COSOB Regulation No. 23-02 of April 12, 2023, Fixing the Management and Intervention Conditions of the Good Performance Guarantee Fund for Financial Market Operations and Contribution Calculation Rules

10 Rabie Ethani 1445 25 October 2023 JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 68 15

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Decree of 18 Safar 1445 corresponding to 4 September 2023 approving the regulation of the Commission for the Organization and Supervision of Stock Exchange Operations No. 23-02 of 21 Ramadhan 1444 corresponding to 12 April 2023 fixing the management and intervention conditions of the good performance guarantee fund for operations traded on the financial market as well as the rules for the assessment and calculation of contributions.

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The Minister of Finance,

Having seen Legislative Decree No. 93-10 of 23 May 1993, amended and supplemented, relating to the securities exchange;

Having seen Presidential Decree No. 23-119 of 23 Chaâbane 1444 corresponding to 16 March 2023, amended, appointing the members of the Government;

Having seen Executive Decree No. 94-175 of 3 Moharram 1415 corresponding to 13 June 1994 implementing Articles 21, 22, and 29 of Legislative Decree No. 93-10 of 23 May 1993 relating to the securities exchange;

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16 JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 68 10 Rabie Ethani 1445 25 October 2023

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

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

Decrees:

Article 1. — The regulation of the Commission for the Organization and Supervision of Stock Exchange Operations No. 23-02 of 21 Ramadhan 1444 corresponding to 12 April 2023 fixing the management and intervention conditions of the good performance guarantee fund for operations traded on the financial market as well as the rules for the assessment and calculation of contributions, attached to this decree, is approved.

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

Done in Algiers, on 18 Safar 1445 corresponding to 4 September 2023.

Laziz FAID.

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ANNEX

COSOB Regulation No. 23-02 of 21 Ramadhan 1444 corresponding to 12 April 2023 fixing the management and intervention conditions of the good performance guarantee fund for operations traded on the financial market as well as the rules for the assessment and calculation of contributions.

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

Having seen Legislative Decree No. 93-10 of 23 May 1993, amended and supplemented, relating to the securities exchange, particularly its Articles 10 and 11;

Having seen Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to 10 January 1996 relating to collective investment undertakings in securities (UCITS) (SICAVs) and (FCPs);

Having seen Law No. 19-14 of 14 Rabie Ethani 1441 corresponding to 11 December 2019, the finance law for 2020, particularly its Article 99;

Having seen the Presidential Decree of 5 Chaâbane 1444 corresponding to 26 February 2023 appointing the President of the Commission for the Organization and Supervision of Stock Exchange Operations;

Having seen the Decree of 29 Ramadhan 1443 corresponding to 30 April 2022 appointing the members of the Commission for the Organization and Supervision of Stock Exchange Operations;

Having seen COSOB Regulation No. 97-03 of 17 Rajab 1418 corresponding to 18 November 1997, amended and supplemented, relating to the general regulations of the securities exchange;

Having seen COSOB Regulation No. 03-01 of 15 Moharram 1424 corresponding to 18 March 2003 establishing the general regulations of the central securities depository;

Having seen COSOB Regulation No. 15-01 of 25 Joumada Ethania 1436 corresponding to 15 April 2015 relating to the conditions for approval, obligations, and control of intermediaries in stock exchange operations;

After adoption by the Commission for the Organization and Supervision of Stock Exchange Operations on 21 Ramadhan 1444 corresponding to 12 April 2023;

Enacts the regulation whose text follows:

Article 1. — In application of the provisions of Article 99 of Law No. 19-14 of 14 Rabie Ethani 1441 corresponding to 11 December 2019 cited above, this regulation aims to fix the management and intervention conditions of the good performance guarantee fund for operations traded on the financial market as well as the rules for the assessment and calculation of contributions, hereinafter referred to as the "fund".

Art. 2. — The fund aims to guarantee the good performance of operations traded on the financial market, by covering the risks of failure in the settlement or delivery of securities, when one of the intermediaries in stock exchange operations, hereinafter referred to as "IOB", is in a situation of inability to meet its obligations.

The following are excluded from the scope of intervention of the fund:

— negotiated block operations on the market; — operations negotiated bilaterally outside the market.

Art. 3. — The fund is endowed with a current account opened with the Bank of Algeria.

The fund is managed by the central securities depository.

The central securities depository is endowed with the necessary powers to manage the available liquidity in the fund's current account, in order to preserve its real value, by carrying out placement operations in securities issued by the Public Treasury, with a maturity not exceeding one year.

Art. 4. — The contribution that each IOB must make to the fund is composed of:

— the Initial Minimum Guarantee: it corresponds to the minimum amount that the IOB must pay, regardless of the volume of its activity on the market. Its amount is equal for all IOBs;

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10 Rabie Ethani 1445 25 October 2023 JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 68 17

— the Individual Guarantee: is an additional guarantee calculated based on the volume of the IOB's activity during a determined period;

— the Open Position Guarantee: is calculated and updated daily, based on pending settlement operations and price fluctuations between the date of the operation and the date of position calculation;

— the Extraordinary Guarantee: is a guarantee that may be demanded in case of identification of an extraordinary risk on an IOB.

The amount of the initial minimum guarantee as well as the periodicity and calculation procedure for the other guarantees are fixed by the central securities depository, after opinion of the Commission for the Organization and Supervision of Stock Exchange Operations, hereinafter referred to as "the Commission".

Art. 5. — The fund has a joint guarantee, composed of fifty percent (50%) of the initial minimum guarantees and fifty percent (50%) of the individual guarantees.

The joint guarantee is intended to cover potential losses of an IOB, when the guarantees paid by it are not sufficient to close its position.

Art. 6. — Guarantees are constituted in cash. However, the central securities depository may accept that guarantees be constituted by liquid securities with low credit risk.

The list of securities that can be accepted as guarantees in substitution for the cash contribution is fixed by the central securities depository, after opinion of the Commission.

Art. 7. — At the end of each business day, the central securities depository calculates for each IOB:

— the amount paid, as the initial minimum guarantee; — the amount paid, as the individual guarantee; — the amount paid, as the open position guarantee; — the amount paid, as the extraordinary guarantee; — the total of guarantees paid.

The central securities depository compares the amounts paid by each IOB with the required amounts, then determines the amount to be debited or credited to the IOB's cash account on the following day.

Art. 8. — The fund may return the entire or part of the contribution brought by the IOB, notably in the case of cessation of activity by the latter.

Art. 9. — In the case of default of an IOB, the fund intervenes according to the following modalities:

1. the fund uses the guarantees brought by the defaulting IOB, in the following order of priority:

— the extraordinary guarantee; — the open position guarantee; — the individual guarantee; — the initial minimum guarantee.

2. the fund calls upon the joint guarantees paid by the remaining IOBs, after exhaustion of all guarantees brought by the defaulting IOB, in the following order of priority:

— the joint component of the individual guarantee of non-defaulting IOBs, pro rata of their joint contributions; — the joint component of the initial minimum guarantee, equally for all IOBs.

The fund's coverage ceases when the joint guarantees are exhausted.

Art. 10. — When the default of an IOB has required the use of part or all of the joint guarantees of the fund, the non-defaulting IOBs must proceed to the reconstruction of these joint guarantees, at the latest, the following day.

Art. 11. — The IOB having failed in its contribution obligations to the fund is subject to the payment of a penalty for each day of delay.

The amount of the penalty is fixed by the central securities depository, after opinion of the Commission.

Art. 12. — The defaulting IOB is suspended from exercising the activity of stock exchange trading and settlement and delivery operations of securities, from the date where it is declared incapable:

— of meeting its obligations, and this until the settlement of pending operations; — of paying the entirety of its contributions, including those aimed at reconstructing the joint contributions of the remaining IOBs, and this until the reconstruction of all guarantees it had disposed of.

The decision to suspend the trading activity is taken by the securities management company (SGBV), based on the information communicated to it by the central securities depository.

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Art. 13. — The management of the fund gives rise to the payment, by the IOBs, of an annual management commission for the account of the central securities depository, due in equal shares and deducted from the fund's balance, determined on 31 December of each year.

The amount and payment method of the management commission are fixed by the central securities depository after opinion of the Commission.

Art. 14. — This regulation shall be published in the Official Journal of the Algerian Democratic and Popular Republic.

Done in Algiers, on 21 Ramadhan 1444 corresponding to 12 April 2023.

Youcef BOUZENADA.

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