Revision of Circular No. 02-2010 of February 15, 2010, Regarding the Content of the Information Note for Financial Operations on the UMOA Regional Financial Market – Terms of Reference

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REVISION OF CIRCULAR NO. 02-2010 OF FEBRUARY 15, 2010, REGARDING THE CONTENT OF THE INFORMATION NOTE FOR FINANCIAL OPERATIONS ON THE UMOA REGIONAL FINANCIAL MARKET TERMS OF REFERENCE

I. CONTEXT AND JUSTIFICATION The pursuit of efficiency in conducting financial operations concerns all regulators. In this context, the Autorité des Marchés Financiers (AMF-UMOA) has undertaken several initiatives to facilitate and accelerate the decision-making of its governing bodies. One such initiative was the development and publication, on February 15, 2010, of a Circular regarding the content of the Information Note for financial operations by issuers and/or their arrangers for the issuance/transfer of securities on the regional financial market.

Although it has yielded significant results, the application of this Circular raises some concerns. Among these are:

• substantial differences in the content of the Information Note from one issuer to another, preventing investors from locating desired information at specific sections or chapters. This situation may also prolong the review and verification timelines for the produced document;
• the existence of a standard Information Note model for all issuances, regardless of the placement method (public offering versus private placement), despite differing requirements for each mode;
• the lack of an information document enabling the straightforward implementation of a securities issuance program on the regional financial market.

Other difficulties linked to the operations themselves have been observed during the implementation of the Circular, namely:

• the near-impossibility for certain investors to participate in the regional financial market due to prevailing regulations in their jurisdiction. For example, some investors do not utilize Global Depository Notes and Global Depository Receipts;
• the absence of an effective and transparent mechanism for determining prices of financial instruments issued on the regional market, notably through order book construction via bookbuilding and/or auction processes.

Specifically regarding private placement bonds, their information notes appear to follow the same requirements as public offering issuances, raising questions about the appropriateness of the placement mode choice by issuers and its impact on issuance request characteristics and treatment.

In addition to these limitations, difficulties have arisen in implementing primary market operations. Indeed, the placement and allocation process has shown shortcomings leading to out-of-time regulatory submission of issuance reports, inconsistencies, multiple subscriptions, and inequitable treatment of subscribers. These difficulties prolong the listing period and deprive investors of exercising their rights diligently.

These operations have also generated complaints at the AMF-UMOA level, from both investors and members of the placement syndicates for these operations. The concerns or criticisms relate to: − the late provision by the lead manager of the Information Note and subscription forms for the operation to other members of the placement syndicate; − allocation issues stemming from inequitable distribution among investors, arbitrary allocations for certain investors, and non-compliance with allocation rules stipulated in the operation’s Information Note; − the management of duplicate entries and homonyms; − delays in post-subscription operations, as allocations are not executed in real time; − the speed of fund return to investors in case of unallocated securities; − the lack of availability of physical or electronic subscription forms.

Furthermore, the pursuit of efficiency between the primary and secondary markets requires greater synchronization and coherence to maximize response times and feedback from participating entities.

The revision of the Circular regarding the content of the Information Note primarily aims to enable the issuance on the regional financial market of any type of securities, whereas until now, issuances have concerned only ordinary shares and bonds.

Indeed, the absence of a formal framework for issuing other types of financial instruments prevents the comprehensive assessment of risks and, where applicable, the procedure for conducting such operations.

Currently, regardless of the operation type, there is only one model for preparing an Information Note. This fact subjects all issuers to the same obligations, despite operations potentially presenting variable characteristics, complexities, and/or risks.

In light of the above context, AMF-UMOA seeks to engage a Consulting Firm to address the concerns identified above.

II. OBJECTIVES OF THE CONSULTATION 2.1. General Objective The general objective of the services is, on the one hand, to revise the Circular regarding the content of the Information Note to align it with international best practices and shorten financial operation execution timelines, and on the other hand, to broaden the possibilities for issuing Financial Instruments.

2.2. Specific Objectives The specific objectives concerning the revision of the Information Note content:

1. conduct a benchmark of Information Notes and prospectuses internationally to account for the information needs of international investors as well as those specific to green, social, and sustainable bonds;
2. broaden the possibilities for using financial instruments other than currently used securities on the regional financial market, including: 2.1 issuance of other Financial Instruments beyond classical securities issuances, notably composite and subordinated securities provided by the Uniform Act, as well as financial contracts; 2.2 recourse to the issuance of Global Depository Receipts (GDR); 2.3 financing projects through the regional financial market via dedicated vehicles, while addressing legal framework obstacles and proposing solutions or alternatives;
3. provide an improved description of the subscription and allocation process in the Information Note: 3.1 possibility for direct subscription of issued securities (firm commitment); 3.2 ability to calibrate a platform to propose multiple allocation methods, including simple proportional allocations with or without minimum quantities, iterative allocations, first-come-first-served allocations, block allocations, etc.; 3.3 equitable treatment of subscriptions: the announced mechanism must include filters limiting discriminatory allocations; 3.4 the mechanism must be capable of managing investor quota issues, namely employees, natural persons, legal entities, and/or other categories; 3.5 the mechanism must handle duplicate entries and/or multiple subscriptions, giving the issuer or lead manager the discretion to decide on their inclusion; 3.6 addressing the validation date of subscriptions, verification of subscriber provisions, and payment of subscriptions in line with spot market operations (specifically for legal entities);
4. incorporate international standards established by the International Organization of Securities Commissions (IOSCO);
5. define procedures for establishing issuance or transfer programs;
6. specify timelines for returning unallocated funds to investors and mobilized amounts to issuers: 6.1 use of an electronic subscription form meeting integrity and security conditions.

The Consultant will identify the most appropriate legal text to support this major reform, taking into account the regional financial market’s legal and regulatory framework.

III. TASKS OF THE CONSULTANT The mission will be executed by an experienced Market Finance Consulting Firm. The Consultant must:

• propose a detailed work plan with the methods, data collection tools, and analysis approaches to achieve the stated objectives;
• conduct a benchmark on the content of Information Notes and/or prospectuses to support the options chosen in revising the Circular regarding the regional financial market’s Information Note content.

IV. PROFILE OF THE CONSULTANT AND RESOURCES TO BE DEPLOYED The Consultant/Firm must demonstrate sufficient technical and professional capabilities, confirmed expertise in regulation, and a very good knowledge of financial markets in general, and specifically, complete mastery of financial operations on a financial market (Consultant references attesting to competencies in the field must be submitted).

To this end, the Consultant commits to:

• deploying necessary means to accomplish its mission in accordance with best practices;
• ensuring that experts or collaborators entrusted with tasks possess appropriate competence for the nature and complexity of this mission.

It must also have qualified human resources (composed of experts chosen for professional competence, complementarity, and confirmed experience) available to carry out the mission. To this end, it must:

• demonstrate proven professional practice in conducting this type of mission;
• possess confirmed competencies in oral and written communication, particularly in report writing and developing training modules;
• have good time management skills, including the ability to meet deadlines and execute multiple tasks simultaneously with a high degree of autonomy;
• demonstrate perfect mastery of the French language, both written and oral;
• present Experts capable of working in a multinational environment with diverse partners at national, regional, and global levels, with the key profiles listed below: • Economy and finance of financial markets, Mission Lead; • Senior market legal expert; • Senior experts in regulation and financial market supervision.

The Experts assigned to the mission must present at minimum the following profiles and experiences:

S/N	Required Profile	Minimum Years of Experience	Details of Profiles and Experiences
1.	One (1) Senior Expert in Economy and Finance of Financial Markets	15 years	• Hold at least a university degree (BAC+5) in economics or finance (including financial markets);<br>• Possess relevant experience of at least ten (10) years in the financial sector;<br>• Have at least five (5) years of experience coordinating teams for missions (financial operations, transactions...) related to the financial sector;<br>• Have a very good knowledge of the financial system of the countries subject to the mission;<br>• Have participated in at least five (5) similar missions;<br>• Demonstrate excellent report writing quality.
2.	Two (2) Senior Experts in Regulation and Supervision of Financial Markets	10 years	• Hold at least a university degree (BAC+5) in Economics, Finance, Business Law, or Financial Markets Law.<br>• Have at least ten (10) years of professional experience in finance and financial markets, including at least five (5) years in regulation and/or market activity supervision,<br>• Justify the completion of two (2) relevant projects in financial system regulation/supervision;<br>• Demonstrate excellent report writing quality.
3.	Senior Market Legal Expert	10 years	• Hold at least a university degree (BAC+5) in Business Law, Economics, or Finance;<br>• Have at least ten (10) years of professional experience in finance, particularly financial markets, with proven expertise in financial advisory and market matchmaking;<br>• Justify at least five (5) years of relevant experience conducting similar missions (financial operations, transactions) within the financial system/regulatory text development.<br>• Excellent report writing quality.

V. EXPECTED RESULTS OF THE MISSION This mission should achieve the following results:

• a benchmark on the content of Information Notes and prospectuses at the international level is completed;
• new types of financial instruments, notably composite and subordinated securities provided by the Uniform Act as well as financial contracts, are proposed;
• elements strengthening the subscription and allocation process of securities are proposed in the Information Note;
• procedures for establishing issuance or transfer programs are proposed;
• a more appropriate legal text incorporating international standards established by the International Organization of Securities Commissions (IOSCO) is proposed.

VI. METHODOLOGY Interested firms or consultants must submit their offer accompanied by a methodological note presenting, based on the knowledge, expertise, and experience of the proposed team members, a precise work plan specifying their understanding and vision of the mission to be performed and its organization, taking into account the planned duration for the study.

The team of experts must: − adapt the Information Note to operation types and, where applicable, propose a simplified Information Note for issuers who already have a reference document that could fit into issuance programs.¹ − review Circular No. 02/2010, with a view to revising it and positioning it at a more binding regulatory level, including information by reference. It should be noted that Article 89 of the Uniform Act on Commercial Companies and GIE stipulates that the information document, published in connection with a market operation, may refer to any other information document issued within the last year. It can also be supplemented by an operation note. − define the content of different types of issuances or transfers of financial instruments or securities based on international practices, notably the issuance or transfer of ordinary or preferred shares, bonds, convertible shares or bonds, warrants-bearing shares or bonds, government bonds, securities issued by non-resident entities, etc. − take into account entities not previously covered by securities issuances, notably decentralized financial system entities and certain Ad-hoc entities (Special Purpose Vehicles). − address the specific case of Small and Medium-sized Enterprises (SMEs).

Nevertheless, the Consultant will propose an adapted methodology that takes into account the needs and imperatives described above. It will provide the different steps of its approach as well as the temporal allocation of Experts to propose its solution.

1. Preparation and Launch Phase This phase allows the consulting team to refine its understanding of the assigned mission and establish an implementation schedule to be submitted for AMF-UMOA validation.

This meeting, at the start of the work, will enable the consultant to present its understanding of the mission and expected results, clarify practical modalities, and detail the implementation schedule to collect observations and clarifications from the Committee.

¹ For example, the implementing regulation of the European Union Prospectus Directive has provided several prospectus schemes, including those applicable to the following securities:

• shares and other transferable securities equivalent to shares as well as other securities;
• asset-backed securities;
• bonds and derivative instruments with a unit nominal value of at least 50,000 euros;
• securities issued by Member States or third countries as well as their regional and local authorities;
• securities issued by international public bodies and debt instruments guaranteed by an OECD member country;
• closed-end collective investment schemes.

The document also describes the registration document scheme specific to banks due to their uniqueness.

This phase will result in the following essential tasks: • documentary analysis; • collection of all useful information for carrying out the mission; • meetings with regional financial market actors using appropriate information collection tools; • methodology sharing and validation of tools, etc.

Following initial review, documentary analysis, the Consultant must produce a scoping note that refines orientations and methodology, and more precisely indicates the calendar. This deliverable is mandatory.

2. Diagnostic Report Development Phase The collected information will be processed by the Consultant. It will serve to develop the various expected reports. This phase will focus on developing the diagnostic report of the securities issuance process on the regional financial market and benchmarking proposed evolution options for the new text. This deliverable is mandatory.

3. Draft Text Proposal Phase At this stage, draft texts regarding the content of the Information Note will be proposed. Furthermore, a workshop will be organized with all market participants to discuss lessons learned from the mission and observations/recommendations for the new texts.

4. Final Mission Report and New Prospectus Development Phase This phase will consist of incorporating market observations and suggestions to finalize the Mission Report and present the new prospectus on the Information Note for financial operations on the regional financial market.

VII. DOCUMENTS TO BE MADE AVAILABLE TO THE SELECTED FIRM All available documents or information necessary for the execution of its services will be made available to the Independent Expert, including:

• the report on the financial market reform “The Regional Financial Market – A Reform Requirement” prepared by the Central Bank of West African States (BCEAO) in 2016;
• the Strategic Plan 2014-2021 of the regional financial market;
• the new priorities of the UMOA regional financial market;
• the General Regulation regarding the organization, functioning, and control of the UMOA Regional Financial Market and related decisions available on the AMF-UMOA website;
• various Instructions: 36/2009-63/2020-47/2011R- 29/2001 available on the AMF-UMOA website;
• Circular No. 02/2010 regarding the content of the Information Note for financial operations on the UMOA regional financial market;
• various annual reports available on the AMF-UMOA website.

VIII. DURATION AND LOCATION OF THE MISSION The mission will take place at the AMF-UMOA headquarters and may require travel to all UMOA countries. The mission execution period is ninety (90) calendar days, excluding the review and validation timeline for deliverables and the organization of the conclusions validation workshop. Each candidate’s financial proposal must account for this delay in man/days.

IX. DELIVERABLES AND INDICATIVE SCHEDULE To assist in conducting the assigned study, AMF-UMOA will provide the Consultant/Firm with mission support and facilitation in various forms: designation of a reference point (at mission launch), document provision, contact facilitation, technical and/or organizational support, studies, etc. AMF-UMOA will provide the Consultant/Firm with a dedicated office space and access to facilities for the duration of the mission.