COSOB Regulations Nos. 16-03 and 16-04 on Investment Fund Management Company Organization and Professional Ethics

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JOURNAL OFFICIAL OF THE ALGERIAN REPUBLIC No. 25 17 22 Rajab 1438 April 19, 2017 MINISTRY OF FINANCES Decree of 22 Joumada El Oula 1438 corresponding to February 19, 2017 approving the regulation of the Commission for Organization and Supervision of Stock Market Operations No. 16-03 of 28 Dhou El Kaada 1437 corresponding to September 1, 2016 regarding the guarantees that the investment fund management company must present in terms of organization, technical and financial resources, and professional competence.

The Minister of Finances, Having seen Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the stock exchange; Having seen Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to June 24, 2006, as amended and supplemented, relating to venture capital companies; Having seen Presidential Decree No. 15-125 of 25 Rajab 1436 corresponding to May 14, 2015, as amended, appointing the members of the Government; Having seen Executive Decree No. 95-54 of 15 Ramadhan 1415 corresponding to February 15, 1995, fixing the attributions of the Minister of Finances; Having seen Executive Decree No. 96-102 of 22 Chaoual 1416 corresponding to March 11, 1996, implementing Article 32 of Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the stock exchange; Decrees: Article 1. The regulation of the Commission for Organization and Supervision of Stock Market Operations No. 16-03 of 28 Dhou El Kaada 1437 corresponding to September 1, 2016, regarding the guarantees that the investment fund management company must present in terms of organization, technical and financial resources, and professional competence, the text of which is annexed to this decree, is approved. Art. 2. This decree will be published in the Official Journal of the Algerian Democratic and Popular Republic. Done in Algiers, on 22 Joumada El Oula 1438 corresponding to February 19, 2017. Hadji BABA AMMI.

ANNEX Regulation No. 16-03 of 28 Dhou El Kaada 1437 corresponding to September 1, 2016 regarding the guarantees that the investment fund management company must present in terms of organization, technical and financial resources, and professional competence.

The President of the Commission for Organization and Supervision of Stock Market Operations (COSOB); Having seen Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the stock exchange; Having seen Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to June 24, 2006, as amended and supplemented, relating to venture capital companies; Having seen Executive Decree No. 16-205 of 20 Chaoual 1437 corresponding to July 25, 2016, relating to the procedures for the formation, management, and exercise of the activity of the investment fund management company; Having seen the Presidential Decree of 3 Rabie El Aoual 1434 corresponding to January 15, 2013, appointing the President of the Commission for Organization and Supervision of Stock Market Operations; Having seen the Decree of 23 Safar 1438 corresponding to November 24, 2016, appointing the members of the Commission for Organization and Supervision of Stock Market Operations; Having seen COSOB Regulation No. 15-01 of 25 Joumada Ethania 1436 corresponding to April 15, 2015, relating to the conditions for approval, obligations, and control of stock market intermediaries; After adoption by the Commission for Organization and Supervision of Stock Market Operations on September 1, 2016; Enacts the regulation whose text follows:

Article 1. In application of the provisions of Article 5 of Executive Decree No. 16-205 of 20 Chaoual 1437 corresponding to July 25, 2016, relating to the procedures for the formation, management, and exercise of the activity of the investment fund management company, this regulation aims to define the guarantees that the investment fund management company, hereinafter designated as "management company," must present in terms of organization, technical and financial resources, and professional competence.

Art. 2. The management company must be equipped with the necessary human, organizational, and financial means, allowing it to properly exercise the activity for which the authorization to operate is requested. The management company must have premises equipped with all technical means dedicated exclusively to its main activity. The premises of the management company must take into account the volume of its activity.

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Art. 3. The management company must set up an organization and information system comprising, in particular, computer equipment and software, adjusted to its size and the volume of its activity, allowing it to ensure compliance with current regulations. Furthermore, the management company must set up work procedures to frame, in particular:

• the management and monitoring of operations carried out;
• the management and monitoring of risks associated with the activities exercised;
• the detection and management of conflicts of interest;
• the fight against money laundering and the financing of terrorism;
• the compliance function.

Art. 4. The organizational chart of the management company must show, in particular, the following responsibilities:

• the person responsible for implementing the investment policy;
• the person responsible for compliance control;
• the person responsible for risk control.

Art. 5. The stock market intermediary (IOB), authorized to exercise the activity of a management company, must have a structure equipped with adequate human and technical means, dedicated exclusively to the management company activity. It must also set up the necessary procedures for the prevention and management of conflicts of interest between its management company activity and all its stock market intermediary activities.

Art. 6. The management company must designate a compliance control manager who will ensure compliance with legislative and regulatory texts by the management company. The provisions relating to the compliance control of stock market intermediaries are applicable to the management company.

Art. 7. The own funds of the management company may in no case be lower than the minimum capital amount as fixed by Article 5 of Executive Decree No. 16-205 of 20 Chaoual 1437 corresponding to July 25, 2016, mentioned above.

Art. 8. The management company must subscribe to professional civil liability insurance covering all risks linked to its activity.

Art. 9. The management company must mention in all its deeds, invoices, announcements, publications, or other documents established with third parties, in addition to the mentions fixed by the commercial code, the references of its authorization to exercise the activity of a management company.

Art. 10. The director of the management company and the person responsible for the activity of the management company within the IOB must undergo training organized by a training body whose program is fixed in collaboration with COSOB.

Art. 11. This regulation will be published in the Official Journal of the Algerian Democratic and Popular Republic. Done in Algiers, on 28 Dhou El Kaada 1437 corresponding to September 1, 2016. Abdelhakim BERRAH. ---★--- Decree of 22 Joumada El Oula 1438 corresponding to February 19, 2017 approving the regulation of the Commission for Organization and Supervision of Stock Market Operations No. 16-04 of 23 Moharram 1438 corresponding to October 25, 2016 relating to the code of ethics specific to the investment fund management company.

The Minister of Finances, Having seen Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the stock exchange; Having seen Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to June 24, 2006, as amended and supplemented, relating to venture capital companies; Having seen Presidential Decree No. 15-125 of 25 Rajab 1436 corresponding to May 14, 2015, as amended, appointing the members of the Government; Having seen Executive Decree No. 95-54 of 15 Ramadhan 1415 corresponding to February 15, 1995, fixing the attributions of the Minister of Finances; Having seen Executive Decree No. 96-102 of 22 Chaoual 1416 corresponding to March 11, 1996, implementing Article 32 of Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the stock exchange; Decrees: Article 1. The regulation of the Commission for Organization and Supervision of Stock Market Operations No. 16-04 of 23 Moharram 1438 corresponding to October 25, 2016, relating to the code of ethics specific to the investment fund management company, the text of which is annexed to this decree, is approved. Art. 2. This decree will be published in the Official Journal of the Algerian Democratic and Popular Republic. Done in Algiers, on 22 Joumada El Oula 1438 corresponding to February 19, 2017. Hadji BABA AMMI.

No. 25 19 22 Rajab 1438 April 19, 2017

ANNEX Regulation No. 16-04 of 23 Moharram 1438 corresponding to October 25, 2016 relating to the fundamental rules of ethics to be respected by the investment fund management company.

The President of the Commission for Organization and Supervision of Stock Market Operations (COSOB); Having seen Legislative Decree No. 93-10 of May 23, 1993, as amended and supplemented, relating to the stock exchange; Having seen Ordinance No. 96-08 of 19 Chabane 1416 corresponding to January 10, 1996, relating to collective investment schemes in securities (UCITS), (SICAV) and (FCP); Having seen Law No. 06-11 of 28 Joumada El Oula 1427 corresponding to June 24, 2006, as amended and supplemented, relating to venture capital companies; Having seen Law No. 15-18 of 18 Rabie El Aoual 1437 corresponding to December 30, 2015, bearing the finance law for 2016, notably its Article 70; Having seen the Presidential Decree of 3 Rabie El Aoual 1434 corresponding to January 15, 2013, appointing the President of the Commission for Organization and Supervision of Stock Market Operations; Having seen Executive Decree No. 16-205 of 20 Chaoual 1437 corresponding to July 25, 2016, relating to the procedures for the formation, management, and exercise of the activity of the investment fund management company; Having seen the Decree of 23 Safar 1438 corresponding to November 24, 2016, appointing the members of the Commission for Organization and Supervision of Stock Market Operations; Having seen COSOB Regulation No. 15-01 of 25 Joumada Ethania 1436 corresponding to April 15, 2015, relating to the conditions for approval, obligations, and control of stock market intermediaries; After adoption by the Commission for Organization and Supervision of Stock Market Operations on 23 Moharram 1438 corresponding to October 25, 2016; Enacts the regulation whose text follows:

Article 1. In application of Article 9 of Executive Decree No. 16-205 of 20 Chaoual 1437 corresponding to July 25, 2016, mentioned above, this regulation aims to fix the fundamental rules of ethics to be respected by the investment fund management company, hereinafter designated as "management company."

Art. 2. The code of ethics of the management company dictates the fundamental rules of ethics comprising, in particular, good management practices and the prevention of conflicts of interest, applicable to the management company as well as its employees involved in the investment fund management activity, including in financial engineering or in the business relationship with the company in which the funds are invested, hereinafter designated as "target company."

Art. 3. The fundamental rules of ethics to be respected by the management company are fixed as follows:

• behave in all circumstances with competence, diligence, and loyalty, both towards the holders of shares of the investment fund and towards target companies;
• prohibit the use of entrusted funds for purposes other than those fixed in the management mandate;
• respect the principle of transparency towards the investment fund and provide it, within the framework of its information obligations, with all useful information on the evolution of the activity, the risks incurred, and the procedures for handling potential conflicts of interest;
• ensure fair treatment towards managed investment funds, when the funds of the latter are invested at the same time in the same target company;
• prohibit the disclosure to third parties, without the agreement of the interested parties, of any confidential, financial, or technical information, obtained either during the preliminary examination of projects, or during the monitoring of investments carried out, or, more generally, during the exercise of their activities;
• inform the investment fund of all personal interests held by the management company in a target company before engaging in it and during the exercise of the management mandate. It must also inform it of all measures taken to manage situations of conflicts of interest that may exist between its own interests and those of the investment fund;
• ensure that its employees are not agents of several management companies at the same time, nor agents of a management company and a target company at the same time;
• ensure that its director is neither a director nor an employee of another management company at the same time, nor a director of a management company and a target company at the same time;
• ensure that its employees declare their interests as well as those of their spouse, descendants, and ascendants in a target company, upon taking their functions and during the exercise of their activities;
• ensure that its employees inform their hierarchical superiors before exercising any mission that could put them in a situation of conflicts of interest between their personal interests, those of their spouse, descendants, or ascendants, on the one hand, and the interests of the managed investment fund, on the other hand. In the case where there is an established risk of conflict of interest, the management company relieves the involved employee of this mission and designates another. In the case where the situation of conflicts of interest arises during the exercise of their mission, the employee informs the management company, which takes charge of informing the target company and the investment fund of the situation and the measures taken to manage these conflicts of interest;

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• ensure that its employees are prohibited from asking for or receiving benefits of any nature, during the exercise of their functions, from the target company, which could influence their independence;
• ensure that its employees are prohibited from exploiting information they may have known to carry out stock market transactions or to obtain benefits of any nature, either individually or by acting in concert within a group of individuals;
• ensure that its employees inform their hierarchical superiors of transactions carried out by themselves or by their spouse, ascendants, and descendants, involving securities issued by companies listed or unlisted on the stock exchange.

Art. 4. The management company must inform all its managers and employees involved in the investment fund management activity, including in financial engineering or in the business relationship with the target company, of all these rules by integrating them into the internal regulations of the management company as well as into the compliance control guide.

Art. 5. The management company must set up the necessary procedures to collect, at least on an annual basis, declarations from employees regarding transactions, links, and interests they maintain by themselves or through their spouse or their ascendants and descendants with the target company, as well as gifts and other benefits coming from the target company.

Art. 6. The management company must set up an effective compliance control to ensure that its employees permanently respect all the rules established in this regulation.

Art. 7. Agents authorized by the Commission for Organization and Supervision of Stock Market Operations may conduct investigations with the management company, have any useful document communicated to them, and access all premises used for professional purposes during working hours, in order to verify that the management company respects the provisions of this regulation.

Art. 8. Breaches of the provisions of this regulation give rise to the drafting of a detailed report addressed to the Minister in charge of Finances.

Art. 9. This regulation will be published in the Official Journal of the Algerian Democratic and Popular Republic. Done in Algiers, on 23 Moharram 1438 corresponding to October 25, 2016. Abdelhakim BERRAH.

Ahcene Saidi Mohammed Fouial Mourad Amarouche Ahcene Saidi Mohammed Fouial Zohra Mansour Hassiba Khelfaoui Abdelouahed Belbal Zohra Mansour Abdelouahed Belbal Hassiba Khelfaoui Mourad Amarouche 20 JOURNAL OFFICIAL OF THE ALGERIAN REPUBLIC No. 25 22 Rajab 1438 April 19, 2017 Official Printing Office - Les Vergers, Bir-Mourad Raïs, BP 376 - ALGERS-GARE JOURNAL OFFICIAL OF THE ALGERIAN REPUBLIC No. 25