Instruction No. 4/97 on the Approval of Management and Intermediation Companies (SGI)

WEST AFRICAN MONETARY UNION REGIONAL COUNCIL FOR PUBLIC SAVINGS AND FINANCIAL MARKETS

INSTRUCTION NO. 4/97 ON THE APPROVAL OF MANAGEMENT AND INTERMEDIATION COMPANIES (SGI)

Having regard to the Convention of 3 July 1996 establishing the Regional Council for Public Savings and Financial Markets, hereinafter referred to as the Regional Council, Having regard to Article 21 of the annex to said Convention, Having regard to Decision No. 001/97 of the Council of Ministers of the West African Monetary Union in its session on 28 November 1997 adopting the General Regulations concerning the Organization, Operation and Supervision of the regional financial market of the UMOA, hereinafter referred to as the General Regulations, Having regard to Articles 26 to 35 of said General Regulations, Having regard to the decision of the Regional Council in its session on 29 November 1997, The Regional Council hereby adopts

Article 1: Management and Intermediation Companies (SGI) are authorized, upon approval by the Regional Council, to exclusively exercise the activities of listed securities broker-dealer for third-party accounts.

Article 2: The application file for the approval of a Management and Intermediation Company shall be submitted to the Regional Council. It must include the following documents: a) the company's articles of association, which must be incorporated as a public limited company and have its registered office in one of the member states of the West African Monetary Union, b) the amount and distribution of share capital, as well as the identity and business activities of shareholders holding more than 10% of the capital, c) own funds, defined as follows: . paid-up share capital, . + reserves, . + reserve-type provisions,

• carried forward credit balance,
• shares in the Regional Securities Exchange and the Central Depository/Settlement Bank,
• first-demand guarantees up to the amount of share capital,

• carried forward debit balance,
• projected current-year result, if deficit. d) the composition of corporate bodies, e) the list of senior management and their criminal records, f) the description of technical resources available to the company, g) for pre-existing companies, the audited financial statements and balance sheets of the last three fiscal years by an auditor approved by the Regional Council, h) the undertaking to submit a copy of the Internal Regulations to the Regional Council, i) the identity and extract of criminal record of the person(s) designated to perform internal control functions. j) the nature of planned activities, k) the guarantees provided, l) the written undertaking to acquire shares in the capital of the Regional Securities Exchange and the Central Depository/Settlement Bank upon approval, amounting to at least forty million and twenty million respectively, m) the written undertaking by the company to understand client expectations, provide clear, prompt and complete information on transactions processed or being processed for their account, and to join the Market Guarantee Fund. n) the undertaking to apply for membership in the Professional Association of SGI, o) any other document deemed necessary by the Regional Council

Article 3: The minimum share capital of SGI is set at 150 million FCFA. Cash contributions made towards the share capital of the SGI must be fully paid up upon issuance of the corresponding shares. The provisions of the preceding paragraph also apply to share issuances resulting from a capital increase.

The own funds of SGI must not fall below 150 million FCFA during their existence.

Article 4: Management and Intermediation Companies (SGI) must notify the Regional Council for Public Savings and Financial Markets of any changes to the characteristic elements of their situation included in the initial approval application.

Article 5: The granting of approval is subject to the payment of a fee, the amount of which is fixed by instruction of the Regional Council.

Article 6: The approval of an SGI is subject to a notice published in the official stock exchange bulletin.

Done at Ouagadougou, on 29 November 1997 For the Regional Council The President L. NAKA