Executive Decree No. 16-205 of July 25, 2016, on the Establishment, Management, and Exercise of Investment Fund Management Company Activities

8 JOURNAL OFFICIAL OF THE ALGERIAN REPUBLIC No. 45 26 Chaoual 1437 31 July 2016

Having seen Ordinance No. 75-59 of 26 September 1975, as amended and supplemented, establishing the Commercial Code;

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

Having seen Ordinance No. 96-08 of 19 Chaâbane 1416 corresponding to 10 January 1996, relating to collective investment schemes in securities (O.P.C.V.M), (S.I.C.A.V) and (F.C.P);

Having seen Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, relating to the venture capital company;

Having seen Law No. 15-18 of 18 Rabie El Aouel 1437 corresponding to 30 December 2015, establishing the finance law for 2016, particularly its Article 70;

Having seen Presidential Decree No. 15-125 of 25 Rajab 1436 corresponding to 14 May 2015, modifying and appointing members of the Government;

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. 08-56 of 4 Safar 1429 corresponding to 11 February 2008, relating to the conditions for exercising the activity of the venture capital company;

Decrees:

Article 1. — In application of the provisions of Article 1 of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, relating to the venture capital company, this decree aims to set the procedures for the establishment, management, and exercise of the activity of the investment fund management company.

Art. 2. — When the venture capital company ensures solely the management of the venture capital activity for the account of third parties, it becomes an investment fund management company.

It is governed by the provisions of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, and the provisions of this decree.

Art. 3. — The main activity of the investment fund management company is the management of funds entrusted to it by virtue of a mandate.

It may also be mandated by the venture capital company to manage its funds.

Art. 4. — The exercise of the activity of the investment fund management company is subject to the same authorization conditions as the venture capital company.

Stockbrokers (IOB), constituted as joint-stock companies (SPA), may, after authorization from the Minister in charge of Finance, exercise the activity of the investment fund management company.

Executive Decree No. 16-205 of 20 Chaoual 1437 corresponding to 25 July 2016 relating to the procedures for the establishment, management, and exercise of the activity of the investment fund management company.

The Prime Minister,

On the report of the Minister of Finance,

Having seen the Constitution, particularly its Articles 99-4° and 143 (paragraph 2);

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The refusal to grant authorization must be reasoned and notified in accordance with the provisions of Article 14 of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, cited above.

Art. 5. — Only legal persons created in the form of a joint-stock company (SPA) in accordance with Article 7 of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, relating to the venture capital company, meeting the following conditions may exercise the activity of the investment fund management company:

— possess a minimum share capital of ten million dinars (10,000,000 DA), fully paid up upon their establishment;

— provide sufficient guarantees, particularly in terms of organization, technical and financial means, as well as professional competence. These guarantees are defined by a regulation of the CASFB (Algerian Capital Market Authority);

— the managers of the investment fund management company must not have been subject to the convictions provided for in Article 11 of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, cited above.

The conditions cited above must be maintained by the investment fund management company for the entire duration of the exercise of its activities.

Art. 6. — The investment fund management company manages the funds entrusted to it by virtue of a management mandate which must specify, at least:

— the object of the mandate, which must cover the venture capital activity as defined by Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, cited above;

— the identification of the investment fund and the management company concerned;

— the methods of remuneration of the management company;

— the methods of informing the fund holders on the exercise of the mandate;

— the duration of the mandate;

— the conditions and procedures for termination of the management mandate in accordance with current legislation.

Art. 7. — The main activity of the investment fund management company is:

— the placement of funds entrusted for management in accordance with the intervention modalities of venture capital companies provided for by the provisions of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, cited above;

— the representation of investment funds vis-à-vis third parties.

Art. 8. — The management company may manage one or more funds.

Art. 9. — The investment fund management company must take all reasonable measures to identify situations of conflicts of interest arising during the management of funds entrusted to it by virtue of a mandate.

A code of ethics specific to the investment fund management company, including in particular good management practices and prevention of these conflict of interest situations, is fixed by a regulation of the CASFB.

Art. 10. — The investment fund management company may initiate the establishment of investment funds which it will be called upon to manage.

The investment fund management company is authorized to take participations, on its own funds, up to a maximum of 5% of the funds it establishes.

Art. 11. — The CASFB establishes and maintains up to date the list of investment fund management companies.

Art. 12. — The withdrawal of authorization is pronounced and notified under the same conditions and forms as the granting of authorization and entails the deletion from the list of management companies cited in Article 11 above.

Art. 13. — In accordance with Article 16 of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, cited above, in the event of withdrawal of authorization, the investment fund management company must cease its activities immediately and its dissolution is pronounced in accordance with the provisions provided for in Article 715 bis 18 of the Commercial Code, as amended and supplemented.

Art. 14. — The investment fund management company is subject to the control of the CASFB.

Art. 15. — The intervention modalities of the investment fund management company are those provided for by the provisions of Articles 4 and 5 of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, cited above.

Art. 16. — The investment fund management company is required, in the exercise of its management mandate, to respect the rules of taking participations provided for by the provisions of Articles 18 and 19 of Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to 24 June 2006, as amended and supplemented, cited above.

Art. 17. — This decree will be published in the Official Journal of the Algerian Democratic and Popular Republic.

Done in Algiers, on 20 Chaoual 1437 corresponding to 25 July 2016.

Abdelmalek SELLAL.