COSOB Regulation No. 23-04 of October 25, 2023, Relating to the General Regulations of the Securities Exchange

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Regulation of the Commission for the Organization and Supervision of Stock Exchange Operations (COSOB) No. 23-04 of 10 Rabie Ethani 1445 corresponding to October 25, 2023, relating to the General Regulations of the Securities Exchange.

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The President of the Commission for the Organization and Supervision of Stock Exchange Operations (COSOB),

Having seen Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the securities exchange;

Having seen Ordinance No. 96-08 of Chaâbane 19, 1416 corresponding to January 10, 1996, relating to collective investment schemes in securities (O.P.C.V.M) (S.I.C.A.V) and (F.C.P);

Having seen Law No. 21-16 of Joumada El Oula 25, 1443 corresponding to December 30, 2021, bearing the finance law for 2022, particularly its Article 163;

Having seen Presidential Decree of Chaâbane 5, 1444 corresponding to February 26, 2023, appointing the President of the Commission for the Organization and Supervision of Stock Exchange Operations;

Having seen the Order of Ramadhan 29, 1443 corresponding to April 30, 2022, appointing the members of the Commission for the Organization and Supervision of Stock Exchange Operations;

Having seen COSOB Regulation No. 97-03 of Rajab 17, 1418 corresponding to November 18, 1997, as amended and supplemented, relating to the General Regulations of the Securities Exchange;

After adoption by the Commission for the Organization and Supervision of Stock Exchange Operations, on the date of 10 Rabie Ethani 1445 corresponding to October 25, 2023;

Enacts the regulation whose content follows:

Article 1st. — In application of the provisions of Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the securities exchange, this regulation sets the conditions for the organization and functioning of the securities exchange.

Art. 2. — For the purposes of this regulation, the following terms are understood as:

— securities exchange: the securities exchange is the framework for the organization and conduct of operations on securities issued by the State, other public law entities, and joint-stock companies.

— stock exchange management company: the body established by Article 15 of Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the securities exchange; it is responsible for the conduct of transactions in securities on the stock exchange.

— official listing: it corresponds to the list of securities registered and traded on the stock exchange, and includes several markets and compartments.

— equity securities: shares and investment certificates.

— debt securities: bonds, participatory securities, convertible bonds, and bonds with share subscription warrants to be issued.

— securities of collective investment schemes (OPC): shares, units, and Sukuks.

— issuer: any legal entity referred to in Articles 41, 45, 51, and 52 of this regulation that issues one or more securities, the State and local authorities, as well as any collective investment scheme.

— investors: natural or legal persons who wish to invest their capital in equity, debt, and collective investment scheme securities listed on the stock exchange.

— applicant company: the company that submits an application for the admission of securities to the official listing.

— official listing bulletin: the official dissemination medium of the stock exchange management company; it contains information relating to securities traded on the stock exchange.

— trading session: the period of time during which securities are traded on the stock exchange.

— trading and quotation system: the set of rules and procedures governing how securities are traded on the stock exchange; it can be organized through an electronic platform. It defines the roles of the different market participants, the types of orders that can be placed, the price determination mechanisms, and the surveillance rules.

CHAPTER 1st THE STOCK EXCHANGE MANAGEMENT COMPANY

Art. 3. — The stock exchange management company, hereinafter referred to as "SGBV", may specify, within its area of competence, the implementation methods of this regulation in the form of internal measures, opinions, or decisions.

Decisions are subject to prior approval by the Commission for the Organization and Supervision of Stock Exchange Operations, hereinafter referred to as the "Commission".

Art. 4. — Decisions taken by the SGBV concerning the organization and functioning of the market are enforceable as soon as they have been brought to the attention of the public or the interested parties, as the case may be, unless an execution deadline has been specified.

Art. 5. — In the context of respecting the rules of organization and functioning of the market, the SGBV ensures the regularity of operations carried out by stock exchange intermediaries hereinafter referred to as "IOB", or by persons acting on their behalf.

The SGBV reports to the Commission, without delay, any irregularity or infringement of market rules, collusion between two or more participants, or any other anomaly likely to harm the integrity and transparency of the market.

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Art. 6. — The decisions and opinions of the SGBV are published in a bulletin called the "official listing bulletin", referred to in Article 7 below.

Art. 7. — The official listing bulletin, prepared after each trading session and published within the time limits set by the SGBV, is the official publication medium concerning:

— market information; — information on listed securities; — information necessary for the proper functioning of the market.

The presentation, content, and periodicity of the official listing bulletin are fixed by decision of the SGBV.

Art. 8. — The only modifications authorized, once the official listing bulletin is published, concern omissions or possible errors.

These modifications will appear, without delay, in a bordered section of the official listing bulletin.

Art. 9. — All activities carried out by the SGBV related to the functioning of the market are ensured with diligence, integrity, neutrality, and impartiality. These activities are carried out in respect of market integrity.

Art. 10. — The SGBV must ensure that its employees and any person acting on its behalf respect their professional obligations.

Art. 11. — The persons cited in Article 10 above are subject to professional secrecy and the obligation of reserve.

Art. 12. — SGBV employees must, to carry out transactions on securities admitted to the stock exchange for their own accounts or for the account of their spouse or children, be expressly authorized by the General Director of the SGBV. These transactions must be declared to the Commission.

These transactions cannot be carried out under privileged conditions compared to those benefiting the entire client base of the IOBs.

Art. 13. — The SGBV establishes an internal regulation, including the ethical rules applicable to its employees.

This regulation sets the conditions for respecting the principles provided for in Articles 9 to 12 above, and any other rule adopted in this matter by the SGBV.

The SGBV may impose additional restrictions on transactions carried out by its employees.

Art. 14. — Holding a professional card is mandatory for the exercise of certain functions within the SGBV. The list of these functions as well as the conditions for the attribution of professional cards to the concerned persons are fixed by the internal regulation of the SGBV.

Art. 15. — The SGBV collects commissions on transactions carried out on the market and remuneration for its service provisions.

The rules for calculating the commissions collected by the SGBV are fixed by the Commission and published in the official listing bulletin.

Other fees and remuneration for service provisions are defined by the SGBV.

CHAPTER 2 ADMISSION OF SECURITIES TO THE OFFICIAL LISTING OF THE SECURITIES EXCHANGE AND THEIR DELISTING

Section 1 Organization of the official listing

Art. 16. — The official listing of the securities exchange comprises:

— a market for equity securities, composed of a main compartment and a growth compartment, dedicated to securities issued by the companies referred to, respectively, in Articles 41 and 45 below;

— a market for debt securities, composed of a premium compartment and an emerging compartment, dedicated to securities issued by the issuers referred to, respectively, in Articles 51 and 52 below;

— a market for securities issued by collective investment schemes, hereinafter referred to as "OPC market";

— a market for professional investors dedicated to equity and debt securities and securities issued by collective investment schemes, traded exclusively for the account of professional investors referred to in Article 61 below;

— a market for Treasury securities.

The conditions for the admission of securities to the official listing of the stock exchange and their delisting are defined according to the provisions of this chapter.

Section 2 Conditions for admission to the official listing

Sub-section 1 Common provisions

Art. 17. — The admission of securities to stock exchange trading must be the subject of an admission application to the Commission, accompanied by a draft information notice submitted for the visa of the Commission.

The draft information notice is prepared according to the conditions fixed by an instruction of the Commission.

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The provisions of this sub-section do not apply to debt securities issued by the State and local authorities, and to debt securities issued by legal entities and guaranteed by the State or a local authority. These securities are admitted by right to stock exchange trading, if the issuer and the guarantor request it.

Art. 18. — The securities that may be admitted to stock exchange trading are equity and debt securities issued by joint-stock companies, the rights attached thereto, as well as securities issued by collective investment schemes.

Art. 19. — The company requesting the admission of its securities to stock exchange trading must have fully paid-up share capital. Said securities must be freely negotiable.

Art. 20. — The company requesting the admission of its securities to stock exchange trading must designate an IOB responsible for assisting it in the admission and introduction procedures.

Art. 21. — The stock exchange intermediary must ensure that the company meets the admission conditions provided for in this chapter.

Art. 22. — The IOB acting in the capacity of advisor to the company must notify the SGBV of its intention to introduce an application for the admission of securities to stock exchange trading.

Art. 23. — The application for the admission of securities to stock exchange trading must be introduced sixty (60) days at least before the date referred to for introduction to the stock exchange, unless a derogation is granted by the Commission.

Art. 24. — Admission is requested for all securities of the same category as the securities already issued.

Art. 25. — The company requesting the admission of its securities to stock exchange trading must, prior to introduction to the stock exchange, justify the deposit of its securities with the central securities depository.

Art. 26. — The admission application is accompanied by a file containing the legal, economic, financial, and accounting documents of the applicant company.

The list of elements that the admission file must contain is fixed by an instruction of the Commission.

Art. 27. — Any modification of an element constituting the admission file occurring between the date of filing the file and the date of notification of the Commission's decision must be brought to the attention of the latter by the applicant company.

Art. 28. — The company requesting the admission of its securities to stock exchange trading must transmit to the Commission all communications and notices of a financial nature and publications to be disseminated by the company, as well as any document of an economic or financial nature that the company may be required to publish and must obtain the Commission's approval for their dissemination.

Art. 29. — The Commission has a period of two (2) months to examine the application for the admission of securities to stock exchange trading, starting from the date of receipt of the admission application file. When the Commission requests additional information, this deadline is suspended until the receipt of the requested information.

When it rules favorably, the Commission notifies the applicant company of an admission decision, including a visa number. The admission decision is transmitted to the SGBV for publication in the official listing bulletin.

The validity period of an admission decision is fixed at four (4) months. The Commission may, at the request of the applicant company, extend the validity of its decision by four (4) additional months, when it considers that the supporting documents provided are reasonable.

Art. 30. — The Commission may reject the admission application of a security to stock exchange trading if it considers that it is prejudicial to the interest of the market and investors.

Art. 31. — The company requesting the admission of additional securities in the same category as those already admitted to stock exchange trading must submit an information notice to obtain the visa of the Commission and introduce an admission application accompanied by a simplified file, the content of which is fixed by an instruction of the Commission.

Art. 32. — Unless a derogation is granted by the Commission, securities granting access to the capital of a company cannot be admitted to stock exchange trading unless the equity securities to which they refer are themselves admitted to stock exchange trading.

Art. 33. — The information notice, visaed by the Commission, must be made available to investors at the registered office of the concerned company, with the SGBV, and with the IOBs responsible for the introduction. It is posted online on the websites of the company, the Commission, and the SGBV.

Art. 34. — Any information support relating to the admission of securities to stock exchange trading cannot contain information other than that already appearing in the visaed information notice, and must be approved by the Commission before its publication.

Art. 35. — The company whose securities are the subject of an application for admission to stock exchange trading must keep the Commission informed of any disposals or abandonments of asset elements occurring before its introduction.

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Art. 36. — The company whose securities are the subject of an application for admission to stock exchange trading must:

— justify the existence of an internal audit structure to be assessed by the statutory auditor in its report on the company's internal control. In the contrary case, the company must commit to setting up this structure during the exercise following the admission of its securities to stock exchange trading;

— ensure the handling of securities transfer operations.

Art. 37. — In the case where a shareholder, other than the State or a public holding, holding control over a company, maintains with this company a special link from which conflicts of interest could result between the company's obligations towards this shareholder and the company's responsibilities towards all its shareholders, the company may not be eligible for admission to stock exchange trading.

Art. 38. — In the case where the resolution of the conflict of interest is possible, the Commission may require that it be resolved within a deadline set by it, following the admission of the company's securities to stock exchange trading.

Art. 39. — If it appears that the conflict of interest cannot be resolved, the Commission may require, when it considers that the company is eligible for the admission of its securities to the stock exchange despite the presence of a conflict of interest, that all shareholders of the company as well as the investing public in general be advised and the company must mention this in the information notice.

Art. 40. — The company requesting the admission of its securities to stock exchange trading undertakes to respect the conditions for the publication of periodic and permanent information, as defined in the regulations and instructions of the Commission.

Sub-section 2 Conditions for admission of equity securities to trading on the main compartment

Art. 41. — Admission to trading on the main compartment is reserved for equity securities issued by joint-stock companies having:

— a capitalization of a minimum value of five billion dinars (5,000,000,000 DA); — distributed to the public equity securities representing a minimum value of one billion dinars (1,000,000,000 DA), distributed among a minimum number of one hundred fifty (150) shareholders, at the latest, on the day of introduction.

The capitalization of the company and the securities distributed to the public, mentioned above, are evaluated based on the subscription or introduction price, if applicable.

Art. 42. — The company whose equity securities are the subject of an application for admission to trading on the main compartment must have published the certified financial statements of the three (3) exercises preceding the one during which the admission application is presented, unless a derogation is granted by the Commission.

However, this condition does not apply in the case of a company in the process of being constituted by public offering.

Art. 43. — The company whose securities are the subject of an application for admission to trading on the main compartment must present its valuation report, prepared by a member of the National Order of Chartered Accountants other than the statutory auditor of the company, or by any other qualified evaluator duly registered with the Commission, except members of the latter.

The conditions and procedures for the registration of qualified evaluators are defined by an instruction of the Commission.

Art. 44. – The company must have realized profits during the exercise preceding its admission application on the main compartment, unless a derogation is granted by the Commission.

Sub-section 3 Conditions for admission of equity securities to trading on the growth compartment

Art. 45. — Admission to trading on the growth compartment is reserved for equity securities issued by joint-stock companies, regardless of their capitalization, having distributed to the public equity securities representing a minimum value of ten million dinars (10,000,000 DA), distributed among a minimum number of fifty (50) shareholders or three (3) professional investors referred to in Article 61 of this regulation, at the latest, on the day of introduction.

The securities distributed to the public, mentioned above, are evaluated based on the subscription or introduction price, if applicable.

Art. 46. — The company requesting the admission of its equity securities to trading on the growth compartment must have published the certified financial statements of the last two exercises, unless a derogation is granted by the Commission.

However, this condition does not apply to companies in the process of being constituted by public offering.

Art. 47. — The company requesting the admission of its equity securities to trading on the growth compartment must present its valuation report in accordance with the provisions of Article 43 above.

Art. 48. — The company requesting the admission of its equity securities to trading on the growth compartment must designate a stock exchange sponsor for a period of five (5) years. The stock exchange sponsor is responsible for assisting the company, during the issuance of securities, in preparing the admission operation and ensuring that it respects its legal and regulatory information obligations.

The stock exchange sponsor must be registered with the Commission. The conditions and procedures for its registration are defined by an instruction of the Commission.

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Art. 49. — The designation of the stock exchange sponsor by the company gives rise to the signing of an accompaniment agreement, valid for a minimum duration of one (1) year, established according to the model fixed by an instruction of the Commission.

In the event of termination of said agreement, the company must inform the Commission, without delay. It is also required to designate, without delay, a new stock exchange sponsor.

Art. 50. — The stock exchange sponsor attests, by its signature on the information notice submitted for the visa of the Commission, that it has carried out the usual diligence and that the information contained in the information notice conforms to reality and does not contain errors likely to alter its meaning.

Sub-section 4 Conditions for admission of debt securities to trading on the debt securities market

Art. 51. — Admission to trading on the premium compartment is reserved for debt securities issued by the State and local authorities, regardless of the amount issued, as well as for debt securities issued by public bodies and joint-stock companies, whose outstanding amount is greater than or equal to one billion dinars (1,000,000,000 DA), on the day of introduction.

Art. 52. — Admission to trading on the emerging compartment is reserved for debt securities issued by public bodies and joint-stock companies, whose outstanding amount is less than one billion dinars (1,000,000,000 DA), on the day of introduction.

Art. 53. — The company requesting the admission of its debt securities to trading on the emerging compartment must designate a stock exchange sponsor duly registered with the Commission, for the entire duration of the stay of its securities on the stock exchange. The stock exchange sponsor is responsible for assisting the company, during the issuance of securities, in preparing the admission operation and ensuring that it respects its legal and regulatory information obligations.

The provisions provided for in Articles 49 and 50 above apply to the stock exchange sponsor of the company requesting the admission of its debt securities to trading on the emerging compartment.

Art. 54. – The Commission may require the company requesting the admission of its securities to trading on the debt securities market, particularly when the offer is intended for the public, to prod