Single Authorization of Banks and Financial Institutions

Within the framework of deepening financial integration within the West African Monetary Union (UMOA), the UMOA Council of Ministers established in 1998 the single authorization for banks and financial institutions. This regulatory provision falls within the framework of the Union's common market, based on the free movement of persons, goods, services, and capital, as well as the right of establishment for natural and legal persons. It serves to strengthen and complement an already unified monetary area, characterized notably by the use of the same currency issued by a common Issuing Institute, the integration of money markets, the application of harmonized banking regulations, and the existence of a community body for the control and supervision of banking activity.

General Principles The single authorization confers upon a duly constituted bank or financial institution the right to conduct banking or financial activities in a Member State of the Union and to establish itself or provide services of the same nature freely throughout the Union, without being required to obtain new authorizations. Thus, since January 1, 1999, the date of its entry into force, any bank or financial institution with its headquarters in a UMOA Member State may provide banking or financial services freely throughout the Union or establish itself freely in accordance with the procedures defined by an instruction from the Governor of the BCEAO. The freedom to provide banking or financial services consists, for a bank or financial institution authorized in a UMOA Member State, in the ability to offer throughout the Union the same services for which it has received authorization.

Practical Procedures The establishment of a duly authorized bank or financial institution in a UMOA Member State other than the one for which authorization was granted may take place under the legal status that the requesting bank or financial institution deems appropriate (branch, agency, or subsidiary), subject to compliance with the host country's legislation. To conduct its activities under the single authorization, any bank or financial institution submits to the Competent Authorities, supported by a statement of intent, a technical file presenting notably the financial aspects and the business plan for the new establishment. The statement of intent and the establishment file are filed with the National Directorate of the BCEAO. The file is processed by the General Secretariat of the Banking Commission. The authorization or refusal to establish is notified within a maximum period of three months from the date of receipt of the complete file. It should be noted that prior to the adoption of this mechanism, to establish itself in another State, a bank already authorized in a Union country is required to apply for a new authorization according to the complete procedure associated with it. Under the single authorization, all legal or regulatory provisions relating to banks and financial institutions established in the UMOA, particularly prudential rules, apply on an individual basis to the requesting institution and its subsidiaries, branches, or agencies. In particular, a capital allocation equivalent to the minimum required capital (1 billion for banks and 300 million for financial institutions) is required for any new establishment.

Composition of the Technical File and Decision-Making Process Composition of the Technical File The information and documents required under the single authorization concern both the institution requesting authorization and the new structure. Regarding the requesting entity acting as a parent company, the technical file includes decisions by deliberative bodies authorizing the new establishment, a description of the control system integrating the new structure, and projected financial and prudential statements for five years. Regarding the new structure, required documents cover notably the general policy and pursued objectives, the activity program, projected financial statements over a five-year period, the amount of capital allocation, legal and administrative documents concerning management and the effective constitution of the structure, human and material resources, as well as their projected development. A complete list of required documents and information can be obtained, upon request, from the National Directorates of the BCEAO in each country.

Decision-Making Process The decision to establish a new structure under the single authorization is made by the President of the Banking Commission, after consulting the Minister in charge of Finance of the State where the requesting institution is duly authorized within the Union (headquarters location) and that of the State of the new establishment. The application for establishment is filed with the National Directorate of the BCEAO. Upon receipt and after verification, the complete file is transmitted for processing to the General Secretariat of the Banking Commission. The result of the processing is submitted to the President of the Banking Commission, whose opinion is communicated to the Minister in charge of Finance of the state of the requesting institution and that of the state of the new establishment. In the event of a favorable opinion from the concerned Ministers and the President of the Banking Commission, or an unexplained silence beyond a period of one (1) calendar month, the President of the Banking Commission notifies the authorization for establishment to the applicant and informs the Ministers.