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Considerations on the relevance of the Terms and Conditions for the transfer of services and activities for investing in Securities

Heriwalter Domingos


It is increasingly becoming a certainty about the relevance of the securities market in Angola, as a fundamental element for the existence of a robust, competitive and increasingly transparent financial system.


The genesis of the first approaches to the capital market in Angola, at the academic level, is based on the work of Carlos São Vicente “The Capital Market in Angola, 1996”. However, it was only on September 10, 1997 that the Capital Market and Stock Exchange Nucleus structurally appeared.

It is considered that, unlike other markets, in the case of the Angolan market, it is sui generis, as instead of the market appearing first, it was the opposite, that is, the regulatory base was first consolidated and only then did the market begin to develop up with activation of different market segments and adherence of certain participants.

Regarding the focus of the topic under discussion, it was on the 9th of November that the Capital Market Commission (CMC) and the National Bank of Angola (BNA), following the provisions of paragraph 2 of article 440.º, of Law No. 14/21, of 19 May, on the General Regime of Financial Institutions (LRGIF), made public the guidelines of what could be the new modus operandi of Intermediation Agents at the level of the Securities Market (MVM). ).

    current frame

In the spectrum of financial institutions, designated as intermediation agents as established in subparagraph a) of paragraph 2 of article 2, of Law no. 22/15, of August 31, Approves the Securities Code (CodVM ), that is, “Financial institutions that are authorized to carry out one or more services and investment activities in securities and derivative instruments in Angola and that are registered with the Capital Markets Supervisory Body” currently at the level of the Angola's Capital Market and Stock Exchange, we have the following structure:

The participation of intermediation agents in the secondary market has been an essential factor for the consolidation of the securities market in Angola. In this context, there is a considerable growth in the performance of intermediation agents, so for the purposes of example, in 2020 BODIVA Members contributed to the realization of 5,512 trades, moving an amount of KZ 1,187,231,611,940.56 .

With regard to the Financial Derivatives Industry, they are also experiencing an interesting growth dynamic, with 463 derivative contracts signed in 2020, enabling an average of around AOA 147.99 billion to be transacted.

As for the number of participants that a given market must have, there are two currents: The first current argues that the greater the size of the economy and the maturity of the market itself, the greater the number of participants, while the second current defends that the number of participants will be subjective, the most important being their strength, ie how strong and resilient they can be.

DIn light of the above, both assumptions are valid, as shown in the graph above, although the dynamics of the market itself may make more sense, as the determining factor for the number of Members, as an example we have B3 (Brazil) with more than 100 participants and Euronext Lisbon with only 10 participants, both being markets with considerable depth in terms of transactions.

The approach regarding the number of participants is relevant for reflection purposes, as in the near future, and by virtue of the aforementioned Press Release, there may be a growth or a decrease in market participants.

    Transfer Process of Services and Investment Activities in Securities:

The highlighted press release that the Capital Markets Commission (CMC) made public regarding the Transfer Terms of Services and Investment Activities in Securities, leaves a great expectation about the number and performance of the market in 2022 and 2023 Allied to this challenge, it will be interesting to analyze how the main players will respond in accordance with the published note and within the established deadline.

Accordingly, it is considered that the Press Release establishes two processes that Banking Financial Institutions operating in the Securities Market must be aware of, namely:

    Process of Transfer of Services and Activities of Investment in Securities in the lato sensu: Banking Financial Institutions, until December 31, 2022, must proceed with the transfer of services provided for in paragraph 1 of article 3 of the Presidential Legislative Decree no. /13, 9th of October -Companies – Legal Regime of Securities Brokers and Distributors. Without prejudice to the preceding paragraphs of the aforementioned article, only paragraph a) The reception of transmission of orders on behalf of others is highlighted; b) The execution of orders on behalf of others in regulated markets or outside them; c) trading for the portfolio.

    Automatic License Revocation Process: The Press Release establishes that with the respective publication, Banking Financial Institutions that have not provided services and activities involving investments in securities and derivative instruments for more than 365 days, their licenses are automatically considered. revoked.

    What will the number of participants in the Securities Market look like within the scope of the Transfer of Services and Investment Activities in Securities?

Without prejudice to formal approaches that duly competent institutions may present, it is understood that we may have the scenario identified below:

In the case of Securities Brokerage Companies and Securities Distributing Companies, it is believed at this stage to represent institutions that eventually lead to further discussions in terms of resources for the preparation of conditions, the licensing process should be done with the CMC (Registration and Authorization for the Constitution); and the Member Admission process, with BODIVA (Instruction No. 6/2020- On Admission of Members).

In light of the above, there are certainly many challenges ahead in several directions, with the main market players having to "run at three speeds", that is, they should pay attention to the points highlighted below:

    Market regulation

    Administrative Aspects

    Operational Aspects

In this way, as in any process, it is considered that the main objective of the Transfer of Services and investment activities in Securities and Derivative Instruments is to make the market increasingly robust in terms of the performance of the participants, the performance of the regulators and growth in the level of financial literacy.

Thus, with the exercise to be carried out in 2022, certainly in 2023 it would be interesting to have a general assessment at the level of study, of the entire process.

Opinion of
Heriwalter Domingos