Instruction No. 008-05-2015 Governing the Conditions and Modalities for the Exercise of Electronic Money Issuer Activities in the Member States of the West African Monetary Union (UMOA)

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INSTRUCTION NO. 008-05-2015 GOVERNING THE CONDITIONS AND MODALITIES FOR THE EXERCISE OF ELECTRONIC MONEY ISSUER ACTIVITIES IN THE MEMBER STATES OF THE WEST AFRICAN MONETARY UNION (UMOA)

The Governor INSTRUCTION NO. 008-05-2015 GOVERNING THE CONDITIONS AND MODALITIES FOR THE EXERCISE OF ELECTRONIC MONEY ISSUER ACTIVITIES IN THE MEMBER STATES OF THE WEST AFRICAN MONETARY UNION (UMOA)

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• 3 - TABLE OF CONTENTS TITLE I: GENERAL PROVISIONS ������������������������������6 TITLE II: CONDITIONS FOR GRANTING APPROVAL OR AUTHORIZATION TO CARRY OUT ELECTRONIC MONEY EMISSION ACTIVITIES ��������������������������������������������13 TITLE III: GENERAL MODALITIES AND CONDITIONS FOR THE EXERCISE OF ELECTRONIC MONEY EMISSION ACTIVITIES������������������������������������������������������������17 TITLE IV: SPECIFIC MODALITIES AND CONDITIONS APPLICABLE TO ELECTRONIC MONEY ESTABLISHMENTS������������������������������������������������������������20 TITLE V: PROVISIONS RELATING TO THE PROTECTION OF ELECTRONIC MONEY HOLDERS ������������25 TITLE VI: SUPERVISION, CONTROL AND SANCTIONS�������31 TITLE VII: TRANSITIONAL AND FINAL PROVISIONS �����38 ANNEXES �������������������������������������������������������������������41

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• 5 - The Governor of the Central Bank of West African States (BCEAO), Having regard to the Treaty of the West African Monetary Union, dated January 20, 2007, particularly Article 34; Having regard to the Statutes of the Central Bank of West African States annexed to the UMOA Treaty, dated January 20, 2007, particularly Articles 21, 30 and 59; Having regard to Regulation No. 15/2002/CM/UEMOA of September 19, 2002 on payment systems in the member states of the West African Economic and Monetary Union (UEMOA), particularly Articles 3, 42, 131 and 247; Having regard to Regulation No. 09/2010/CM/UEMOA of October 1, 2010 on the external financial relations of the member states of the West African Economic and Monetary Union; Having regard to Directive No. 08/2002/CM/UEMOA of September 19, 2002 on measures to promote banking inclusion and the use of book payment means, particularly Article 11; Having regard to the Uniform Act on banking regulation, particularly Articles 2, 3, 4, 7, 42, 43 and 46; Having regard to the Uniform Act on decentralized financial systems regulation, particularly Article 6;

• 6 - - 7 - TITLE I: GENERAL PROVISIONS Having regard to Instruction No. 01/2007/RB of July 2, 2007, from the Governor, on combating money laundering within financial institutions, DECIDES

TITLE I: GENERAL PROVISIONS Article 1: Definitions For the purposes of this Instruction, the following terms shall mean:

1. Acceptor: the provider of goods and services accepting electronic money as payment.
2. Supervisory authorities: the Central Bank of West African States, the UMOA Banking Commission and the Minister in charge of Finance.
3. Bank: banks as defined in Article 3 of the Act on banking regulation.
4. BCEAO: the Central Bank of West African States or Central Bank.
5. CENTIF: the National Financial Information Processing Unit.
6. Holder: the person who, by virtue of a contract concluded with an issuing establishment, holds electronic money.
7. Prudential provisions: the set of rules defined within the framework of prudential supervision of electronic money issuing establishments.

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8. Distributor: the legal or natural person registered in the Trade and Movable Credit Register, or decentralized financial system, offering customers, pursuant to a contract with the issuing establishment, an electronic money distribution service.
9. Electronic money distribution: cash withdrawal services, loading and reloading against the handover of fiat or book money, payment and money transfer services linked to electronic money.
10. Electronic money emission: the issuance of electronic value units in exchange for received funds.
11. Electronic money establishment: any legal person, other than banks, payment financial institutions and decentralized financial systems, authorized to issue payment instruments in the form of electronic money and whose activities are limited to:

• the emission of electronic money;
• the distribution of electronic money.

12. Issuing establishment: banks, payment financial institutions, duly authorized decentralized financial systems and electronic money establishments.
13. Payment financial institution: payment financial institutions as defined in Instruction No. 011-12/2010/RB on the classification, operations and legal form of banking-character financial institutions.

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14. FCFA: the CFA Franc, the legal monetary unit of the member states of UMOA.
15. Interoperability: the capacity possessed by an electronic money emission and distribution system, whose interfaces are fully known, to operate with other existing or future systems and to share information without access restrictions.
16. Electronic money: a monetary value representing a claim on the issuing establishment which is:

• stored in electronic form, including magnetic;
• issued without delay against the handover of funds from an amount not less than the monetary value issued;
• and accepted as a means of payment by natural or legal persons other than the issuing establishment.

17. OHADA: the Organization for the Harmonization of Business Law in Africa.
18. Technical operator: the entity that provides an issuing establishment with technical services as well as material and software conditions for processing operations related to electronic money, without itself being an issuer of electronic money.
19. Sub-distributor: the legal or natural person or decentralized financial system, offering customers, pursuant to a contract with the distributor, under the responsibility of the issuer, an electronic money distribution service.

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20. Decentralized Financial System or DFS: the institution whose main object is to offer financial services to persons who generally do not have access to bank and financial institution operations as defined by the banking regulation Act and authorized under the decentralized financial systems regulation Act to provide these services.
21. UEMOA: the West African Economic and Monetary Union.
22. UMOA: the West African Monetary Union.
23. Union: UMOA or UEMOA. Article 2: Object The present Instruction aims to regulate the conditions and modalities for exercising electronic money emission and management activities in the member states of the West African Monetary Union. To this end, it sets out the conditions for granting approval to electronic money establishments and authorization to exercise electronic money emission activities for decentralized financial systems. Furthermore, this Instruction clarifies the control and supervision framework for these activities of issuing establishments. Article 3: Scope of Application The provisions of this Instruction apply to the following establishments: • banks; • payment financial institutions;

• 10 - - 11 - TITLE I: GENERAL PROVISIONS • decentralized financial systems; • electronic money establishments. It governs all uses of electronic money regardless of the medium, notably cards, internet, telephone, with the exception of those limited to subsidiaries of the issuing establishment or restricted to the purchase of predetermined goods and services from it. Article 4: Partnership Agreements Electronic money issuing establishments may conclude partnership agreements with one or more technical operators. The activity of these partners must be limited to the technical processing of electronic money or its distribution, under the responsibility of the issuer. In this case, the technical partner's communication actions or any other action directed at the public must indicate the issuing establishment, including when it acts within partnerships with multiple issuers. The responsibility for electronic money emission cannot be outsourced to a technical operator. Article 5: Prohibition of electronic money credit issuance and remuneration of funds Issuing establishments are not authorized to provide, in any form whatsoever, credit services to their customers, nor to pay interest on funds received in exchange for issued electronic money units. However, funds from a credit granted to a client by a bank or DFS may be used to issue electronic money.

• 10 - - 11 - TITLE I: GENERAL PROVISIONS Article 6: Obligation to comply with regulations on external financial relations Electronic money transactions with non-UEMOA member states must be carried out in accordance with the regulations on external financial relations of UMOA member states. The non-compliance with these provisions is subject to the sanctions provided for in Article 40 of this Instruction, without prejudice to other sanctions provided by the Uniform Act on disputes concerning infractions to the external financial relations regulations of UMOA member states. Article 7: Technical requirements or specifications Any electronic money emission solution must meet the specifications or requirements aimed at: • ensuring high platform availability; • preserving message integrity; • maintaining information confidentiality; • guaranteeing transaction authenticity; • ensuring transaction non-repudiation. The issuing establishment must in particular: • put in place a proven operational continuity mechanism; • implement a risk management strategy defining the policy, practices and procedures associated with risks inherent to the system;

• 12 - - 13 - TITLE I: GENERAL PROVISIONS • ensure that technical and operational provisions have been taken to facilitate interoperability with other payment systems; • prove the existence of an audit trail ensuring transaction traceability from the origin of the payment order to its settlement. The issuing establishment ensures transaction traceability for a period of ten years, from the date of their execution. Compliance with these requirements must be attested by periodic audits conducted at least once every three years, by a qualified, approved and experienced external body, in order to guarantee notably the relevance of the security mechanism put in place. This technical audit, which may also cover service quality, must be extended to the partner technical operator of the issuing establishment, where applicable. When outsourcing its technical system, the issuing establishment is required to ensure that the technical service provider meets the aforementioned requirements. To this end, it must have control means for monitoring the provider's activity. A copy of the agreement concluded with the technical service provider must be transmitted to the BCEAO. The outsourcing of the technical system must not alter either the quality or the scope of the controls provided for in Article 37 of this Instruction. The issuing establishment remains responsible for the compliance of the outsourced technical system with the stated requirements.

• 12 - - 13 - TITLE II: CONDITIONS FOR GRANTING APPROVAL OR AUTHORIZATION TO CARRY OUT ELECTRONIC MONEY EMISSION ACTIVITIES TITLE II: CONDITIONS FOR GRANTING APPROVAL OR AUTHORIZATION TO CARRY OUT ELECTRONIC MONEY EMISSION ACTIVITIES Article 8: Obligation to obtain prior approval or authorization Except for banks and payment financial institutions authorized by the banking regulation Act, no structure or establishment may exercise electronic money emission activities without having been duly approved or authorized in advance by the Central Bank. However, banks and payment financial institutions are required to inform the BCEAO at least two months before the launch of their electronic money emission activities or commercialization to the general public, of any new service related to electronic money. Electronic money establishments must be approved by the Central Bank before launching their electronic money emission activities. The exercise, by decentralized financial systems, of activities related to electronic money is subject to prior authorization from the BCEAO. Article 9: Legal form and corporate object of electronic money establishments Electronic money establishments established within the Union are constituted as Public Limited Companies (Sociétés Anonymes) TITLE II: CONDITIONS FOR GRANTING APPROVAL OR AUTHORIZATION TO CARRY OUT ELECTRONIC MONEY EMISSION ACTIVITIES

• 14 - - 15 - TITLE II: CONDITIONS FOR GRANTING APPROVAL OR AUTHORIZATION TO CARRY OUT ELECTRONIC MONEY EMISSION ACTIVITIES or Limited Liability Companies (Sociétés à Responsabilité Limitée Pluripersonnelles), Mutual Societies, Cooperatives or Economic Interest Groups. The Central Bank reserves the right to assess the adequacy of the establishment's legal form to the activities it intends to exercise. Except for banks, payment financial institutions and decentralized financial systems, electronic money emission may only be carried out by a legal person whose corporate object is exclusively focused on this activity. Article 10: Registered office Electronic money establishments must have their registered office within the territory of one of the UMOA member states. Article 11: Requirements regarding minimum share capital or minimum deposit The minimum share capital of an electronic money establishment is three hundred million FCFA. It must be fully subscribed and entirely paid in cash, prior to the granting of approval. Any decentralized financial system whose equity and total amount of customer deposits held in its books are at least equal to three hundred million FCFA, at the end of the financial year preceding the authorization request date, may be authorized to issue electronic money. The Central Bank may, based on its assessment of the risk profile, require an increase in the share capital of an electronic money establishment or the amount of deposits or equity that a DFS must hold, to align it with its volume of activities. Article 12: Procedures for requesting approval or authorization to exercise electronic money emission activities The application file for approval or authorization is submitted, for processing, to the National Directorate of the BCEAO in the state where the requesting establishment is domiciled. To this end, the applicant is obliged to submit a complete file to the Central Bank, comprising the documents listed in Annex I in three copies accompanied by the electronic version of said documents. The documents and information constituting the application file for approval or authorization are presented according to the template in Annex III of this Instruction. Any incomplete file is inadmissible. The submission of the application file for approval or authorization results in the issuance, by the BCEAO, of an acknowledgment of receipt. The date of issuance of this acknowledgment serves as the file reception date. For the purposes of processing the approval or authorization request, the Central Bank may: • request any additional information or elements it deems necessary;

• 16 - - 17 - TITLE II: CONDITIONS FOR GRANTING APPROVAL OR AUTHORIZATION TO CARRY OUT ELECTRONIC MONEY EMISSION ACTIVITIES • conduct on-site visits to ensure the relevance of communicated information; • summon the applicant for a hearing. Article 13: Processing period The maximum regulatory processing period for the application file for approval or authorization, by the BCEAO, is three months. Any request for information or additional elements suspends the processing period of the file. The three-month processing period starts anew, from the date of receipt of the requested information or additional elements. Applicants have a maximum period of two months to communicate the supplementary information elements referred to in the 6th paragraph of Article 12 above. Upon expiration of this period and, in the absence of communication of all required information or elements, the application is considered inadmissible and subject to rejection notified to the promoter by the Central Bank. Article 14: Notification of the decision taken at the end of processing The approval or authorization is pronounced by Decision of the Governor of the Central Bank and notified in writing to the applicant. The refusal of approval or authorization is also notified in writing to the applicant.

• 16 - - 17 - TITLE III: GENERAL MODALITIES AND CONDITIONS FOR THE EXERCISE OF ELECTRONIC MONEY EMISSION ACTIVITIES The approval or authorization is materialized by the registration of the beneficiary establishment or institution on the list of establishments authorized to issue electronic money. This list is maintained and published by the BCEAO. The beneficiary must publish the Approval or Authorization Decision in a legal announcements newspaper of the state in which it is domiciled. The Central Bank informs, as soon as possible, the Minister in charge of Finance of the state where the beneficiary is domiciled, of the granting of approval or authorization. TITLE III: GENERAL MODALITIES AND CONDITIONS FOR THE EXERCISE OF ELECTRONIC MONEY EMISSION ACTIVITIES Article 15: Scope of Application The provisions of this Title apply to all electronic money issuing establishments, notably banks, payment financial institutions, duly authorized decentralized financial systems and approved electronic money establishments. Article 16: Nature or typology of activities of electronic money issuing establishments Electronic money issuing establishments, approved or authorized by the Central Bank, may provide services related to electronic money emission and distribution, as well as data storage on electronic media for the account of other legal persons. TITLE III: GENERAL MODALITIES AND CONDITIONS FOR THE EXERCISE OF ELECTRONIC MONEY EMISSION ACTIVITIES

• 18 - - 19 - TITLE III: GENERAL MODALITIES AND CONDITIONS FOR THE EXERCISE OF ELECTRONIC MONEY EMISSION ACTIVITIES In the course of exercising their activities, the concerned establishments must comply with the prudential requirements defined by the Central Bank. Furthermore, before launching their activities, they must justify a physical headquarters or domicile. Article 17: Use of distributor services The electronic money issuing establishment is authorized to use, within the limits of its approval or authorization to operate, the services of one or more legal or natural persons, referred to as distributors, for the commercialization of services related, notably: • to the subscription of usage contracts with customers; • to the loading of electronic money units; • to cash withdrawal and reimbursement operations for electronic money units; • to payment operations. The distributors provide the necessary assistance to the issuing establishment to ensure transaction traceability. They are required to hold an operations journal recording identified frauds and customer complaints. Electronic money issuing establishments must communicate to the BCEAO, in accordance with Article 36 of this Instruction, the updated list of their distributors as well as the measures put in place for risk management, notably governance and liquidity within their distribution network.

• 18 - - 19 - TITLE III: GENERAL MODALITIES AND CONDITIONS FOR THE EXERCISE OF ELECTRONIC MONEY EMISSION ACTIVITIES The distribution agreement concluded between the electronic money issuing establishment and its distributor must specify the respective obligations of each party. The distributor may, in no case, be constrained to limit its activities to a single electronic money issuing establishment. The distribution network may be organized around principal distributors and sub-distributors. Principal distributors may notably include decentralized financial systems, non-bank financial institutions, notably Post Offices and insurance companies, private non-financial enterprises or any other person registered in the Trade and Movable Credit Register possessing sufficient liquidity to meet the needs of holders of electronic money units. Sub-distributors are natural or legal persons, registered in the Trade and Movable Credit Register or any other equivalent register, who have received a mandate from one or more principal distributors responsible for supplying them with electronic money and liquidity, in order to carry out one or more operations referred to in the first paragraph of this article. Article 18: Responsibilities of issuing establishments towards distributors Electronic money issuing establishments ensure that distributors provide the public, by any appropriate means, notably through visible and legible signage, the information relating