Instruction No. 24-06 on the Procedures for COSOB's Supervision of Investment Capital Companies

Instruction No. 24-06 of July 17, 2024, regarding the procedures for the exercise of control by the COSOB on investment capital companies

Chapter I: General Provisions Article 1: This instruction aims to establish, in application of Article 24 of Law No. 06-11 of June 24, 2006, relating to investment capital companies, the procedures for the exercise of the supervisory mission by the Commission for the Organization and Supervision of Stock Exchange Operations (COSOB) on the activity of investment capital companies.

Chapter II: Obligations of Investment Capital Companies Article 2: The COSOB ensures the permanent maintenance of the conditions provided for by legislative and regulatory provisions that led to the granting of authorization to exercise the investment capital activity.

Article 3: Without prejudice to the provisions of Article 13 of Law No. 06-11 of June 24, 2006, cited above, the investment capital company must immediately bring to the attention of the COSOB any changes regarding the conditions related to the authorization to exercise the investment capital activity. These modifications concern, in particular:

• Share capital and its distribution;
• The composition of the Board of Directors;
• The management and control of the company;
• The organizational structure;
• The change of registered office; and
• Any other modification compared to the information provided during the granting of the authorization to exercise this activity.

The investment capital company must inform the COSOB without delay of any administrative, civil, or criminal action brought against the company or any of its executives.

Article 4: The COSOB ensures that investment capital companies comply with the rules of shareholding as defined by the provisions of Articles 17, 18, 19, and 20 of Law No. 06-11 of June 24, 2006, cited above.

Chapter III: Transmission of Documents to the COSOB Article 5: The COSOB ensures that investment capital companies observe their information obligations, particularly those related to the filing with the COSOB of annual and semi-annual documents.

Article 6: The annual documents, designated below, are transmitted to the COSOB no later than six months from the closing of the fiscal year.

• The individual and consolidated financial statements (the balance sheet, the income statement, the cash flow statement, the statement of changes in equity, as well as the notes);
• The reports of the statutory auditors (general and special);
• The annual management report which provides a description of the evolution of the company's activity, its financial situation, the operations carried out, and an analysis of the results;
• The minutes of the General Meeting approving the individual and consolidated financial statements of the fiscal year.

Article 7: The documents for the first half-year, designated below, are transmitted to the COSOB no later than ninety (90) days from the end of the first half-year.

• The first-half activity report;
• The balance sheet and income statement as of June 30;
• A statement regarding the company's shareholdings, the model of which is attached as an annex, certified by the statutory auditor(s);
• A statement regarding contentious and/or problematic shareholdings.

Article 8: In addition to the aforementioned documents, the investment capital company is required to transmit to the COSOB the minutes of the Board of Directors' deliberations within a maximum period of 10 days after each meeting, as well as any other document or information not provided for by this instruction deemed necessary for the accomplishment of its supervisory mission.

Chapter IV: Procedures for Control by the COSOB Article 9: The supervisory mission exercised by the COSOB is primarily conducted on documents and may, where appropriate, be supplemented by inspections carried out at the registered office of the investment capital company.

Article 10: In its supervisory mission, the COSOB will rely on the conclusions of the work carried out by the statutory auditor regarding the assessment of the internal control system put in place and any irregularities and inaccuracies noted during the exercise of their functions.

Chapter V: Internal Control Article 11: The investment capital company is required to designate an internal control officer, whose appointment and, where applicable, replacement must be brought to the attention of the COSOB without delay.

Article 12: The investment capital company must have an internal control procedures manual. This manual must be updated to reflect the organizational and regulatory developments of the company.

Article 13: Formal regular evaluations of the internal control system must be carried out by the investment capital company. These evaluations may be conducted by independent internal or external parties.

Article 14: The investment capital company must ensure the separation of functions, particularly the approval of shareholdings, their management, and their monitoring.

Article 15: The investment capital company must establish mechanisms for continuous vigilance to detect and prevent fraud, irregularities, and operational risks.

Article 16: The investment capital company is required to submit an annual report to the Commission for the Organization and Supervision of Stock Exchange Operations (COSOB) on the internal control system. This report will provide information on the results of internal evaluations, corrective actions taken, and identified non-compliance incidents.

Article 17: This instruction, which repeals Instruction COSOB No. 14-01 of June 17, 2014, enters into force as of its date of signature.

Made in Algiers, on 11 Muharram 1446 corresponding to July 17, 2024.

The President Youcef BOUZENADA