CMF Regulation on Combating Market Abuses

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N° 28 Journal Officiel de la République Tunisienne — 7 avril 2017 Page 1231 Order of the Minister of Religious Affairs of April 7, 2017, delegating signature. The Minister of Religious Affairs, Having regard to the Constitution, Having regard to Law No. 83-112 of December 12, 1983, on the general status of State personnel, local authorities, and public administrative establishments, together with texts amending or supplementing it, Having regard to Decree No. 75-384 of June 17, 1975, authorizing Ministers and Secretaries of State to delegate their signature, Having regard to Decree No. 2013-4522 of November 12, 2013, on the organization of the Ministry of Religious Affairs, Having regard to Presidential Decree No. 2016-107 of August 27, 2016, on the appointment of the Head of Government and its members, Having regard to Presidential Decree No. 2017-43 of March 17, 2017, on the appointment of two Government members, Having regard to the Order of the Minister of Religious Affairs of September 23, 2016, appointing Mrs. Hajer Khatteli, Principal Preacher, as Director of Financial Affairs at the General Directorate of Common Services of the Ministry of Religious Affairs, Having regard to the Order of December 6, 2016, appointing Mrs. Hajer Khatteli to the rank of Principal Preacher Outside Class effective November 30, 2016.

Orders: Article 1 - In accordance with paragraph 2 of Article 1 of the aforementioned Decree No. 75-384 of June 17, 1975, Mrs. Hajer Khatteli, Principal Preacher Outside Class, serving as Director of Financial Affairs, is authorized to sign by delegation from the Minister of Religious Affairs all acts falling within her remit, except regulatory acts. Art. 2 - This Order shall be published in the Official Journal of the Republic of Tunisia and shall take effect as of March 17, 2017. Tunis, April 7, 2017. The Minister of Religious Affairs Ahmed Adhoum

MINISTERE DES FINANCES Order of the Minister of Finance of March 28, 2017, approving the regulation of the Financial Market Council on combating market abuses. The Minister of Finance, Having regard to the Constitution, Having regard to Law No. 94-117 of November 14, 1994, on the reorganization of the financial market, as amended and supplemented by subsequent texts, notably Law No. 2009-64 of August 12, 2009, promulgating the code on financial services to non-residents and notably its Articles 19, 28, 29, 31, 40, 53 and 88, Having regard to Law No. 2000-35 of March 21, 2000, on the dematerialization of securities, On the proposal of the Financial Market Council Board.

Orders: Article 1 - The regulation of the Financial Market Council on combating market abuses, attached to this Order, is approved. Art. 2 - This Order shall be published in the Official Journal of the Republic of Tunisia. Tunis, March 28, 2017. The Minister of Finance Lamia Boujnah Zribi Approved by The Head of Government Youssef Chahed Annexe à l’arrêté de la ministre des finances portant visa du règlement du conseil du marché financier relatif à la lutte contre les manquements sur le marché The Board of the Financial Market Council, Having regard to Law No. 94-117 of November 14, 1994, on the reorganization of the financial market, as amended and supplemented by subsequent texts, notably Law No. 2009-64 of August 12, 2009, promulgating the code on financial services to non-residents and notably its Articles 19, 28, 29, 31, 40, 53 and 88, Having regard to Law No. 2000-35 of March 21, 2000, on the dematerialization of securities,

Page 1232 Journal Officiel de la République Tunisienne — 7 avril 2017 N° 28 Having regard to the General Regulation of the Tunis Stock Exchange, as approved by Order of the Minister of Finance of February 13, 1997 and amended and supplemented by subsequent texts, notably the Order of the Minister of Finance of April 15, 2008 and notably its Articles 22, 75 and 84. Decides: Article 1 - This regulation establishes the prevention rules and sanctions applicable to abuses relating to privileged information and market manipulation committed on securities, as defined by Law No. 2000-35 of March 21, 2000, on the dematerialization of securities, admitted to the listing of the Stock Exchange, as defined in Article 22 of the General Regulation of the Tunis Stock Exchange, and those falling under the off-market segment traded on the electronic system provided for in Article 75 of the aforementioned regulation. Art. 2 - For the purposes of this regulation, the following terms apply:

• Reference Shareholder: any shareholder or group of shareholders pursuant to an express or tacit agreement, who holds directly or indirectly a share of the company's capital conferring the majority of voting rights or enabling it to control or exert significant influence over the company's decisions, without necessarily being majority-owned.
• Persons Exercising Management Responsibilities:  executives: members of the board of directors, management board, supervisory board, chairman and managing director, general manager, deputy general manager or delegated general manager;  any other person who, on the one hand, has the power to take management decisions or decisions concerning the company's evolution and strategy, and on the other hand, has regular access to privileged information concerning directly or indirectly said company.
• Privileged Information: precise information that has not been made public, which concerns directly or indirectly one or more companies or one or more securities and that, if made public, would be likely to have a significant effect on the price of the relevant security. Precise information constitutes information mentioning a set of circumstances that exists or may reasonably be expected to exist, or an event or its intermediate stages that has occurred or may reasonably be expected to occur, and which allows drawing a conclusion regarding the possible effect of this set of circumstances or event on the price of securities. Information is qualified as likely to have a significant effect on the price of a security if, once made public, a reasonable investor would be able to use it as a basis for investment decisions. Privileged information also includes any precise information transmitted by a client concerning pending orders of that client, relating directly or indirectly to one or more companies or securities, and likely, if made public, to have a significant effect on the price of the relevant securities.
• Insider: any person holding privileged information by virtue of:  their status as a member of the company's administration, management, or supervisory bodies;  their status as a reference shareholder;  their profession, functions, or participation in the preparation and execution of an operation concerning the company;  their exercise of activities that may be qualified as offenses or crimes.
• Transaction without economic justification: any transaction carried out by a person and having the effect of inducing market participants to trade securities in order to benefit from reactions triggered by other market participants, by executing reverse transactions to realize a profit or avoid a loss.

N° 28 Journal Officiel de la République Tunisienne — 7 avril 2017 Page 1233 Title I Abuses Relating to Privileged Information Chapter 1: Prohibition of Transactions Linked to Privileged Information Art. 3 - Any insider is prohibited from using privileged information by acquiring or disposing of, or attempting to acquire or dispose of, for their own account or on behalf of others, either directly or indirectly, the securities to which such information relates. When the insider is a legal entity, the prohibition also applies to natural persons participating in the transaction on its behalf. Art. 4 - Any insider is prohibited from communicating privileged information to another person outside the normal course of their work or for purposes other than those for which it was communicated. Any insider is also prohibited from recommending to another person to execute a transaction or to cancel or modify an order based on privileged information. When the insider is a legal entity, the prohibitions set out in the first and second paragraphs of this article also apply to natural persons participating in the transaction on its behalf. Art. 5 - Any person other than insiders is prohibited from using or communicating privileged information, or from recommending to another person to execute a transaction or cancel or modify an order based on privileged information, when that person knew or ought to have known that the information was privileged. In all cases, a person is presumed to know that the information is privileged when it was communicated by an insider.

Chapter 2: Preventive Measures for Abuses Relating to Privileged Information Section 1: Common Provisions Art. 6 - The provisions of this section apply to:

• companies whose securities are admitted to the Stock Exchange listing or fall under the off-market segment traded on the electronic system and their executives;
• stockbrokers and their executives;
• portfolio management companies for third parties and their executives;
• the Tunis Stock Exchange and its executives;
• the deposit, clearing, and settlement company and its executives. Art. 7 - The persons referred to in Article 6 of this regulation must take all necessary measures to avoid the undue use and circulation of privileged information. They must in particular:
• implement written procedures for managing privileged information that their employees must comply with. These procedures must be evaluated and updated regularly taking into account the risks faced by the concerned persons;
• implement effective measures to prevent access to privileged information for persons other than those who need it to perform their functions;
• establish and update a list of persons under their authority or acting on their behalf who have regular or occasional access to privileged information concerning directly or indirectly a company or security, according to the model attached to this regulation. This list must be made available to the Financial Market Council. Art. 8 - Without prejudice to legal provisions on personal data protection, the list provided for in Article 7 of this regulation must indicate in particular:
• the identity of all persons having access to privileged information;
• the reason for which the concerned persons are registered on the list and the date on which they obtained access to privileged information;
• the dates of creation and updating of the list. Art. 9 - The persons referred to in Article 6 must update, without delay, the list provided for in Article 7, particularly in the following cases:
• change of the reason justifying a person's registration on the list;
• registration of a new person on the list;
• removal of a person from the list, specifying the date on which that person ceases to have access to privileged information.

Page 1234 Journal Officiel de la République Tunisienne — 7 avril 2017 N° 28 Art. 10 - The persons referred to in Article 6 must inform the concerned persons of their registration on the list provided for in Article 7 by any means leaving a written record, which must be made available to the Financial Market Council. The failure to inform a concerned person of their registration on the list provided for in Article 7 does not exempt them from the obligations imposed by this regulation. Section 2: Preventive Measures Specific to Companies Whose Securities are Admitted to the Stock Exchange Listing or Fall Under the Off-Market Segment Traded on the Electronic System Paragraph 1: Obligation to Define Trading Blackout Periods Art. 11 - The company must define in its written procedures periods during which persons exercising management responsibilities and any person registered on the list referred to in Article 7 should be prohibited from executing transactions on its securities. Art. 12 - The following are notably considered as blackout periods within the meaning of Article 11:

• the period between the date on which the company becomes aware of a privileged information and the date on which the information is made public through legal and regulatory channels;
• the fifteen-day period preceding the publication of annual and interim financial statements and quarterly activity indicators by the company through legal and regulatory channels. Paragraph 2: Obligation to Declare Transactions Executed by Persons Exercising Management Responsibilities Art. 13 - Persons exercising management responsibilities within a company whose securities are admitted to the Stock Exchange listing or fall under the off-market segment traded on the electronic system must, at the latest seven trading days after taking office, declare to the Financial Market Council, according to the model attached to this regulation, the number of securities issued by said companies that they hold. The declaration obligation set out in the first paragraph applies to persons having a link with persons exercising management responsibilities. The following are considered as having a link with persons exercising management responsibilities:
• the spouse;
• ascendants and descendants up to the first degree;
• any legal entity or entity directly or indirectly managed, administered, or controlled by persons exercising management responsibilities or by a person having a link with them. Art. 14 - Persons exercising management responsibilities within a company whose securities are admitted to the Stock Exchange listing or fall under the off-market segment traded on the electronic system, as well as persons having a link with them within the meaning of Article 13, must declare at the end of each month to the Financial Market Council and to the company transactions for acquisition, disposal, subscription, and exchange carried out for their own account and relating to securities issued by said company. The persons referred to in the first paragraph must also declare to the Financial Market Council, the Tunis Stock Exchange, and the company within three trading days following their execution, significant transactions for acquisition, disposal, subscription, and exchange carried out for their own account and relating to securities issued by said company. Transactions are considered significant when they involve a volume equal to or greater than 50% of the total trading session volume for said company's securities and a value equal to or greater than twenty thousand dinars. The Tunis Stock Exchange must publish, without delay, the declarations received on its website. The declarations provided for in the first and second paragraphs must be prepared according to the models attached to this regulation. Art. 15 - Companies whose securities are admitted to the Stock Exchange listing or fall under the off-market segment traded on the electronic system must establish and update the list of persons exercising management responsibilities according to the model attached to this regulation. This list must be transmitted to the Financial Market Council by January 31 of each year at the latest and without delay upon each update. The company informs the concerned persons of their registration on said list.

N° 28 Journal Officiel de la République Tunisienne — 7 avril 2017 Page 1235 Title II Abuses Relating to Market Manipulation Chapter 1: Abuses Relating to Price Manipulations Art. 16 - Any person, acting alone or in concert, is prohibited from exercising or attempting to exercise maneuvers resulting or likely to result in price manipulation. The following notably constitute maneuvers resulting or likely to result in price manipulation: 1- Carrying out transactions or issuing orders, unless the person who carried them out or issued them proves their legitimacy and conformity with admitted market practices as provided for in point 4 of Article 20:

• which give or are likely to give false or misleading indications on the supply, demand, or price of one or more securities;
• which fix the price of one or more securities at an abnormal or artificial level. 2- Carrying out transactions or issuing orders using procedures that give a fictitious image of the state of the market or any other form of deception. Art. 17 - The following are notably considered as price manipulations: 1- Securing a dominant position in the market for one or more persons acting in concert, having the effect of fixing directly or indirectly a price at predetermined levels or creating other unfair conditions; 2- Issuing buy or sell orders for securities at the opening or closing, where applicable during fixing, with the object of hindering price establishment on the market or having the effect of misleading investors acting based on the relevant prices; 3- Carrying out a transaction or series of transactions to give the impression of strong activity or price movement, through transactions without apparent economic justification or through transactions on a security that do not result in an effective transfer of ownership. Art. 18 - The following are notably considered as constitutive elements of a price manipulation consisting in giving false or misleading indications or fixing prices at an abnormal or artificial level within the meaning of point 1 of Article 16:
• the importance of the share of daily transaction volume represented by orders issued or transactions carried out on the relevant security, particularly when these interventions result in a significant price variation;
• the importance of the price variation resulting from orders issued or transactions carried out by persons holding a significant selling or buying position on that security;
• reversals of positions over a short period resulting from orders issued or transactions carried out on the market for the relevant security, possibly associated with significant price variations;
• concentration of orders issued or transactions carried out over a brief period during the trading session, resulting in a price variation that is subsequently reversed;
• the effect of orders issued on the best displayed bid and ask prices for the security, or generally the central order book representation, which are cancelled before execution;
• price variations resulting from orders issued or transactions carried out at the precise moment or a close moment to when reference prices are calculated. The constitutive elements provided for in the first paragraph do not themselves constitute a price manipulation. Art. 19 - The following are notably considered as constitutive elements of a price manipulation consisting in using fictitious procedures or any other form of deception within the meaning of point 2 of Article 16:
• issuing orders or carrying out transactions by persons who are preceded or followed by the direct or indirect dissemination of false or misleading information by these same persons;
• issuing orders or carrying out transactions by persons who are preceded or followed by the direct or indirect production or dissemination of investment recommendations, research works, or opinions that are false, misleading, or manifestly influenced by a significant interest by these same persons.

Page 1236 Journal Officiel de la République Tunisienne — 7 avril 2017 N° 28 The constitutive elements provided for in the first paragraph do not themselves constitute a price manipulation. Art. 20 - The following do not constitute price manipulations within the meaning of Article 16, when carried out in compliance with applicable legal and regulatory provisions: 1- A company admitted to the Stock Exchange listing purchasing its own shares with a view to stabilizing its market price in accordance with Article 19 of Law No. 94-117 of November 14, 1994, on the reorganization of the financial market; 2- A company whose securities are admitted to the Stock Exchange listing or fall under the off-market segment traded on the electronic system purchasing its own shares with a view to their cancellation within the framework of a capital reduction not motivated by losses in accordance with Article 88 of the aforementioned Law No. 94-117; 3- Transactions carried out within the framework of a liquidity contract...