## INTRODUCTION — New Arrangements to Borrow (NAB) Proposed Renewal and Modifications (_102116a)

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### Review of the Functioning of the NAB
- Activations and use:
  - NAB activated ten times from April 1, 2011 to February 25, 2016, including six times since the last renewal on November 17, 2012.
  - Each activation approved for the maximum available amounts and for the maximum period of six months, supporting a 3:1 NAB to quota financing ratio historically.
  - Managing Director’s proposals received unanimous or near-unanimous participant support; Executive Board decisions adopted on a lapse of time basis.
  - Following quota payments under the Fourteenth Review, NAB was rolled back in February 2016 from SDR 370 billion to SDR 182 billion as agreed under Board of Governors’ Resolution No. 66-2.
  - Last activation period terminated early on February 25, 2016.
  - NAB resources currently not used to finance new commitments; continue to finance existing NAB-eligible commitments with a 1:1 NAB to quota financing ratio.
- Procedures and operational experience:
  - Activation procedures functioned well and were streamlined since the last renewal.
  - Participant consideration period for activation proposals lengthened (initially four days in April 2011, extended to 10 days; later activations had longer periods, about four weeks for the last three activations).
  - Informal consultation process streamlined: one informal consultation meeting with NAB representatives; written note constitutes consultation with Executive Directors unless a Director requests a meeting.
- Maturity and repayment:
  - Maximum maturity of NAB claims extended from five years to 10 years at last renewal; extension did not apply to certain bilateral loan claims folded into NAB for some Extended Arrangements approved prior to expanded NAB—those folded claims retain a maximum maturity of five years.
  - Maturity mismatches arose in January 2016 and expected to arise intermittently until the first quarter of FY 2018.
  - In consultation with relevant NAB participants, maturing claims from these mismatches that may not be fully repaid with pass-through repayments of Fund credit funded with NAB resources are being covered by quota resources.
- Proportionality practice and threshold change:
  - Maximum threshold for small individual purchases not subject to strict proportionality increased from SDR 100 million to SDR 1 billion.
  - Operational impact: 59 purchases exceeding SDR 100 million disbursed using NAB resources since threshold increase; of these, 42 purchases were below the new SDR 1.0 billion threshold and thus no longer subject to strict proportionality.
- Fund capacity context:
  - Forward Commitment Capacity (FCC) currently about SDR 220 billion.
  - Activation of NAB could potentially add about SDR 100 billion in uncommitted resources.
  - NAB activation is a precondition for use of other borrowed resources.

### Participants, Credit Arrangements, and Key Figures
- Selected credit arrangement amounts (in millions of SDRs, Annex I; current participants):
  - China: 15,860.38
  - Deutsche Bundesbank: 12,890.02
  - France: 9,479.16
  - Japan: 33,508.50
  - United States: 28,202.47
  - Total (current participants): 180,572.58
- New participants and amounts:
  - Greece: 840.60
  - Ireland: 957.97
  - Total after adherence by new participants: 182,371.15
- Note: Credit arrangements are subject to a minimum of SDR 340 million.
- Annex I (selected systemic changes and totals):
  - Total current amount listed: 180,572.58
  - Total after adherence by new participants (aggregate): 369,997.36; 182,371.14; 182,371.15 (as presented in source, multiple totals preserved verbatim).

### Proposed Renewal, Modifications, and Rationale
- Renewal proposal:
  - Staff proposes renewing the NAB Decision for a further five-year period through November 16, 2022 (the next NAB period would expire on November 16, 2022; should renewal be approved the new NAB period would become effective on November 17, 2017).
  - Rationale: continued elevated risks of large and potentially systemic economic and financial crises amid structural shifts, diminished policy buffers, and lower medium-term growth prospects; renewal helps preserve global financial stability and confidence in the Fund’s capacity to meet members’ potential resource needs.
  - Five-year renewal viewed as consistent with past practice and important to assure supplemental resources available for extended periods.
- Consistency with Fund size analysis:
  - Staff recommended maintaining the Fund’s current overall lending capacity, retaining access to borrowed resources including the NAB as backstop to quota resources.
  - G20 Leaders expressed support for maintaining access to bilateral and multilateral borrowing agreements between members and the IMF.
- Proposed changes (two technical amendments and other drafting adjustments):
  - Technical change 1 — Periodicity requirement for Resource Mobilization Plans (RMPs):
    - When NAB is not activated, Managing Director would have discretion to propose RMP periods of up to six months; no change to quarterly RMPs during activation periods.
    - Exact amended sentence (Box 1, Paragraph 6(a), first sentence) preserved verbatim in source:
      “To fund outright purchases during an activation period and commitments under arrangements approved during an activation period, calls under individual arrangements of participants may be made on the basis of resource mobilization plans approved by the Executive Board normally on a quarterly basis in conjunction with the quarterly financial transactions plan for the General Resources Account, normally on a quarterly basis for periods where the New Arrangements to Borrow is activated and for periods up to six months when the New Arrangements to Borrow is not activated.”
    - Implementation clarification: when FTP/RMP period is up to six months, the “quarterly period” in paragraph 11(a) would be (i) the first three months of the relevant FTP/RMP period or (ii) the remaining period after the first three months; repayments to NAB participants linked to repurchases earlier than ten years after a NAB-funded purchase would be made in the corresponding three-month subperiod.
  - Technical change 2 — Reference to General Review of Quotas:
    - Replace reference to the “Fourteenth General Review of Quotas” with the “Fifteenth General Review of Quotas”.
    - Exact amended sentence (Box 1, Paragraph 19(a), second sentence) preserved verbatim in source:
      “When considering a renewal of this decision for any period following the period referred to in this paragraph 19(a), the Fund and the participants shall review the functioning of this decision and, in particular, (i) the experience with the procedures for activation and (ii) the impact of the Fourteenth Fifteenth General Review of Quotas on the overall size of quotas, and shall consult on any possible modifications.”
  - Other drafting and technical adjustments summarized:
    - Allow RMPs and FTPs “for periods up to six months where the New Arrangements to Borrow is not activated.”
    - Change references from “the Fourteenth General Review of Quotas” to “the Fifteenth General Review of Quotas.”
    - Modify the figure “SDR 367,467.36 million” in paragraph 21(b) to read “SDR 180.572.58 million.”
    - Replace certain references to effective dates with “March 11, 2011.”
    - Replace references to “quarterly financial transactions plan” with “financial transactions plan” in specified paragraphs.
- Procedural points on modifications and amendments:
  - Modifications at time of renewal become effective with the new period; most do not require consent of NAB participants except changes to paragraphs 4(b), 15(b), and 16 which are subject to special consent requirements.
  - Amendments during a period require Fund decision with concurrence of participants representing 85 percent of total credit arrangements, except as provided in specified paragraphs.
  - Participants may withdraw adherence to the renewed NAB by advising the Fund no less than six months before end of the period (i.e., May 16, 2017 for the proposed renewal); absent such notice, participant deemed to continue adherence.

### Repayment, Transferability, and Notes (General Terms and Conditions highlights)
- Repayment and maturities:
  - Standard maturity for Fund repayment: ten years after a transfer in response to a call (paragraph 11(a)).
  - Repayments linked to early repurchases: Fund shall repay participants an equivalent amount during the quarterly period in which a drawer repurchases earlier than ten years.
  - Special repayment allocation objective: achieve available commitments of participants that are of equal proportion relative to their credit arrangements; repayments applied first to the longest outstanding claim (paragraph 11(d)).
- Notes (General Terms and Conditions, Annex II):
  - Notes issued at participant request up to amount of any call; Notes denominated in the special drawing right.
  - Notes ordinarily have maturity of ten years; Notes issued pursuant to paragraph 13(k) have maturity of the exchanged loan claim.
  - Interest rate: equal to the combined market interest rate computed by the Fund for determining the rate at which it pays interest on holdings of special drawing rights, or any higher rate agreed between the Fund and participants representing 85 percent of total credit arrangements.
  - Interest accrues daily and is paid as soon as possible after each July 31, October 31, January 31, and April 30.
- Transferability and restrictions:
  - Claims and Notes transferable only in accordance with paragraph 13/Annex II or with prior consent of the Fund.
  - Eligible transferees: a participant; or a non-participant that is (i) a Fund member, (ii) the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes, or (iii) an official entity prescribed as an SDR holder under Article XVII, Section 3.
  - Price for claim/Note transfer as agreed between transferee and transferor; transfer must be registered by the Fund to be effective.
  - Derivative transactions in respect of any claim or Note, and transfers of participation interests in any claim or Note, are prohibited.

### Proposed Decision (high-level elements) and Staff Recommendation
- Proposed Executive Board action:
  - Executive Board Decision No. 11428-(97/6) proposed to be renewed for five years from November 17, 2017.
  - Effective November 17, 2017, proposed modifications include deletion, insertion, and rewording of specified references and sentences in paragraphs 3(c), 6(a), 11(b), 11(c), 19(a), 21(b), 23, and other provisions to reflect:
    - Allowing RMPs and FTPs “for periods up to six months where the New Arrangements to Borrow is not activated.”
    - Changing references from “the Fourteenth General Review of Quotas” to “the Fifteenth General Review of Quotas.”
    - Modifying the figure “SDR 367,467.36 million” in paragraph 21(b) to read “SDR 180.572.58 million.”
    - Replacing certain references to effective dates with “March 11, 2011.”
    - Replacing references to “quarterly financial transactions plan” with “financial transactions plan” in specified paragraphs.
- Staff recommendation:
  - Staff recommends the Executive Board approve the proposed renewal and modifications to the NAB Decision.
  - If approved, renewal with modifications to take effect on November 17, 2017.

*Source: INTRODUCTION, Annex I, Appendix I, Appendix II, Annex II (document _102116a — INTRODUCTION, October 21, 2016).*

### INTRODUCTION

### INTRODUCTION

### Review of the Functioning of the NAB
- The NAB has been activated ten times, from April 1, 2011 to February 25, 2016, including six times since the last renewal of the NAB on November 17, 2012.
- Each activation was approved for the maximum available amounts and for the maximum period of six months, providing substantial resources to supplement quota resources under a 3:1 NAB to quota financing ratio.
- On all occasions, the Managing Director’s proposal received unanimous or very close to unanimous support of participants, and the associated decisions of the Fund’s Executive Board were adopted on a lapse of time basis.
- Following the quota payments under the 14th Review, the NAB was rolled back in February 2016 from SDR 370 billion to SDR 182 billion as agreed under the Board of Governors’ Resolution No. 66-2.
- The last NAB activation period was terminated early on February 25, 2016.
- NAB resources are currently not used to finance new commitments, but they continue to be used to finance existing NAB-eligible commitments with a 1:1 NAB to quota resources financing ratio.
- Staff assessment of activation procedures:
  - Procedures have functioned well and have been streamlined to address concerns raised during the last renewal.
  - The time period for participants to consider the Managing Director’s activation proposals has been lengthened (historically: initially four days for first activation in April 2011, extended to 10 days; for later activations longer periods established, about four weeks for the last three activations).
  - The informal consultation process was streamlined: an informal consultation meeting is held with representatives of NAB participants, and a written note constitutes the consultation process with Executive Directors unless a meeting is requested by a Director.
- Maturity and repayment issues:
  - At the last NAB renewal the maximum maturity of NAB claims was extended from five years to 10 years; however, this extension did not apply to bilateral loan claims folded into the NAB for a limited number of Extended Arrangements approved prior to the activation of the expanded NAB—those folded claims retain a maximum maturity of five years.
  - The resulting maturity mismatches first arose in January 2016 and are expected to arise intermittently until the first quarter of FY 2018.
  - In consultation with relevant NAB participants, maturing claims arising in the context of these mismatches that may not be fully repaid with pass through repayments of Fund credit funded with NAB resources are being covered by quota resources.
- Proportionality practice:
  - The maximum threshold for small individual purchases not subject to strict proportionality was increased from SDR 100 million to SDR 1 billion.
  - Operational impact: A total of 59 purchases exceeding SDR 100 million were disbursed using NAB resources since the maximum threshold was increased to SDR 1.0 billion. Of these, 42 purchases were below the new SDR 1.0 billion maximum threshold and thus no longer subject to strict proportionality.
- NAB participants and credit arrangements (selected figures from Table 1; amounts in millions of SDRs):
  - China: 15,860.38
  - Deutsche Bundesbank: 12,890.02
  - France: 9,479.16
  - Japan: 33,508.50
  - United States: 28,202.47
  - Total (current participants): 180,572.58
  - New participants: Greece 840.60; Ireland 957.97
  - Total after adherence by new participants: 182,371.15
  - Note: Credit arrangements are subject to a minimum of SDR 340 million.
- Fund capacity context:
  - The Fund’s Forward Commitment Capacity (FCC) currently stands at about SDR 220 billion.
  - Activation of the NAB could potentially add about SDR 100 billion in uncommitted resources.
  - Activation of the NAB serves as a precondition for use of other borrowed resources.

### Proposed Renewal and Modifications
- Renewal proposal:
  - Staff proposes renewing the NAB Decision for a further five-year period through November 16, 2022 (the next NAB period would expire on November 16, 2022; should renewal be approved the new NAB period would become effective on November 17, 2017).
  - Rationale: continued elevated risks of large and potentially systemic economic and financial crises amid structural shifts, diminished policy buffers, and lower medium-term growth prospects; renewal helps preserve global financial stability and confidence in the Fund’s capacity to meet members’ potential resource needs.
  - Staff views the five-year renewal period as consistent with past practice and critical to assuring supplemental resources would be available for extended periods should the need arise.
- Consistency with staff analysis on Fund size:
  - Staff recommended that the Fund’s current overall lending capacity at least be maintained, which entails retaining access to borrowed resources including the NAB as a backstop to quota resources.
  - G20 Leaders expressed support for maintaining access to bilateral and multilateral borrowing agreements between members and the IMF.
- Proposed changes: two technical amendments and a number of minor drafting changes (Appendix II shows red-line changes; Appendix I summarizes procedures for modifying the NAB Decision).
  - Technical change 1 — Periodicity requirement for Resource Mobilization Plans (RMPs):
    - Rationale: when NAB is not activated calls would likely be less frequent and more predictable; to facilitate streamlining the Managing Director would have discretion to propose RMP periods of up to six months. There would be no change for the quarterly length of RMPs during activation periods.
    - Exact amended sentence (Box 1, Paragraph 6(a), first sentence):
      “To fund outright purchases during an activation period and commitments under arrangements approved during an activation period, calls under individual arrangements of participants may be made on the basis of resource mobilization plans approved by the Executive Board normally on a quarterly basis in conjunction with the quarterly financial transactions plan for the General Resources Account, normally on a quarterly basis for periods where the New Arrangements to Borrow is activated and for periods up to six months when the New Arrangements to Borrow is not activated.”
    - Implementation clarification: When the FTP/RMP period is established for up to six months, the “quarterly period” in paragraph 11(a) would be (i) the first three months of the relevant FTP/RMP period or (ii) the remaining period after the first three months; repayments to NAB participants linked to repurchases earlier than ten years after a NAB-funded purchase would be made in the corresponding three-month subperiod.
  - Technical change 2 — Reference to General Review of Quotas:
    - Proposed modification replaces reference to the “Fourteenth General Review of Quotas” with the “Fifteenth General Review of Quotas”.
    - Exact amended sentence (Box 1, Paragraph 19(a), second sentence):
      “When considering a renewal of this decision for any period following the period referred to in this paragraph 19(a), the Fund and the participants shall review the functioning of this decision and, in particular, (i) the experience with the procedures for activation and (ii) the impact of the Fourteenth Fifteenth General Review of Quotas on the overall size of quotas, and shall consult on any possible modifications.”
- Other proposed drafting and technical adjustments (summarized):
  - Give the Managing Director discretion to propose RMP periods of up to six months when NAB is not activated (no change to quarterly RMPs during activation).
  - Amend references and timing in several NAB Decision paragraphs to reflect renewal to November 16, 2022 and other updated dates and figures (detailed changes shown in the Proposed Decision section).
  - Clarify interpretation of “quarterly period” in paragraph 11(a) and apply same interpretation to paragraph 11(c).

### Conclusion and Staff Recommendation
- Recommendation:
  - Staff recommends that the Executive Board approve the proposed renewal of, and modifications to, the NAB Decision.
  - If approved, the renewal with modifications will take effect on November 17, 2017.
- Participant notice:
  - Pursuant to paragraph 19(b) of the NAB Decision, any participant may advise the Fund no less than six months before the end of the period (i.e., May 16, 2017) that it will withdraw its adherence to the NAB Decision as renewed. In the absence of such notice, a participant shall be deemed to continue to adhere to the NAB Decision as renewed.

### Proposed Decision (high-level elements)
- Executive Board Decision No. 11428-(97/6) is proposed to be renewed for five years from November 17, 2017.
- Effective November 17, 2017, proposed modifications include (inter alia):
  - Deletion, insertion, and rewording of specified references and sentences in paragraphs 3(c), 6(a), 11(b), 11(c), 19(a), 21(b), 23, and other provisions to:
    - Allow RMPs and FTPs “for periods up to six months where the New Arrangements to Borrow is not activated.”
    - Change references from “the Fourteenth General Review of Quotas” to “the Fifteenth General Review of Quotas.”
    - Modify the figure “SDR 367,467.36 million” in paragraph 21(b) to read “SDR 180.572.58 million.”
    - Replace certain references to effective dates with “March 11, 2011.”
    - Replace references to “quarterly financial transactions plan” with “financial transactions plan” in specified paragraphs.

*Source: INTRODUCTION (document _102116a - INTRODUCTION, October 21, 2016).*

### 3. The credit arrangements of current and new participants in the New Arrangements to

### 3. The credit arrangements of current and new participants in the New Arrangements to Borrow

### Update to credit arrangements
- The credit arrangements of current and new participants in the New Arrangements to Borrow set out in the Annex I to the NAB Decision shall be updated as set out in the Annex of EBS/16/103, (10/21/16) to reflect the effectiveness of the changes in credit arrangements following the implementation of the rollback of credit arrangements in accordance with Executive Board Decision No. 15073-(12/1), adopted December 21, 2011.

### Annex — NAB Participants and Amounts of Credit Arrangements (in Millions of SDRs)1/
- Current Participants and Amount
  - Australia 2,220.45
  - Austria 1,818.49
  - Banco Central de Chile 690.97
  - Banco de Portugal 783.50
  - Bangko Sentral ng Pilipinas 340.00
  - Bank of Israel 340.00
  - Belgium 3,994.33
  - Brazil 4,440.91
  - Canada 3,873.71
  - China 15,860.38
  - Cyprus 340.00
  - Danmarks Nationalbank 1,629.76
  - Deutsche Bundesbank 12,890.02
  - Finland 1,133.88
  - France 9,479.16
  - Hong Kong Monetary Authority 340.00
  - India 4,440.91
  - Italy 6,898.52
  - Japan 33,508.50
  - Korea 3,344.82
  - Kuwait 341.29
  - Luxembourg 493.12
  - Malaysia 340.00
  - Mexico 2,537.66
  - National Bank of Poland 1,285.40
  - Netherlands 4,594.80
  - New Zealand 340.00
  - Norway 1,966.69
  - Russian Federation 4,440.91
  - Saudi Arabia 5,652.74
  - Singapore 648.55
  - South Africa 340.00
  - Spain 3,405.14
  - Sveriges Riksbank 2,255.68
  - Swiss National Bank 5,540.66
  - Thailand 340.00
  - United Kingdom 9,479.16
  - United States 28,202.47
  - Total 180,572.58

- New Participants
  - Greece 840.60
  - Ireland 957.97

- Total after adherence by new participants
  - 182,371.15

- Note:
  - Credit arrangements are subject to a minimum of SDR 340 million.

### Appendix I — Changes to the NAB Decision
- Overview
  - The NAB Decision can be changed under two sets of procedures:
    - (i) modifications at the time of renewal, which become effective with the start of the next period, and
    - (ii) amendments during an NAB period.
  - For the issues under consideration for the upcoming review, only modifications at the time of renewal are relevant.

- Modifications at the Time of Renewal
  - Paragraph 19(b) of the NAB Decision provides: “This decision may be renewed for such period or periods and with such modifications, subject to paragraphs 4(b) [changes in credit arrangements], 15(b) [right of withdrawal in case of an amendment] and 16 [withdrawal of membership], as the Fund may decide.”
  - Most modifications adopted at the time of renewal do not require the consent of NAB participants, except for changes to paragraphs 4(b), 15(b), and 16, which are subject to special consent requirements (Paragraph 15(a), last sentence, NAB Decision).
  - Modifications adopted as part of the renewal become effective with the new period, provided that for those changes that require the consent of participants the required consents have been received.
  - Participants have the right to withdraw from the NAB as renewed if they give notice six months before the end of the expiring NAB period (Paragraph 19(b) NAB Decision).

- Amendments to the NAB Decision and Changes in NAB Credit Arrangements During a Period
  - Paragraph 15(a) provides that the NAB Decision may be amended during a period by a decision of the Fund and with the concurrence of participants representing 85 percent of total credit arrangements, except as provided in paragraphs 4(b), 15(b), and 16.
  - Paragraph 4(b) provides that individual credit arrangements may be reviewed from time to time in light of developing circumstances.
    - Changes require the agreement of the Fund (an Executive Board decision with the majority of the votes cast) and of participants representing 85 percent of total credit arrangements, including each participant whose credit arrangement is changed.

*Source: Annex and Appendix I, New Arrangements to Borrow (NAB)—Proposed Renewal.*

### Appendix II. Redlines over the NAB Decision

### Appendix II. Redlines over the NAB Decision

### Preamble and Purpose
- Purpose: Enable the International Monetary Fund (the “Fund”) to fulfill more effectively its role in the international monetary system by having a number of countries provide resources to the Fund up to specified amounts in accordance with the terms and conditions of this decision.
- Scope: Credit arrangements under this decision are quota-based and drawn upon only when quota resources need to be supplemented to forestall or cope with an impairment of the international monetary system.
- Legal basis: Terms and conditions adopted under Article VII, Section 1(i) of the Fund’s Articles of Agreement.

### Definitions (Paragraph 1)
- Key defined terms (exact wording preserved):
  - “amount of a credit arrangement” — the maximum amount expressed in special drawing rights that a participant undertakes to make available to the Fund under a credit arrangement;
  - “available commitment” — a participant’s credit arrangement less any drawn and outstanding balances;
  - “borrowed currency” or “currency borrowed” — currency transferred to the Fund’s account under a credit arrangement;
  - “call” — a notice by the Fund to a participant to make a transfer under its credit arrangement to the Fund’s account;
  - “credit arrangement” — an undertaking to provide resources to the Fund on the terms and conditions of this decision;
  - “drawer” — a member that purchases borrowed currency from the General Resources Account of the Fund;
  - “indebtedness of the Fund” — the amount the Fund is committed to repay under a credit arrangement;
  - “participant”, “participating institution”, “participating member” — as defined in the decision;
  - “currency actually convertible” — currency included in the Fund’s quarterly financial transactions plan for transfers.
- Special provision for the Monetary Authority of Hong Kong (the “HKMA”) (Paragraph 1(b)):
  - Loans and payments involving the HKMA shall be made in the currency of the United States of America unless otherwise agreed.
  - References to balance of payments and reserve position in specified paragraphs shall refer to Hong Kong.
  - HKMA voting and call eligibility contingent on Hong Kong’s present and prospective balance of payments and reserve position.
  - HKMA right to request early repayment for claims transferred to the HKMA under paragraph 13(c) if balance of payments position is sufficiently strong.

### Credit Arrangements and Adherence (Paragraphs 2–4)
- Credit arrangements:
  - Participants undertake to provide resources up to the amount in special drawing rights set forth in Annex I; Annex I may be amended to reflect changes from application of specified paragraphs.
  - Resources shall be made in the currency of the participant except as agreed or as provided in paragraph 1(b)(i).
- Adherence:
  - New participant admission: if Fund and participants representing 85 percent of total credit arrangements agree (paragraph 3(b)).
  - A joining member/institution must specify an SDR amount for its credit arrangement; minimum set equal to the smallest credit arrangement.
  - Admission of new participant triggers proportional reductions in credit arrangements of participants whose credit arrangements exceed the smallest participant’s amount, subject to no reduction below the minimum amount in Annex I.
  - Adherence effected by deposit of an instrument with the Fund; participant status effective on deposit or on the effective date of specified prior amendments, whichever is later (paragraph 3(c)).
- Changes in credit amounts:
  - Total credit arrangements may be increased with agreement of participants representing 85 percent of total credit arrangements, not exceeding the amount of the new participant’s credit arrangement (paragraph 4(a)).
  - Individual credit arrangements may be reviewed and changed with agreement of the Fund and participants representing 85 percent of total credit arrangements, including each participant whose arrangement is changed (paragraph 4(b)).

### Activation Period, Resource Mobilization Plans, and Calls (Paragraphs 5–7)
- Activation Period (Paragraph 5):
  - Trigger: Managing Director proposal when Fund’s available resources from the General Resources Account need supplementation to forestall or cope with an impairment of the international monetary system.
  - During an activation period the Fund may: (i) make commitments under Fund arrangements that may trigger calls, and (ii) fund outright purchases by making calls.
  - Duration limit: an activation period shall not exceed 6 months.
  - Proposal must specify: overall size of possible Fund arrangements; balance between drawn and precautionary arrangements; additional financing needs that may arise; and mix of quota and NAB resources for purchases. Information updated quarterly during activation.
  - Participant decision rule: if not unanimous, decision by poll requiring an 85 percent majority of total credit arrangements of participants eligible to vote (paragraph 5(b)).
  - Ineligibility to vote: a participant not included in the financial transactions plan for transfers of its currency at the time of decision based on present and prospective balance of payments and reserve position (paragraph 5(c)).
  - An activation period becomes effective only if accepted by participants per paragraph 5(b) and approved by the Executive Board (paragraph 5(d)).
- Resource Mobilization Plans and Calls (Paragraph 6):
  - Executive Board approves resource mobilization plans normally on a quarterly basis in conjunction with the quarterly financial transactions plan for the General Resources Account.
  - Plans specify for each participant the maximum amount for which calls may be made during the applicable period; plans may be amended at any time.
  - Allocation objective: normally to result in available commitments of participants being of equal proportion relative to their credit arrangements.
  - Exclusion: a participant not included in the quarterly financial transactions plan for transfers of its currency shall not be included in the resource mobilization plan (paragraph 6(b)).
  - Calls made by Managing Director with due regard to the allocation objective; no call on a participant whose currency is not being used in transfers at time of call (paragraph 6(c)); participant shall promptly make transfers in response (paragraph 6(d)).
- Special Calls (Paragraph 7):
  - Calls pursuant to paragraph 11(e) or paragraph 23 may be made at any time and are not subject to procedures in paragraphs 5 or 6, subject to eligibility conditions tied to financial transactions plan and balance of payments/reserve position.
  - Participants must promptly comply with such calls.

### Nature of Indebtedness, Notes, Interest (Paragraphs 8–9)
- Nature and evidence of indebtedness (Paragraph 8):
  - Participant’s claim on the Fund arising from calls shall be in the form of a loan; at participant’s request, the Fund shall issue and the participant may purchase one or more promissory notes (“Notes”) up to the amount of any call.
  - Notes are subject to the General Terms and Conditions for NAB Notes (the “GTC”) set forth in Annex II; GTC may be amended with agreement of participants representing 85 percent of total credit arrangements and amendments apply upon effectiveness to all outstanding Notes.
  - Loans or Notes shall be evidenced by instruments as agreed; repayment procedures for instruments and registered Notes specified.
- Interest (Paragraph 9):
  - Interest rate: equal to the combined market interest rate computed by the Fund for determining the rate at which it pays interest on holdings of special drawing rights, or any such higher rate agreed between the Fund and participants representing 85 percent of the total credit arrangements (paragraph 9(a)).
  - Accrual and payment schedule: interest shall accrue daily and be paid as soon as possible after each July 31, October 31, January 31, and April 30 (paragraph 9(b)).
  - Interest payment methods: in special drawing rights, participant’s currency, the currency borrowed, freely usable currencies, or, with agreement, other actually convertible currencies (paragraph 9(c)).

### Use of Borrowed Currency and Rates of Exchange (Paragraphs 10, 12)
- Use of borrowed currency (Paragraph 10):
  - Fund’s policies and practices under Article V, Sections 3 and 7 of the Articles on use of general resources apply to purchases of currency borrowed by the Fund.
  - Access to Fund resources for individual members determined by Fund policies and practices, independent of borrowing under this decision.
- Rates of exchange (Paragraph 12):
  - Value of any transfer calculated as of the date of dispatch of instructions for the transfer; calculation in terms of the special drawing right in accordance with Article XIX, Section 7(a) of the Articles (paragraph 12(a)).
  - For all purposes of this decision, the value of a currency in terms of the special drawing right shall be calculated by the Fund in accordance with Rule O-2 of the Fund’s Rules and Regulations (paragraph 12(b)).

### Repayment by the Fund (Paragraph 11)
- Standard repayment timing and methods (Paragraph 11(a)):
  - Standard maturity: the Fund shall repay a transfer ten years after a transfer by a participant in response to a call.
  - If a drawer repurchases earlier than ten years after its purchase, Fund shall repay participants an equivalent amount during the quarterly period in which the repurchase is made.
  - Repayment currencies: whenever feasible in the currency borrowed, or in the participant’s currency, or in special drawing rights subject to Article XIX, Section 4 limits, or in freely usable currencies, or with participant agreement in other actually convertible currencies.
- Early or partial repayment (Paragraph 11(b)–(e)):
  - Fund may make repayment in part or in full before the ten-year date after consultation with participants; Fund has option on repayment currency subject to same set as in 11(a).
  - Special repayment for reductions in Fund’s holdings of a drawer’s currency attributed to purchases of currency borrowed under this decision: Fund shall promptly repay equivalent amounts to participants and allocate repayments per paragraph 11(d) (paragraph 11(c)).
  - Repayment allocation objective: achieve available commitments of participants that are of equal proportion relative to their credit arrangements; repayments applied first to the longest outstanding claim for each participant (paragraph 11(d)).
  - Participant may give notice that there is a balance of payments need for repayment and request repayment; Fund shall give the overwhelming benefit of any doubt to the participant’s representation and shall make repayment promptly after consultation (paragraph 11(e)). Managing Director may make calls on participants to provide necessary balances under their credit arrangements subject to available commitments.
- Restoration of available commitment (Paragraph 11(f)):
  - When a repayment is made on a claim arising from a call, the amount that can be called under the participant’s credit arrangement shall be restored pro tanto.
- Treatment for participating institutions (Paragraph 11(g)):
  - Fund deemed to have discharged obligations to participating institutions if it transfers an equivalent amount in special drawing rights to the member in which the participating institution is established.

### Transferability and Restrictions (Paragraph 13)
- General rule (Paragraph 13(a)):
  - No participant or non-participant holder may transfer claims except in accordance with paragraph 13 or with prior consent of the Fund.
- Eligible transferees (Paragraph 13(b)):
  - Claims may be transferred to a participant or to a non-participant that is: (i) a member of the Fund, (ii) the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes, or (iii) an official entity prescribed as a holder of SDRs under Article XVII, Section 3.
- Effect and conditions of transfer (Paragraph 13(c)–(l)):
  - Transferred claim held on same terms as original subject to specified limitations (e.g., right to request early repayment on balance of payments grounds only if transferee is a member or institution whose currency is usable in transfers under Fund’s financial transactions plan).
  - Price for claim transfer as agreed between transferee and transferor; transfer must be registered by the Fund and effective as of agreed value date.
  - Derivative transactions in respect of any claim and transfer of participation interests in any claim are prohibited (paragraph 13(l)).
  - Fund shall assist in seeking to arrange transfers if requested and shall accommodate exchanges between loan claims and Notes at transferee request.

### Notices, Amendments, Withdrawal, and Period (Paragraphs 14–19)
- Notices (Paragraph 14):
  - Notices to or by participating members delivered in writing or by rapid means to the fiscal agency designated per Article V, Section 1 and Rule G-1; notices to or by participating institutions given to the institution directly.
- Amendment procedures (Paragraph 15):
  - Decision may be amended during the period prescribed in paragraph 19(a) and any subsequent renewal periods only by Fund decision with concurrence of participants representing 85 percent of total credit arrangements, except for specified limited provisions.
  - Participant adversely affected materially by an amendment and who voted against it may withdraw adherence within 90 days of adoption (paragraph 15(b)).
- Withdrawal of adherence (Paragraph 16):
  - Participant may withdraw in accordance with paragraph 19(b) but may not withdraw within the initial period prescribed in paragraph 19(a) except with agreement of Fund and all participants.
- Withdrawal from membership (Paragraph 17):
  - If a participating member withdraws from membership, its credit arrangement ceases when withdrawal takes effect; Fund’s indebtedness treated as amount due from the Fund for purposes of Article XXVI, Section 3 and Schedule J.
- Suspension and liquidation (Paragraph 18):
  - Fund’s right to make calls and obligation to make repayments suspended during any suspension of exchange transactions under Article XXVII.
  - On liquidation, credit arrangements cease and Fund’s indebtedness constitutes liabilities under Schedule K; order of payable currencies specified.
- Period and renewal (Paragraph 19):
  - Stated term in text: “This decision shall continue in existence until November 16, 2022 2012*.” (text preserves both dates as in source).
  - Fund and participants shall review functioning when considering renewal, including experience with activation procedures and impact of Fourteenth Fifteenth General Review of Quotas on quota size.
  - Renewal decision to be adopted not later than twelve months before end of the prescribed period; any participant may advise Fund not less than six months before end of period of intent to withdraw adherence as renewed; absent such notice, participant deemed to continue adherence (paragraph 19(b)).
  - If decision is terminated or not renewed, paragraphs 8–14, 17 and 18(b) continue to apply to existing indebtedness until repayment completed (paragraph 19(c)).

### Relationship with the General Arrangements to Borrow and Aggregate Limits (Paragraph 21)
- Principle: New Arrangements to Borrower shall be facility of first and principal recourse; if a proposal to establish an activation period under NAB is not accepted under paragraph 5(a), a proposal may be made under the General Arrangements to Borrow (GAB) (paragraph 21(a)).
- Aggregate limit (Paragraph 21(b)):
  - Outstanding drawings and available commitments under the New Arrangements to Borrower and the General Arrangements to Borrow shall not exceed SDR 367,467.36 180,572.58* million, or such other amount of total credit arrangements as may be in effect.
  - Available commitment of a participant under NAB reduced pro tanto by outstanding drawings or commitments under GAB; and vice versa as specified.

### Other Provisions and Transitional Arrangements (Paragraphs 22–24)
- Other borrowing arrangements (Paragraph 22):
  - Nothing precludes the Fund from entering into other types of borrowing arrangements.
- Transitional arrangements (Paragraph 23):
  - At request of a participant holding claims under bilateral borrowing agreements entered into prior to March 11, 2011, Managing Director shall make calls under the participant’s credit arrangement to fund repayment of such claims; maturity date of claims under credit arrangements arising from such calls shall be the maturity date of the bilateral borrowing agreement claim for whose repayment the call was made.
- Delay in drawings (Paragraph 24):
  - No drawings shall be made under this decision until participants representing at least 70 percent of the total credit arrangements of new participants listed in Annex I have adhered in accordance with paragraph 3(c).

*Italic source attribution: Appendix II. Redlines over the NAB Decision (PDF chapter/section)._

### Annex I

### Annex I — Participants and Amounts of Credit Arrangements (in Millions of SDRs)

### Current participants and amounts
- Australia — Current amount: 4,370.41; New amount: 2,220.45
- Austria — Current amount: 3,579.24; New amount: 1,818.49
- Banco Central de Chile — Current amount: 1,360.00; New amount: 690.97
- Banco de Portugal — Current amount: 1,542.13; New amount: 783.50
- Bangko Sentral ng Pilipinas — Current amount: 340.00; New amount: 340.00
- Bank of Israel — Current amount: 500.00; New amount: 340.00
- Belgium — Current amount: 7,861.85; New amount: 3,994.33
- Brazil — Current amount: 8,740.82; New amount: 4,440.91
- Canada — Current amount: 7,624.43; New amount: 3,873.71
- China — Current amount: 31,217.22; New amount: 15,860.38
- Cyprus — Current amount: 340.00; New amount: 340.00
- Danmarks Nationalbank — Current amount: 3,207.78; New amount: 1,629.76
- Deutsche Bundesbank — Current amount: 25,370.81; New amount: 12,890.02
- Finland — Current amount: 2,231.76; New amount: 1,133.88
- France — Current amount: 18,657.38; New amount: 9,479.16
- Hong Kong Monetary Authority — Current amount: 340.00; New amount: 340.00
- India — Current amount: 8,740.82; New amount: 4,440.91
- Italy — Current amount: 13,578.03; New amount: 6,898.52
- Japan — Current amount: 65,953.20; New amount: 33,508.50
- Korea — Current amount: 6,583.44; New amount: 3,344.82
- Kuwait — Current amount: 341.29; New amount: 341.29
- Luxembourg — Current amount: 970.59; New amount: 493.12
- Malaysia — Current amount: 340.00; New amount: 340.00
- Mexico — Current amount: 4,994.76; New amount: 2,537.66
- National Bank of Poland — Current amount: 2,530.00; New amount: 1,285.40
- Netherlands — Current amount: 9,043.72; New amount: 4,594.80
- New Zealand — Current amount: 624.34; New amount: 340.00
- Norway — Current amount: 3,870.94; New amount: 1,966.69
- Russian Federation — Current amount: 8,740.82; New amount: 4,440.91
- Saudi Arabia — Current amount: 11,126.03; New amount: 5,652.74
- Singapore — Current amount: 1,276.52; New amount: 648.55
- South Africa — Current amount: 340.00; New amount: 340.00
- Spain — Current amount: 6,702.18; New amount: 3,405.14
- Sveriges Riksbank — Current amount: 4,439.74; New amount: 2,255.68
- Swiss National Bank — Current amount: 10,905.42; New amount: 5,540.66
- Thailand — Current amount: 340.00; New amount: 340.00
- United Kingdom — Current amount: 18,657.38; New amount: 9,479.16
- United States — Current amount: 69,074.27; New amount: 28,202.47

### Totals
- Total current amount listed: 180,572.58
- Total after adherence by new participants (aggregate): 369,997.36; 182,371.14; 182,371.15

### Prospective new participants
- Greece — Current amount: 1,654.51; New amount: 840.60
- Ireland — Current amount: 1,885.52; New amount: 957.97
- Philippines — Current amount: 340.00; New amount: 340.00

### Notes and procedural points (Annex I)
- Credit arrangements are subject to a minimum of SDR 340 million.
- If requested by a participant, the Fund may confirm the new credit arrangement effective the morning of the business day of the scheduled payment of the quota increase under the Fourteenth General Review of Quotas, on the condition that the quota payment of the relevant member is received later that day. The rollback would be reversed if the quota payment is not received.
- Greece and Ireland may continue to adhere with the credit arrangements approved in April 2010 ("current amount") until the effectiveness of their respective quota increases under the Fourteenth General Review, after which they may adhere with the proposed "new amount". If these members adhere with their current amount, the credit arrangements would be changed to the new amount on the day their respective quota increases become effective.
- The Philippine authorities have requested a name change in Annex I from “Philippines” to “Bangko Sentral ng Pilipinas”; upon Executive Board approval and consent of NAB participants, Annex I will be revised accordingly.
- Annex I is amended to eliminate pre-rollback credit arrangements that are no longer relevant.
- Revisions align terminology with Paragraph 3(a) of the NAB Decision and reflect exact amounts under arrangements with individual participants without affecting individual participants' obligations.

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### Annex II — General Terms and Conditions for Notes Issued by the IMF under the NAB

### Purpose and scope
- These General Terms and Conditions apply to promissory notes ("Notes") issued by the Fund pursuant to paragraphs 8 and 13(k) of Executive Board Decision No. 11428-(97/6), January 27, 1997, on the New Arrangements to Borrow (the "NAB Decision"), as amended.
- Undefined terms have the meanings ascribed in the NAB Decision.

### Paragraph 1 — Issuance
- At the request of a participant pursuant to paragraph 8(a) of the NAB Decision, the Fund will issue Notes to the participant and the participant shall purchase Notes up to the amount of the Fund’s call on the participant under its credit arrangement.
- At the request of the transferee of a loan claim, the Fund will issue Notes to the transferee in exchange for the loan claim pursuant to paragraph 13(k) of the NAB Decision.
- Notes shall be denominated in the special drawing right.

### Paragraph 2 — Form, delivery and custody
- Notes will be issued in book entry form; the Fund will maintain a book entry account recording number, issue date, principal amount, and maturity date.
- Making an entry in the Fund’s records constitutes delivery and establishes the holder for all purposes.
- Upon request, the Fund will issue a registered Note in the form set out in the Appendix; registered Notes bear as their issue date the value date of the purchase or exchange and will be held in custody by the Fund unless otherwise agreed.

### Paragraph 3 — Interest
- Interest rate: equal to the combined market interest rate computed by the Fund for determining the rate it pays on holdings of special drawing rights or any such higher rate agreed between the Fund and participants representing 85 percent of the total credit arrangements under the NAB Decision.
- Interest accrues daily and shall be paid as soon as possible after each July 31, October 31, January 31, and April 30.
- Interest due may be paid in special drawing rights, in the holder’s currency if the holder is a member, in the currency borrowed, in freely usable currencies, or, with agreement, in other actually convertible currencies.

### Paragraph 4 — Maturity and repayment
- Notes shall have a maturity of ten years, except Notes issued pursuant to paragraph 13(k) of the NAB Decision, which shall have the maturity of the exchanged loan claim.
- Repayment of principal is made in accordance with paragraph 11 of the NAB Decision.
- The Fund may be deemed to have discharged obligations to make repayment or pay interest in SDRs by transferring an equivalent amount in SDRs to the account of the member in which the institution is established, unless otherwise agreed with certain holders.
- Cancellation of Notes occurs upon payment of principal and accrued interest, upon transfer in accordance with paragraph 6, or upon exchange for a loan claim pursuant to paragraph 13(k). If early payment is less than principal, the Fund will cancel the Note and issue a new Note for the remainder.
- Registered Notes to be cancelled that are not in the Fund’s custody must be surrendered.

### Paragraph 5 — Rates of exchange
- Currency values in terms of the special drawing right shall be calculated by the Fund in accordance with Rule O-2 of the Fund’s Rules and Regulations.

### Paragraph 6 — Transferability
- Holders may not transfer Notes except (i) in accordance with paragraph 6 or (ii) with prior consent of the Fund on approved terms; other purported transfers are of no force or effect.
- Transfers may be made at any time to a participant or to a non-participant that is (i) a Fund member, (ii) the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes, or (iii) an official entity prescribed as an SDR holder under Article XVII, Section 3.
- As from the value date of transfer, the Note is held by the transferee on specified terms; transferees have limited rights to request early repayment on balance of payments grounds only if certain strength/conditions are met.
- Notes transferred are considered drawn balances of the first transferor participant for purposes of determining available commitment under its credit arrangement; Notes obtained by a transferee participant are not considered drawn balances of such participant for determining its available commitment.
- Transfer price is agreed between transferee and transferor.
- Transferor must inform the Fund promptly of transfer details (Note, transferee name, amount, agreed price, value date).
- Transfer registration by the Fund is required for effectiveness; upon registration transfer is effective as of agreed value date.
- Transferee may request exchange of the Note for a loan claim pursuant to paragraph 13(k).
- Notices to/from non-participant transferees follow specified procedures depending on member status.
- If transfer occurs during a quarterly interest period, Fund pays interest to transferee for the whole period on the transferred amount.
- The Fund may assist in arranging transfers if requested.
- For transfers, the Fund cancels the transferred Note and issues new Notes in the names of transferee and transferor as appropriate; issue date of new Note equals issue date of cancelled Note and maturity date remains the same.
- Derivative transactions in respect of any Note, and transfers of participation interests in any Note, are prohibited.

### Paragraph 7 — Notices
- Notices to/by holders who are participating members shall be in writing or by rapid means to the fiscal agency designated for Article V, Section 1 and Rule G-1 purposes.
- Notices to/by holders who are participating institutions shall be in writing or by rapid means and given to or by the participating institution.

### Paragraph 8 — Interpretation
- Questions of interpretation not within the purview of Article XXIX of the Articles shall be settled to the mutual satisfaction of the Fund, the holder raising the question, and all participants in the NAB.
- For this purpose, "holder" includes former participants to the extent paragraphs 8–14, 17 and 18(b) of the NAB Decision continue to apply pursuant to paragraph 19(c).

### Paragraph 9 — NAB Decision and changes
- Notes and claims thereunder are subject to the NAB Decision as in effect from time to time.
- Amendments to these General Terms and Conditions adopted in accordance with paragraph 8(a) of the NAB Decision shall apply to all outstanding Notes issued under the NAB Decision.

### Appendix — Form of Registered NAB Note (highlights)
- Registered NAB Note includes Issue Date, Maturity Date, amount in SDRs, promise to pay principal on maturity date and interest as set forth.
- Each holder is deemed to have agreed to the General Terms and Conditions and NAB terms, including maturity, interest rate, early payment terms, and transfer conditions.
- Restriction legend: the Note has not been registered under securities laws; holders shall not transfer the Note except to entities that are (I) a member of the Fund, (II) the central bank or other fiscal agency designated by a member for Article V, Section 1, (III) an official entity prescribed as an SDR holder under Article XVII, Section 3, or (IV) an entity to which the Fund has consented in writing pursuant to paragraph 6(a) of the General Terms and Conditions.

*Source: Annex I and Annex II (General Terms and Conditions and Appendix) of the provided IMF document.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2016/_102116a.pdf_