Instruction No. 36/2009 Amending and Repealing Instruction No. 33/2006 on Public Offers to the Savings Market within the UMOA

WEST AFRICAN MONETARY UNION crepmf REGIONAL COUNCIL FOR PUBLIC SAVINGS AND FINANCIAL MARKETS

---

INSTRUCTION NO. 36 / 2009

AMENDING AND REPEALING INSTRUCTION NO. 33/2006 ON PUBLIC OFFERINGS TO THE SAVINGS MARKET WITHIN THE UMOA

The Regional Council for Public Savings and Financial Markets,

Having regard to the Convention of 3 July 1996 establishing the Regional Council for Public Savings and Financial Markets (hereinafter the "Council");

Having regard to the Annex to the Convention on the Composition, Organization, Operation and Powers of the Regional Council;

Having regard to the General Regulations on the Organization, Operation and Supervision of the UMOA Regional Financial Market;

Having regard to the resolutions of the Regional Council at its ordinary session on 26 October 2009;

DECIDES

CHAPTER I - GENERAL PROVISIONS

Article 1

The following entities are deemed to make a public offering to the savings market: States or any other entity:

a) whose securities are distributed beyond a circle of one hundred persons, having no legal relationship with each other,

b) which, in order to offer the public of the UMOA investment products, resort either to a placement syndicate or to any solicitation methods of the public including in particular advertising and door-to-door sales,

c) whose securities are listed on the Regional Stock Exchange for Securities.

Article 2

Public offerings to the savings market on the UMOA regional financial market are subject to prior endorsement by the Regional Council.

---

Instruction No. 36 / 2009

The prior endorsement requirement is not required for bonds issued by a State or a group of States.

The endorsement granted by the Regional Council must be widely disseminated throughout the UMOA territory.

Article 3

Any entity or person intending to make a public offering to the savings market in the context of an issuance or transfer is required:

• to prepare an information note, subject to the mandatory endorsement of the Regional Council, except for that prepared by a State or group of States,

• to designate a Securities Management and Intermediation Company (SMIC) as the lead manager of the placement syndicate.

Article 4

The decision of the Regional Council granting endorsement to a public offering to the savings market and the information note, referred to in Articles 2 and 3 above, must contain a warning drafted as follows:

"The granting by the Regional Council of its endorsement does not imply approval of the operation's suitability, nor authentication of the presented accounting and financial elements, nor guarantee or certification of the disseminated information. The information note subject to endorsement is prepared solely under the responsibility of the issuer, and the endorsement is granted only after verification that this information note is complete and understandable and that the information it contains is relevant and coherent in light of the operation proposed to investors. The Regional Council's endorsement does not constitute a guarantee against the risk of non-repayment of the securities whose issuance by public offering to the savings market is thus authorized."

CHAPTER II - OBLIGATIONS OF ISSUERS, OTHER THAN STATES AND LOCAL OR TERRITORIAL PUBLIC AUTHORITIES

Article 5

Any issuer, other than States and local or territorial public authorities, intending to carry out a public offering to the savings market must obtain authorization from the Regional Council. To this end, it submits a file comprising in particular:

• a certified copy of the articles of association or any other document serving as such,

• the minutes of the meeting of the duly authorized body, having approved the operation,

---

Instruction No. 36 / 2009

• the financial statements of the last three fiscal years certified by a statutory auditor as well as, where applicable, the audited consolidated accounts, for existing companies in the case of capital operations,

• the financial statements of at least two fiscal years certified by a statutory auditor or, failing that, a guarantee deemed sufficient by the Regional Council, in the case of debt operations,

• the information note,

• any other document requested by the Regional Council in the context of file processing.

The Regional Council may have independent experts conduct any audit deemed necessary, at the expense of the requesting issuer.

Article 6

The information note must contain in particular the following required information:

1. General Information Concerning the Issuer

1.1. the name or corporate title, 1.2. the legal status, 1.3. the registered office, 1.4. a description of activities, 1.5. the list of corporate officers, with mention of their first and last names, titles, addresses, etc., 1.6. the amount of share capital as well as the identity and description of activities of shareholders holding more than 10% of the capital each, 1.7. the first and last names, addresses, as well as the description of activities of the founders (for companies in the process of incorporation), 1.8. the certificate by the person responsible for the information note, 1.9. the certificate of statutory auditors on the financial information contained in the information note.

2. Characteristics of the Operation

2.1. the amount of the envisaged operation and the number of securities to be issued, 2.2. the nature of the securities (shares, bonds, etc.), 2.3. the form of the securities, 2.4. the par value and issue price, 2.5. the taxation applicable to the securities, 2.6. the indicative duration of the investment,

---

Instruction No. 36 / 2009

2.7. the purpose of the operation as well as a detailed description of the projects to be financed specifying their nature, amount, implementation deadlines, etc., 2.8. the competent courts in case of dispute, 2.9. the latest rating report, where applicable, 2.10. the following supplementary information, when it concerns the issuance of debt securities:

• the name of the security,
• the nominal interest rate and duration,
• the repayment schedule,
• the value date,
• redemption clauses, where applicable,
• the guarantees offered, where applicable.

3. Accounting Information

3.1. the certified financial statements of the last two fiscal years, for debt operations, or of the last three fiscal years for capital operations, 3.2. the projected operating statements of the five fiscal years following that for which the file was submitted or, failing that, the issuer's financial outlook, 3.3. the indication of the existence, where applicable, of founder's shares, preferred shares, convertible bonds, etc.

Article 7

Any issuer that has carried out a public offering to the savings market is required to publish periodic information.

The Regional Council sets, by Instruction, the deadlines and the periodic information to be published.

Article 8

Any issuer, other than States and local or territorial public authorities, making a public offering to the savings market must be rated by a rating agency duly approved by the Regional Council.

For any issuance of debt securities by public offering to the savings market or other transferable debt instruments, issuers undertake to be rated for the entire life of the securities. In the absence of being able to produce a sufficient "investment grade" rating from a rating agency, issuers must provide a first-demand guarantee in favor of subscribers.

---

Instruction No. 36 / 2009

In the absence of a rating, the amount of the guarantee must fully cover the principal and interest of the concerned security, and its duration must correspond to that of the amortization of said security.

This guarantee must be issued by a guarantor approved by the Regional Council and benefiting from a satisfactory rating, attributed by a duly approved rating agency.

CHAPTER III - OBLIGATIONS OF STATES OR GROUPS OF STATES

Article 9

Prior to any public offering to the savings market, a State or group of States prepares an information note which is submitted to the Regional Council before its dissemination. It must contain, among others, the following information:

1 - the name of the State or group of States, 2 - a description of the offered securities and their characteristics, 3 - the destination of the collected funds, 4 - the placement terms for the securities with the public.

CHAPTER IV - OBLIGATIONS OF LOCAL OR TERRITORIAL PUBLIC AUTHORITIES

Article 10

Local or territorial public authorities intending to make a public offering to the savings market must obtain authorization from the Regional Council. To this end, they submit a file comprising in particular:

1. the joint approval of the operation by the Minister in charge of finance and that in charge of local authorities,
2. the authorization of the issuance by the deliberative body or bodies,
3. the texts defining the status of the authority and its capacity to contract,
4. the annual budgets for the last three (3) fiscal years,
5. the financial statements of the last three (3) fiscal years, approved by the authorized body,
6. the budgets for the next five (5) years, balanced in revenues and expenditures,
7. an information note.

The information note must contain the following information:

1. the name and geographical location of the authority or group of local or territorial public authorities,

---

Instruction No. 36 / 2009

2. the list of elected officers,
3. a description of the offered securities and their characteristics,
4. the administrative and financial organization as well as a description of technical services,
5. a description of the tax regime,
6. the investment program to be financed by borrowing,
7. the economic development plan of the authority,
8. the evaluation of financial resources and cash flow situation,
9. the rating of the issuance or, where applicable, the guarantees offered.

CHAPTER V - DISSEMINATION OF INFORMATION AND DOCUMENTS TO THE PUBLIC

Article 11

The information note must be widely disseminated throughout the UMOA territory by the issuer as soon as the endorsement is granted or registered by the Regional Council.

It must be made available to the public at the headquarters of the Regional Council, the issuer, and the member establishments of the placement syndicate for the operation.

Article 12

Brochures, inserts and advertising announcements intended for the public or the written press, as well as, where applicable, the texts of radio or television announcements, must previously obtain the endorsement of the Regional Council before their publication or dissemination when the information note to which they refer is subject to this formality.

Article 13

When an information note and its accompanying documents are not disseminated to the public within three (3) months after the date of affixing the Regional Council's endorsement, they must be updated and submitted again to the Regional Council for approval before dissemination.

Article 14

Certain information required of States and local or territorial public authorities may be omitted from the information note when they are likely to jeopardize national defense, internal security, foreign policy, public order or the fundamental interests of one of the UMOA member States.

---

Instruction No. 36 / 2009

The nature of the above-mentioned information must be previously brought to the knowledge of the Regional Council.

CHAPTER VI - CONDUCT OF THE OPERATION

Article 15

The lead SMIC of the placement operation is required to inform the Regional Council, on behalf of the issuer, of the progress of subscription operations, according to a periodicity specified upon the granting of the endorsement.

Article 16

The Regional Council may, at any time, after the issuance of its endorsement and during the placement period of the securities, suspend the operation for serious grounds such as in particular the revelation of incomplete or erroneous information, likely to affect the interests of savers. These grounds are immediately brought to the knowledge of the issuer and the public.

CHAPTER VII - PUBLIC OFFERING TO THE SAVINGS MARKET BY A NON-RESIDENT ENTITY

Article 17

Any non-resident entity intending to make a public offering to the savings market in the UMOA is required to address itself to the Regional Council for prior authorization.

To this end, it must produce the conforming opinion of the authority in charge of exchange control required.

CHAPTER VIII - ENDORSEMENT FEES

Article 18

The granting of the endorsement is subject to the payment of an amount fixed by Instruction of the Regional Council.

Likewise, the endorsement of advertising documents related to operations subject to the authorization of the Regional Council gives rise to the collection of a commission, the amount of which is fixed by Instruction of the Regional Council.

---

Instruction No. 36 / 2009

CHAPTER IX - TRANSITIONAL AND FINAL PROVISIONS

Article 19

Issuers whose securities are listed on the Regional Stock Exchange for Securities have a period of three years to comply with the provisions of Article 8 of this Instruction.

Article 20

This Instruction, which will be published wherever necessary, repeals Instruction No. 33/2006 of 23 November 2007 and takes effect as from the date of its signature.

Done in Abidjan, on 23 November 2009

The President (Signature) Léné SEBGO