Circulaire No. 11/CREPMF-2022 on the Fees of Collective Investment Undertakings

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

CIRCULAR NO. 11/CREPMF-2022
ON THE FEES OF COLLECTIVE INVESTMENT UNDERTAKINGS (CIUs)

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The General Secretariat of the Regional Council for Public Savings and Financial Markets (CREPMF) reminds approved Collective Investment Undertakings (CIUs) and Management Companies for CIUs (MCCIs) on the regional financial market of the UMOA that, in accordance with current regulations, they must comply with the provisions of this Circular, which specifies the remuneration and expenses that a Management Company for CIUs is authorized to charge from a CIU, as well as the method of calculating these remuneration.

1. PRINCIPLES

a. The types of fees, commissions, and remuneration for various actors and intermediaries are regulated by this Circular and must be subject to particular transparency towards investors and potential investors. b. CIUs may charge the following commissions and fees:

• management fees;
• depositary-related fees;
• custodian-related fees, [where applicable];
• stock investment advisor and/or business originator-related fees, [where applicable];
• audit firm fees;
• delegate-related fees (financial, administrative, and accounting), [where applicable];
• transaction/commission fees;
• audit fees, [where applicable];
• legal fees, [where applicable];
• distribution-related fees;
• subscription and redemption commissions;
• regulatory asset-based commissions payable to the Regulator;
• performance fees. c. The Management Company for CIUs applies fair treatment to all unit holders and shareholders of the CIU.

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2. SUBSCRIPTION AND REDEMPTION COMMISSIONS

Subscription and redemption commissions increase the subscription price paid by the investor or decrease the reimbursement price. Commissions retained by the CIU serve to offset the costs incurred by the CIU for investing or divesting entrusted assets. Commissions not retained by the CIU accrue to the Management Company, the distributor, or a third party, provided that such third party holds the relevant approval. When a CIU invests in another CIU managed by the same Management Company for CIUs, no subscription and redemption commission is paid to the CIU or the Management Company. The elements mentioned in paragraph 1, must be presented in the Prospectus in table form:

Fees charged to the investor, collected during subscriptions and redemptions	Calculation Basis	Rate / Schedule
Subscription commission not retained by the CIU	Net asset value multiplied by the Number of units/shares	x%, up to x% maximum, or specific arrangement (range, etc.)
Subscription commission retained by the CIU	Net asset value multiplied by the Number of units/shares	x% or according to specific arrangements (applicable to all subscriptions)
Redemption commission not retained by the CIU	Net asset value multiplied by the Number of units/shares	x%, up to x% maximum, or specific arrangement (range, etc.)
Redemption commission retained by the CIU	Net asset value multiplied by the Number of units/shares	x% or according to specific arrangements (applicable to all redemptions)

3. FINANCIAL MANAGEMENT FEES

A Management Company for CIUs distinguishes financial management fees from external administrative fees. a. Financial management fees accrue to the Management Company for the financial management of the CIU. b. External administrative fees to the Management Company for CIUs include:

• Audit firm fees;
• Depositary-related fees;
• CREPMF-related fees;
• Distribution technical fees (technical costs of distribution platforms);

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• Custodian-related fees;
• Fees related to the delegation of administrative and accounting management;
• Audit fees;
• Tax fees;
• Legal fees specific to the CIU;
• Guarantee fees;
• Translation fees specific to the CIU;
• or any other regulatory fee set by the Regional Council. External administrative fees to the Management Company for CIUs are accrued on each net asset value.

4. LEGAL FEES

Legal fees include, in particular, regulatory fees related to the approval of the CIU.

5. TRANSACTION/COMMISSION FEES

The schedule of transaction/commission fees is included in the prospectus and specifies, in particular:

• the calculation bases used;
• the transactions;
• securities operations;
• other operations;
• the maximum rates or amounts applicable to these different bases;
• the allocation keys among the various actors. It must, in addition, contain a brief description of the intermediary selection procedure and any relevant comments.

6. PERFORMANCE FEE

a) The management fee may include a variable component linked to the outperformance of the managed CIU relative to its management objective, provided that:

• it is expressly provided for in the Prospectus and the Key Information Document (KID) of the CIU;
• it is consistent with the management objective as described in the Prospectus and the Key Information Document (KID) of the CIU;
• the CIU's outperformance share attributed to the Management Company for CIUs must not lead the latter to take excessive risks, considering the investment strategy, objective, and risk profile defined in the Prospectus and the Key Information Document (KID). b) The performance calculation is verifiable to prevent any possible manipulation.

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c) The collection frequency cannot be less than one year. d) Unit holders or shareholders are informed of the existence of a performance fee and its potential impact on the CIU's return. e) The outperformance share mentioned in point a) cannot exceed 30% of the management fees. f) When outperformance is calculated relative to a benchmark index, the calculation basis for the performance fee covers the difference between the CIU's performance and that of the benchmark index. The benchmark index used is identical and consistent with the investment objective. g) Outperformance is calculated net of costs.

7. PRESENTATION OF FEES AND COMMISSIONS

These elements must be presented in table form within the Prospectus:

Fees charged to the CIU	Calculation Basis	Rate or Fixed Amount
Financial management fees	Net assets	X% incl. tax Maximum rate Fixed amount
External administrative fees to the management company	Net assets	X% incl. tax Maximum rate Fixed amount
Maximum indirect fees (commissions and management fees)	Net assets	X% incl. tax Maximum rate Fixed amount
Transaction/commission fees	Deducted from each transaction	Schedule: x% on equities y% on bonds Etc.
Performance fee	Net assets	x% of performance above the benchmark index (incl. tax) (*)

(*) Where applicable, a maximum rate may be indicated, in addition to the effective rate.

This Circular takes effect from its publication date.

Done in Abidjan, on 03 JAN 2022

The General Secretary Ripert BOSSOUKPE