Instruction No. 2010-04 of February 15, 2010 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

Instruction No. 2010-04 of the Banking Commission amending Instruction No. 2006-02 regarding the appointment of statutory auditors

The Banking Commission,

Having regard to Articles L. 517-5, L. 517-9, L. 511-38, L. 522-19-V and L. 613-8 of the Monetary and Financial Code,

Having regard to Articles D. 511-8 to D. 511-12, D. 517-1 to D. 517-8 and D. 533-3 to D. 533-6 of the Monetary and Financial Code,

Having regard to Article L. 621-22 of the Monetary and Financial Code,

Having regard to Article L. 515-30 of the Monetary and Financial Code,

Having regard to Instruction No. 2006-02 of the Banking Commission,

Decides:

Article 1

Instruction No. 2006-02 of the Banking Commission mentioned above is amended as follows:

I – In Article 1, after the words “investment firms”, the words “, to payment institutions not carrying out other activities in accordance with Article L. 522-3” are inserted.

II – In Article 2, after “intends to appoint one or more statutory auditors, full or alternate”, the words “, whether it be an appointment or the renewal of a previous mandate,” are added.

III – The following article replaces Article 7 “In order to obtain the opinion of the Banking Commission on the appointment of their specific controllers, full and alternate, provided for in Article L. 515-30 of the Monetary and Financial Code, credit real estate companies meet the information requirement of the Commission by transmitting for each proposed controller the same type of information as that provided for by this Instruction.”

Article 2

The annexes to Instruction No. 2006-02 are repealed and replaced by the annexes attached to this instruction.

Article 3

This instruction enters into force on March 1, 2010.

Paris, February 15, 2010

The President of the Banking Commission

Jean-Paul REDOUIN

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OFFICIAL TEXTS OF THE BANKING COMMISSION Instruction No. 2010-04 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

Annex 1 to Instruction No. 2010-04

Request for opinion on the proposed appointment of statutory auditors

Declarative statement to be completed by the institution ¹

➢ Complete the tables and, if necessary, cross out unnecessary entries. ➢ Attach - duly completed by the proposed statutory auditor(s) - Form 1 and, if applicable, Form 2.

A – Identity of the declaring institution

Name of the organization

CIB

Status

• Credit institution
• Investment firm
• Payment institution
• Financial company
• Mixed holding financial company

Legal form

B – Obligations of the declaring institution

Obligation to publish consolidated accounts? YES / NO Reminder: Entities required to publish consolidated accounts must appoint at least two statutory auditors (Art. L. 823-2 of the Commercial Code)

If no: total social balance sheet amount as of December 31 of the last financial year: Reminder: If the social balance sheet total of the entity exceeds a threshold (set by CRC Regulations No. 84-09 and 2002-02), it is mandatory to appoint at least two statutory auditors.

Obligation to inform the AMF? YES / NO If yes - under what title: Securities admitted to trading on a regulated market (1) or Securities offered to the public on a multilateral trading system that complies with legislative or regulatory provisions aimed at protecting investors against insider dealing, market manipulation and the dissemination of false information (2) - Has the proposal been brought to the knowledge of the Autorité des Marchés Financiers (AMF)? YES / NO

(a) Ref. 1 and 2 of the previous paragraph and in accordance with Article L. 621-22-I or L.621-22-VI of the Monetary and Financial Code

¹ For Monégasque institutions, only take into account the relevant sections with regard to Monégasque regulation.

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OFFICIAL TEXTS OF THE BANKING COMMISSION Instruction No. 2010-04 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

C – Details on the proposed mandate(s)

Proposed date for the appointment of the statutory auditor(s) (a)

Nature of the proposed mandate(s) full 1/ full 2 alternate 1/ alternate 2

Expiration date of the proposed mandate(s) (b)

For companies whose securities are admitted to trading on a regulated market that intend to appoint one or more statutory audit firms, the mandatory rotation date for each engagement partner.

• Full 1
• Full 2

Estimated annual budget for each proposed statutory auditor whose appointment is envisaged or whose mandate is ongoing (in euros and number of hours) (c)

• Full 1:
• Full 2:

Has the proposed appointment(s) received a recommendation from the Audit Committee? YES / NO (in this case, specify why) / Not applicable (in the absence of an audit committee)

(a) Date of the general meeting scheduled to vote on the proposal for appointment or modification in case of change of engagement partner for a statutory audit firm (b) Reminder: The Banking Commission has a period of two months – possibly extendable in case of request for additional information – to give its opinion on the proposal for the appointment of the statutory auditor. (c) This information is indicative based on information known at the date of preparation of the request for opinion (a range may be indicated)

D – Statutory auditors following the proposed appointment(s) ¹

	Statutory Auditor	Reason for Appointment (a)
Full 1:	If it is a natural person: Name and first name(s): <br><br> If it is a company: Company name: Name and first name(s) of the engagement partner: <br><br> Network (if applicable):	- Creation or approval of the institution <br> - New mandate <br> - Renewal of previous mandate with change of engagement partner <br> - Renewal of previous mandate without change of engagement partner <br> - Change of engagement partner within the framework of an ongoing mandate (if company) (b) <br> - Other cases: (specify the reason, if applicable in a separate letter)
Alternate (c)	If it is a natural person: Name and first name(s): <br><br> If it is a company: Company name: Name and first name(s) of the engagement partner: <br><br> Network (if applicable):	- Creation or approval of the institution <br> - New mandate <br> - Renewal of previous mandate with change of engagement partner <br> - Renewal of previous mandate without change of engagement partner <br> - Replacement of the previous full auditor by the previous alternate, due to: death / incapacity / resignation of the auditor in place (cross out the unnecessary entry and, in case of resignation, specify the reason in a separate letter) <br> - Change of engagement partner within the framework of an ongoing mandate (if company) <br> - Other cases: (specify the reason, if applicable, in a separate letter)

¹ The table must be completed with as many full and alternate auditors as necessary.

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OFFICIAL TEXTS OF THE BANKING COMMISSION Instruction No. 2010-04 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

	Statutory Auditor	Reason for Appointment (a)
Full 2	If it is a natural person: Name and first name(s): <br><br> If it is a company: Company name: Name and first name(s) of the engagement partner: <br><br> Network (if applicable):	- Creation or approval of the institution <br> - New mandate <br> - Appointment of a second statutory auditor <br> - Renewal of previous mandate with change of engagement partner <br> - Renewal of previous mandate without change of engagement partner <br> - Change of engagement partner within the framework of an ongoing mandate (if company) <br> - Other cases: (specify the reason, if applicable in a separate letter)
Alternate 2	If it is a natural person: Name and first name(s): <br><br> If it is a company: Company name: Name and first name(s) of the engagement partner: <br><br> Network (if applicable):	- Creation or approval of the institution <br> - New mandate <br> - Appointment of a second statutory auditor <br> - Renewal of previous mandate with change of engagement partner <br> - Renewal of previous mandate without change of engagement partner <br> - Replacement of the previous full auditor by the previous alternate, due to: death / incapacity / resignation of the auditor in place (cross out the unnecessary entry and, in case of resignation, specify the reason in a separate letter) <br> - Change of engagement partner within the framework of an ongoing mandate (if company) <br> - Other cases: (specify the reason, if applicable, in a separate letter)

(a) Delete unnecessary entries for auditors whose appointment is proposed; for auditors already in place and not covered by the request for opinion, cross out the entire cell. (b) This refers to the partner designated as the “engagement partner”. Reminder (Art. D. 511-10 of the Monetary and Financial Code): “When the proposed statutory auditor is a statutory audit firm (...), the credit institution specifies the name of the statutory auditor partner, shareholder or director responsible for the mission on behalf of this company. It informs the Banking Commission of any subsequent modification of this situation.” Cf. also Articles D. 517-2 and D. 533-4. (c) Reminder (Art. L. 823-1 of the Commercial Code): One or more statutory auditors, called upon to replace the full auditors in case of refusal, incapacity, resignation or death, are appointed under the same conditions. The functions of the alternate statutory auditor called upon to replace the full auditor end on the date of expiration of the mandate entrusted to the latter unless the incapacity is only temporary.

The signatory confirms that the institution he represents has ensured the experience of the proposed auditor(s), and that to his knowledge there is no element likely to call into question his independence vis-à-vis the declaring institution ¹. He undertakes to inform the Banking Commission of any element of which he becomes aware subsequently and which could call into question the independence of the statutory auditor(s).

(Name, date and signature of a responsible executive)

¹ Reminder: Incompatibility situations result notably from Article L. 822-11 of the Commercial Code and the Code of Ethics for Statutory Auditors (Decree No. 2005-1412 of November 16, 2005)

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OFFICIAL TEXTS OF THE BANKING COMMISSION Instruction No. 2010-04 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

Annex 2 to Instruction No. 2010-04

Request for opinion on the proposed appointment of statutory auditors

Form 1 Declaration to be established by the statutory auditor (natural person or responsible engagement partner ¹ in case of appointment of a statutory audit firm)

(Date and place)

I, the undersigned: Name and first names:

Established at (address):

Telephone: Fax: Email Address

(If applicable) Belonging, in the capacity of ____________________, to the statutory audit firm (name, address and SIREN number), the firm itself being part of the network ² ____________________ (specify the name) or member of the technical association ² ____________________

Proposed for: my appointment / my renewal

As: statutory auditor natural person / engagement partner on behalf of the aforementioned statutory audit firm

In the capacity of: full / alternate

Of (company name of the institution envisaging the appointment):

Confirms being registered on the list provided for in Article L. 822-1 of the Commercial Code, established by the regional commission of

I confirm having carried out the necessary due diligence to assess whether accepting the envisaged certification mission would not place me in a position to affect compliance with the fundamental principles of conduct of statutory auditors provided for by the code of ethics and professional standards in force, and notably to harm the principles of impartiality, independence, prevention of conflicts of interest and competence necessary for the exercise of my mission (if applicable, specify in a separate letter the identified risk situations and the safeguard measures put in place).

In particular, I confirm for myself and (if applicable) for the company on whose behalf I would exercise the missions mentioned above:

• having the necessary integrity to accept the envisaged mandate, and notably not being subject to a disciplinary or judicial sanction that would prevent me from accepting the envisaged mandate;
• having an organization meeting the conditions provided for in Article 15 of the Code of Ethics, and the level of competence and human and material resources adapted to the size and nature of the activities of the institution considered as well as the extent of my mission;

¹ Reminder: When the institution informs the Banking Commission of its intention to appoint a statutory audit firm as statutory auditor, it specifies the name of the statutory auditor partner, shareholder or director responsible for the mission on behalf of this company and exercising this function on behalf of this company, in accordance with Article L.822-9 of the Commercial Code. ² As defined by Article 22 of the Code of Ethics.

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OFFICIAL TEXTS OF THE BANKING COMMISSION Instruction No. 2010-04 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

• presenting with regard to the institution envisaging my appointment any situation or any financial, personal or professional link that could be likely to compromise my independence or susceptible to be perceived as likely to call into question the impartial nature of my certification mission, and having notably taken all necessary measures to ensure compliance with Articles L. 822-10 to L. 822-14 of the Commercial Code as well as the Code of Ethics and professional standards in force. I have noted in this regard the limitations imposed by Article L. 822-11 of the Commercial Code regarding the provision of services by the statutory auditor and (if applicable) by the network to which he belongs; I further confirm not holding any financial link likely to lead to any of the incompatibility situations referred to in Article 28 of the Code of Ethics, and having ensured that the members of the statutory audit team do not have, with regard to the institution concerned, personal, financial or professional links incompatible with the statutory audit mission, in application of Articles 26 to 30 of the Code of Ethics.

I undertake to inform the Banking Commission of any development likely to give rise to or reveal situations likely to call into question the content of this declaration during my mission.

I finally specify that I am aware of Article L. 613-9-II of the Monetary and Financial Code regarding the duty to inform incumbent on statutory auditors vis-à-vis the Banking Commission concerning institutions subject to its control ¹.

(Date and signature of the statutory auditor / engagement partner) ²

(If applicable) (Name and signature of the executive of the statutory audit firm)

In accordance with Article 32 of Law No. 78-17 of January 6, 1978, as amended, relating to data processing, files and freedoms, the General Secretariat of the Banking Commission informs statutory auditors, natural persons, that the personal information collected through this form, which must be completed in application of Instruction No. 2006-02 of the Banking Commission regarding the appointment of statutory auditors, are intended to be recorded in the financial agents database “BAFI” in order to allow the Banking Commission to carry out the mission, provided for in Article L. 511-38 of the Monetary and Financial Code, of issuing a prior opinion on the appointment of statutory auditors of institutions over which it exercises its control.

The interested parties may exercise their right of access (Article 39 of the “data processing and freedoms” law) and rectification (Article 40) with the General Secretariat of the Banking Commission (89-1740, 73, rue de Richelieu, 75002 Paris).

¹ Reminder (Art. L. 613-9-II of the Monetary and Financial Code): Statutory auditors are required to report as soon as possible to the Banking Commission any fact or decision concerning the persons mentioned in the first paragraph of I of this article of which they have become aware in the exercise of their mission, of a nature: 1- To constitute a violation of legislative or regulatory provisions applicable to them and likely to have significant effects on the financial situation, result or assets; 2- To harm the continuity of operations; 3- To lead to the issuance of reservations or the refusal of the certification of the accounts. ² If the engagement partner wishes, this declaration may be countersigned by an executive of the statutory audit firm.

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OFFICIAL TEXTS OF THE BANKING COMMISSION Instruction No. 2010-04 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

Annex 3 to Instruction No. 2010-04

Request for opinion on the proposed appointment of statutory auditors

Form 1M Declaration to be established by the statutory auditor

(Date and place)

I, the undersigned: Name and first names:

Established at (address):

Telephone: Fax: Email Address

(If applicable) Belonging, in the capacity of ____________________, to the accounting firm (name and address), the firm itself being part of the network ____________________ (specify the name) or member of the technical association ____________________

Proposed for: my appointment / my renewal as statutory auditor

In the capacity of: full / alternate

Of (company name of the institution envisaging the appointment):

Confirms being registered on the list drawn up by the Order Council according to the conditions provided for in Article 20 of Monégasque Law No. 1.231, and being authorized in this respect to exercise the functions of statutory auditor.

I confirm having carried out the necessary due diligence to assess whether accepting the envisaged certification mission would not place me in a position to affect compliance with the ethical principles applicable to statutory auditors of credit institutions in accordance with the Monetary and Financial Code, and notably to harm the principles of impartiality, independence, prevention of conflicts of interest and competence necessary for the exercise of my mission. (if applicable, specify in a separate letter the identified risk situations and the safeguard measures put in place).

In particular, I confirm:

• having the necessary integrity to accept the envisaged mandate, and notably not being subject to a disciplinary or judicial sanction that would prevent me from accepting the envisaged mandate;
• having an organization, level of competence and human and material resources adapted to the size and nature of the activities of the institution considered as well as the extent of my mission;
• presenting with regard to the institution envisaging my appointment any situation or any financial, personal or professional link that could be likely to compromise my independence or susceptible to be perceived as likely to call into question the impartial nature of my certification mission, in accordance with Article L. 511-38, 3rd paragraph, of the Monetary and Financial Code which imposes on statutory auditors to present all guarantees of independence vis-à-vis credit institutions under their control. I further confirm having ensured that the members of the statutory audit team do not have, with regard to the institution concerned, personal, financial or professional links incompatible with the statutory audit mission.

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OFFICIAL TEXTS OF THE BANKING COMMISSION Instruction No. 2010-04 amending Instruction No. 2006-02 regarding the appointment of statutory auditors

I undertake to inform the Banking Commission of any development likely to give rise to or reveal situations likely to call into question the content of this declaration during my mission. I finally specify that I am aware of Article L 613-9-II of the Monetary and Financial Code regarding the duty to inform incumbent on statutory auditors vis-à-vis the Banking Commission concerning institutions subject to its control¹.

(Date and signature of the statutory auditor)

In accordance with Article 32 of Law No. 78-17 of January 6, 1978, as amended, relating to data processing, files and freedoms, the General Secretariat of the Banking Commission informs statutory auditors, natural persons, that the personal information collected through this form, which must be completed in application of Instruction No. 2006-02 of the Banking Commission regarding the appointment of statutory auditors, are intended to be recorded in the financial agents database “BAFI” in order to allow the Banking Commission to carry out the mission, provided for in Article L. 511-38 of the Monetary and Financial Code, of issuing a prior opinion on the appointment of statutory auditors of institutions over which it exercises its control.

The interested parties may exercise their right of access (Article 39 of the “data processing and freedoms” law) and rectification (Article 40) with the General Secretariat of the Banking Commission (89-1740, 73, rue de Richelieu, 75002 Paris).

¹ Reminder (Art. L. 613-9-II of the Monetary and Financial Code): Statutory auditors are required to report as soon as possible to the Banking Commission any fact or decision concerning the persons mentioned in the first paragraph of I of this article of which they have become aware in the exercise of their mission, of a nature: 1- To constitute a violation of legislative provisions