Instruction No. 51/2016 on Technical Opinions from Regional Financial Market Central Structures for Commercial Participant Approval

UNION MONETAIRE OUEST AFRICAINE crepmf CONSEIL REGIONAL DE L'EPARGNE PUBLIQUE ET DES MARCHES FINANCIERS

INSTRUCTION N°51/2016

RELATIVE A L'AVIS TECHNIQUE REQUIS DES STRUCTURES CENTRALES DU MARCHE FINANCIER REGIONAL DANS LE CADRE DU PROCESSUS D'AGREMENT DES INTERVENANTS COMMERCIAUX SUR LE MARCHE FINANCIER REGIONAL DE L'UMOA

The Regional Council for Public Savings and Financial Markets,

Whereas the Convention of 3 July 1996 establishing the Regional Council for Public Savings and Financial Markets (hereinafter "Council");

Whereas the Annex to the Convention on the composition, organization, functioning and powers of the Council, particularly Article 18;

Whereas the General Regulation on the Organization, Functioning and Supervision of the UMOA Regional Financial Market (hereinafter "General Regulation"), particularly Articles 28 and 37;

Whereas Decision No. CM/001/03/98 of the UMOA Council of Ministers amending Article 37 of the General Regulation;

Whereas Decision No. CM/12/03/2013 of 22 March 2013 by the UMOA Council of Ministers appointing the President of the Regional Council;

Whereas Instruction No. 4/97 of the CREPMF on the approval of Management and Intermediation Companies (MICs);

Whereas Instruction No. 16/98 of the CREPMF authorizing Union banks to perform the functions of Account Keeper and Clearing House;

Whereas the General Regulation of the UMOA Regional Securities Exchange, particularly Article 16;

Whereas the General Regulation of the UMOA Central Depository/Clearing Bank, particularly Article 26;

Whereas the deliberations of the Regional Council in its 68th ordinary session on 14 November 2016;

HEREBY DECIDES

Preamble

This Instruction derives from Article 28 of the General Regulation on the organization, functioning and supervision of the UMOA Regional Financial Market (hereinafter "General Regulation"), which states: "The Regional Council first requires the reasoned technical opinions of the Regional Securities Exchange and the Central Depository/Clearing Bank when analyzing an approval application submitted by a company applying to exercise, on the one hand, the activities of trading-clearing house and, on the other hand, account keeping, which are conferred as a monopoly to MICs. "In the event of an unfavorable opinion from either institution, the approval application is rejected by the Regional Council. "However, an appeal may be lodged by the applicant with the Regional Council. "If the opinions of the aforementioned institutions are both favorable, the Regional Council is not bound by them. It proceeds to analyze the application file, excluding technical aspects, and communicates its decision to the applicant upon completion."

This provision, which initially applied only to Management and Intermediation Companies (MICs), is linked to Article 37 of the General Regulation, which granted them the monopoly for exercising trading-clearing and securities account-keeping activities on behalf of third parties.

However, the UMOA Council of Ministers, through Decision No. 001/03/98 amending Article 37 of the General Regulation, adopted in its session on 27 March 1998, opened the exercise of securities account-keeping and custody activities for third parties to Union banks.

Consequently, to exercise this activity, Union banks must obtain approval from the CREPMF and are therefore subject to Article 28 above, in their capacity as Account-Keeper and Custodian Banks (ACCBs).

This Instruction clarifies the nature and scope of the technical opinion requested from the Regional Securities Exchange and the Central Depository/Clearing Bank, when processing an approval application submitted by a company applying to exercise trading-clearing and/or account-keeping/custodian activities.

Article 1: Object This Instruction aims, within the framework of an approval application by a company applying to exercise trading-clearing and/or account-keeping/custodian activities, to: (i) clarify the nature and scope of technical opinions requested from the Regional Securities Exchange and the Central Depository/Clearing Bank; and (ii) determine the necessary documents and information on which the Regional Securities Exchange and the Central Depository/Clearing Bank are called upon to issue their opinions, as well as the timeframe for transmitting these opinions to the Regional Council.

Article 2: List of documents and information to be transmitted to the Regional Securities Exchange and the Central Depository/Clearing Bank when requesting a technical opinion When requesting a technical opinion from the Regional Securities Exchange and the Central Depository/Clearing Bank, the following documents and information contained in the approval application file are communicated to them: a) corporate name; b) corporate purpose; c) registered office address of the Commercial Participant; d) registration numbers with the commercial register and movable property registry; e) hardware and software configurations of computers designated to host trading-clearing and/or account-keeping and custody software; f) technical description and manual of the trading-clearing and/or account-keeping and custody operating software; g) list of all software installed and/or to be installed on each user terminal; h) specified information security tools (routers, firewalls, antivirus, etc.); i) network architecture presentation; j) data backup plan description; k) proposed access method to the BRVM and/or DC/CB systems; l) internet connection type for computers accessing the BRVM and/or DC/CB systems; m) functional organization of users; n) any other technical information regarding the proposed access to BRVM and/or DC/CB systems.

Article 3: Nature and scope of technical opinions from the Regional Securities Exchange and the Central Depository/Clearing Bank The required technical opinions from the Regional Securities Exchange and the Central Depository/Clearing Bank consist of analyzing the compatibility of equipment, software, communication systems, and internet connection types of applicants, which are necessary for accessing their systems.

The BRVM and/or the DC/CB issue exclusively two (2) types of opinions, duly reasoned, solely regarding information system security and functionality: a) Favorable opinion, or b) Unfavorable opinion. In case of an unfavorable opinion, the applicant may lodge an appeal with the Regional Council, in accordance with the prevailing financial market regulatory texts.

Article 4: Timeframe for issuing technical opinions by the Regional Securities Exchange and the Central Depository/Clearing Bank The Regional Securities Exchange and the Central Depository/Clearing Bank have a maximum timeframe of one (01) month from the date of transmission of a complete file containing the information and/or documents referred to in Article 2 above, to notify their technical opinions to the Regional Council. If this timeframe expires, the applicant must compensate for the failure of the Regional Securities Exchange and the Central Depository/Clearing Bank by transmitting, within one (01) month of notification of the failure, a technical opinion from an expert previously approved by the Regional Council.

Article 5: Entry into force This Instruction, which repeals all prior and contrary provisions, takes effect from the date of its signature, and shall be published wherever necessary.

Done at Abidjan, 23 November 2016

THE PRESIDENT (Signature) JEREMIAS PEREIRA