General Decision of the Financial Markets Council No. 13 on Processing Conditions for Stock Orders and Minimum Standards for Electronic Registers

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General Decision of the Financial Markets Council No. 13 On the conditions for processing stock orders and on the minimum standards of registers kept on electronic media¹

The Board of Directors of the Financial Markets Council; Having regard to Law No. 94-117 of November 14, 1994, reorganizing the financial market as amended by Law No. 99-92 of August 17, 1999, on revitalizing the financial market and Law No. 2005-96 of October 18, 2005, on strengthening the security of financial relations and notably its Articles 28, 31, 48 and 58; Having regard to Law No. 2000-83 of August 9, 2000, on electronic transactions and commerce; Having regard to Law No. 2004-5 of February 3, 2004, on computer security; Having regard to Decree No. 99-2478 of November 1, 1999, establishing the status of stockbrokers as amended by Decree No. 2007-1678 of July 5, 2007, and notably its Articles 49 to 70; Having regard to the Order of the Minister of Communication Technologies dated July 19, 2001, setting out the technical characteristics of the electronic signature creation device; Having regard to the General Regulations of the Tunis Stock Exchange, approved by the Order of the Minister of Finance dated February 13, 1997, and the amendments thereto approved by Orders of the Minister of Finance dated September 9, 1999, September 24, 2005, September 24, 2007 and April 15, 2008, and notably its Articles 96 and 97; Having regard to the Financial Markets Council Regulation on the maintenance and administration of securities accounts, approved by the Order of the Minister of Finance dated August 28, 2006. Decides:

Article 1:
This decision applies to:

• stockbrokers;
• credit institutions engaged in the collection and transmission of stock orders;
• investors in securities and financial products;
• the Tunis Stock Exchange;
  ¹ As amended by General Decision of the Financial Markets Council dated January 28, 2010.
• the deposit, clearing and settlement company.

Title 1: Transmission of Stock Orders
Chapter 1: General Provisions

Article 2:
A stock order may be transmitted, according to the agreement concluded between the order giver and the stockbroker, in writing, by telephone or by any means leaving a trace on an electronic document as defined by Article 453 bis of the Code of Obligations and Contracts. The account opening agreement must specify the modes of order transmission (written, telephone, Internet or other means which must be clearly specified).

Article 3:
When a stock order is transmitted in writing, it must be prepared on the order model used by the stockbroker and must be signed by the order giver. Said model must be approved by the Financial Markets Council. The written order must be prepared in two copies, duly timestamped and signed by the client and the stockbroker. One of the two copies is handed to the client, the other is retained by the stockbroker.

Article 4:
When a stock order is transmitted by telephone, the conversation must be recorded on an approved magnetic medium and retained for at least six months. It must be materialized by the stockbroker's employee responsible for receiving telephone communications through a written transcript. In all cases, it must result in a written confirmation by the order giver.

Chapter 2: Provisions relating to the transmission of orders via Internet Section 1: General provisions

Article 5:
A stockbroker offering the services of receiving and executing stock orders, including the reception of orders via a dedicated Internet site, must specify on this site its identity, reference and date of final approval as well as the services it is authorized to provide.

Article 6:
A stockbroker offering the services of receiving and executing stock orders, including the reception of orders via a dedicated Internet site, is required to comply with all legislative and regulatory texts relating to the account opening procedure as well as to counter-terrorist financing and anti-money laundering.

Article 7:
A stockbroker must ensure that it permanently has:

• a high-performance computerized order reception system, including a backup system;
• the necessary alternative equipment to be offered to clients in case of computer system failure: telephone and/or fax as well as the necessary human resources.
  In case of malfunction of the order reception system, the stockbroker must make every effort to inform users of the nature and foreseeable duration of the malfunction.
  The stockbroker describes in the account opening agreement the alternative equipment made available to the client in case of temporary service interruption.

Article 8:
The stockbroker ensures that the client systematically receives the information provided for in Article 51 of the Stockbrokers Statute regarding risks inherent to the nature of the operations they intend to perform.

Article 9:
The stockbroker may offer the client, within the account opening agreement, a choice between requesting delivery by mail and requesting delivery via Internet, of order confirmations on the one hand, and account statements on the other. In cases where the client does not receive the order confirmation or account statement, claims regarding their dispatch as well as responses from the stockbroker must be made in accordance with the provisions of the Financial Markets Council Regulation on the maintenance and administration of securities accounts.

Article 10:
When a transaction in securities does not fall within the usual scope of the securities concerned or amounts involved, as initiated habitually by the client, the stockbroker must follow up with its client to inquire about the objectives of the transaction in question before the order is executed.

Article 11:
The stockbroker must have an automated system for verifying its client's account. In case of insufficient provisions or cover, the system must ensure the blocking of order entry and notify the client of the reasons for the blockage.

Article 12:
The stockbroker, offering the services of receiving and executing stock orders including via a dedicated Internet site, must implement an automatic system for verifying the consistency of the order transmitted by the client via the Internet site, particularly regarding its attached price limit, with market conditions. In case of inconsistency, the system must ensure automatic blocking of order entry into the trading system and notify the concerned client of the reasons for the blockage.

Article 13:
The stockbroker must allow the client to definitively recapitulate all their choices, confirm or modify the order at their discretion, and consult the electronic certificate regarding their identification elements. Likewise, the stockbroker is required to implement an order confirmation reception system from the client. The account opening agreement must specify that the stockbroker assumes responsibility for the proper execution of the order, after the confirmation of order receipt has been sent to the client and from the moment the latter confirms their agreement. However, as long as the order has not been executed, the client may request its modification or cancellation by any means provided for in Article 2 of this decision, notwithstanding any confirmation on their part.

Article 14:
The account opening agreement may provide for the possibility of using an electronic payment method in transactions between the stockbroker and its client.
The use of such a payment method is subject to prevailing legislation and regulations, particularly Article 37 of Law No. 2000-83 of August 9, 2000, regarding cases of theft or loss of the electronic payment method or instruments enabling its use, as well as any related fraudulent use.

Section 2: Technical security

Article 15 (new) (General Decision of the Financial Markets Council dated January 28, 2010): A stockbroker proposing the reception of orders via a dedicated Internet site must possess an electronic certification device obtained from an electronic certification service provider approved by the National Electronic Certification Agency. This electronic certification device must include:

• "a personal certificate" which allows identification of the stockbroker and its link with verification elements of its signature;
• "a Web server certificate" which allows identification of the stockbroker's server and certification of its content.
  The stockbroker must also provide the client, who has opted for order transmission via a dedicated Internet site, with a private key "username" as well as a password to guarantee the security and confidentiality of transmitted data. The stockbroker must ensure that the client possesses a personal certificate obtained from an electronic certification service provider allowing identification only in the following cases:
• when the client performs Internet transactions resulting in the transfer of funds or securities from their account to another account opened with the same stockbroker;
• when the client performs Internet transactions resulting in the transfer of funds or securities from their account to an account opened with another stockbroker.

Article 16:
The electronic certification device obtained by the stockbroker must ensure data integrity, authentication of origin and protection of confidential messages, in accordance with prevailing regulations, particularly the Order of the Minister of Communication Technologies dated July 19, 2001. In this framework, the stockbroker must notably:

• take the minimum precautions set by the aforementioned Order to avoid any illegitimate use of encryption elements or personal equipment related to its electronic signature;
• notify the electronic certification service provider of any illegitimate use of its signature;
• ensure the accuracy of all data declared to the electronic certification service provider and to any person relying on its signature.

Article 17:
The stockbroker is solely responsible for the confidentiality and integrity of its signature creation device, and any use of this device is deemed to be its act. These provisions also apply to the stockbroker's client in the context of using their personal certificate. The stockbroker is required to notify the electronic certification service provider of any modifications to the information contained in the certificate.

Article 18:
A stockbroker proposing the reception of orders via a dedicated Internet site is required to periodically conduct mandatory audits of its computer systems, in accordance with Article 5 of Law No. 2004-5 of February 3, 2004.

Title 2: Minimum standards of registers kept on electronic media

Article 19:
The provisions of this title apply to all registers kept by stockbrokers on electronic media and provided for by prevailing regulations.

Article 20:
The register of purchase and sale orders received or initiated, kept by the stockbroker on electronic media, must contain all details provided for in Article 66 of the Stockbrokers Statute.

Article 21:
The stockbroker is required to comply with obligations regarding the retention of registers and documents kept on electronic media, including the legal retention period obligation, in accordance with prevailing regulations.

Article 22:
The stockbroker is required to retain registers on a non-degradable electronic medium allowing:

• consultation of their content throughout their validity period;
• retention in definitive form to ensure content integrity;
• retention of information regarding their origin and destination;
• restitution on paper in a directly intelligible form of any data retained in the computer system.
  In the context of retaining data on electronic media, the stockbroker must preserve storage containers against heat, humidity, magnetic effects and any form of disturbance. It is also required to provide for the backup of a copy of data retained on electronic media outside its premises.

Article 23:
The stockbroker must have an electrical network and air conditioning system ensuring work continuity and optimal operation of computerized equipment and systems.
The stockbroker is also required to ensure that, with regard to common security and reliability standards for computer systems, its computerized system is properly secured, notably by placing its servers and terminal equipment allowing access to them in secure areas accessible only to authorized agents, whose names are fixed in a list established for this purpose.

Article 24:
The computer system available to the stockbroker must allow identification of electronic documents. This identification is achieved by:

• page numbering;
• the use of the processing date and time, generated by the system and which cannot be modified by the stockbroker, to date documents;
• the use of a program preventing cancellation or modification of validated operations.

Article 25:
The stockbroker must have documentation relating to the analysis, programming and execution of computerized processing operations it performs.

Article 26:
The stockbroker's computer system must generate a closing procedure designed to freeze chronology and guarantee the inviolability of records.
In this framework, the stockbroker must transcribe monthly on paper:

• statements of creditor and debtor account balances and its liquidity;
• securities balance statements by value;
• securities and cash balance statements for each client.

Done at: [City]
Date: [Date]
Visa
The Minister of Finance For the Board of Directors of the Financial Markets Council The President ---