Instruction COSOB No. 16-04 of December 18, 2016 on the Functions and Qualification and Registration Conditions of the Compliance Officer

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COSOB
Instruction COSOB No. 16-04 of December 18, 2016 on the functions and conditions of qualification and registration of the compliance officer

Article 1:
Pursuant to Article 7 of COSOB Regulation No. 15-01 of April 15, 2015, relating to the conditions for approval, obligations, and supervision of Stock Exchange Intermediaries (IOBs), this instruction aims to clarify the functions and conditions of qualification and registration of the compliance officer.

Article 2:
The compliance officer is tasked with ensuring compliance with the professional obligations applicable to IOBs. They serve as the liaison with the Commission regarding the application of legislative and regulatory texts within the IOB, particularly concerning ethical rules. They are responsible for:

• ensuring that the IOB, its personnel, and persons acting on its behalf have a clear understanding of the activities conducted by the IOB and the legislative and regulatory texts governing them;
• designing training programs for IOB personnel to improve their understanding of the legislative and regulatory texts governing stock exchange intermediation, and to raise awareness regarding the necessity of complying with current legislative and regulatory texts;
• establishing a compliance guide and updating it regularly in accordance with internal control procedures. The said guide must contain all necessary procedures to ensure that the IOB and its personnel comply with current legislative and regulatory texts;
• assisting the IOB and its personnel in interpreting and applying the provisions of current legislative and regulatory texts, particularly those related to ethical and prudential rules;
• ensuring that the IOB handles client complaints diligently and promptly;
• conducting investigations following the occurrence or in case of doubt regarding a probable violation of current legislative and regulatory texts by IOB personnel or by one of the IOB's clients;
• informing the head of the IOB structure or the General Director of the IOB company of observed irregularities and the measures to be taken to correct them;
• documenting and archiving the results of conducted investigations as well as the measures taken to regularize observed irregularities;

Commission for the Organization and Supervision of Stock Exchange Operations The People's Democratic Republic of Algeria

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• informing the Commission of irregularities and violations of current legislative and regulatory texts to which the IOB has refused to take the necessary measures to remedy;
• preparing and submitting to the Commission, one (01) month after the end of each year, a report on the IOB's compliance with the provisions of current legislative and regulatory texts. The content of the report is defined in the annex to this instruction.

Article 3:
The IOB must ensure that the compliance officer holds a hierarchical position allowing them to exercise their compliance control functions effectively.
The IOB must provide them with all necessary means to accomplish their mission, including:

• adequate human and material resources;
• access to all documents and all modules of the information systems useful for accomplishing their mission;
• access to complaints filed by clients.

Article 4:
The compliance officer must meet the following qualification conditions:

• having undergone training organized by the Commission or by an organization recognized by the Commission, the program of which covers the legal framework of the financial market and professional obligations, particularly ethical ones applicable to IOBs;
• possessing sufficient experience in the field of internal control.
  The IOB must ensure continuous training for the compliance officer to update their regulatory and technical knowledge in internal control matters, in order to accomplish their missions and guarantee compliance with current legislative and regulatory texts.

Article 5:
The application for registration on the list of compliance officers with the Commission is submitted by the IOB on behalf of the candidate. The application must be accompanied by the candidate's file composed of the following documents:

• a copy of obtained diplomas;
• a CV detailing professional experience;
• a recent passport-size photo.
  The Commission notifies its decision to the IOB within one (01) month after the submission of the application.

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Article 6:
Compliance officers working within banks and financial establishments approved as IOBs are automatically registered as compliance officers for stock exchange intermediation activities upon simple notification letter from the bank or financial establishment. However, these compliance officers must undergo the training provided for in Article 4 above.

Article 7:
The IOB must inform the Commission without delay, which will proceed to remove the compliance officer from its list of compliance officers, upon the occurrence of any of the following events:

• the compliance officer no longer exercises this function within the IOB;
• the compliance officer ceases their employment relationship with the IOB;
• the compliance officer is subject to a disciplinary measure by the IOB related to infractions of market rules justifying their replacement.
  In all cases cited above, the IOB must take the necessary measures to ensure compliance with the professional obligations of its collaborators and designate a new compliance officer as soon as possible.

Article 8:
A candidate who has ceased exercising the function for more than 12 months must undergo the training provided for in Article 4 of this instruction to update their regulatory knowledge applicable to IOBs.

Article 9:
This instruction enters into force as of the date of its signature.

Done in Algiers, on December 18, 2016
Abdelhakim BERRAH

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Annex: Content of the Compliance Report
The compliance report must address the IOB's compliance in relation to at least the following themes:

i. Approval conditions:

• Human resources,
• Material resources,
• IT resources,
• Communication resources,
• Physical security of client funds and securities,
• IT security,
• Management autonomy and accounting autonomy,
• Insurance of assets and property,
• Contribution to the Guarantee Fund.

ii. Work procedures:

• Client information documents (information notes made available to clients, securities account statements, execution notices, transaction notices, fees and commissions...),
• Order processing,
• Public offering processing,
• Blocking of cash provision,
• Timestamping and respect of order priority,
• Securities account opening agreement,
• Securities accounting,
• Mandatory registers,
• Internal control,
• Organization, conditions for exercising approved activities, and separation of duties,
• Conflicts of interest,
• Transactions carried out by IOB personnel and executives,
• Anti-money laundering and counter-terrorism financing,
• Complaint processing,
• Information of the Commission.