the previous paragraph are not applicable when there is a relationship of control by the participating financial institution.

Article 7.
(Acquisition of participation in non-financial entities)

1. The acquisition, isolated or joint, direct or indirect, of qualified participations in non-financial entities by financial institutions under the supervision of the Bank of Angola depends on the prior authorization of the latter.

2. The request for acquisition or increase of participation referred to in the previous paragraph must be submitted to the Bank of Angola, specifying the elements contained in Annex I of this Notice, at least 30 (thirty) days in advance of the date scheduled for the formalization of the respective acts.

3. The acquisition of participations in non-financial entities by financial institutions under the supervision of the Bank of Angola depends on the fulfillment of the following requirements:
   a) compliance with the operational and prudential limits established in the current regulation; b) compliance with the limits of paid-up share capital and regulatory own funds.

4. The Bank of Angola will only grant authorization in cases where it can dispose of the information, data, and documents necessary for the evaluation of the active and passive operations of those investments, in order to ensure global consolidated supervision.

5. In the case of institutions subject to consolidation, the authorization provided for in the previous paragraph implies that the Bank of Angola

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has integral and unrestricted access to the information regarding the risks assumed by the participated entities, regardless of their operational activity, in accordance with the legislation in force.

Article 8.
(Official declaration)

1. The Bank of Angola may declare, at any time, that any participation of a financial institution has a qualified character, regardless of the application of other measures provided for in regulation, under the following circumstances:
   a) of relevant acts or facts whose communication was omitted or incorrectly made by its holder; b) of acts or facts likely to alter the influence exercised by its holder on the management of the participated institution.

SECTION II
(Acquisition and increase of qualified participation with relationship of control)

Article 9.
(Qualified participation with relevance in the relationship of control)

1. Whenever the acquisition of the proposed participation results in the establishment of a relationship of control, the financial institution must fill out Annex III of this Notice.

2. The information and documentation requested in the Annex referred to in the previous paragraph must take into account the situation of the financial institution subject to the acquisition of participation before the operation and refer to the main changes resulting from the execution of the operation, including the following elements:

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a) strategy underlying the changes to be made; b) scheduling; c) potential risks.

3. If, as a result of the acquisition referred to in paragraph 1 of this article, there is the appointment of new members of the governing bodies, these must be registered with the Bank of Angola, in accordance with the provisions of the legislation in force.

4. The provisions of this article also cover acquisitions from which the participated financial institution becomes a subsidiary of the proposed acquirer.

Article 10.
(Compliance with the business plan)

1. After the acquisition of a qualified participation with a relationship of control, the activity of the financial institution must be in conformity with the business plan provided during the acquisition request.

2. During the first 3 (three) economic years following the acquisition, the annual report and accounts must include the adequacy of the operations carried out to the strategic objectives defined in the authorization request for acquisition.

3. If during the first 3 (three) economic years, the adequacy of the operations to the strategic objectives is not verified, a justified explanation must be presented to the Bank of Angola, which may establish additional conditions for its operational continuity, setting a deadline for this purpose.

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SECTION III
(Changes in corporate structure)

Article 11.
(Information by the financial institution)

1. Financial institutions authorized by the Bank of Angola must immediately inform the Bank of Angola about the realization of the transactions provided for in Article 3 of this Notice.

2. For the purposes of the previous paragraph, institutions must fill out Annex IV accompanying this Notice.

CHAPTER III
(MERGER OR DEMERGER)

Article 12.
(General principles)

1. The requirements for obtaining authorization for the execution of the merger or demerger must be adapted to the size, nature, and complexity of the activity of the institutions involved, their risk profile, and their importance for the stability of the financial system.

2. The authorization to execute the merger or demerger depends on the fulfillment of the following conditions:
   a) suitability of the shareholders or partners; b) compatibility of the economic-financial capacity of the shareholders or partners, considered individually, with the size, nature, and objective of their participation; c) knowledge of the origin and control of the funds, as well as the ultimate beneficial owners;

d) demonstration in the business plan of the compliance with legal and regulatory requirements and the viability of the plan itself, namely regarding:
i. financial resources;
ii. human resources;
iii. information and communication systems;
iv. internal controls and risk management.

3. The merger of two or more institutions or the demerger of an institution must have, at the time of constitution, share capital and own funds not lower than the minimums established in the legislation in force.

Article 13.
(Authorization)

1. The realization of merger or demerger operations of financial institutions is subject to prior authorization by the Bank of Angola.

2. Financial institutions wishing to merge or demerge with one or more companies must fill out Annexes III and V of this Notice, without prejudice to the presentation of complementary elements for the appreciation of the operation.

3. The prior communication of merger or demerger operations is made to the Bank of Angola, by the set of companies subject to the merger or by the company to be demerged, or, in the case of demerger-merger, by the participating companies.

4. The provisions of Articles 8 to 12 of Notice 09/13 of June 3, on authorization for the constitution of banking financial institutions, are applicable to the request for authorization of merger or demerger, with the necessary adaptations.

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5. The Annexes referred to in this article must be filled out by the person designated to represent the set of companies subject to merger or demerger.

6. The provisions of Article 4 of this Notice are also applicable in merger requests that result in the acquisition or increase of participations.

Article 14.
(Constitution of new financial institution)

If the merger or demerger results in the constitution of a new financial institution, the registration of the new financial institution and the provisions of special regulation in force are applicable.

CHAPTER IV
FINAL PROVISIONS

Article 15.
(Documents)

1. The official documents required in this Notice must have a validity period not exceeding 3 (three) months.

2. In the case of foreign citizens or non-residents, the demonstration of the veracity of the information provided must be proven through any document, means, or diligence considered valid, suitable, and sufficient, namely, through an equivalent document issued by a competent entity of the country of origin.

3. Documents intended to process the request for authorization of statutory changes that are drafted in a foreign language must be translated into Portuguese and duly certified.

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Article 16.
(Sanctions)
The violation of the imperative provisions of this Notice constitutes an offense punishable under the terms of the Financial Institutions Law.

Article 17.
(Revocation)
All provisions that contradict this Notice are revoked, namely Notice No. 12/07 of September 12, on participations and establishment of branches abroad.

Article 18.
(Entry into force)
This Notice enters into force on the date of its publication.

PUBLISH
Luanda, June 10, 2013.

THE GOVERNOR
JOSÉ DE LIMA MASSANO