COSOB Regulation No. 97-04 of November 25, 1997, concerning Collective Investment Schemes in Securities (UCITS)

Decree of 6 Chaâbane 1418 corresponding to December 6, 1997, approving the regulation of the Commission for the Organization and Supervision of Stock Exchange Operations No. 97-04 of 24 Rajab 1418 corresponding to November 25, 1997, concerning Collective Investment Schemes in Securities (UCITS).

The Minister of Finance,

Having seen Ordinance No. 75-59 of September 26, 1975, as amended and supplemented, establishing the Commercial Code;

Having seen Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, concerning the securities market;

Having seen Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, concerning Collective Investment Schemes in Securities (UCITS): (SICAV and FCP);

Having seen Presidential Decree No. 97-231 of 20 Safar 1418 corresponding to June 25, 1997, appointing members of the Government;

Having seen Executive Decree No. 95-54 of 15 Ramadhan 1415 corresponding to February 15, 1995, fixing the attributions of the Minister of Finance;

Having seen Executive Decree No. 96-102 of 22 Chaoual 1416 corresponding to March 11, 1996, implementing Article 32 of Legislative Decree No. 93-10 of May 23, 1993, concerning the securities market;

Having seen Executive Decree No. 96-474 of 17 Chaâbane 1417 corresponding to December 28, 1996, concerning the application of Articles 8 and 23 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, concerning Collective Investment Schemes in Securities (UCITS);

Decrees:

Article 1. — The regulation of the Commission for the Organization and Supervision of Stock Exchange Operations concerning Collective Investment Schemes in Securities is approved.

Art. 2. — This decree shall be published in the Official Journal of the Algerian Democratic and Popular Republic.

Done in Algiers, on 6 Chaâbane 1418 corresponding to December 6, 1997.

Abdelkrim HARCHAOUI.

ANNEX

COSOB Regulation No. 97-04 of 24 Rajab 1418 corresponding to November 25, 1997 concerning Collective Investment Schemes in Securities (UCITS).

The President of the Commission for the Organization and Supervision of Stock Exchange Operations (COSOB);

Having seen Ordinance No. 75-59 of September 26, 1975, as amended and supplemented, establishing the Commercial Code;

Having seen Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, concerning the securities market;

Having seen Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, concerning Collective Investment Schemes in Securities (UCITS): (SICAV) and (FCP);

Having seen Executive Decree No. 96-474 of 17 Chaâbane 1417 corresponding to December 28, 1996, concerning the application of Articles 8 and 23 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, concerning Collective Investment Schemes in Securities (UCITS): (SICAV) and (FCP);

After adoption by the Commission for the Organization and Supervision of Stock Exchange Operations on 24 Rajab 1418 corresponding to November 25, 1997;

Enacts the regulation whose text follows:

CHAPTER I OBJECT

Article 1. — This regulation aims to define the procedures for the establishment and operation of Collective Investment Schemes in Securities (UCITS), as well as the prudential rules, information, and control thereof.

DEFINITIONS

Art. 2. — The net asset value (NAV) of a share or unit of a U.C.I.S. is obtained by dividing the net assets by the number of its shares or units in circulation.

Art. 3. — The net assets of a U.C.I.S. are equal to the difference between its total assets and its liabilities.

The determination of the net assets of a U.C.I.S. takes into account: — latent capital gains or losses, — results pending allocation, — reserves, — results realized since the beginning of the current fiscal year.

Art. 4. — "Management fees" are considered to be all operating expenses borne by a U.C.I.S., excluding interest and commissions on loans.

CHAPTER II ESTABLISHMENT OF UCITS

1 - APPROVAL

Art. 5. — In application of the second paragraph of Article 6 and the second paragraph of Article 18 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, cited above, the approval of a Variable Capital Investment Company (S.I.C.A.V) or the draft regulations of a Common Investment Fund (F.C.P.) is subject to the deposit by the founders, with the C.O.S.O.B., of an approval file.

Art. 6. — The founders of an FCP are the manager and the depositary institution.

Art. 7. — Upon receipt of the approval file, the C.O.S.O.B. issues to the founders who deposited it a duly dated and signed receipt attesting to the receipt of this file.

Art. 8. — The granting or refusal of approval of the draft statutes or draft regulations is notified to the founders of the S.I.C.A.V or the F.C.P. by registered letter with acknowledgment of receipt by the C.O.S.O.B. within a period not exceeding two (2) months from the date of deposit of the complete approval file.

Art. 9. — Any modification of the statutes of a S.I.C.A.V or the regulations of an F.C.P. is subject to prior approval issued by the C.O.S.O.B. under the same conditions provided for in Articles 5, 7, and 8 above.

2 - ESTABLISHMENT OF S.I.C.A.Vs

Art. 10. — The statutes of SICAVs are drawn up in accordance with the legislation in force.

Art. 11. — The statutes of SICAVs must include at least the following indications: 1 - form; 2 - corporate purpose; 3 - corporate name; 4 - duration (maximum 99 years); 5 - amount of initial capital; 6 - amount below which share buybacks must be suspended; 7 - conditions for the issuance and buyback of shares; 8 - procedures and frequency of net asset value calculation; 9 - form of shares (bearer or registered); 10 - procedures for valuing securities listed in the assets or held in the portfolio; 11 - rights and obligations linked to shares; 12 - procedures for allocation and distribution of results; 13 - dates for opening and closing of company accounts; 14 - commissions received upon subscription or buyback of shares, as well as the maximum amount of management fees; 15 - procedures for the issuance and buyback of shares; 16 - conditions for extension or early dissolution; 17 - conditions and procedures for liquidation; 18 - names, first names, addresses, and curricula vitae of the founders; 19 - valuation of in-kind contributions established under its responsibility by a statutory auditor; 20 - minimum number of directors or members of the board of directors and supervisory board; 21 - minimum number of shares per director; 22 - duration of the mandates of directors or members of the board of directors and supervisory board; 23 - prerogatives of the board of directors or the board of directors and supervisory board; 24 - conditions for convening and deliberating the general meeting of shareholders; 25 - nature and frequency of information to be provided to shareholders; 26 - statutory auditor:

• procedures for appointment and dismissal,
• rights and obligations of the auditor,
• duration of the auditor's mandate, 27 - corporate name, legal name, or registered office of the depositary institution.

Art. 12. — After approval issued by COSOB under the conditions provided for in Articles 5, 7, and 8 above, a copy of the statutes is deposited at the National Center of the Commercial Register.

The founders are required to publish, under their responsibility, a notice in the Official Bulletin of Legal Announcements.

This notice contains the essential elements of the SICAV: — corporate name and registered office, — names, first names, and addresses of the founders, — initial share capital, — corporate purpose, — approval number and date of its obtaining from COSOB, — dates for opening and closing of subscriptions, — corporate name and registered office of the depositary institution.

Art. 13. — After completion of the formalities provided for in Article 12 above, the subscription of shares is carried out and is evidenced by subscription forms.

Art. 14. — Within thirty (30) days following its establishment, every SICAV is required to complete the registration formalities with the commercial register.

From this registration, the SICAV is endowed with legal personality. Upon inscription in the commercial register, every SICAV is required to publish in the Official Bulletin of Legal Announcements, a notice reproducing an extract of the minutes of the constituent general meeting, notably: — name of the SICAV, — registered office of the SICAV, — corporate purpose of the SICAV, — duration, — corporate name and registered office of the depositary institution, — names, first names, titles, and addresses of the directors or members of the board of directors and supervisory board, — name of the statutory auditor, — amount of initial share capital, — amount of share capital below which share buybacks must be suspended, — approval number and date of its obtaining from COSOB.

Art. 15. — Within the same thirty (30) day period referred to in Article 14 above, the SICAV is required to deposit with COSOB a copy of the payment certificate attesting to the deposit of the capital, a copy of the valuation report of in-kind contributions, established under its responsibility by the statutory auditor, and the statutes approved by the constituent general meeting.

Art. 16. — In application of Article 7 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, cited above, the approval obtained by a SICAV is considered null if the formalities provided for in Articles 12 to 15 above are not completed within three (3) months following the issuance of this approval by COSOB.

3 - ESTABLISHMENT OF FCPs

Art. 17. — The draft regulations of an FCP are drawn up at the joint initiative of the manager and the depositary institution.

Art. 18. — The draft regulations of an FCP must include at least the following information: 1 - the name of the manager and the depositary institution; 2 - the investment policy of the FCP, notably the specific goals it aims for and the criteria it draws upon; 3 - procedures and frequency of net asset value calculation; 4 - procedures for valuing securities listed in the assets or held in the portfolio; 5 - amount of initial capital; 6 - minimum amount below which the capital cannot fall, under penalty of liquidation of the FCP; 7 - maximum amount of subscription and buyback commissions, as well as the maximum amount of management fees; 8 - dates for opening and closing of the first fiscal year as well as those of subsequent fiscal years; 9 - nature and frequency of information to be provided to unit holders; 10 - procedures for the issuance and buyback of units; 11 - the manager and the depositary institution:

• procedures for appointment and dismissal,
• rights and obligations,
• procedures for remuneration, 12 - the statutory auditor:
• procedures for appointment,
• rights and obligations,
• procedures for remuneration, 13 - procedures for the allocation of results and (if applicable) distribution of income; 14 - procedures for amending the regulations; 15 - procedures for dissolution, liquidation, and transformation of the FCP; 16 — copies of the statutes of the manager and the depositary institution and copies of extracts from the commercial register.

Art. 19. — The establishment of the FCP results from the signing of the regulations by the manager and the depositary institution and the full payment of units after receipt by the manager of the approval issued by COSOB;

Art. 20. — Within a period of three (3) months following the approval of the FCP, the manager must publish an extract of the regulations in a newspaper authorized to receive legal announcements.

Art. 21. — Within the period of three (3) months referred to in Article 20 above, the manager is required to deposit with COSOB a copy of the payment certificate issued by the depositary institution and a copy of the valuation report of in-kind contributions, established under its responsibility by the statutory auditor.

Art. 22. — In application of Article 22 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, cited above, the manager is required, under penalty of nullity of the approval issued by COSOB, to complete the establishment formalities provided for in Articles 19 to 21 above.

CHAPTER III OPERATION OF UCITS

1. • Operation of SICAVs.

Art. 23. — When the capital of a SICAV remains, during the four (4) months following the suspension of the buyback of its shares, less than half of the minimum amount fixed by Article 2 of Executive Decree No. 96-474 of December 28, 1996, cited above, at five million dinars (5,000,000 DA), the board of directors or the board of directors must convene the extraordinary general meeting to decide either on the dissolution of the company or on one of the operations provided for in Article 25 of this regulation.

The resolution pronounced, on this occasion, by the extraordinary general meeting is immediately communicated to COSOB.

In the case where the extraordinary general meeting decides on the dissolution of the SICAV, the resolution must be published, immediately after its communication to COSOB, in a newspaper authorized to receive legal announcements.

Art. 24. — In the event of cessation of functions of the depositary institution, for any reason whatsoever, the board of directors or the board of directors of the SICAV must proceed to its replacement within a period not exceeding three (3) months. The dates of cessation of functions and replacement of the depositary institution must be communicated immediately to COSOB.

In the interval separating the two (2) dates, the liability of the outgoing depositary institution remains fully engaged; this institution must take all necessary measures to preserve the interests of the shareholders of the SICAV.

If the replacement of the depositary institution is not carried out within a period of three (3) months, the approval of the SICAV is withdrawn.

Art. 25. — In application of Article 744 of the Commercial Code, a SICAV, even in liquidation, may be absorbed by another SICAV or participate in the establishment of a new SICAV by way of merger.

It may also contribute its assets to existing SICAVs or participate with them in the establishment of new SICAVs by way of merger-splitting.

A SICAV may also absorb an FCP.

It may finally contribute its assets to new SICAVs by way of splitting.

Art. 26. — Shareholders of SICAVs that have been subject to a merger, splitting, or absorption operation, who would not have been entitled, given the exchange ratio, to a whole number of shares, may request the refund of the fractional shares or pay in cash the necessary complement to the attribution of a whole share. These payments and refunds are always made at the next net asset value and do not give rise to the payment of fees and commissions.

2. • Operation of FCPs.

Art. 27. — FCP units must necessarily take the form of registered shares. They are represented by registered certificates issued by the manager.

Each certificate may represent one or more units.

Art. 28. — If the net assets of an FCP become less than half of the minimum amount fixed by Article 3 of Executive Decree No. 96-474 of December 28, 1996, cited above, at one (1) million DA (1,000,000 DA), it may be proceeded to its dissolution or to one of the operations provided for in Article 29 below, during the six (6) months following the suspension of the buyback of units in application of Article 26 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, cited above.

If this period is exceeded, the dissolution of the concerned FCP is pronounced in accordance with the provisions of Article 30 of the aforementioned ordinance.

Art. 29. — Any common investment fund, even in liquidation, may be absorbed by any SICAV or any FCP.

Any FCP may merge with another FCP to create a new FCP.

Any FCP may be subject to a splitting operation.

3. • Common provisions relating to merger, splitting, and absorption operations.

Art. 30. — The project for merger, merger-splitting, or splitting concerning one or more UCITS is decided by the board of directors or the board of directors of the concerned SICAVs and/or the manager and the depositary institution of the concerned FCP(s).

It is subject to prior approval issued by COSOB under the same conditions provided for in Articles 5, 7, 8, and 9 above.

Art. 31. — The project for absorption, merger, merger-splitting, or splitting must specify, as the case may be, the name, registered office, and approval number issued by COSOB and the registration number in the commercial register of the SICAV(s) or manager(s).

It must contain the following information:

1. the motives, goals, and conditions of the projected operation;
2. the dates on which the accounts of the concerned SICAV or FCP were finalized, used to establish the conditions of the operation;
3. the designation and evolution of the assets and liabilities whose transmission to the absorbing SICAVs or FCPs or new entities is planned;
4. the date on which the extraordinary general meetings of the SICAVs will be called to vote on the exchange ratios of shares or units;
5. the report on the exchange of shares or units.

The project or a declaration annexed to it exposes the valuation methods used and gives the reasons for the choice of the exchange ratio of shares or units.

Art. 32. — The board of directors or the board of directors of each of the concerned SICAVs or the manager of any concerned FCP is required to communicate the project for merger, splitting, or absorption to the statutory auditors of each SICAV or manager of the concerned FCP at least forty-five (45) days before the extraordinary general meetings of the SICAVs voting on the operation or the date fixed by the manager(s) of the concerned FCP(s).

Art. 33. — The operation is carried out by the boards of directors or the boards of directors of the concerned SICAVs or their proxies, as well as, where applicable, by the managers of the concerned FCPs.

Art. 34. — The statutory auditors prepare reports on the conditions for the realization of the operation which are obligatorily made available to shareholders or unit holders at the latest fifteen (15) days before the date fixed by the extraordinary general meetings or, in the case of FCPs, by the manager(s).

CHAPTER IV PRUDENTIAL RULES

Art. 35. — In application of the provisions of Article 41 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, cited above, the management of the assets of any UCITS must respect the following rules: — a UCITS may invest in securities and financial instruments of the same issuer up to 20% of its assets; — a UCITS may invest in securities or financial instruments of the same issuer up to 60% of its assets if these securities or instruments are issued or guaranteed by the State; — a UCITS may not hold more than 20% of the same category of financial instruments of the same issuer; — a UCITS may not invest in liquidity more than 20% of its assets, — a UCITS may proceed to cash borrowings within the limit of 10% of its assets.

CHAPTER V INFORMATION AND CONTROL

Art. 36. — The issuance of shares or units is subject to the prior approval by COSOB of an information prospectus describing the characteristics of the concerned UCITS, established according to the model provided by commission instruction.

The information prospectus must be made available to the public and delivered prior to any first subscription.

Art. 37. — UCITS are required to display every working day the net asset value, as well as the subscription and buyback commissions, in the premises of the SICAVs, the FCP manager, and the institutions responsible for subscriptions and buybacks.

Art. 38. — The activity of UCITS is exercised under the control of COSOB. COSOB may, at any time, initiate an inspection mission on any activity of the concerned UCITS.

CHAPTER VI FINANCIAL PROVISIONS

Art. 39. — In application of Article 51 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, cited above, the maximum amount of commissions received, upon subscription or buyback of shares or units of UCITS, may not exceed respectively three percent (3%) and one and a half percent (1.5%) of the net asset value of the share or unit.

Art. 40. — The maximum amount of management fees, referred to in Article 51 of Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to January 10, 1996, cited above, may not exceed two percent (2%) of the average of the assets recorded during the establishment of the last net asset value of each month, less the shares or units of other UCITS held in the portfolio.

Management fees are borne by the UCITS.

Art. 41. — The valuation of asset elements will be finalized based on the following procedures: — securities traded on the stock exchange are evaluated every working day based on the closing price of the stock exchange session when they are listed on the official list; — the evaluation of bonds must take into account accrued interest in addition to the capital; — securities not admitted to the official list are evaluated based on the last price practiced on the market on the day of evaluation.

The board of directors or the board of directors of the SICAV or the manager of the FCP may correct at any time, the valuation of securities whose price was not quoted on the day of evaluation as well as that of other balance sheet elements based on variations that ongoing events make probable.

Its decision is communicated to the statutory auditor and to COSOB.

Art. 42. — The result of the fiscal year is equal to interest, dividends, and all other products relating to the securities constituting the portfolio, increased by the product of temporarily available sums and decreased by the amount of management fees and financial fees on loans.

Distributable sums are equal to the net result decreased by reserves provided by law and increased by the results pending allocation.

CHAPTER VII MISCELLANEOUS PROVISIONS

Art. 43. — The net asset value is calculated on the last working day of each week.

Art. 44. — The issuance and buyback of shares and units of UCITS may be carried out every working day.

Art. 45. — Subscriptions and buybacks of shares and units of UCITS are carried out based on the last net asset value and upon simple requests deposited at all counters of the concerned SICAV or the manager of the FCP.

The payment...