BCEAO Instruction No. 024-11-2016 on Attribute Definitions

BCEAO Instruction No. 024-11-2016 on Attribute Definitions

The Governor of the Central Bank of the States of West Africa (BCEAO),

Having regard to the Treaty of the West African Monetary Union (UMOA) of January 20, 2007, particularly Article 34;

Having regard to the Statutes of the Central Bank of the States of West Africa (BCEAO), annexed to the UMOA Treaty of January 20, 2007, particularly Articles 30, 31, 32, 33, and 34;

Having regard to Regulation No. 03/2010/CM/UEMOA of March 30, 2010, relating to secured obligations in the UMOA;

Having regard to Regulation No. 01/CM/AFRISTAT/2011 of April 11, 2011, amending Regulation No. 001/CM/2000 of the Council of Ministers of September 19, 2000, adopting activity and product nomenclatures for the member states of AFRISTAT;

Having regard to the General Regulation relating to the organization, functioning, and control of the financial market in the UMOA;

Having regard to the Uniform Law on banking regulation, particularly Articles 50, 51, 52, 53, and 54;

Having regard to the Uniform Law on the regulation of decentralized financial systems of the UMOA;

Having regard to the Uniform Law on the treatment of dormant accounts in the books of financial institutions of the member states of the UMOA;

Having regard to Decision No. 013/24/06/CM/UMOA of June 24, 2016, establishing the prudential framework applicable to credit institutions and financial companies in the UMOA;

Having regard to Decision No. 397/12/2010 of December 6, 2010, of the BCEAO Monetary Policy Committee, establishing the rules, instruments, and procedures for implementing the BCEAO's monetary and credit policy;

Having regard to Decision No. 24/2013/CPM/BCEAO of December 9, 2013, modifying and supplementing Decision No. 397/12/2010 of December 6, 2010, of the BCEAO Monetary Policy Committee establishing the rules, instruments, and procedures for implementing the BCEAO's monetary and credit policy;

Avenue Abdoulaye FADIGA BP 3108 – Dakar - Senegal Tel.: (221) 33 839 05 00 / Fax: (221) 33 823 93 35 www.bceao.int

INSTRUCTION NO. 024 - 11 - 2016 RELATING TO THE DEFINITION OF ATTRIBUTES

The Governor

Having regard to Decision No. 357-11-2016 of November 15, 2016, instituting the Revised UMOA Banking Accounting Plan and its annex, particularly Articles 62, 76, 79, 82, 85, 88, 92, 96, and 100;

Having regard to Instruction No. 11-12-2010/RB of December 13, 2010, relating to the classification, operations, and legal form of financial establishments with a banking character;

Having regard to Instruction No. 005-06-2014 of June 30, 2014, relating to the conditions and procedures for searching for holders of accounts that have remained inactive for eight years;

Having regard to Instruction No. 008-05-2015 of May 21, 2015, governing the conditions and procedures for exercising the activities of electronic money issuers in the UMOA,

DECIDES

Article 1

In application of the provisions of the Revised UMOA Banking Accounting Plan, banks and financial establishments with a banking character, hereinafter referred to as "subject establishments," must provide in their information systems for the identification of operations carried out and the economic agents with whom these operations are conducted, according to the attributes defined in the annex to this instruction, which forms an integral part thereof.

Article 2

An attribute constitutes a specification, an information or identification criterion linked to an operation or a set of operations that provides information complementing that of the accounting headings, particularly by allocating the balance of a general account and/or completing it with an additional characteristic.

In this regard, an attribute allows providing, for the balance of a general account, complementary information: – on the characteristics of the operations that contributed to the formation of this balance; – or on the economic agents with whom these operations are conducted.

Article 3

This instruction repeals and replaces all previous provisions dealing with the same subject. It enters into force on January 1, 2018, and will be published wherever necessary.

Done in Dakar, on November 15, 2016 Tiémoko Meyliet KONE

ANNEXES:

• ANNEX 1: LIST OF REGULATORY ATTRIBUTES
• ANNEX 2: DEFINITION AND CONTENT OF ATTRIBUTES

ANNEX 1: LIST OF REGULATORY ATTRIBUTES

1. Country of residence
2. Economic agent
3. Initial maturity
4. Residual maturity
5. Currency
6. Group of linked clients
7. Issuer of securities
8. Quotation of securities
9. Nature of securities
10. Collateral
11. Nature of the underlying assets of lending and borrowing operations with deposit-taking institutions
12. Operations on earmarked resources
13. Purpose of financing
14. New credits
15. Earmarked or unearmarked deposits and borrowings
16. Inactive accounts
17. Underlying assets of repurchase operations
18. Activity sections.

ANNEX 2: DEFINITION AND CONTENT OF ATTRIBUTES

1° - COUNTRY OF RESIDENCE

The residence of an economic agent is linked to the economic territory on which it has its predominant center of economic interest.

Persons traveling abroad for full-time studies, persons traveling abroad for medical treatment, crews of ships, aircraft, oil platforms, space stations, or other similar installations operating outside a territory or on multiple territories, national diplomats, military personnel, and other officials employed abroad in enclaves of their government, as well as their households, are considered residents of their countries of origin.

Regarding cross-border workers and refugees, their residence ceases to be their country of origin if they stay or intend to stay in another economy for at least one year.

The assets, liabilities, and off-balance sheet commitments of subject establishments must be allocated based on the country of residence of the counterparties (debtors, creditors, issuers of securities, beneficiaries of collateral, principals, or guarantors) or based on the country of residence of the remitters and the place of payment, for checks, bills of exchange, and other values for collection.

The following geographical allocations must be respected.

1.1 - State of the Reporting Entity

The expression "State of the Reporting Entity" refers to the member state of the West African Monetary Union (UMOA) on whose territory the subject establishment has received approval or authorization to install itself to exercise its activities. The "State of the Reporting Entity" includes: • natural persons, nationals or not, having their habitual residence in the same state as the subject establishment; • legal persons, nationals or not, for their establishments forming an integral part of the economy of the state in question.

Operations with the institutions referred to in point 1.3 below must not be treated under the State of the Reporting Entity.

1.2 - Other Member States of the UMOA

The expression "Other Member States of the UMOA" refers to the member states of the UMOA, other than the "State of the Reporting Entity" defined above. The diplomatic and consular representations of UMOA member states installed in the State of the Reporting Entity fall under "Other Member States of the UMOA." The zone "Other Member States of the UMOA" must be allocated among the different states concerned.

1.3 - UMOA Residents

The expression "UMOA Residents" refers to the residence of UMOA entities that are not residents of any member state of the Union. The institutions concerned are notably the Headquarters of the Central Bank of the States of West Africa (BCEAO), the Commission of the West African Economic and Monetary Union (UEMOA), as well as the regional institutions affiliated with it (Court of Justice, Court of Auditors, Interparliamentary Committee, Regional Chamber of Commerce, Council of Labor and Social Dialogue, Council of UMOA Local Authorities, etc.), the West African Development Bank (BOAD), and the Regional Council for Public Savings and Financial Markets (CREPMF).

1.4 - Rest of the World

The expression "Rest of the World" refers to states other than those indicated in points 1.1 and 1.2 above. The "Rest of the World" notably includes international financial or non-financial institutions whose territorial competence extends to states that are not members of the UMOA, natural or legal persons established in states that are not members of the UMOA, as well as the diplomatic and consular representations of states outside the UMOA.

The Zone "Rest of the World" must be subdivided according to the following distribution.

1.4.1 - Other countries of the Franc Zone

The expression "Other countries of the Franc Zone" refers to the states of the Franc Zone, other than those of the UEMOA and France.

1.4.2 - Other Member States of ECOWAS1

The other countries of ECOWAS group together the states of the Economic Community of West African States, other than those of the UEMOA, as well as the ECOWAS Institutions.

1.4.3 - Euro Zone

The Euro Zone is a monetary zone that groups together all countries of the European Union using the euro as a single currency2. It also includes diplomatic representations, Euro Zone institutions located on the territory of the Euro Zone, etc.

1.4.4 - Other States

These are all states of the rest of the world, other than those belonging to the zones cited above. The Institutions of the European Union, which are extended to non-member states of the Euro Zone, are also recorded in this group.

2° - ECONOMIC AGENT

An economic agent is an economic entity capable, on its own behalf, of owning assets, incurring liabilities, engaging in economic activities, and conducting operations with other entities.

Credit institutions must classify their assets, liabilities, and off-balance sheet commitments according to the following categories of economic agents.

1: As of December 31, 2015, ECOWAS comprised fifteen (15) countries: Benin, Burkina, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo (which constitute the UEMOA), as well as Cape Verde, Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone. 2: As of December 31, 2015, the Euro Zone comprised nineteen (19) countries: Germany, Austria, Belgium, Cyprus, Spain, Estonia, Finland, France, Greece, Ireland, Italy, Lithuania, Latvia, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Slovakia.

2.1 - Financial Corporations

By financial corporations, it is meant economic agents engaged primarily in financial intermediation or in financial auxiliary activities related thereto. They include central banks or issuing institutes, other deposit-taking institutions, and other financial corporations.

2.1.1 - Central Banks

In the UMOA, the "Central Bank" refers to the common issuing institute for the member states, named BCEAO.

For branches of banks and financial establishments with a banking character installed outside the UMOA, this refers to the issuing institute of the state(s) of installation of said branches.

Subject establishments must distinguish operations conducted with the Central Bank from those conducted with the issuing institutes of other states of installation of the establishments.

2.1.2 - Other Deposit-Taking Institutions

Other deposit-taking institutions are deposit-taking institutions other than Central Banks. Their main function is to ensure financial intermediation and they issue elements of liability entering into the definition of broad money.

They include Postal Check Centers (CCP), National Savings Banks, banks, financial establishments with a banking character authorized to receive deposits, and decentralized financial systems authorized to collect deposits.

2.1.2.1 - Postal Check Center

This refers to the Postal Check Center of the state(s) of installation of the subject establishment, enjoying management autonomy.

2.1.2.2 - National Savings Bank

The National Savings Bank is a deposit institution created and managed on behalf of the State, which acts as guarantor for receiving deposits under conditions defined by law. It is generally placed under the authority of the Minister in charge of the economy.

2.1.2.3 - Banks

Banks are enterprises approved in this capacity in the member states of the UMOA, as well as enterprises installed outside the UMOA that exercise banking activities, in accordance with the regulation of the country of installation. The list of banks approved in the UMOA is established by the UMOA Banking Commission.

2.1.2.4 - Financial establishments with a banking character authorized to receive deposits

Financial establishments with a banking character are legal persons approved in this capacity in the member states of the UMOA. They include lending establishments, leasing or hire-purchase establishments, guarantee establishments, factoring, and payment establishments.

When they are authorized to receive deposits under the conditions provided by the law on banking regulation in the UMOA, financial establishments with a banking character are to be classified in this sub-heading, under "Other deposit-taking institutions." The list of financial establishments with a banking character approved in the UMOA is established by the UMOA Banking Commission.

2.1.2.5 - Decentralized Financial Systems (DFS1) authorized to collect deposits

DFS are entities approved in this capacity under the provisions of the law on the regulation of DFS in the UMOA or are recognized as such in their state of installation.

2.1.3 - Other Financial Corporations

Other financial corporations include insurance companies and pension funds, other financial intermediaries, and financial auxiliaries.

2.1.3.1. Insurance Companies and Pension Funds

Insurance companies and pension funds are insurance companies as well as retirement funds, insofar as the latter are not affiliated with a social security body under the control of the public administration (or Government).

2.1.3.1.1. Insurance Companies

Insurance Companies are companies, mutuals, or other entities intended to offer insurance services to third parties, notably on life, fire, accidents, and various risks.

2.1.3.1.2. Pension Funds

Pension Funds are autonomous entities established to provide retirement benefits to determined groups of employees. They have their own assets and liabilities and conduct financial operations for their own account. They are financed by contributions from employers and/or employees.

2.1.3.2 Other Financial Intermediaries

The category "Other Financial Intermediaries" is a group composed of all financial corporations other than deposit-taking institutions, insurance companies and pension funds, and financial auxiliaries. They notably include financial establishments with a banking character not authorized to receive deposits, DFS not authorized to collect deposits, and various other financial intermediaries.

2.1.3.2.1. Financial establishments with a banking character not authorized to receive deposits

These establishments do not benefit from the authorization provided by the banking law to receive deposits.

1: DFS are institutions whose main object is to offer financial services to persons who generally do not have access to the operations of credit institutions.

They also include Financial Establishments for the Issuance of Secured Obligations (EFOS) as well as investment finance establishments and venture capital finance establishments subject to banking law, subject to the legislative and regulatory provisions applicable to them.

2.1.3.2.2. DFS not authorized to collect savings

The DFS concerned are those approved in this capacity, under the provisions of the law on the regulation of DFS in the UMOA or in the state of installation, but which do not have the authorization to collect deposits.

2.1.3.2.3. Various other financial intermediaries

Various other financial intermediaries include Collective Investment Schemes in Securities (CIS), particularly variable capital investment companies (SICAV), Common Investment Funds (FCP) or any other collective investment vehicle approved by the CREPMF, as well as Securitization Credit Common Funds (FCTC), venture capital companies, and holding companies.

2.1.3.3 Financial Auxiliaries

Financial auxiliaries are financial corporations that exercise activities closely linked to financial intermediation but do not themselves play the role of financial intermediaries. These include, notably, stock exchanges and securities markets, particularly the Regional Securities Market (BRVM) and the Central Depository/Settlement Bank (DC/BR) in the UMOA, brokers and agents, as well as exchange companies, money transfer companies, financial guarantee companies when they are not governed by the Banking Law, banking operations intermediaries (IOB), branches of foreign banks, Management and Intermediation Companies (SGI), the UMOA-Titres Agency (AUT), Portfolio Management Companies, Investment Advisors and Stock Investment Advisors, constituted as legal persons, as well as Electronic Money Establishments (EME).

2.2. Non-Financial Corporations

Non-financial corporations correspond to economic agents whose activity is the production of non-financial goods and services.

Subject establishments must identify by any adequate technical means the entities of this category meeting the definition of SMEs/SMEIs1, in accordance with the relevant provisions applicable in the UMOA.

Non-financial corporations include the following categories.

2.2.1. Public Non-Financial Corporations

These are essentially:

1: In accordance with Decision No. 29 of 29/09/2015/CM/UMOA relating to the establishment of a support mechanism for the financing of Small and Medium Enterprises and Small and Medium Industries (SMEs/SMEIs), the SME/SMEI is defined as "an autonomous enterprise, producer of goods and/or marketable services, registered in the commercial register, whose annual turnover excluding taxes does not exceed one billion (1,000,000,000) FCFA and which complies with the legal obligation to produce financial statements according to current provisions."

2.2.1.1. Non-financial corporations, whose main function is the production of goods or the provision of marketable services and which are controlled directly or indirectly by public administrations. Control is presumed when public administrations hold more than half of the voting rights, or have the power to determine the company's policy or appoint its administrators, by virtue of a law, decree, or regulation.

2.2.1.2. Public establishments with an industrial or commercial character which are State or public authority bodies, not having the legal form of a company, and whose main function is the production of goods or the provision of marketable services.

2.2.2. Other Non-Financial Corporations

The main function of other non-financial corporations is the production of goods or the provision of marketable services. Subject establishments distinguish among other non-financial corporations, non-financial corporations under foreign control and national private non-financial corporations.

2.2.2.1. Non-financial corporations under foreign control1 are resident non-financial corporations that are controlled by non-residents, based on majority participation.

2.2.2.2. National private non-financial corporations are resident non-financial corporations that are not under the control of public administrations or non-resident units.

2.3. Public Administrations

Public administrations exercise legislative, executive, or judicial power over other economic agents. Their function is to provide goods and services to the entire community, by exercising non-market production activities or by redistributing income and wealth.

Public administrations include central administration, local and regional administrations, and social security administrations.

2.3.1 - Central Public Administration

The central public administration exercises its power over the entire national territory and the economic territory under its charge.

It notably includes the State and the bodies dependent on it (institutions of the republic, ministries, central services, diplomatic and consular representations, etc.), the Treasury, Agencies and Regulatory Bodies created and managed by the State or its subdivisions.

2.3.2 - Local and Regional Administrations

Local and regional administrations exercise autonomous power over a significant subdivision of the national territory. These include regions, provinces, departments, communes, and various bodies of local administration.

1: Non-financial corporations under foreign control are resident non-financial corporations that are controlled by non-residents. These corporations are classified based on majority participation.

2.3.3 - Social Security Administrations

Social security administrations are bodies dependent on social security under the control of the central State or retirement funds affiliated with social security.

2.4. Households

Households include sole proprietorships and individuals.

Subject establishments must identify by any adequate technical means the entities of this category meeting the definition of SMEs/SMEIs, in accordance with the relevant provisions applicable in the UMOA.

2.4.1. Sole Proprietorships

Sole proprietorships are non-financial enterprises that do not have a legal personality distinct from that of the entrepreneur as a natural person. This category notably includes artisans, merchants, agricultural operators, and members of liberal professions, exercising their activity individually.

Non-company enterprises belonging to households and those having marketable production activities are classified in the sector of non-financial corporations, if they can be considered as quasi-corporations1. Otherwise, they are included in the sector of households.

2.4.2. Individuals

This category includes natural persons, excluding sole proprietors.

2.5. Non-Profit Institutions Serving Households (NPISH)

NPISH have as their main activity the provision of goods and services to households or to the entire community free of charge or at prices that are not economically significant, except for those that are controlled and primarily financed by the