BCEAO Instruction No. 012-09-2015 to Account-Keeping Intermediaries on the Registration and Circulation of Treasury Bonds and Obligations Issued via Auction with the Assistance of UMOA-Titres Agency

Governor of the Central Bank of West African States (BCEAO),

Having regard to Regulation No. 06/2013/CM/UEMOA of June 28, 2013 on Treasury bonds and obligations issued via auction or syndication with the assistance of the UMOA-Titres Agency, particularly Articles 10, 12, and 14,

Having regard to Decision No. CM/UMOA/006/05/2012 of May 10, 2012 by the Council of Ministers authorizing the BCEAO to create a Regional Agency for the Issuance and Management of Public Debt Securities by UEMOA Member States, named "UMOA-Titres Agency",

Having regard to Decision No. 98-03-2013 of March 15, 2013 by the BCEAO Governor establishing the UMOA-Titres Agency,

Having regard to Decision No. 397/12/2010 of December 6, 2010 by the BCEAO Monetary Policy Committee setting rules, instruments, and procedures for implementing the BCEAO's monetary and credit policy, particularly Articles 22 to 35,

Having regard to Decision No. 24/2013/CPM/BCEAO of December 9, 2013 amending and supplementing Decision No. 397/12/2010 of the BCEAO Monetary Policy Committee of December 6, 2010 setting rules, instruments, and procedures for implementing the BCEAO's monetary and credit policy,

Having regard to the Law on banking regulation in the UEMOA,

Having regard to the prudential framework applicable to banks and financial institutions in the UEMOA,

Having regard to the provisions of the UEMOA Banking Accounting Plan,

Having regard to the Convention on participation in the Automated Securities and Liquidity Management System of the West African Monetary Union (SAGETIL-UMOA),

Avenue Abdoulaye FADIGA
BP 3108 – Dakar – Senegal
Tel. (221) 33 839 05 00 / Fax. (221) 33 823 93 35 www.bceao.int

INSTRUCTION No. 012-09-2015 TO ACCOUNT-KEEPING INTERMEDIARIES ON THE REGISTRATION AND CIRCULATION OF TREASURY BONDS AND OBLIGATIONS ISSUED VIA AUCTION WITH THE ASSISTANCE OF THE UMOA-TITRES AGENCY

The Governor

DECIDES

PRELIMINARY TITLE: GENERAL PROVISIONS

Article 1: Definitions
For the purposes of this Instruction, the following terms shall mean:

1. UMOA-Titres: UMOA-Titres Agency;
2. BCEAO or Central Bank: Central Bank of West African States;
3. CREPMF: Regional Council for Public Savings and Financial Markets;
4. Credit Institution: Bank or banking-type financial institution as defined by the Law on banking regulation;
5. ISIN: International Securities Identification Number;
6. SGI: Management and Intermediation Company;
7. SAGETIL-UMOA: Automated Securities and Liquidity Management System of the West African Monetary Union;
8. UEMOA: West African Economic and Monetary Union;
9. UMOA: West African Monetary Union.

Article 2: Purpose
This Instruction aims to specify the rules that account-keeping intermediaries must comply with regarding the registration and circulation of Treasury bonds and obligations issued via auction by the member states of the West African Economic and Monetary Union.

TITLE I: CONDITIONS FOR EXERCISING THE ACCOUNT-KEEPING FUNCTION

Article 3: General Conditions
Under the conditions set by this Instruction, any credit institution listed on the UEMOA list of banks or banking-type financial institutions, or any Management and Intermediation Company approved by the Regional Council for Public Savings and Financial Markets, may exercise the activity of keeping accounts for Treasury bonds or obligations.

Article 4: Prudential Rules
The account-keeping institution must comply with the applicable prudential regulations in the UEMOA for credit institutions or SGIs, particularly those relating to solvency and liquidity.

Article 5: Maintenance of "Securities" Accounts
The account-keeping intermediary must comply with the securities management procedures prescribed by this Instruction and implement an accounting scheme consistent with the principles set forth in these provisions.

Article 6: Information Obligation
The account-keeping intermediary shall communicate to the BCEAO and the UMOA-Titres Agency an annual inventory of securities accounts registered in its books, within a maximum period of one month following the closing of the fiscal year.

TITLE II: ACCOUNTING PRINCIPLES AND CHART OF ACCOUNTS

Article 7: Basic Principles of Securities Accounting
Securities account tracking is carried out according to an accounting architecture based on the following principles:
– exclusive netting with the BCEAO of movements of Treasury bonds and obligations issued via auction with the assistance of the UMOA-Titres Agency; – registration in the books of account-keeping intermediaries or the BCEAO as the exclusive method of holding securities and the rights attached thereto; – separation of securities managed by authorized intermediaries for their own account from those managed for client accounts; – separation of securities by value and by issuance line.

"Values" are considered to be Treasury bonds or Treasury obligations of a member state of the West African Economic and Monetary Union, issued via auction.
"Lines" are considered to be issuances carried out for the same value, according to specific characteristics. A line of Treasury bonds or obligations may be subject to successive issuances retaining the same characteristics. Each line is identified by an ISIN code, assigned by the competent body at the request of the UMOA-Titres Agency.

Account-keeping intermediaries are required to open two distinct categories of accounts in their books, namely a category of accounts listing securities held for their own account and another listing securities held for client accounts.

Article 8: Accounting for Securities in the Books of Account-Keeping Intermediaries
Securities held by account-keeping intermediaries for their own account are recorded as assets, in accordance with the provisions of the applicable accounting regulations.
Securities held in escrow or managed for client accounts are recorded off-balance sheet, in accordance with the applicable accounting provisions. Fund movements related to securities transactions are listed in the "Securities Settlement Account" appearing on the balance sheet.

Article 9: Registration of Securities Held for Third Parties
Securities held for third-party accounts are registered, by number of securities and by amount, value by value, line by line, to the credit of the account opened for this purpose off-balance sheet. The debit of the counterparty account for securities held for client accounts includes, by value, the total nominal amount as well as the number of securities held for the entire client base, in accordance with the applicable accounting provisions.

Article 10: Maintenance of Auxiliary Accounting for Client Securities
Client accounts record in auxiliary accounting, by value and by line, the number and total nominal amount of securities individually held for each client of the account-keeping intermediary. They are grouped into different categories, including "individuals and corporate securities" accounts, "non-available securities" accounts, and "pending accounts".

Article 11: "Individuals and Corporate Securities" Accounts
"Individuals and Corporate Securities" accounts, maintained by value and by line, record the available balances of each client. The balance of these accounts must at all times be credit or zero.

Article 12: "Non-Available Securities" Accounts
"Non-Available Securities" accounts record, inter alia, securities encumbered by pledges, subject to escrow, admitted as collateral for advances on the money market, or subject to stock lending. "Non-Available Securities" accounts also record transactions that do not present any formal or substantive anomalies, but for which an additional period is necessary before posting. This notably includes the transfer of a client file from one account-keeping intermediary to another. The transfer requires the recipient to complete a certain number of formalities, including the establishment of a bank account statement, the title of the account to be credited, the assessment of the ordering party's legal capacity, etc. During this period, the relevant securities are recorded in a "Non-Available Securities" account. They are credited or debited by the debit or credit of the relevant client accounts.

Article 13: Pending Accounts
Pending accounts comprise the following two categories of accounts:

• "Securities to be received for client accounts" accounts, which record securities movements expected by the account-keeping intermediary in favor of clients. "Securities to be received" accounts are credited pending the delivery of securities and debited following confirmation of said deliveries;
• "Securities to be delivered upon client order" accounts, which operate according to the same mechanism as "Securities to be received for client accounts", but in the opposite direction.

TITLE III: ACCOUNT REGISTRATION AND MAINTENANCE

Article 14: Mandatory Entries upon Account Registration
Securities accounts must obligatorily contain the following entries:

• identification details of the natural or legal persons in whose name they were opened, notably their name, corporate name, and address, and, where applicable, the nature of their rights, in particular, the enjoyment of bare ownership or usufruct, or any incapacities affecting them;
• the name and identification number of the issuance;
• any restrictions encumbering the securities, notably pledges, escrow, admission as collateral for advances on the money market, and stock lending;
• the account identification number.

Article 15: Attestation and Securities Account Statement
Account-keeping intermediaries shall issue, upon request by any account holder, an attestation specifying the nature, number, and nominal value of the securities, as well as the entries made thereon. Furthermore, they shall prepare, at the end of each month, a statement of securities accounts indicating, in number of securities and nominal value, the opening balance, all operations carried out during the period, and the closing balance.

Article 16: Account Maintenance Fees
Commissions and all other fees charged by account-keeping intermediaries are regulated by the BCEAO or the CREPMF, within the limits of their respective competencies.

TITLE IV: SECURITIES TRANSACTIONS

Article 17: General Principles
As securities are dematerialized, their transfer is effected by simple account-to-account transfer.
Any securities operation resulting in a movement of funds or rights to an investor's account is subject to simultaneous entries on the securities, funds, and rights accounts. Securities purchase and sale operations are executed according to the principle of payment against delivery. Thus, cash settlements must be carried out simultaneously with the delivery of securities, on the value date of the operation. Securities lending and borrowing for a fixed term are based on an agreement concluded between the account-keeping intermediary and its client or another entity holding the securities. They are executed according to the principle of payment of remuneration by the assignee to the assignor against delivery of the securities by the latter. The execution of movements on securities domiciled in the books of the issuing institution is carried out according to the automated procedures of the SAGETIL-UMOA application.

Article 18: Trigger for Accounting Registration
Entries resulting from any securities operation are posted to "securities" accounts as soon as the account-keeping intermediary is informed according to standard procedures, notably of the client order and the BCEAO confirmation.

Article 19: Movement Order
When a transaction results in the transfer of securities to another account-keeping intermediary and/or a change in the ownership of the securities, it is required of each party to issue a movement order, under the control of the account-keeping intermediary holding the securities subject to the transaction. In the case where both parties are domiciled with the same account-keeping intermediary, that intermediary shall net the operations and transmit, for information, copies of the movement orders, prepared according to the form templates referred to in Appendix 1 for the assignor and Appendix 2 for the assignee, to the National Directorate of the BCEAO of its country of establishment.

Article 20: Mandatory Entries
For any movement affecting accounts, account-keeping intermediaries are required to ensure, under their responsibility, the identity and capacity of the ordering party as well as the regularity of the operation. Any movement affecting securities accounts gives rise to an accounting entry containing, inter alia, the following information:
– date of registration of the operation;
– explanatory description of the operation in abbreviated or coded form, enabling access to supporting documents; – number of securities moved and their total nominal value.
The accounting documents for the registration include, inter alia, orders emanating from clients and securities transfer orders to or from another account-keeping intermediary, issued by a securities account holder or an authorized third party. Except for a transfer as defined below or an administrative act executed ex officio, any movement of securities or rights expected to debit an account holder's account is executed exclusively on the signed instruction of the holder or their duly authorized representative. Transfer refers to any change in the ownership of a security, not originating from a direct sale, nor from a modification in the extent of rights, on the one hand, and in the capacity or legal status of a holder, on the other. The regularity of a transfer is subject to the production of a transfer certificate, except in the following cases:

• removal of a restrictive mention regarding the holder's right to freely dispose of the security, when this mention has become irrelevant, either due to the expiration of the set term, or upon production of a supporting document;
• account-to-account transfer, linked to the establishment, modification, or extinction of a guarantee, notably in connection with advances on the money market.

Article 21: Control of Account-Keeping Intermediary Operations
The BCEAO and the CREPMF are each authorized, within their respective competencies, to verify at any time the formal regularity of operations executed by account-keeping intermediaries, particularly regarding the conformity of accounting with the rules of this Instruction, the proper retention of accounting documents, and compliance with posting deadlines.

TITLE V: FINAL PROVISIONS

Article 22: Entry into Force
This Instruction and its appendices, which form an integral part thereof, repeal and replace all prior provisions dealing with the same subject.
It enters into force on the date of its signature and shall be published wherever necessary.
Done in Dakar, on
Tiémoko Meyliet KONE

LIST OF APPENDICES
APPENDIX 1: Order to Sell Treasury Bonds or Obligations
APPENDIX 2: Order to Purchase Treasury Bonds or Obligations

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Appendix 1

LOGO OF THE ACCOUNT-KEEPING INTERMEDIARY
ORDER TO SELL TREASURY BONDS OR OBLIGATIONS
No. …………………. OF ……………….(1)
ISSUER: ………………………………………………………………………………….
NAME OF SECURITIES: ………………………………………………….
IDENTIFICATION NUMBER: ……………………………………..…………………………………..
ASSIGNOR: ……………………………………………………………………………….……………………

• Corporate name: ……………………………………………………………………………….…
• Address: ……………………………………………………………………….………………………..
• Settlement account or current account No.: ………………………………………………..
• Securities account No.: …………………………………………………………………………………………………

WE HEREBY DECLARE TO SELL THE SECURITIES MENTIONED ABOVE FOR:

• our own account(2)
• the account of our client below(2)
• Name or corporate name: ………………………………………………….………………………
• Address: ………………………………………………………………………………………….………

UNDER THE FOLLOWING CONDITIONS:

• Number of securities: ………………………………………………..……………………………..………………………
• Unit nominal value: …………………………………………………………….………………..………………..
• Total nominal value: ………………..………………………………………………………..……………..…………
• Total sale price: ............................................................................................................................................
  including accrued interest: …………………………..………………………………….………………
• Value date: …………………………………..…..………………………….
• Settlement bank: Central Bank(2) – Other (2)

ACCORDINGLY, WE AUTHORIZE YOU TO DEBIT OUR SECURITIES ACCOUNT IN YOUR BOOKS BY CREDITING THE SECURITIES ACCOUNT OF THE ASSIGNEE:

• Corporate name: ………………………………………..……………………………………..………
• Address(2): …………………………………………………………………………..…………………………
• Settlement account or current account No.: ………….…………………………………………
• Securities account No.: …………………………………………………………………….………………………………..

ACTING FOR

• its own account (2)
• the account of its client below (2)
• Name or corporate name: …………………………………………………………..
• Address: ……………………………............................................................................

At ………………….., on ………………..
The Assignor
Authorized Signature

Recipients: Assignor, account-keeping intermediary of the assignor, and account-keeping intermediary of the assignee (1) Reference of the ordering party's transmission.
(2) Strike out the unnecessary mention.

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Appendix 2

LOGO OF THE ACCOUNT-KEEPING INTERMEDIARY
ORDER TO PURCHASE TREASURY BONDS OR OBLIGATIONS No. …………………. OF ……………….(1) NAME OF SECURITIES: …………………………………………………………………..
ISSUER: …………………………………………………………………………………………..
IDENTIFICATION NUMBER: ………..…………………………………………………….….
ASSIGNEE: …………………………………………………………………………………..

• Corporate name: …….……………………………………….……………………..……...
• Address: ………………………………………………………………………………………….
• Settlement account or current account No.: …………………………………….……
• Securities account No.: …………………………………………………………………………………

AFTER HAVING TAKEN NOTICE OF THE CHARACTERISTICS OF THE ABOVE-MENTIONED SECURITIES, WE HEREBY DECLARE TO PURCHASE FOR:

• our own account(2)
• the account of our client below (2)
• Name or corporate name: ……………………………………………..………….
• Address: …………………………………………………………………………………

UNDER THE FOLLOWING CONDITIONS:

• Number of securities: …………………………………………..………..…………….
• Unit nominal value: ………………………………………….……..………………..
• Total nominal value: ………………………………………….………..…………….
• Total acquisition price: ……………………………………………..……………………
  including accrued interest: ………………………………………………….……………….
• Value date: ……………..……………………………………………………

ACCORDINGLY, WE AUTHORIZE YOU TO DEBIT OUR SETTLEMENT ACCOUNT OR OUR CURRENT ACCOUNT IN YOUR BOOKS FOR THE TOTAL ACQUISITION PRICE OF THE ABOVE-MENTIONED SECURITIES IN FAVOR OF THE ASSIGNOR:

• Corporate name: ………………………………………………………………………….
• Address: …………………………………………………………………………………………
• Settlement account or current account No.: ………………………… ……………..
• Securities account No.: …………………………………………………………………………………

ACTING FOR

• its own account (2)
• the account of its client below (2)
• Name or corporate name: …………………………………………………………..
• Address: ………………………………………………………………………………..…

At ………………….., on ………………..
The Assignee
Authorized Signature

Recipients: Assignee, account-keeping intermediary of the assignee, and account-keeping intermediary of the assignor (1) Reference of the ordering party's transmission.
(2) Strike out the unnecessary mention.