Law No. 94-117 of November 14, 1994 on the Reorganization of the Financial Market

1
LAW NO. 94-117 OF NOVEMBER 14, 1994
ON THE REORGANIZATION OF THE FINANCIAL MARKET¹

In the name of the people,
The Chamber of Deputies having adopted,
The President of the Republic promulgates the law as follows:

TITLE I - ON THE PUBLIC OFFERING
CHAPTER 1
ON THE CONCEPT OF PUBLIC OFFERING
Article 1. -
Companies or entities making a public offering are deemed:

1. Companies declared as such by their statutes.
2. Companies whose securities are admitted to the stock exchange listing.
3. Banks and insurance companies, regardless of their number of shareholders.
4. Companies with a number of shareholders equal to or greater than one hundred.
5. Collective Investment Schemes in Securities (CIS).
6. Companies and entities other than CIS that, for the placement of their securities, resort to intermediaries, or to any publicity methods, or to canvassing.
   For the purposes of this law, canvassing refers to the activity of a person who habitually visits the residences, workplaces, or public places of individuals in order to propose the subscription or acquisition of securities.
   The sending of letters, brochures, or any other documents is also considered canvassing when used habitually to propose the subscription or acquisition of securities.

CHAPTER 2
ON INFORMATION TO THE PUBLIC
Article 2. -
Without prejudice to provisions regarding publications required by existing legislation, any company or entity issuing securities or financial products through a public offering must each time and in advance publish a prospectus intended for public information, covering inter alia the organization of the company or entity, its financial situation and business development, as well as the characteristics and purpose of the issued security or product.

¹ Such as amended by Law No. 99-92 of August 17, 1999 on the revitalization of the financial market, Law No. 2005-96 of October 18, 2005 on strengthening the security of financial relations, Law No. 2009-64 of August 12, 2009 promulgating the code for financial services to non-residents, and Law No. 2019-47 of May 29, 2019 on improving the investment climate.

The prospectus is prepared according to models established by the Financial Market Council referred to in Article 23 of this law.
The draft issuance prospectus is submitted for visa to the Financial Market Council. It indicates, where applicable, statements to be modified and additional information to be added. It may request any necessary explanations and justifications. If the company fails to comply, the visa is refused. This issuance prospectus must be delivered or sent to any person whose subscription is solicited. It must be filed at the company's registered office and with all intermediaries responsible for collecting subscriptions. Companies and issuing entities, upon admission of their securities to the stock exchange listing, as well as persons concerned by public offers in accordance with conditions set forth in the General Regulations of the Stock Exchange referred to in Article 29 of this law, must prepare and publish admission or offer prospectuses in accordance with the conditions set forth in the above paragraphs of this article. The State and local public authorities are not subject to the formalities provided by this article.

Article 3. – (new) (Law No. 2005-96 of October 18, 2005, art. 15)
Without prejudice to provisions regarding collective investment schemes in securities, companies making a public offering are required to deposit or send, on paper and magnetic media, to the Financial Market Council and the Tunis Securities Exchange provided for in Article 63 of this law, within a period of four months at the latest from the close of the financial year and fifteen days at least before the holding of the ordinary general meeting:

• the agenda and draft resolutions proposed by the board of directors or management board,
• the documents and reports provided for, as applicable, by Articles 201 or 235 of the Commercial Companies Code and Article 471 of said code. The annual management report must contain information determined by regulation of the Financial Market Council, particularly an overview of activity results, their foreseeable evolution and, where applicable, changes in accounting preparation and presentation methods, as well as elements on internal control,
• the reports of the statutory auditors referred to, as applicable, in Articles 200, 269 and 472 of the Commercial Companies Code. Said reports must contain a general assessment of internal control.

Article 3 bis. – (Inserted by Law No. 2005-96 of October 18, 2005, art. 15)
Companies making a public offering must publish in the official bulletin of the Financial Market Council and in a daily newspaper published in Tunis, their annual financial statements accompanied by the full text of the statutory auditor's opinion within the time limits referred to in Article 3 of this law. However, for publication purposes in the daily newspaper, companies may limit themselves to publishing the mandatory notes on financial statements and the most relevant notes, subject to obtaining written consent from the statutory auditor.

Article 3 ter. – (Inserted by Law No. 2005-96 of October 18, 2005, art. 15)
Companies making a public offering must, within four working days following the date of the ordinary general meeting, deposit or send to the Financial Market Council and the Tunis Securities Exchange:

• the documents referred to in Article 3 of this law if modified,
• the resolutions adopted by the ordinary general meeting,
• the statement of changes in equity taking into account the decision on allocation of accounting results,
• the balance sheet after allocation of accounting results,
• the list of shareholders,
• the list of holders of voting rights certificates,
• the list of holders of convertible bonds.
  ³ List of members of the board of directors including their main professional activities and, where applicable, their mandates in other boards of directors. (Inserted by Law No. 2019-47 of May 29, 2019, art. 33)

Article 3 quater. – (Inserted by Law No. 2005-96 of October 18, 2005, art. 15)
Companies making a public offering must publish in the official bulletin of the Financial Market Council and in a daily newspaper published in Tunis within thirty days after the holding of the ordinary general meeting at the latest:

• the resolutions adopted by the ordinary general meeting,
• the statement of changes in equity taking into account the allocation of accounting results,
• the balance sheet after allocation of accounting results,
• financial statements if modified.
• list of members of the board of directors including their main professional activities and, where applicable, their mandates in other boards of directors. (Inserted by Law No. 2019-47 of May 29, 2019, art. 33)

Article 3 quinter. – (Inserted by Law No. 2005-96 of October 18, 2005, art. 15)
Companies making a public offering must deposit with or send to the Financial Market Council and the Tunis Securities Exchange at least fifteen days before the date of the extraordinary general meeting:

• the agenda and draft resolutions proposed by the board of directors or management board,
• the report of the statutory auditor(s), if any,
• documents made available to shareholders as support for proposed resolutions.
  The resolutions are sent to the Financial Market Council and the Tunis Securities Exchange upon their adoption by the general meeting.

Article 3 sexies. (Inserted by Law No. 2005-96 of October 18, 2005, art. 8)
Notwithstanding its legal obligations, each statutory auditor of a company making a public offering must:
1- immediately notify the Financial Market Council of any fact likely to jeopardize the interests of the company or its security holders, 2- simultaneously submit to the Financial Market Council a copy of each report addressed to the general meeting.

Article 4. -
Without prejudice to provisions regarding collective investment schemes in securities, companies making a public offering are required to provide the Financial Market Council and the Tunis Securities Exchange with all necessary information and documents in order to ensure continuous public information regarding the negotiation or assessment of their securities under conditions set by the General Regulations of the Stock Exchange. At the request of the Financial Market Council, said companies must disseminate this information or any additional explanation required by the Financial Market Council via press releases.

CHAPTER 3
ON PUBLIC OFFERS AND ACQUISITIONS OF BLOCKS OF SECURITIES
Article 5. -
A public offer is considered to be an offer emanating from a natural or legal person, aimed at purchasing, exchanging, selling, or withdrawing a block of securities issued by a company making a public offering, under realization and pricing conditions different from those of the market.

Article 6 (new). (Law No. 2005-96 of October 18, 2005, art. 16)
Any person or defined group of persons intending to acquire a block of securities likely to confer voting rights exceeding a proportion fixed by decree², either with specific shareholders or through a public tender offer in a company making a public offering, must submit a file to the Financial Market Council, which rules taking into account the interests of the remaining shareholders and orders the applicant to proceed with a purchase offer covering the remaining capital it does not hold, either in the form of a public tender offer or under a fixed-price market support procedure. The Financial Market Council may exempt the applicant from proceeding with a purchase offer covering the remaining shares, if the company's shares were not originally the basis for its classification among companies making a public offering, and if this operation does not prejudice the interests of security holders originally responsible for this classification.

Article 7 (new). – (Law No. 2005-96 of October 18, 2005, art. 16)
When a person, acting alone or in concert and by any means, comes to hold a number of securities likely to confer voting rights exceeding a proportion fixed by decree², in a company making a public offering, the Financial Market Council may order them to proceed with a purchase offer covering the remaining shares they do not hold, in the form of a public tender offer or under a fixed-price market support procedure, provided that the price in both cases is not lower than the minimum provided by the general regulations of the stock exchange. The provisions of Article 40 of this law apply to those who do not comply with the Financial Market Council's decision, and securities thus acquired lose their voting rights by a decision of the Financial Market Council taken after hearing the interested party.

CHAPTER 4
ON CROSSING PARTICIPATION THRESHOLDS AND CONCERTED ACTION
Article 8 (new). – (Law No. 2005-96 of October 18, 2005, art. 16)
Any natural or legal person, acting alone or in concert, who comes to hold directly or indirectly more than one-twentieth, one-tenth, one-fifth, one-third, one-half or two-thirds of the capital of a company making a public offering, is required to declare the crossing of one or more of the aforementioned thresholds to this company, the Financial Market Council and the Tunis Securities Exchange, within a period of five working days from the date of crossing, and to declare the total number of shares and voting rights held in accordance with conditions set by regulation of the Financial Market Council. ² Decree No. 2006-795 of March 23, 2006. This declaration is also made within the same time limit and to the same bodies when the shareholding or number of voting rights falls below the thresholds provided for in the first paragraph of this article. For variable capital investment companies and common securities investment funds, the declaration is incumbent upon the manager. The provisions of Article 40 of this law apply to defaulters of the provisions of this article.

Article 9. -
To determine the participation thresholds referred to in Article 8 of this law, securities and voting rights held by persons required to declare are assimilated to:
1 - Securities or voting rights held on their behalf by other persons; 2 - Securities and voting rights held by companies they control; 3 - Securities and voting rights held by a third party with whom they act in concert; 4 - Securities and voting rights that they or one of the persons referred to in sub-paragraphs 1 to 3 have the right to acquire at their sole initiative pursuant to a prior agreement. For common investment funds, participation thresholds are determined taking into account the total shares held in a single company by all common funds managed by the same manager.

Article 10. -
Concerted action is an agreement concluded between natural or legal persons aimed at acquiring, exercising, or transferring voting rights, to implement and follow a common policy vis-à-vis a company making a public offering.
Said concerted action is legally presumed to exist:
1 - between a company, its chairman of the board of directors, its general managers, its managers as well as their spouses, ascendants and descendants up to the first degree; 2 - between a holding company and the companies it controls and their executives; 3 - between companies controlled by the same or same persons. For the purposes of this law, a company is deemed a holding company vis-à-vis another company considered subject to its control:

• when it holds, directly or indirectly, more than 50% of voting rights at the general meetings of this company;
• or when it alone holds the majority of voting rights in this company pursuant to an agreement with other shareholders, notwithstanding the nullity provided for in Article 94 paragraph two of the Commercial Code;
• or when it factually determines, through its voting rights, decisions at the general meetings of this company.

Article 11. -
In order to calculate the different participation thresholds, and at the latest within fifteen days following the general meeting, any company making a public offering informs its shareholders and the Financial Market Council of the total number of voting rights existing on the date of holding this meeting. To the extent that, between two general meetings, the number of voting rights varies by a percentage fixed by the Financial Market Council relative to the previously declared number, the company, upon becoming aware thereof, informs its shareholders and the Financial Market Council of the new number to be taken into account.

Article 12. -
The person required to declare must indicate:
1 - the number of shares and voting rights held directly or indirectly before crossing the thresholds referred to; 2 - the number of securities providing access to capital in the future, as well as the voting rights attached thereto; 3 - securities and voting rights acquired in crossing participation thresholds provided by this law; 4 - the objectives they aim to achieve over the next twelve months and, in particular, whether they intend to continue acquiring new shares or voting rights or to stop said acquisitions or to acquire control of the concerned company and request their appointment as director; 5 - whether they act alone or in concert with one or more persons.

Article 13. -
The Tunis Securities Exchange disseminates on its markets the content of the declaration referred to in the preceding article; the issuing company informs other shareholders at the next general meeting with the content of the declaration inscribed as a separate point on the agenda.

Article 14. -
Holding one-twentieth of the shares or voting rights entitles a shareholder to request the inscription of draft resolutions on the agenda of the company's general meetings.

Article 15. -
Failing to have been regularly declared under the conditions provided in the preceding articles, securities held upon crossing thresholds lose their voting rights for any shareholders' meeting held within 3 years following the date of regularization carried out voluntarily by the interested party or after being compelled to do so by the Financial Market Council following verification of the aforementioned crossing. The Financial Market Council takes the decision on deprivation after hearing the interested party. (Inserted by Law No. 2005-96 of October 18, 2005, art. 17)

Article 16. -
Shareholders of variable capital investment companies are not subject to the provisions of this chapter.

CHAPTER 5
OTHER COMMON PROVISIONS RELATING TO COMPANIES MAKING A PUBLIC OFFERING
Article 17. -
Without prejudice to provisions regarding variable capital investment companies, the payment of dividends decided by the ordinary general meeting of a company making a public offering must take place within a maximum period of three months from the decision of the general meeting.

Article 18. -
In the event of a call for payment of unpaid capital remaining ineffective, companies making a public offering may, after completing all legal, regulatory and statutory formalities to recover the due capital, proceed with stock exchange execution, even on duplicate and without any judicial authorization, of shares not fully paid returning to the defaulting shareholder. Stock exchange execution is at the risk and peril of the defaulting shareholder and under their responsibility. The company requesting stock exchange execution must justify that a call was made for the remaining capital or a tranche of the remaining capital, expressly and unequivocally, and that the shareholder defaulted on this call. The call for the remaining capital or a tranche thereof may be brought to the attention of shareholders by press release or any other means. The shareholder cannot be declared in default after the expiration of the time limit granted to them by a registered letter with acknowledgment of receipt. Approval and preemption clauses provided in the statutes of companies making a public offering are unenforceable against the purchaser of partially paid shares in accordance with the provisions of this article.

CHAPTER 6
SPECIFIC PROVISIONS FOR COMPANIES ADMITTED TO THE STOCK EXCHANGE LISTING
Article 19. (new) – (Law No. 99-92 of August 17, 1999, art. 7)
Companies admitted to the stock exchange listing may purchase their own shares aimed at regulating their market prices.
For this purpose, the ordinary general meeting must have expressly authorized the company's board of directors to purchase and resell its own shares on the stock exchange.
The board of directors fixes inter alia the conditions for purchasing and selling shares on the market, the maximum number of shares to be acquired and the time limit within which the acquisition must be effected.
This authorization may not be granted for a duration exceeding three years. The company may hold no more than 10% of shares deposited with the deposit, clearing and settlement company provided for in Article 77 of this law.
These shares must be issued in registered form and fully paid upon acquisition.
The company must possess, at the time of the general meeting's decision, reserves other than legal reserves, amounting to at least equal to the value of all shares to be acquired calculated on the basis of the price justifying market regulation. Shares held by the issuing company are entitled neither to dividends, which must be deposited in a retained earnings account, nor to subscription rights in case of capital increase by cash, nor to voting rights. They are not taken into account for calculating the different quorums. Before proceeding with the execution of the aforementioned general meeting decision, the company must inform the Financial Market Council. Upon closing of the market regulation operation, the company submits to the Financial Market Council a detailed report on its progress and effects.

Article 20. -
Companies admitted to the stock exchange listing are required to appoint their statutory auditor among members of the Tunisian Order of Chartered Accountants.

Article 21 (new). – (Law No. 2005-96 of October 18, 2005, art. 18)
Companies whose capital or capital-accessing securities admitted to the stock exchange listing are required to deposit, with the Financial Market Council and the Tunis Securities Exchange or send to them, in addition to documents provided for in Article 3 of this law, activity indicators fixed by sector, by regulation of the Financial Market Council, and no later than twenty days after the end of each quarter of the financial year. Said companies must publish said quarterly indicators in the official bulletin of the Financial Market Council and in a daily newspaper published in Tunis.

Article 21 bis. – (Inserted by Law No. 2005-96 of October 18, 2005, art. 18)
Companies whose capital or capital-accessing securities are admitted to the stock exchange listing are required to deposit, with the Financial Market Council and the Tunis Securities Exchange or send to them, no later than two months after the end of the first half of the financial year on paper and magnetic media, interim financial statements accompanied by the full report of the statutory auditor(s) concerning them. Said companies publish the interim financial statements accompanied by the full text of the report of the statutory auditor(s), in the official bulletin of the Financial Market Council and in a daily newspaper published in Tunis.