Instruction No. 55/2018 on the Authorization and Exercise of Listing Sponsor Activities on the Regional Financial Market

Union Monétaire Ouest Africaine

crepmf
Conseil Régional de l'Epargne Publique et des Marchés Financiers

INSTRUCTION N°55/2018
RELATIVE AUX CONDITIONS D’AGRÉMENT ET D’EXERCICE DE L’ACTIVITÉ DE LISTING SPONSOR SUR LE MARCHÉ FINANCIER RÉGIONAL

The Regional Council for Public Savings and Financial Markets,

Whereas the Convention of July 3, 1996 establishing the Regional Council for Public Savings and Financial Markets (hereinafter the "Council"), and its Annex on the Composition, Organization, Operation and Functions of the Council;

Whereas the General Regulation on the Organization, Operation and Supervision of the UMOA Regional Financial Market, dated November 28, 1997;

Whereas the OHADA Uniform Act on commercial company law and economic interest groups, dated January 30, 2014;

Whereas the Council's deliberations at its 28th extraordinary session, dated March 1, 2018;

HEREBY DECREES:

CHAPTER I: Preliminary Provisions

Article 1: Purpose and Scope
This Instruction sets out the conditions for exercising Listing Sponsor activities on the UMOA regional financial market. It specifies the missions and obligations incumbent upon the Listing Sponsor.

Article 2: Role of the Listing Sponsor
A Listing Sponsor is an entity authorized to assist and advise another company in its admission process to the Third Compartment of the UMOA Regional Securities Exchange (BRVM) and throughout its presence in said Compartment.

The Listing Sponsor assists the issuer it accompanies in ensuring compliance with applicable legal and regulatory obligations.

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Article 3: Listing Sponsor Activity
The Listing Sponsor activity consists of:

• evaluating the eligibility of the candidate company for admission to the Third Compartment of the BRVM (company assessment, fundraising process, financial communication, market environment, quotation method, etc.);
• verifying the relevance of the initial public offering (IPO) project relative to the candidate company's financing plan and strategy;
• assisting the candidate company in the listing admission process;
• contributing to drafting the documentation required for the candidate company's IPO;
• advising the candidate company on partner selection and operational characteristics to optimize its financing structure;
• informing the candidate or listed company regarding its legal and regulatory obligations.

Article 4: Eligible Entities for Listing Sponsor Activity The Listing Sponsor activity is exercised by Management and Intermediation Companies, Credit Institutions, as well as Audit and/or Financial Advisory Firms.

Listing Sponsors may form associations and develop a charter governing relations between members.

CHAPTER II: Provisions Relating to the Conditions for Granting and Revoking Authorization

Article 5: Eligibility Criteria for Listing Sponsor Activity The exercise of Listing Sponsor activity on the regional financial market is subject to prior authorization by the Council.

In the context of the authorization application, the Listing Sponsor must:

• be established as a limited liability company (S.A.R.L.) or joint-stock company (S.A.);
• demonstrate at least three (03) years of activity;
• have experience in financial advisory and structuring operations;
• have a minimum of two (02) staff members individually qualified and experienced to conduct Listing Sponsor activities;
• establish internal regulations with procedures to avoid conflict of interest situations;
• subscribe to civil liability insurance and commit to maintaining it during the validity period of its authorization.

The Council may, at the applicant's expense, have independent experts conduct any necessary audit of the Listing Sponsor.

Article 6: Content of the Authorization File The authorization application file submitted to the CREPMF must contain the following documents:

• a copy of its authorization for its usual professional activity, where applicable;
• a copy of its articles of association;
• the shareholding distribution specifying the identity and activity of shareholders holding more than 10% of the share capital;
• the list of directors and their term lengths;
• the list of executive officers and their criminal records, accompanied by an organizational chart;
• a description of the human and material resources to be used to fulfill the Listing Sponsor mission;
• the curriculum vitae of at least two (02) staff members individually qualified and experienced to conduct Listing Sponsor activities;
• the financial statements for the last three (03) fiscal years, certified by an Auditor registered with the Order of Certified Accountants in a UMOA country;
• a written commitment from the Listing Sponsor to understand its clients' expectations and provide clear, prompt, and complete information on operations handled or completed for them;
• a copy of the internal regulations and procedures to avoid conflict of interest situations;
• proof of subscription to civil liability insurance and the written commitment by the Listing Sponsor to maintain this insurance during the authorization validity period.

The Council may request any other useful document or information for file processing.

Article 7: Authorization Procedure
Within five (05) business days following receipt of the authorization request, the Council verifies whether the application file is complete.

When the file is complete, the Council has sixty (60) calendar days to process it. Upon completion of processing, a decision granting, postponing, or rejecting the Listing Sponsor application is issued by the Council.

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However, the Council's lack of response upon expiration of the processing period does not constitute tacit authorization for the Listing Sponsor application.

In case of a request for supplementary information by the Council, the processing period is suspended until receipt of said information.

Article 8: Granting of Authorization
The granting of authorization is subject to a Council decision transmitted to the Listing Sponsor. Authorization may be granted subject to fulfilling certain due diligence or transmitting information deemed necessary by the Council.

The granted authorization is subject to the effective commencement of the applicant's activities within a maximum period of twelve (12) months from the notification date of said authorization.

The Listing Sponsor must provide proof of the effective commencement of its activities before the deadline mentioned above, by transmitting a copy of contracts signed with its clients to the Council.

The transmission of the authorization decision is followed by the payment of a sum, fixed by UMOA Council of Ministers' decision and payable in full.

The Listing Sponsor authorization decision is published on the CREPMF website and in the Official Bulletin of the BRVM Listing.

The Council's rejection of an authorization application is notified to the applicant by a reasoned decision.

Article 9: Protection of the Listing Sponsor Designation No person may, without prior authorization and registration on the Listing Sponsors list, exercise the activity defined in Article 2, nor claim the status of Listing Sponsor, IPO advisor, or Third Compartment accompaniment provider, nor create such status, notably by using related terms in its corporate name, trade name, advertising or otherwise, in its activities.

Article 10: Modifications of Authorization Conditions Any modification concerning the characteristic elements listed in the initial authorization file must be promptly brought to the Council's attention.

Article 11: Validity Period of Authorization The authorization granted by the Council is valid for a period of three (03) years from its signature date.

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Three (03) months before said expiry, the CREPMF will evaluate the Listing Sponsor's activity. The authorization renewal decision will result from said evaluation. Authorization renewal is not subject to commission payments.

Article 12: Pricing of Services Offered by the Listing Sponsor to Companies The pricing of Listing Sponsor services will be subject to Council approval and publication in the Official Bulletin of the BRVM Listing prior to implementation.

All subsequent modifications to approved tariffs will require submission to the Council for new approval.

Article 13: Revocation of Authorization
The Council reserves the right to revoke a Listing Sponsor's authorization when it:

• fails to use the authorization within twelve (12) months from its grant date;
• commits serious breaches of the regional financial market regulations;
• no longer meets the conditions required for authorization;
• makes a reasoned request for revocation.

The authorization revocation is notified to the Listing Sponsor by registered mail with acknowledgment of receipt. The revocation decision is published in the Official Bulletin of the BRVM Listing or by any other means.

When authorization is revoked from a Listing Sponsor, it has one (01) month from the notification date to designate another authorized Listing Sponsor responsible for continuing its activities, except in case of bankruptcy. This transfer of activities is subject to prior Council approval.

In case of the latter's failure to designate another authorized Listing Sponsor, the Council proceeds with the designation.

In case of bankruptcy or dissolution of a Listing Sponsor, the Council designates another authorized Listing Sponsor responsible for taking over ongoing activities contracted by the first.

In all cases, the authorization granted by the Council or any other right or obligation arising therefrom cannot in any case be assigned, transferred (except in the case of entity restructuring without change of effective owner, subject to CREPMF approval) or encumbered by or on behalf of the Listing Sponsor.

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CHAPTER III: Principles, Responsibilities and Obligations of the Listing Sponsor

Article 14: Principles Applicable to the Listing Sponsor In exercising its activity, the Listing Sponsor must respect the following principles:

• having internal resources and procedures to successfully carry out its missions;
• having competent teams and committing to ensuring their regular training;
• agreeing in writing with the candidate company on the cost of services to be provided, notably defining the mission content before, during and after admission to listing as well as its duration and remuneration;
• refraining from being remunerated in the form of shares attributed by the candidate or listed company;
• conducting regular compliance evaluations of the sponsored company;
• preventing and stopping any "Market Abuse" as defined by the Council's General Regulation, during the Listing Sponsor contract term and for six (06) months following its termination;
• taking necessary measures with its staff to prevent the exploitation of inside information regarding sponsored companies.

Article 15: Responsibilities of the Listing Sponsor The Listing Sponsor must carry out necessary due diligence to ensure the sincerity of information communicated by the candidate company to the Third Compartment of the BRVM, and the Information Note for the operation must bear its signature.

The Listing Sponsor must maintain a register of its professional due diligence. This register records, for each sponsored company, indications enabling subsequent control of completed work. The register established under this article is kept for ten (10) years and made available to the Council upon request.

The Listing Sponsor promptly informs the Council and the BRVM of the termination of its contract with the candidate or listed company in the Third Compartment of the BRVM.

The activities of the Listing Sponsor must be limited to those provided by this Instruction and comply with prevailing legal texts.

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Article 16: Obligations of the Listing Sponsor towards its Client The Listing Sponsor must, on behalf of the candidate or listed company in the Third Compartment of the BRVM, ensure that available financial information is realistic, sufficient, clear and precise. Otherwise, the Listing Sponsor identifies and proposes appropriate changes.

Following the IPO, the Listing Sponsor continuously monitors its client's compliance with financial communication commitments, assists it in its regional financial market operations, and advises on its financial strategy and communication plan.

In case of the candidate or listed company's failure to meet its information obligations, the Listing Sponsor reminds it of these obligations and provides necessary assistance to correct observed shortcomings. It must also report the nature of the shortcoming and steps taken to remedy it to the Council and the BRVM.

Article 17: Obligations of the Listing Sponsor towards the Regional Council a) Upon each securities offering:
Upon admission of the candidate company to the Third Compartment of the BRVM, the Listing Sponsor must attest in writing to the Council:

• having provided the concerned candidate company with all information regarding legal and regulatory obligations arising from the IPO and its listing presence, and that it meets eligibility conditions;
• having verified and carried out necessary due diligence regarding admission to the Third Compartment of the BRVM;
• that the candidate company has implemented necessary measures to comply with its periodic and continuous information publication obligations.

Any Listing Sponsor subject to administrative or judicial proceedings during mission exercise must inform the Council promptly, within the limits of investigation confidentiality.

b) Periodic information requirements:
The Listing Sponsor annually transmits to the Council and by January 10 at the latest each year, all of the following information:

• actual and potential conflicts of interest;
• a definition of what it considers to be, or not be, auxiliary services to its Listing Sponsor activity;
• any significant modifications to practices, procedures and processes within its Listing Sponsor activities;

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• a description of the archiving policy;
• financial information regarding turnover as a Listing Sponsor, broken down by revenue generated, on the one hand, by Listing Sponsor activity and, on the other hand, by the provision of other services, with a complete description of each revenue type.

Article 18: Conflict of Interest
The Listing Sponsor must refrain from exercising its mission on behalf of a candidate or listed company that would place it in a conflict of interest situation. These situations include, non-exhaustively:

• the auditing of said company's accounts;
• the exercise of a management or administrative function within said company by any partner, executive or employee of the Listing Sponsor;
• the participation of the Listing Sponsor or one of its partners, executives or employees, in said company's capital, whether individually or jointly.

The Listing Sponsor must inform the Council, for prior review, of any situation that may resemble a conflict of interest.

Article 19: Use of Inside Information
The Listing Sponsor must ensure that any person acting on its behalf does not use (directly or indirectly) inside information concerning sponsored companies to profit from it before said information is made public.

Article 20: Confidentiality
The Listing Sponsor ensures the confidentiality, vis-à-vis third parties, of information regarding its clients, former clients and prospects, unless authorized by the concerned party.

The confidentiality clause is not enforceable against Council requests and relevant regulatory provisions.

CHAPTER IV: Supervision of the Listing Sponsors' Activity

Article 21: List of Authorized Listing Sponsors The Council establishes a list of authorized Listing Sponsors. This list is updated and published no later than January 15 each year.

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Article 22: Supervision of Listing Sponsor Activity The Council is invested with all inspection powers to ensure compliance by Listing Sponsors with the provisions of this Instruction.

To carry out its mission, the Council exercises its powers:

• directly;
• in collaboration with other authorities, or
• by referring to competent authorities.

The Council may:

• access any document, in any form, and receive copies;
• request information from any person and, if necessary, summon and hear any person to obtain information;
• conduct scheduled or unannounced inspections.

CHAPTER V: Final Provisions

Article 23: Entry into Force
This Instruction, which will enter into force upon its signature, shall be published wherever necessary.

Done at Abidjan, March 14, 2018

The President

[Signature]
Mamadou NDIAYE

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