Central Bank of Tunisia Circular to Banks and Financial Institutions No. 2020-01 dated January 28, 2020

CIRCULAR TO BANKS AND FINANCIAL INSTITUTIONS No. 2020-01 dated January 29, 2020 Subject: Preliminary measures for the adoption of International Financial Reporting Standards (IFRS).

The Governor of the Central Bank of Tunisia, Having regard to Law No. 2016-35 of April 25, 2016 establishing the status of the Central Bank of Tunisia, Having regard to Law No. 2016-48 of July 11, 2016 on banks and financial institutions, Having regard to Circular No. 91-24 of December 17, 1991 on credit institutions regarding division, risk coverage and monitoring of commitments as amended and supplemented by subsequent texts, Having regard to Circular No. 2006-19 of November 28, 2006 on internal control, Having regard to Circular No. 2011-06 of May 20, 2011 on strengthening good governance rules in credit institutions, Having regard to Circular No. 2016-06 of October 11, 2016 on the counterparty rating system, Having regard to Circular No. 2017-06 of July 31, 2017 on accounting, prudential and statistical reporting to the Central Bank of Tunisia, Having regard to Circular No. 2018-06 of June 5, 2018 on capital adequacy standards, Having regard to the opinion of the Compliance Monitoring Committee No. 2020-01 dated January 27, 2020.

Decides:

Article 1: This circular defines the measures to be taken by banks and financial institutions to manage the IFRS adoption project in accordance with the decision of the General Assembly of the National Accounting Council dated September 6, 2018.

Article 2: The management body of the bank or financial institution must establish a strategic plan for project management, which must be approved by its board of directors or supervisory board. This plan must in particular include: • The strategic and operational project management process; • The roadmap for project execution; • The project team and participating departments; • The measures required to adapt the information and accounting systems to IFRS requirements; • An internal and external communication plan; and • The training plan for all project stakeholders.

Article 3: The board of directors or supervisory board must monitor the implementation of the strategic plan and allocate the necessary human and material resources for the proper execution of the IFRS adoption project. The audit committee and the risk committee must assist the board in the proper execution of the project.

Article 4: The bank or financial institution must establish a steering committee for the project provided by this circular. This steering committee is responsible for: • Forming a project team; • Monitoring and controlling the project progress; • Tracking objectives in line with strategic directions; • Coordinating between business lines and support functions; and • Validating key project phases.

Article 5: The project team must include at least heads from the Finance, Risk, Credit, Organization, Human Resources, Information Systems, Internal Audit and Legal departments, and where applicable, representatives of subsidiaries within the accounting consolidation scope of the bank or financial institution.

Article 6: The bank or financial institution must submit to the Central Bank of Tunisia, no later than three months from the publication date of this circular, the strategic plan and roadmap approved by its board of directors or supervisory board.

Article 7: This circular takes effect from the date of its publication.

THE GOVERNOR Marouane EL ABASSI