COSOB Instruction No. 16-03 of April 18, 2016 Fixing the Elements Constituting the File Attached to the Application for Approval as a Stock Exchange Intermediary

COSOB Regulation Instruction No. 16-03

Instruction COSOB No. 16-03 of April 18, 2016
Fixing the elements constituting the file attached to the application for approval as a Stock Exchange Intermediary

Article 1. — Pursuant to Article 8 of COSOB Regulation No. 15-01 of April 15, 2015, relating to the conditions for approval, obligations, and control of Stock Exchange Intermediaries, this instruction aims to fix the elements constituting the file to be attached to the application by the applicant for approval as a Stock Exchange Intermediary.

Article 2. — The application for approval as a Stock Exchange Intermediary is submitted to the Commission d'Organisation et de Surveillance des Opérations de Bourse (COSOB) by the applicant or their authorized representative, according to the model attached as an annex to this instruction. It must be accompanied by a file comprising the following elements:

1. For commercial companies:

a. Upon submission of the application for authorization to incorporate:

i. a copy of the draft articles of association of the company;
ii. if it is a subsidiary, attach a copy of the articles of association of the parent company;
iii. for each manager of the company, within the meaning of point 10 of Article 2 of COSOB Regulation No. 15-01 of April 15, 2015, relating to the conditions for approval, obligations, and control of Stock Exchange Intermediaries:

1. a copy of the birth certificate;
2. a criminal record extract (No. 3);
3. a list of activities exercised in other companies as well as their capital and voting rights holdings;
4. a declaration of honorability, as defined by Instruction No. 16-02 of February 24, 2016, relating to the honorability of managers of commercial companies that are Stock Exchange Intermediaries.
   iv. For the manager assuming general management of the company:
5. A copy of the certificate of success in the certification exam relating to the training of financial market professionals or any other equivalent diploma, recognized by the Commission;
6. a copy of the diplomas obtained;
7. a CV detailing their professional experience.

b. Upon submission of the application for provisional approval:

i. Form No. 1 duly completed;
ii. a copy of the definitive articles of association of the company;
iii. a copy of the deed of ownership or lease agreement for the premises reserved for the activity of Stock Exchange Intermediary;
iv. a copy of the draft procedures for work, internal control, detection and management of conflicts of interest, as well as for the fight against money laundering and terrorist financing;
v. a copy of the draft organizational chart of the company highlighting the different departments;
vi. a copy of the draft agreement for opening securities accounts or, where applicable, a delegation agreement for the maintenance of securities accounts with an authorized securities custodian;
vii. a copy of the draft stock order, execution notice, and securities transaction notice;
viii. a copy of the bank account statement for the dedicated account for receiving cash assets from clients, in the context of placing and trading securities on the stock exchange;
ix. a letter of commitment, in accordance with the model defined in the annex, covering:

1. compliance with ethical, disciplinary, and prudential rules;
2. subscription or acquisition of a share of the capital of the Stock Exchange Management Company;
3. payment of the contribution to the guarantee fund for Stock Exchange Intermediaries;
4. subscription of civil liability insurance against risks of loss, theft, or destruction of funds and securities entrusted by clients.

c. Upon submission of the application for definitive approval:

i. a copy of the act confirming the payment of the amount subscribed in the capital of the Stock Exchange Management Company;

2. For banks and financial institutions:

a. Upon submission of the application for provisional approval:

i. Form No. 2 duly completed;
ii. For the head of the Stock Exchange Intermediary structure:

1. a copy of the birth certificate;

2. a criminal record extract (No. 3);

3. a copy of the certificate of success in the certification exam relating to the training of financial market professionals or any other equivalent diploma, recognized by the Commission;

4. a copy of the diplomas obtained;

5. a CV detailing their professional experience.
   iii. a copy of the draft procedures for work, internal control, detection and management of conflicts of interest, as well as for the fight against money laundering and terrorist financing;
   iv. a copy of the draft organizational chart of the Stock Exchange Intermediary structure highlighting the different departments and its attachment to general management;
   v. a copy of the draft agreement for opening securities accounts or, where applicable, a delegation agreement for the maintenance of securities accounts with an authorized securities custodian;
   vi. a copy of the draft stock order, execution notice, and securities transaction notice;
   vii. a letter of commitment, in accordance with the model attached in the annex, covering:

6. compliance with ethical, disciplinary, and prudential rules;

7. subscription or acquisition of a share of the capital of the Stock Exchange Management Company;

8. payment of the contribution to the guarantee fund for Stock Exchange Intermediaries;

9. subscription of civil liability insurance against risks of loss, theft, or destruction of funds and securities entrusted by clients.

b. Upon submission of the application for definitive approval:

i. a copy of the act confirming the payment of the amount subscribed in the capital of the Stock Exchange Management Company.

Article 3. — This instruction enters into force on the date of its signature.

Done in Algiers, on April 18, 2016
Abdelhakim BERRAH

Annex:

1. Model for application for authorization to incorporate a commercial company for stock exchange intermediation

Applicant Name: .....................................................
Address: ………………………………………………….
Tel: .................................. Fax:............................
Mail: ………………………………………..
.............................. The .....................………..

Commission d'Organisation et de Surveillance des Opérations de Bourse

Subject: Application for authorization to incorporate a stock exchange intermediary "Commercial Company"

By this letter, (1) ............................ acting as (2) .................................. makes an application for authorization to incorporate the company (3)……………….. with the main objective of exercising the activity of stock exchange intermediary, in accordance with Regulation No. 15-01 of April 15, 2015, relating to the conditions for approval, obligations, and control of stock exchange intermediaries.

Signature of the applicant
(1) Name of the applicant.
(2) Mandate of the applicant
(3) Name of the future company

2. Model for application for approval as a stock exchange intermediary

Application for Approval (Commercial Company / Bank or Financial Institution)

Name: .....................................................
Registered Office: ........................................................
Tel: ........................ Fax: ......................................
.............................. The .....................………..

Commission d'Organisation et de Surveillance des Opérations de Bourse

Subject: Application for approval as a stock exchange intermediary

By this letter, (1).......................................................... applies for approval to exercise the activity of stock exchange intermediary, in accordance with Regulation No. 15-01 of April 15, 2015, relating to the conditions for approval, obligations, and control of stock exchange intermediaries.

Please find attached the additional documents provided for, COSOB Instruction No. ……. of……. :

• the approval form
• a letter of commitment in accordance with the model provided by the Commission;
• list of attached documents (Follow the classification defined by this instruction)

Signature of the manager
(1) Indicate the name of the company.

3. Model for letter of commitment

Letter of Commitment (Commercial Company / Bank or Financial Institution)

Name: ......................................
Registered Office: .........................................
Tel. / Fax: .............................................
.............................The....................………..

Commission d'Organisation et de Surveillance des Opérations de Bourse.

Subject: Commitments in addition to the application for approval

In addition to my application for approval as a stock exchange intermediary and in accordance with the regulations of the Commission d'Organisation et de Surveillance des Opérations de Bourse in force, I commit to:

• respect the ethical, disciplinary, and prudential rules set by the Commission d'Organisation et de Surveillance des Opérations de Bourse.
• subscribe to the capital of the Stock Exchange Management Company;
• pay the contribution to the guarantee fund for stock exchange intermediaries;
• subscribe to insurance against risks of loss, theft, or destruction of funds and securities entrusted by clients;

Signature of the Manager

FORM 1
APPLICATION FORM FOR APPROVAL AS A STOCK EXCHANGE INTERMEDIARY FOR COMMERCIAL COMPANIES

1. GENERAL INFORMATION
   1.1. Company
   Name or Corporate Name:
   Share Capital:
   Registered Office:
   Tel: Fax:
   Main Corporate Purpose: Date of Creation:
   Ancillary and Compatible:
   1.2. Founders
   Name & Surname or Corporate Name
   Activity Address
   1.3. Managers
   Name & Surname Role Other Functions
   1.4. Statutory Auditor
   Name & Surname Address No. Tel/Fax Term of Office
   1.5. Company Capital
   Share Capital
   Amount Subscribed
   Amount Paid Up

1.6. Capital Distribution
Shareholders Amount % of Company Capital
Nature of Contribution
(Cash/Nature)

2. ACTIVITIES REQUESTED
   Activities
   Check the desired activity
   Trading of securities on the stock exchange for client account (1) Trading of securities on the stock exchange for own account Securities investment advice (2) Individual portfolio management under mandate Portfolio management of collective investment undertakings in transferable securities (UCITS) Placement of securities and financial products Good performance guarantee and firm commitment to issue securities (3) Conservation and administration of securities (4) Corporate advice on capital structure, mergers, and acquisitions (1) Mandatory to acquire the status of stock exchange intermediary. (2) This activity is considered requested if the applicant requests the exercise of individual portfolio management or for the benefit of UCITS. (3) These activities can only be exercised with the assistance of a bank or financial institution. (4) This activity requires a request for authorization to the Commission.

Provide a description of the projected activity: target clientele, products and services offered (structuring of issues, IPOs, UCITS...)

3. COMPANY ORGANIZATION
   3.1. Manager assuming company direction
   Name: First Name:
   Date of Birth:
   Role:
   Diploma:
   Professional Experience:
   3.2. Planned Personnel
   category Number Role
   Executives
   Management
   Execution
   3.3. Compliance Officer
   Name & Surname Diploma Scope of Intervention
   3.4. Planned Technical Means
   Nature of Premises Total Area Ownership/Lease
   IT Means
   Communication Means
   3.5. Security Equipment and Devices
   Premises Protection
   Protection of funds and securities (physical security)

IT Security
3.6. Planned Organization
Summary Description:

• Of the organization and attributions of the different structures
• Of internal procedures:
  o Of the circuit of orders, securities, and funds; o Procedure for opening client securities accounts; o Accounting of operations; o Detection and management of conflicts of interest o Procedures for compliance control and internal control. o Of the device for fighting money laundering and terrorist financing

4. MEDIUM-TERM OBJECTIVES AND STRATEGY
   A detailed description of the medium-term objectives set and the strategy to be followed NB: THE COMPANY MAY PROVIDE OTHER INFORMATION ELEMENTS THAT IT MAY FIND USEFUL.

FORM 2
APPLICATION FORM FOR APPROVAL AS A STOCK EXCHANGE INTERMEDIARY FOR BANKS AND FINANCIAL INSTITUTIONS

1. GENERAL INFORMATION:
   1.1. Company
   Name or Corporate Name:
   Share Capital:
   Registered Office:
   Tel: Fax:
   Main Corporate Purpose: Date of Creation:
   Ancillary and Compatible:
   1.2. Managers
   Name & Surname Role Other Functions
   1.3. Statutory Auditor
   Name & Surname Address No. Tel/Fax Term of Office
   1.4. Distribution of Share Capital (persons holding at least 10% of the company shares)
   Name & Surname or Corporate Name
   Share in Capital Share in Voting Rights Date of Acquisition
   1.5. Participation in other entities where the company holds at least 10% of the shares
   Corporate Name Share in Capital Share in Voting Rights Date of Acquisition

2. ACTIVITIES REQUESTED
   Activities
   Check the desired activity
   Trading of securities on the stock exchange for client account (1) Trading of securities on the stock exchange for own account Securities investment advice (2) Individual portfolio management under mandate Portfolio management of collective investment undertakings in transferable securities (UCITS) Placement of securities and financial products Good performance guarantee and firm commitment to issue securities Conservation and administration of securities (3) Corporate advice on capital structure, mergers, and acquisitions (1) Mandatory to acquire the status of stock exchange intermediary. (2) This activity is considered requested if the applicant requests the exercise of individual portfolio management or for the benefit of UCITS. (3) This activity requires a request for authorization to the Commission.

Provide a description of the projected activity: target clientele, products and services offered (structuring of issues, IPOs, UCITS...)

3. ORGANIZATION OF THE STRUCTURE CHARGED WITH EXERCISING THE ACTIVITY OF STOCK EXCHANGE INTERMEDIARY
   3.1. Head of the Structure
   Name: First Name:
   Date of Birth:
   Role:
   Diploma:
   Professional Experience:
   Address of the structure:
   Tel: Fax:
   Mail:
   3.2. Planned Personnel
   category Number Role
   Executives
   Management
   Execution
   3.3. Compliance Officer
   Name & Surname Diploma Scope of Intervention
   3.4. Planned Technical Means
   Nature of Premises & Number of Offices
   Total Area Ownership/Lease
   IT Means
   Communication Means

3.5. Security Equipment and Devices
Premises Protection
Protection of funds and securities (physical security) IT Security
3.6. Planned Organization
Summary Description:

• Of the organization and attributions of the different structures
• Of internal procedures:
  o Of the circuit of orders, securities, and funds; o Procedure for opening client securities accounts; o Accounting of operations; o Detection and management of conflicts of interest o Procedures for compliance control and internal control. o Of the device for fighting money laundering and terrorist financing

4. MEDIUM-TERM OBJECTIVES AND STRATEGY
   A detailed description of the medium-term objectives set and the strategy to be followed NB: THE COMPANY MAY PROVIDE OTHER INFORMATION ELEMENTS THAT IT MAY FIND USEFUL.