Rules on the Opening and Movement of Demand Deposit Accounts at Banco de Portugal

Instructions of Banco de Portugal
Instruction No. 2/2009
SUBJECT: RULES ON THE OPENING AND MOVEMENT OF DEMAND DEPOSIT ACCOUNTS AT BANCO DE PORTUGAL Given the special operating characteristics of TARGET2 and its access criteria, some entities may not meet the necessary conditions to be considered eligible to participate in the system or, if they do, may choose not to participate, particularly as direct participants. The European Central Bank allows National Central Banks to use the standardized modules of the TARGET2 Single Shared Platform or to implement local applications that enable entities not participating in TARGET2 to comply with minimum reserves with their respective National Central Banks (NCBs) or to carry out specific operations with the said Banks, namely, cash deposits and withdrawals. Additionally, and with regard to the commonly designated “Central Bank clients”, the possibility is admitted for them to keep demand deposit accounts open at NCBs for carrying out their operations with their respective NCBs. In these terms, AGIL - Integrated Liquidation Management Application - is created for the local management of access to deposit accounts, at Banco de Portugal, for institutions that do not directly participate in TARGET2-PT. Thus, in accordance with article 14 of its Organic Law, approved by Law No. 5/98 of January 31, with the amendments introduced by Decree-Laws No. 118/2001, of April 17, 50/2004, of March 10, and 39/2007, of February 20, Banco de Portugal determines the following:

1. Scope of Application
   1.1. This Instruction regulates the manner of opening and moving demand deposit accounts with Banco de Portugal, hereinafter referred to as the Bank.
   1.2. Credit institutions and branches subject to compliance with the ECB Regulation on the application of the minimum reserve regime, Central Bank clients, namely correspondent banks and other entities not authorized to participate in TARGET2, and also entities specially authorized to maintain demand deposit accounts with the Bank, who do not wish to participate directly in TARGET2-PT, may be holders of demand deposit accounts at the Bank.
2. Opening of demand deposit accounts
   2.1. The opening of demand deposit accounts with the Bank is permitted for the following purposes:
   a) Compliance with minimum reserves; b) Processing of specific operations with the Bank, namely cash deposit and withdrawal operations; c) Processing of payment operations for Central Bank client accounts.
   2.2 The Bank may authorize the same demand deposit account to be used for more than one of the purposes provided for in number 2.1.
   2.3 The account opening process involves signing the demand deposit account opening contract and respective service conditions, filling out the signature card, and submitting the documentation requested by the Bank, namely the documents identifying the entities with powers to move the account, in accordance with the provisions of number 4 of this Instruction, as well as an express indication of the purpose or purposes for which the demand deposit account is intended.
   2.4 Account holders are not permitted to open more than one demand deposit account.
3. Persons authorized to move the account
   3.1. The account holder must inform the Bank of the persons authorized to move the deposit account and define the terms and conditions of their authorization.
   3.2. Notifications that alter the said authorization will only be considered valid after the Bank has confirmed receipt thereof to the account holder.
   3.3 The communications referred to in numbers 3.1 and 3.2 will be made through the channels previously defined by the Bank in the service conditions applicable to deposit accounts.
   3.4. The terms and conditions for carrying out cash deposit and withdrawal operations in demand deposit accounts, including the associated physical movement, are subject to specific regulation through a separate Instruction.
4. Movement and processing
   4.1. All credit or debit operations in demand deposit accounts will be carried out through a direct participant in TARGET2, except for specific operations with the Bank.
   4.2. For the movement of demand deposit accounts opened for the purposes stated in subparagraphs a) and b) of number 2.1. of this Instruction, only liquidity transfers between accounts of the same holder or specific operations with the Bank are permitted.
   4.3. Overdraft situations are not permitted.
   4.4. Credit or debit operations between demand deposit accounts opened for minimum reserve compliance and specific operations, and Central Bank client accounts are not permitted.
   4.5. The processing of credit or debit operations will be carried out in accordance with the schedule contained in the service conditions.
   4.6. Credit or debit operations must be transmitted to the Bank via the SWIFT network or authenticated fax, with the exception of operations processed via other operational systems of the Bank.
5. Information on account movement
   5.1. The Bank will send each account holder the daily statement of movement of their respective deposit account, via SWIFT, at the end of the day of execution of the operations or by another previously agreed means, at the latest, on the next business day following their execution.
   5.2. Any complaints about the movements itemized in the statements must be communicated to the Bank within a maximum period of 5 business days from the date of their issuance.
6. Value date
   Credit or debit operations in the demand deposit account are assigned the value date of the day of the movement.
7. Liability
   7.1. The Bank will not be liable for any damages or losses resulting from the non-execution or deficient execution of credit or debit operations, instructions or other notifications from the account holder, in cases where:
   a) The account holder does not comply with the technical and operational requirements defined in the service conditions applicable to the said deposit account or the terms and conditions of authorization and movement of the deposit account; b) Situations of force majeure occur, including, namely, measures taken by public authorities, violent actions, breakdowns in companies supplying services to the Bank, strikes, etc.; c) The transmission means used by the account holders, namely, letter, fax, electronic data transmission or other means permitted by the Bank are used improperly or fraudulently; d) Malfunctions or disturbances in the operation of TARGET2 occur.
   7.2. Liability for the non-execution or deficient execution of credit or debit operations, instructions or other notifications from the account holder, attributable to the Bank due to negligence, is limited to the amount of “lost interest” by the respective account holder.
8. Remuneration
   8.1. The calculation and payment of remuneration for accounts used for minimum reserve compliance purposes are governed by the Regulations of the Council and the European Central Bank relating to the application of the minimum reserve regime.
   8.2. Without prejudice to the provisions of the preceding number, demand deposit accounts exclusively used for processing payments for Central Bank clients and/or for specific operations with the Bank, namely cash deposits and withdrawals, will not accrue any interest.
9. Cancellation of demand deposit accounts
   9.1. Holders of demand deposit accounts are obliged to comply with the movement and coverage rules established in this Instruction, under penalty of the Bank, after evaluating the seriousness of the facts attributable to the holders, unilaterally proceeding with the cancellation of their respective deposit accounts.
   9.2. If the demand deposit account shows no movement for a period of 5 years, the Bank may unilaterally proceed with its cancellation.
10. Closure of demand deposit accounts
    10.1. Requests for closure of demand deposit accounts must be addressed, in writing, to the Bank.
    10.2. Holders of demand deposit accounts used for minimum reserve compliance purposes may request the Bank to close their respective accounts, alleging the cessation of the obligation to comply with minimum reserves with the Bank or the option to open an account in TARGET2-PT. The closure of deposit accounts requires approval from the Bank.
    10.3. Holders of demand deposit accounts used for processing specific operations with the Bank, namely cash deposits and withdrawals, or demand deposit accounts used for processing payments for Central Bank clients, may close them at any time, once all previously assumed obligations have been punctually fulfilled.
11. Price list
    The price list is based on the recovery of costs incurred by the Bank with the management of deposit accounts and is set out in the service conditions referred to in number 2.3. of this Instruction.
12. Amendments
    The Bank may amend this Instruction at any time, after consulting the holders of demand deposit accounts whenever it deems necessary.
13. Jurisdiction
    13.1. Operations carried out within the scope of AGIL are subject to Portuguese Law in general and, in particular, to the provisions of this Instruction.
    13.2. For the benefit of the Bank, for any dispute, namely concerning the validity, interpretation and application of this Instruction, as well as the resolution of any conflicts, a voluntary Arbitration Tribunal, to be constituted in accordance with the applicable Law, shall have jurisdiction.
    13.3. The Tribunal will operate in Lisbon and its object will be defined in the constitutive letters of the Tribunal, unless there is a restriction that the arbitrators will decide at the request of any of the parties, and the decision will be rendered according to equity and without appeal.
    13.4. The right of the Bank, at its sole discretion, to initiate any actions in any national or foreign jurisdiction is in no way limited.
14. Correspondence
    Correspondence that, within the scope of the application of this Instruction, is addressed to Banco de Portugal must be sent to:
    BANCO DE PORTUGAL
    Payment Systems Department
    Interbank Settlements and Complaints Service
    Av.ª Almirante Reis, 71 – 7.º
    1150 - 012 LISBOA
15. Transitional provisions
    15.1. From the date of entry into force of this Instruction, all demand deposit accounts existing in the Large Transactions Payment System (SPGT2) and the Other Depositors Settlement System (SLOD) are considered constituted in AGIL.
    15.2. The provisions of the preceding number do not apply to demand deposit accounts existing in SPGT2 and SLOD whose holders, on the date of entry into force of this Instruction, are direct participants in TARGET2-PT.
16. Revocation Norm
    Banco de Portugal Instruction No. 114/96 (published in BNBP No. 2, 15.07.96) is hereby revoked.
17. Entry into force
    The provisions contained in this Instruction will enter into force on March 2, 2009, or on the date to be defined by the Bank as the end of the transition period, which will be notified by the Bank to all holders of single settlement accounts of SPGT2 and SLOD.