FINANCIAL INSTITUTIONS LAW ( PART 30)

Section II
Responsible management

Article 74
General principles

Banking financial institutions should use the funds at their disposal in such a way as to guarantee at all times adequate levels of liquidity and solvency.

Article 75
Capital

1. The responsible supervisory entity shall set the elements, which may be considered capital funds of banking financial institutions and branch offices in Angola of foreign based financial institutions, defining the characteristics of such.

2. Capital funds of the financial institutions referred to in article 3 of this law, may not become less than the minimum amount of stock capital legally required.

3. If it is shown that the capital funds have fallen below the required amount, the Supervisory Entity may, where circumstances justify, grant the institution a limited period to regularize the situation.

Article 76
Reserves

1. The supervisory entity shall define a fraction, not smaller than 10%, of net profits ascertained for each year by banking financial institutions, which must be set aside for the creation of a legal reserve up to the limit of the stock
capital.

2. Financial institutions should also set up special reserves for backing up liquidity or to cover damages that the profit and loss account may not be able to meet.

3. The responsible supervisory entity may define general or specific criteria for the setting up and use of reserves mentioned in the previous number.

Article 77
Ratios and prudent limits

1. The responsible supervisory entity is responsible for defining the ratios to be maintained between asset items, and establishing prudent limits to the operations that financial institutions are authorized to carry out, namely:

a) the ratio between own capital funds and the total of assets and nonpatrimonial accounts, whether or not weighted according to coefficient of risk;
b) limits to the firm uptake of the issue of debentures for indirect subscription or as a guarantee of placement of issues of the same securities;
c) limits and types of cover for third-party resources and any other liabilities towards third parties;
d) limits to the concentration of risk;
e) minimum limits to the provisions for coverage of credit risk or any other risk or liability;
f) ratio of participants shareholding with own funds;
g) ratio of participants shareholding with the capital of the other;
h) limits to fixed assets;
i) limits to credit granted to holders of qualified shareholdings;
j) limits of foreign exchange exposure;
k) others limits to be defined by the responsible supervisory entity.

Article 78
Subsequent communication

Without prejudice to the communication provided for in number 1 of article 22 of this law, facts that result, directly or indirectly, in a qualified shareholding in a credit institution, or an increase in the same under the terms of the provisions of the same article, should be notified by the person concerned to the responsible supervisory entity, within a period of 15 days counting from the date on which the facts arose.

Article 79
Registration of Parasocial Agreements

1. Parasocial agreements between shareholders of financial institutions concerning the exercise of the right to vote are subject to registration at the responsible supervisory entity, under penalty of inefficacy.

2. Either party to the agreement may request the registration.

Article 80
Accounting and publication rules

1. The National Bank of Angola is, without any prejudice to competences that may come to be attributed to other bodies governing accounting, securities and insurance, responsible for establishing the internal control standards, accounting rules and other applicable, to the institutions under the supervision, and also for defining the elements that the institutions should submit and/or publish.

2. Financial institutions shall publish financial statements, in the terms and with the periodicity defined by their respective supervisory boards, which must be prepared by an accountant registered with the entity representing accountants and chartered accountants of Angola, in accordance with law 3/01, dated March 23, Accounting and Audit Law.

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