Instruction No. 01/CRCT/2021 on the Organization and Participation in Non-Competitive Offers for Treasury Securities Issued by CEMAC Member States

---

BANQUE DES ETATS DE L'AFRIQUE CENTRALE HEAD OFFICE Settlement and Securities Depository Unit (CRCT) INSTRUCTION NO. 01/CRCT/2021 - Procedures for the Organization and Participation in Non-Competitive (or Non-Concurrent) Offers for Treasury Securities Issued by CEMAC Member States

THE GOVERNOR, Having regard to Regulation No. 03/19/CEMAC/UMAC/CM on Treasury securities issued by CEMAC Member States; Having regard to the General Regulations of the Settlement and Securities Depository Unit; Having regard to the Adhesion Convention of the Settlement and Securities Depository Unit; Having regard to the Convention on the Organization of Treasury Securities Issuances; Having regard to the Convention on Participation in Treasury Securities Issuances; Having regard to the Specifications for Treasury Securities Specialists; After approval by the CRCT Supervisory Council during its ordinary session on September 30, 2021, via videoconference; Pursuant to Article 34, paragraph 1 of the aforementioned Regulation No. 03/19; HAS ADOPTED THE FOLLOWING INSTRUCTION

Article 1. - LAUNCH OF NON-COMPETITIVE OFFERS Any CEMAC Treasury may request non-competitive offers (NCOs) for the relevant security lines following a competitive auction of Treasury securities. The issuing Treasury informs BEAC of its intention to launch NCOs upon acceptance of competitive offers. The operation is organized, no later than the following day, after the competitive auction. NCOs may only be announced after the publication of results for the relevant competitive auction of Treasury securities.

Article 2. - CONDITIONS FOR PARTICIPATING IN NON-COMPETITIVE OFFERS NCOs are reserved for Treasury Securities Specialists (TSS) of the issuing Treasury, including those who did not participate in the competitive auction.

Article 3. - ANNOUNCEMENT OF NON-COMPETITIVE OFFERS TSS are informed of the opportunity to subscribe to NCOs through a tender notice from the relevant Treasury, transmitted individually by BEAC and also published on BEAC's website and via other communication channels, notably the website of the Ministry responsible for finance in the issuing country. The tender notice includes the same characteristics as the competitive auction operation linked to the NCOs to be launched, including the security code of the relevant titles, maturity date, applicable interest rate for assimilable Treasury bonds (OTA), weighted average rate or price, as well as the requested amount, submission deadline, and settlement date for subscriptions.

Article 4. - MAXIMUM AMOUNT THAT MAY BE REQUESTED FOR NON-COMPETITIVE OFFERS The maximum amount that a Treasury is authorized to request in the tender notice, for each line of assimilable Treasury bills (BTA) and OTA, may not exceed 5 percent of the amount retained by the Treasury following the competitive auction of the relevant Treasury securities.

Article 5. - SUBMISSION OF NON-COMPETITIVE OFFERS NCOs are submitted by indicating only the requested amount for each Treasury security line. A participant may submit only one non-competitive offer per line. Submissions are made via the dedicated platform. If submissions cannot be presented by TSS through the dedicated platform due to technical failure, they may, provided prior permission is obtained from BEAC, be sent via a communication method indicated by BEAC.

Article 6. - ALLOCATION OF OFFERS NCOs are fulfilled at the weighted average rate of the competitive auction for TBAs and at the weighted average price of the competitive auction for OTAs. TSS with at least one accepted competitive offer during the competitive auction will be served first, based on their demand. In case of oversubscription, offers will be allocated pro rata to their demand. In case of undersubscription, the remaining securities will be served to TSS whose offers were not selected in the competitive auction session. Only after full satisfaction of this second category can offers from TSS who did not participate in the competitive auction be considered and served up to the remaining amount pro rata to their demand. BEAC is responsible for notifying the allocation of offers to TSS according to the rule stated in the preceding paragraph, and informs the issuing Treasury before publishing the overall auction results communiqué.

Article 7. - COMMUNICATION OF RESULTS The issuing Treasury publishes the overall auction results on the day of NCO closure, specifying the amount raised through NCOs (see model communiqué dedicated to NCOs). BEAC also communicates, on the same day, to each participant, the outcome reserved for their submission.

Article 8. - SETTLEMENT OF SUBSCRIPTIONS AND DELIVERY OF TREASURY SECURITIES Selected subscriptions are settled on the date indicated in the tender notice according to the "settlement-upon-delivery" principle. Securities are delivered by BEAC against payment by the bidder of the amount corresponding to the value of subscribed securities. Subscriptions are settled by automatic debit of the TSS settlement account at BEAC and credit to the settlement account of the issuing Treasury. In case of payment default on the settlement date for Treasury securities, the amount of unsettled subscriptions is subject to penalties, with a rate fixed per day of delay at the prevailing penalty rate, without prejudice to other sanctions provided by current regulations. The amount corresponding to these penalties is paid into the current account of the issuing Treasury at BEAC. To this end, the TSS authorizes BEAC to automatically debit its settlement account to pay for the subscribed securities as well as related fees and penalties.

Article 9. - REPAYMENT OF MATURITY TREASURY SECURITIES AND PAYMENT OF INTERESTS The repayment of matured Treasury securities and the payment of due interests are initiated, in the name and on behalf of the relevant Treasury, by BEAC. The payment of interest amounts and the repayment of principal at maturity are automatically executed in the dedicated platform by automatic debit of the settlement account of the relevant Treasury and credit to the TSS account. BEAC executes this automatic debit from the Treasury's settlement account when it holds sufficient provisions.

Article 10. - PAYMENT INCIDENTS In case of insufficient provisions, holders of Treasury securities are repaid up to the available provision and pro rata to the number of Treasury securities held. The remainder is repaid as provisions are accumulated. The amount of unsettled operations on the settlement date is subject to penalties, with a rate fixed per day of delay at the prevailing penalty rate. The amount corresponding to these penalties is paid into each TSS's settlement account at BEAC, pro rata to the number of subscribed Treasury securities.

Article 11. - ENTRY INTO FORCE This Instruction enters into force on the date of its signature.

Done at Yaoundé, on September 30, 2021 The Governor, ABBAS T. TOUOLI