Notice on Fee Schedules (Page 396) No. 1/13 of April 12

Gabinete do Governador e dos Conselhos
Avenida Amílcar Cabral • Caixa Postal 101 • Telefone (+238) 2607000 • Fax (+238) 2614447 • Praia – Cabo Verde www.bcv.cv Mod.Not.02 NOTICE ON FEE SCHEDULES Notice No. 1/2013 The commission charging regime for credit institutions was defined by the Bank of Cape Verde through Notice No. 5/94 of March 7. With the development of Cape Verde's banking sector, increasing complexity of financial products and services, and consequent growth in competition, there has been a persistent need to establish more specific, clear, and transparent rules, particularly regarding the fee schedules that credit and para-banking institutions must adopt, which includes guiding principles for charging commissions and expenses, as well as information regarding these charges and applicable interest rates and conventions. Indeed, the aim is to confer greater transparency to the rules governing fee schedules of credit and para-banking institutions, with the additional objective of providing financial consumers, at any stage of contracting, all information likely to influence their choice regarding specific financial operations, particularly in understanding and clarifying all associated commissions, expenses, and interest rates. In this context, and with a view to achieving the above objectives, the Bank of Cape Verde updates the content of Notice No. 5/94 of March 7, which has been in force for eighteen years, adapting it to the current context and dynamics of the monetary and financial market. In fact, the information disclosure regime that institutions must provide to clients requires some modernization, considering today's financial reality, which also leads to the revocation of Notice No. 2/99 of May 3, regarding information to be provided by institutions to their clientele. Thus, with the new notice, unification and insertion of the aforementioned regimes into a single instrument are carried out.

Gabinete do Governador e dos Conselhos
Avenida Amílcar Cabral • Caixa Postal 101 • Telefone (+238) 2607000 • Fax (+238) 2614447 • Praia – Cabo Verde www.bcv.cv Mod.Not.02 In this new notice, emphasis is given to the disclosure of complete and updated fee schedules, composed of commission/expense leaflets and interest rate leaflets, via the internet for credit and para-banking institutions that have one, thereby facilitating their consultation and comparison of charges charged by different institutions. The new fee schedule structure will thus enable a first transversal, standardized comparison capable of identifying available products and maximum applied charges and rates. Likewise, it is innovative the requirement now imposed on institutions when marketing their financial products and services remotely, to ensure prior information to clients regarding the total cost of financial products and services marketed through this channel, particularly by sending the product sheet. The prohibition of charging commissions not provided for in the fee schedule, those with values higher than indicated therein, or whose creation or alteration has not been subject to prior communication to the Bank of Cape Verde is also enshrined. It is also noteworthy that, alongside the regulatory provision regarding the obligation to provide clients with necessary information in the pre-contractual phase so they can previously evaluate the conditions presented by institutions before concluding a contract or acquiring a bank product or service, institutions are imposed with the duty of assistance in the negotiation phase, so that consumers are placed in a position to evaluate whether the proposed contract and its possible amendments adapt to their needs and financial situation. During the contract term, clients are ensured access to permanently updated information, enabling them to know the evolution of marketed services or products.

Gabinete do Governador e dos Conselhos
Avenida Amílcar Cabral • Caixa Postal 101 • Telefone (+238) 2607000 • Fax (+238) 2614447 • Praia – Cabo Verde www.bcv.cv Mod.Not.02 Finally, it is noteworthy that, with the aim of raising the national level of banking inclusion and providing free access to certain services, a new concept was integrated into this Notice: free banking services, i.e., those for which institutions cannot charge any commissions or charges. Thus, in exercise of the powers conferred by Articles 22 and 23 and paragraph c) of Article 42 of its Organic Law, approved by Law No. 10/VI/2002 of July 15, combined with Articles 47 to 49 of Law No. 3/V/96 of July 1, the Bank of Cape Verde establishes the following:
CHAPTER I
GENERAL PROVISIONS
Article 1
(Subject Matter)
This Notice establishes the rules that credit and para-banking institutions, hereinafter referred to as "institutions", must observe in disclosing fee schedules, defines the information and assistance duties owed to clients that bind institutions, and determines which banking services are free.
Article 2
(Scope of Application)
This Notice applies to credit and para-banking institutions with headquarters or branches in national territory.
Article 3
(Principles)
When charging commissions, expenses, and interest rates at any contractual phase, institutions shall observe, in particular, the following principles:
a) Transparency of information; b) Good faith; c) Proportionality; and d) Adequacy.
Article 4
(Definitions)
For the purposes of this Notice, the following are understood as:
a) "Automatic Teller Machines" (ATM): Automated equipment of a banking system network, allowing bank cardholders to perform various banking operations without needing to visit bank branches. b) "Commission": Monetary payments due from clients by institutions, as remuneration for services provided by them or subcontracted to third parties, within the scope of their activity; c) "Total credit cost to the client": All costs, including interest, commissions, and expenses of any nature linked to the credit contract, that the client must pay and are known to the creditor, excluding notarial costs. Costs arising from ancillary services related to the credit contract, in particular insurance premiums, are also included if, additionally, these services are necessary to obtain any credit or to obtain the credit on market terms and conditions; d) "Negotiated overdraft": Express contract by which a creditor allows a client to draw funds exceeding their current account balance; e) "Non-negotiated overdraft": Tacit acceptance by the institution, allowing a client to draw funds exceeding their current account balance or negotiated overdraft; f) "Expenses": Other charges borne by institutions, due to them by third parties and passable on to clients, notably payments to Land Registries, Notarial Offices, or of a fiscal nature, provided they are duly proven; g) "Closure": Termination of current deposit contracts and accounts associated with payment services; h) "Provision of debit or credit card": Production and provision of the credit or debit card, according to the previously agreed cost allocation criterion; i) "Provision of account statement": Production and provision of the complete list of movements of a deposit account, for a certain period, on durable media or in paper format; j) "Inactive account management": Management of an account with a balance equal to or less than 5000$00, where a lack of debit or credit movement is detected for a maximum period of one year, provided no other time deposit account is associated with it. k) "Distance communication means": Any communication medium that can be used without the physical and simultaneous presence of the institution and the client or their representative; l) "Total credit amount": Maximum or total limit of amounts made available by the credit contract; m) "Total amount charged to the client": Sum of the total credit amount and the total credit cost to the consumer; n) "Fee Schedule": Set of permanently updated information regarding the general conditions with patrimonial effects of financial products and services, made available to the public by institutions; o) "Public": Users of financial products and services offered by institutions; p) "Free banking services": Services provided by institutions to individual clients and companies, without charging any commissions, expenses, or other charges; q) "Durable medium": Any instrument that allows the consumer to store information personally addressed to them,
so that in the future they can easily access it for a period appropriate to the purposes of the information and allows unaltered reproduction of stored information; r) "TEAP" (Total Effective Annual Percentage Rate): Rate expressed as an annual percentage of the total credit amount, which reflects the total credit cost to the client for the credit operation, including interest and all charges of any nature linked to the credit contract or of an ancillary nature necessary for obtaining the credit or obtaining it on market terms and conditions, notably insurance premiums required under the relevant Notice; a) "NAR" (Nominal Annual Rate): Nominal annual interest rate, expressed as a fixed or variable percentage, applied on an annual basis to the amount of credit used, which reflects the remuneration of the credit operation and does not include any charges; s) "Automatic Payment Terminal (APT)": Payment means that enables commercial transactions to be paid with bank cards, with full convenience and security; t) "Interbank transfer": Transfer of values between accounts, involving two credit institutions; u) "Intrabank transfer": Onshore transfers made between accounts within the same institution, even if belonging to different holders.
CHAPTER II
FEE SCHEDULES AND DUTIES
Article 5
(Fee Schedule)

1. Institutions must have a complete fee schedule of the general conditions with patrimonial effects for retail financial products and services marketed to the public.
2. The information contained in the fee schedule must be true, objective, updated, and expressed in clear language.
3. The fee schedule consists, according to the range of operations integrating the institution's activity object, of:
   a) Commission and Expense Leaflet (Charges); b) Interest Rate Leaflet; c) Others that the Bank of Cape Verde may determine.
4. The information referred to in paragraph 1 of this article must allow, in particular:
   a) The maximum value of all commissions due from clients; b) The indicative value of main expenses; c) The Total Effective Annual Percentage Rate (TEAP), resulting from credit operations, without prejudice to the publication of the Nominal Annual Rate; d) Information associated with interest rates applicable to deposit and credit operations, indexers, and the most relevant conventions with patrimonial effects, notably the number of days underlying interest calculation and interest rate rounding; e) The value date and availability dates related to deposit account movements.
   Article 6
   (Fee Schedule Structure)
   Institutions must adopt the fee schedule structure, specify its content, as well as the manner of completing them and the procedures they must follow for information disclosure and reporting purposes, to be developed by technical instructions issued by the Bank of Cape Verde.
   Article 7
   (Disclosure of Fee Schedule)
5. Institutions must, obligatorily, ensure that the fee schedule approved by the Bank of Cape Verde is available in all their counters or locations made available for public service, which must be directly accessible and well identified, notably at the service counter, drafted in clear and easily understandable language; they must also ensure that permanently updated information on offered bank products and services and their characteristics is disclosed via an easy and direct consultation device, notably using electronic means.
6. All institutions with an Internet website must make the complete and updated fee schedule available on their pages, in a highly visible location, directly accessible and easily identifiable, without the need for prior registration by interested parties.
   Article 8
   (Other Information Duties)
7. Fee schedule disclosure should not prejudice the provision of applicable information and conditions within the marketing and negotiation of a financial product or service, which must be received by the client in paper or other durable medium, with a minimum advance of 30 days relative to the client's commitment to the contract, including cases where credit institutions relate to clients through distance communication means.
8. Without prejudice to provisions in current laws or regulations, credit and deposit contracts must specify the conditions applicable to the operation, notably regarding charges, interest rates, exchange rates, and conventions in force, including their method of application, quantification, and indexer.
9. Whenever the institution is permitted, under current laws and regulations, to modify contractual conditions on its own initiative, and provided such was established in the contract concluded with the client, this alteration may not be concretized by mere reference to the fee schedule; institutions must, in such cases, communicate the content of these alterations to their respective clients with a minimum advance of thirty (30) days relative to the intended application date, without prejudice to other legally or regulationally fixed periods.
10. Credit institutions must ensure that the information provided under the preceding paragraph allows clients to identify conditions that were subject to alteration, under penalty of contract termination.
11. Institutions are obliged to provide their clients with clear, precise, correct, legible, and current information on offered bank products and services, their essential characteristics, commissions, and other charges levied on operations, so that at each moment the client has an exact notion of them and can make a decision based on them.
12. All information referred to in the preceding paragraph must:
    a) Be transmitted in Portuguese, unless otherwise expressly agreed between the parties; b) Allow easy reading by a reader with average visual acuity, through reproduction in font size of at least 11 points, using Arial typeface as reference, when provided through paper or other durable medium; and c) Be free of charge, without prejudice to the parties agreeing on charges for providing additional or more frequent information, or for transmitting information via communication channels different from those specified in the contract, provided that provision or transmission occurs at the client's request.
13. In cases provided for in the second part of paragraph c) of the preceding article, charges must be adequate and correspond to costs actually borne by the institution.
    Article 9
    (Duty of Assistance)
14. Institutions must clarify the client adequately, placing them in a position to evaluate whether the proposed contract adapts to their needs and financial situation, including providing all information provided in the preceding article, explaining the essential characteristics of proposed products, and describing their specific effects on the consumer, including the consequences of non-payment.
15. It is incumbent upon institutions to prove compliance with the obligations provided in this article.
    Article 10
    (Commission and Expense Leaflet)
16. The Commission and Expense Leaflet must contain updated information on all commissions due from clients regarding financial products and services marketed by institutions, according to the structure to be fixed by Bank of Cape Verde Instruction.
17. Main expenses, as defined in paragraph f) of Article 4, must also be included in this Leaflet, even if indicative.
18. Institutions must adopt the minimum common nomenclature for commissions and expenses related to providing their services or supplying their products, according to what the Bank of Cape Verde's technical instruction may determine.
19. Excluding modifications resulting from legislative changes, institutions:
    a) May not charge commissions for unsolicited services; b) Must define commissions to be charged to clients transparently and rigorously, identifying the associated service, the moment of application, periodicity, and exemption conditions, where applicable; c) May only charge commissions corresponding to or having as consideration a service actually provided by the institution; d) Must prove the cost incurred for providing the service that originated the commission charge and ensure adequacy between the commission value and the actual cost of the provided service; e) Must respect the principle of proportionality in applying the commission to the period of service provided, with charges (commissions and expenses) paid in advance being refunded proportionally to the undecurred period in case of early contract termination; f) May not charge commissions not expressly provided for in the Commission and Expense Leaflet made available to the public under this Notice and previously approved by the Bank of Cape Verde; g) May not include commissions in costs related to providing other services; h) May not charge any values as commissions higher than those provided in the respective Commission and Expense Leaflet.
    Article 11
    (Interest Rate Leaflet)
20. Information contained in the Interest Rate Leaflet must be updated according to market conditions and allow the public, in particular, to know the rates applied by institutions in operations they habitually practice, under terms to be defined through Bank of Cape Verde Instruction.
21. The Interest Rate Leaflet must contain, in particular, the following information regarding credit and deposit operations:
    a) The nominal interest rate of operations; b) Indexers used in variable-rate credit and deposit operations, identified by their respective designations; c) The calculation method and rounding of the indexer; d) Interest calculation convention; e) Applicable spread interval for credit operations and TEAP calculated for a representative example.
    Article 12
    (Submission and Approval of Fee Schedule)
22. Institutions must submit to the Bank of Cape Verde for approval, under terms fixed by Instruction, a copy of the fee schedule to be published on January 1 of the following year, by November 15 of the preceding year.
23. The Bank of Cape Verde may request clarifications it considers appropriate regarding the submitted fee schedule.
24. The Bank of Cape Verde must rule on the submitted fee schedule by letter, electronic mail, or other means it may determine, within a maximum period of 45 days from the date of submission.
25. The period referred to in the preceding paragraph is suspended until all clarifications requested by the Bank of Cape Verde are provided.
26. Institutions are responsible, before the Bank of Cape Verde and third parties, for the accuracy, truthfulness, and currency of information provided in the Fee Schedule and its amendments.
27. Without prejudice to paragraph 3 of this article, the Bank's evaluation of the adequacy of information identified in the fee schedule corresponds to a continuous process within its supervision and oversight functions, notably regarding commission typification and adequacy, so validation does not end with the initial fee schedule assessment or subsequent amendments.
    Article 13
    (Amendments to Fee Schedule)
28. Any amendments to the fee schedule must be submitted to the Bank of Cape Verde with a minimum advance of 30 days relative to the date expected for their effective application.
29. Amendments to the fee schedule must be accompanied by a description of the bank products and services offered to the public.
    Article 14
    (Compliance with Information Duty)
30. It is incumbent upon institutions to prove that they have met the information requirements established in this Notice.
31. Institutions may comply with the information duties provided in Articles 7 and 8 by providing information in paper or any other durable medium, unless the client expressly requests provision of information in paper.
32. The information referred to in paragraphs 3 and 5 of Article 8 must be provided to clients through the contractually agreed medium and means of communication, or, in the absence of contractual provision, to...