APPLICATION TEXTS OF THE LAW ON BANKING REGULATION

December 2011 Edition

APPLICATION TEXTS OF THE LAW ON BANKING REGULATION

TABLE OF CONTENTS

INSTRUCTION N° 002-04-2010 RELATING TO THE CONDITIONS FOR THE APPOINTMENT OF TWO (02) STATUTORY AUDITORS BY FINANCIAL INSTITUTIONS OF A BANKING NATURE NOT SEEKING PUBLIC SAVINGS ..............................5
INSTRUCTION N° 003-04-2010 RELATING TO THE PROCEDURES FOR THE WITHDRAWAL OF APPROVAL FROM CREDIT SALES FINANCIAL INSTITUTIONS ..................................................................7
ADVISORY OPINION N° 001-05-2010 RELATING TO THE TERM OF OFFICE OF STATUTORY AUDITORS OF CREDIT INSTITUTIONS IN THE WEST AFRICAN MONETARY UNION (UMOA)...9
INSTRUCTION N° 011-12/2010/RB RELATING TO THE CLASSIFICATION, OPERATIONS, AND LEGAL FORM OF FINANCIAL INSTITUTIONS OF A BANKING NATURE ......................11
INSTRUCTION N° 012-12/2010/RB SETTING OUT THE PROCEDURES FOR OBTAINING APPROVAL AS A BANK OR FINANCIAL INSTITUTION OF A BANKING NATURE BY SUBSIDIARIES OF A CREDIT INSTITUTION WHOSE APPROVAL HAS BEEN WITHDRAWN ..................................................19
INSTRUCTION N° 013-12/2010/RB SETTING THE AMOUNTS OF LATE PENALTIES REGARDING THE TRANSMISSION OF DOCUMENTS AND INFORMATION TO THE CENTRAL BANK OF THE STATES OF WEST AFRICA (BCEAO) AND THE BANKING COMMISSION OF THE WEST AFRICAN MONETARY UNION...........................21
INSTRUCTION N° 014-12/2010/RB SETTING THE AMOUNT OF FINANCIAL SANCTIONS APPLICABLE TO CREDIT INSTITUTIONS BY THE BANKING COMMISSION OF THE WEST AFRICAN MONETARY UNION ..............................................................23
INSTRUCTION N° 015-12/2010/RB SETTING THE CONDITIONS FOR THE EXERCISE OF ACTIVITIES AS A BANKING OPERATIONS INTERMEDIARY .....................................................................25
INSTRUCTION N° 017-04/2011 ESTABLISHING THE LIST OF DOCUMENTS AND INFORMATION CONSTITUTING THE APPROVAL FILE FOR QUALIFICATION AS A CREDIT INSTITUTION..................33
INSTRUCTION N° 018-04/2011 ESTABLISHING THE LIST OF DOCUMENTS AND INFORMATION CONSTITUTING THE DECLARATION FILE FOR INTENT TO ESTABLISH UNDER THE SINGLE APPROVAL FRAMEWORK.........................................................51

INSTRUCTION N° 002-04-2010 RELATING TO THE CONDITIONS FOR THE APPOINTMENT OF TWO (02) STATUTORY AUDITORS BY FINANCIAL INSTITUTIONS OF A BANKING NATURE NOT SEEKING PUBLIC SAVINGS

The Governor of the Central Bank of the States of West Africa (BCEAO), Having regard to the Treaty of the West African Monetary Union (UMOA), dated January 20, 2007, particularly Article 34 thereof; Having regard to the Statutes of the Central Bank of the States of West Africa (BCEAO) annexed to the UMOA Treaty, dated January 20, 2007, particularly Articles 30 and 59 thereof; Having regard to the Uniform Act on Banking Regulation, particularly Article 51 thereof; DECIDES

Article 1: Purpose

This Instruction aims to set the balance sheet total from which financial institutions of a banking nature not seeking public savings are required to appoint two (02) statutory auditors and two (02) alternate auditors.

Article 2: Definition of the Threshold

The financial institutions of a banking nature referred to in Article 1 above, whose total balance sheet reaches at least twenty billion (20,000,000,000) CFA francs at the end of two (02) consecutive fiscal years, must appoint for future fiscal years a second statutory auditor and their alternate. In the event that the total balance sheet falls below the threshold of twenty billion (20,000,000,000) CFA francs at the end of two (02) subsequent consecutive fiscal years, the financial institutions of a banking nature referred to in the first paragraph above may, after having previously informed the Banking Commission of the West African Monetary Union (UMOA), choose not to renew the mandate of one of the statutory auditors and their alternate appointed pursuant to Article 1 of this Instruction.

Article 3: Duration of Mandates

The term of office of the additional statutory auditor and their alternate appointed in accordance with the first paragraph of Article 2 of this Instruction covers the remaining period of the mandate of the statutory auditor and their alternate already in office.

Article 4: Appointment Procedure

The appointment of statutory auditors and their alternates is subject to the approval of the UMOA Banking Commission, in accordance with Article 51 of the law on banking regulation.

Article 5: Entry into Force

This Instruction enters into force on April 15, 2010, and shall be published wherever necessary.
Done at Dakar, April 14, 2010
Philippe-Henri DACOURY-TABLEY

INSTRUCTION N° 003-04-2010 RELATING TO THE PROCEDURES FOR THE WITHDRAWAL OF APPROVAL FROM CREDIT SALES FINANCIAL INSTITUTIONS

The Governor of the Central Bank of the States of West Africa (BCEAO), Having regard to the Treaty of the West African Monetary Union (UMOA), dated January 20, 2007, particularly Article 34 thereof; Having regard to the Statutes of the Central Bank of the States of West Africa (BCEAO) annexed to the UMOA Treaty, dated January 20, 2007, particularly Articles 30 and 59 thereof; Having regard to the Uniform Act on Banking Regulation, particularly Articles 2, 16, and 109 thereof; DECIDES

Article 1: Purpose

Pursuant to Article 109 of the law on banking regulation, this Instruction aims to clarify the procedures for the withdrawal of approval from credit sales financial institutions in operation on the date of entry into force of said law.

Article 2: Withdrawal of Approval

The withdrawal of approval is notified to credit sales financial institutions by decree issued by the Minister in charge of Finance of the member state of establishment.

Article 3: Formalities Following the Withdrawal of Approval

The credit sales financial institution whose approval has been withdrawn shall carry out the following steps within the timeframe set by the withdrawal decision:
a) amendment of its statutes, notably by removing all provisions relating to its status as a financial institution; b) amendment of its corporate name, if necessary, to remove any reference to its status as a financial institution; c) convening an Extraordinary General Meeting to ratify its new statutes; d) filing the amendment with the Trade and Movable Credit Register. Documents attesting to the effective completion of the steps referred to in the first paragraph above must be transmitted to the Minister in charge of Finance, the Central Bank of the States of West Africa (BCEAO), and the Banking Commission of the West African Monetary Union (UMOA), before the expiration of the timeframe set by the withdrawal decision. Upon receipt of the withdrawal decision, the financial institution is required to inform, by registered mail, its creditors and, where applicable, the subscribers of securities it has issued, of the exclusion of the credit sales operation from the scope of the law on banking regulation and of the withdrawal of its approval as a financial institution. The information referred to in paragraph 3 above must be published in a legal announcements newspaper.

Article 4: Verification Mission of the UMOA Banking Commission

Upon expiration of the timeframe set by the withdrawal decision, the General Secretariat of the UMOA Banking Commission shall conduct a comprehensive verification of the concerned institution.

Article 5: Entry into Force

This Instruction enters into force on May 3, 2010, and shall be published wherever necessary.
Done at Dakar, April 30, 2010
Philippe-Henri DACOURY-TABLEY

ADVISORY OPINION N° 001-05-2010 RELATING TO THE TERM OF OFFICE OF STATUTORY AUDITORS OF CREDIT INSTITUTIONS IN THE WEST AFRICAN MONETARY UNION (UMOA)

Pursuant to Article 51, paragraph 6 of the law on banking regulation, statutory auditors are appointed by the Ordinary General Meeting for a term of three (03) years, renewable.
This Advisory Opinion clarifies the conditions for implementing these provisions.

1. Statutory auditors, both principal and alternate, whose terms of office have not expired by April 1, 2010, the date of entry into force of the UMOA and BCEAO institutional reform, shall continue to exercise their functions in accordance with the prevailing contractual conditions.
2. As of April 1, 2010, the appointment and, where applicable, the renewal of statutory auditors shall be carried out in accordance with the provisions of the aforementioned law.
   Done at Dakar, May 10, 2010
   The Governor
   Philippe-Henri DACOURY-TABLEY

INSTRUCTION N° 011-12/2010/RB RELATING TO THE CLASSIFICATION, OPERATIONS, AND LEGAL FORM OF FINANCIAL INSTITUTIONS OF A BANKING NATURE

The Governor of the Central Bank of the States of West Africa (BCEAO), Having regard to the Treaty of the West African Monetary Union (UMOA), dated January 20, 2007, particularly Article 34 thereof; Having regard to the Statutes of the Central Bank of the States of West Africa (BCEAO) annexed to the UMOA Treaty, dated January 20, 2007, particularly Articles 30 and 59 thereof; Having regard to the Uniform Act on Banking Regulation, particularly Articles 4, 32, 47, and 49 thereof; DECIDES

TITLE I: PURPOSE AND SCOPE

Article 1: Purpose

This Instruction aims to classify financial institutions of a banking nature into categories according to the nature of the banking operations they are authorized to perform, and to specify the legal form under which each category of institutions may be established. It also aims to regulate the operations of the different categories of financial institutions of a banking nature.

Article 2: Scope

The provisions of this Instruction apply to all financial institutions of a banking nature exercising their activities on the territory of the member states of the West African Monetary Union (UMOA), subject to applicable legislative or regulatory provisions concerning public institutions with special status mentioned in Article 11, paragraph 2 of the law on banking regulation.

TITLE II: CLASSIFICATION AND OPERATIONS OF FINANCIAL INSTITUTIONS OF A BANKING NATURE

Chapter I: Classification of financial institutions of a banking nature

Article 3: Categories of financial institutions of a banking nature

Financial institutions of a banking nature are classified into five (05) categories, according to the nature of the operations they are authorized to perform:

• Category 1: lending financial institutions;
• Category 2: financial leasing or hire-purchase financial institutions;
• Category 3: factoring financial institutions;
• Category 4: guarantee financial institutions;
• Category 5: payment financial institutions.
  Institutions whose operations fall under different categories are classified in each corresponding category.

Chapter II: Operations of financial institutions of a banking nature

Article 4: Operations of lending financial institutions

Lending financial institutions regularly carry out, for their own account, notably the following operations:

• financing of working capital and investment needs of enterprises;
• loans for the acquisition of tangible movable property;
• real estate loans;
• deferred credit;
• other loans to individuals and enterprises.
  Deferred credit constitutes a loan whose granting is conditional upon prior payments by the borrower to the concerned financial institution of a banking nature.
  The financial arms of decentralized financial systems established as financial institutions of a banking nature also fall under the category of lending financial institutions. These institutions centralize and manage the surplus resources of the institutions that created them. They may notably mobilize external financing or technical assistance for the benefit of their members and grant any loans, under the conditions provided by their respective statutes.

Article 5: Operations of financial leasing or hire-purchase financial institutions

Financial leasing or hire-purchase financial institutions specialize in the following operations:

• equipment, machinery, or tool leasing operations, regardless of their qualification, which give the lessee the possibility to acquire, at a date agreed upon with the owner, all or part of the leased assets, for a price agreed upon by the parties and taking into account payments made as rent;
• operations, regardless of their qualification, by which a company finances, for its own account, the purchase and/or construction of real estate assets for professional use, in order to lease them to persons at whose request it has acted and who may become owners of all or part, at the latest upon expiration of the lease;
• commercial premises or intangible asset leasing operations, regardless of their qualification, which give the lessee the possibility to acquire, at a date fixed with the owner, the commercial premises or one of its intangible assets, for an agreed price taking into account, at least in part, payments made as rent, excluding any sale-and-leaseback operation to the former owner of the commercial premises or one of its intangible assets.
  Sale-and-leaseback is the act by which a user company sells an asset to a person who immediately leases it back to the user company.

Article 6: Operations of factoring financial institutions

Factoring financial institutions manage client accounts, invoice collection, pre-financing of receivables to be collected, and guarantee against non-payment risk. They act under a convention, either by acquiring said receivables or by acting as the creditor's agent with a performance guarantee, in the latter case.

Article 7: Operations of guarantee financial institutions

Guarantee financial institutions aim to take, for consideration, in the interest of a natural or legal person, a commitment by signature such as an aval, guarantee, or any other security.

Article 8: Operations of payment financial institutions

Payment financial institutions specialize in payment services.
Payment services refer to any activity carried out on a professional basis and intended to make instruments available to the public or offer services allowing them, notably, to execute, regardless of the infrastructure, medium, or technical procedure used, the following operations:

• collections;
• deposits;
• withdrawals;
• transfers;
• payments;
• direct debits.

TITLE III: GENERAL CONDITIONS FOR THE EXERCISE OF ACTIVITIES AND LEGAL FORM OF FINANCIAL INSTITUTIONS OF A BANKING NATURE

Chapter I: Conditions and procedures for the exercise of activities of financial institutions of a banking nature

Article 9: General conditions for exercise

Financial institutions of a banking nature may exercise all activities falling within the category to which they belong.
They are authorized to exercise activities falling under a category other than the one in which their operations have been classified, subject to prior authorization granted as in the case of approval.

Article 10: Prohibitions

Financial institutions of a banking nature are prohibited from acquiring their own shares or equity interests, or from granting loans secured by their own shares or equity interests.

Article 11: Procedures for receiving public funds

Pursuant to Article 49 of the law on banking regulation, financial institutions of a banking nature operating on the territory of the UMOA member states may not receive public deposits, regardless of term, except within the framework of their financial activities and if authorized by decree, following a conforming opinion from the Central Bank of the States of West Africa (BCEAO). They may not issue bonds, regardless of term, except under the conditions provided in the first paragraph of this Article, without prejudice to other legislative or regulatory provisions concerning bond issuances. The authorization request must indicate the activity justifying the receipt of deposits or issuance of bonds, as well as the procedures for deposit or issuance, use, and repayment of funds. The file must be submitted in three (03) copies to the Central Bank, which may request any additional documents or information it deems useful for processing the request. The applicant has a maximum period of one (01) month to communicate the additional elements requested by the BCEAO. Upon expiration of this period and failure to communicate all required documents or information, the request shall be considered inadmissible and rejected by the Central Bank, with notification to the applicant. The Central Bank shall process the authorization request within three (03) months from the date of its receipt or, where applicable, the date of communication of the additional requested elements. At the latest upon expiration of this period, said request, accompanied by the conforming opinion, shall be transmitted by the Central Bank to the Minister in charge of Finance of the member state of establishment. Authorization may only be granted for deposits or bond issuances with a term equal to or greater than two (02) years, or those allocated to a specific operation and kept in their original state or in government funds until the completion of said operation.

Chapter II: Status of financial institutions of a banking nature

Article 12: Legal form of financial institutions of a banking nature

The financial institutions of a banking nature referred to in Article 2 of this Instruction, having their registered office on the territory of the UMOA member states, shall be established as fixed-capital public limited companies or variable-capital cooperative or mutual societies.

TITLE IV: FINAL PROVISIONS

Article 13: Entry into Force

This Instruction repeals and replaces all prior provisions dealing with the same subject.
It enters into force on January 1, 2011, and shall be published wherever necessary.
Done at Dakar, December 13, 2010
Philippe-Henri DACOURY-TABLEY

INSTRUCTION N° 012-12/2010/RB SETTING OUT THE PROCEDURES FOR OBTAINING APPROVAL AS A BANK OR FINANCIAL INSTITUTION OF A BANKING NATURE BY SUBSIDIARIES OF A CREDIT INSTITUTION WHOSE APPROVAL HAS BEEN WITHDRAWN

The Governor of the Central Bank of the States of West Africa (BCEAO), Having regard to the Treaty of the West African Monetary Union (UMOA), dated January 20, 2007, particularly Article 34 thereof; Having regard to the Statutes of the Central Bank of the States of West Africa (BCEAO) annexed to the UMOA Treaty, dated January 20, 2007, particularly Articles 30 and 59 thereof; Having regard to the Annex to the Convention governing the Banking Commission of the West African Monetary Union (UMOA), dated April 6, 2007, particularly Article 16 thereof; Having regard to the Uniform Act on Banking Regulation, particularly Article 23 thereof; DECIDES

Article 1: Purpose

Pursuant to Article 23, paragraph 3 of the law on banking regulation, this Instruction aims to set the procedures for obtaining approval as a bank or financial institution of a banking nature by a subsidiary of a credit institution whose approval has been withdrawn by the Banking Commission of the West African Monetary Union (UMOA).

Article 2: Subsidiary's Request to Continue Activities

The subsidiary referred to in Article 1 above shall submit a written request to the Minister in charge of Finance of the member state of establishment within three (03) months following the notification of the withdrawal of the parent company's approval. The documents to be attached to the request are those specified by the Instruction establishing the list of documents and information constituting approval files for qualification as a credit institution. The request referred to in the first paragraph above shall be processed in accordance with the provisions of, notably, Articles 15 and 16 of the law on banking regulation.

Article 3: Validity Period of the Subsidiary's Establishment Authorization

The subsidiary shall continue its activities based on the establishment authorization obtained under the parent company's approval, until the approval is granted or refused by the monetary and supervisory authorities. The granting or refusal of approval as a bank or financial institution of a banking nature shall automatically result in the withdrawal of the establishment authorization.

Article 4: Entry into Force

This Instruction enters into force on January 1, 2011, and shall be published wherever necessary.
Done at Dakar, December 13, 2010
Philippe-Henri DACOURY-TABLEY

INSTRUCTION N° 013-12/2010/RB SETTING THE AMOUNTS OF LATE PENALTIES REGARDING THE TRANSMISSION OF DOCUMENTS AND INFORMATION TO THE CENTRAL BANK OF THE STATES OF WEST AFRICA (BCEAO) AND THE BANKING COMMISSION OF THE WEST AFRICAN MONETARY UNION

The Governor of the Central Bank of the States of West Africa (BCEAO), Having regard to the Treaty of the West African Monetary Union (UMOA), dated January 20, 2007, particularly Article 34 thereof; Having regard to the Statutes of the Central Bank of the States of West Africa (BCEAO) annexed to the UMOA Treaty, dated January 20, 2007, particularly Articles 30 and 59 thereof; Having regard to the Annex to the Convention governing the Banking Commission of the West African Monetary Union (UMOA), dated April 6, 2007, particularly Article 20 thereof; Having regard to the Uniform Act on Banking Regulation, particularly Articles 51, 52, 53, and 78 thereof; DECIDES

Article 1: Purpose

This Instruction aims to set the amounts of late penalties incurred, under Article 78 of the law on banking regulation, by credit institutions that have failed to provide the Central Bank of the States of West Africa or the Banking Commission of the West African Monetary Union (UMOA) with the documents and information necessary for the exercise of their duties, as provided for in Articles 51, 52, and 53 of said law, as well as in Article 20 of the Annex to the Convention governing the UMOA Banking Commission.

Article 2: Amounts of