Regulatory Alerts2024-05-01
COSOB Recommendation on the Use of Shareholder Current Accounts by Venture Capital Companies
The Algerian COSOB issued a recommendation clarifying that venture capital companies may use shareholder current accounts as a supplementary financing tool only on an ancillary basis. The regulator warns that excessive reliance on this mechanism risks violating prudential participation limits, specifically the 49% capital cap, and must align with fiscal regulations. Consequently, COSOB advises companies to strictly adhere to the 2019 Finance Law conditions, including full capital release and a 50% debt-to-capital ratio, while respecting interest rate ceilings set by the Bank of Algeria.
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