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INSTRUCTION NO. 72/AMF-UMOA/2023

ON THE APPROVAL OF DEPOSIT AND TRUST FUNDS AS ACCOUNT KEEPERS AND THE MANAGEMENT OF DEPOSITED ASSETS ON THE UMOA REGIONAL FINANCIAL MARKET

The UMOA Financial Markets Authority,

• Having regard to the Revised Treaty of the West African Monetary Union (UMOA) of July 12, 2019, which entered into force on October 1, 2022, modifying the name of the Regional Council for Public Savings and Financial Markets (CREPMF) to the UMOA Financial Markets Authority (AMF-UMOA);
• Having regard to the Convention of July 3, 1996 establishing the Regional Council for Public Savings and Financial Markets, particularly its Annex on the composition, organization, functioning, and powers of the Council;
• Having regard to General Regulation No. 001/97 of November 28, 1997 on the organization, functioning, and supervision of the UMOA Regional Financial Market, as amended in Articles 37 and 136 by the UMOA Council of Ministers in its sessions of March 27, 1998, and September 5, 2005;
• Having regard to Decision No. CM/16/09/2022 of September 30, 2022 on inactive accounts and ownerless assets in the books of registered securities account keepers on the UMOA Regional Financial Market;
• Having regard to Decision No. CM/DAC/04/04/2017 of April 14, 2017 of the UMOA Council of Ministers appointing the President of the Council;
• Having regard to Directive No. 01/2023/CM/UEMOA of March 31, 2023 on combating money laundering, terrorist financing, and proliferation of weapons of mass destruction in the member states of the West African Economic and Monetary Union (UEMOA);
• Having regard to Decision No. 04/31/03/2023/CM/UMOA of March 31, 2023 adopting the draft Uniform Act on combating money laundering, terrorist financing, and proliferation of weapons of mass destruction in the member states of the West African Monetary Union (UMOA);
• Having regard to Instruction No. 1/AMF-UMOA/2023 on the treatment of inactive accounts and ownerless assets in the books of registered securities account keepers on the UMOA regional financial market;
• Having regard to the deliberations of the AMF-UMOA at its 97th ordinary session on December 22, 2023, held in Cotonou, Republic of Benin;

HEREBY DECIDES:

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TITLE I: GENERAL PROVISIONS

Article 1: Definitions

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

• Regional financial market actor: any legal or natural person who has been granted the status of market structure or participant, by approval or authorization from the UMOA Financial Markets Authority;
• Financial asset: any security or contract issued or admitted to the regional financial market, which is capable of generating income or capital gains for its holder, in exchange for a certain degree of risk;
• AMF-UMOA: UMOA Financial Markets Authority;
• Assets: financial assets and monetary assets credited to an account with an Account Keeper for the benefit of clients;
• Assets subject to prescription: securities and cash assets held in inactive accounts for thirty (30) years;
• Ownerless assets: assets recorded in suspense accounts or pending in securities and cash reconciliations at Account Keepers, for which no holder has been formally identified for ten (10) years;
• Entitled person: any natural or legal person who, by virtue of a legally established link with the holder, holds the power to dispose of inactive securities and cash assets on behalf of the holder;
• BCEAO: Central Bank of West African States;
• BOC: Official Stock Bulletin;
• BRVM: Regional Securities Exchange;
• Deposit and Trust Fund or DTF: any public financial institution tasked with the collection, conservation, and secure management of public and private funds. It falls under the category of long-term institutional investors, entrusted with missions of general interest;
• Account: any securities account or cash account linked to a securities account, opened with an Account Keeper approved by the AMF-UMOA;
• Securities Account: any account opened in the books of an approved Account Keeper or custodian (Custodian Bank or Management and Intermediation Company) approved by the AMF-UMOA on the regional financial market, on which transferable securities, negotiable debt instruments, units or shares of Collective Investment Undertakings (OPC), and any financial instrument traded on a regulated market authorized by the AMF-UMOA are deposited;
• Inactive account: an account (securities and cash) is considered inactive when, for at least ten (10) years, no transaction has been recorded on said account, except for the payment of income generated by portfolio securities and the repayment of debt securities, and at the same time no contact has been established between the holder, their agent, or an entitled person, and the account-keeping institution;
• DC/BR: Central Depository / Clearing Bank;
• Inactivity of an account: account inactivity exists when the holder or entitled person has not carried out any transaction (purchase, sale, subscription, pledge, and transfer of securities, deposit, withdrawal) on the account and has not manifested any presence, in any form whatsoever, with the Account Keeper for at least ten (10) years. In the event of death, the absence of manifestation is attributed to the heirs, entitled persons, or notary. For the purposes of this Instruction, the starting point of inactivity is considered to be the day following the last intervention by the holder, their agent, or an entitled person on the account or on any other account held by them with the same Account Keeper, with the absence of any manifestation, in any form whatsoever, by them, their agent, or an entitled person;
• Agent: any natural or legal person acting in the name and on behalf of the account holder or entitled persons;
• Client profile: categorization of the client according to their personal or patrimonial financial situation, their competence and experience in investing in financial products, their objectives regarding risk, profitability, and investment horizon;
• Account Keeper: any participant on the regional financial market authorized to credit financial assets to accounts on behalf of third parties;
• Holder: any natural or legal person registered or identified as the holder of one or more accounts by the Account Keeper;
• UEMOA: West African Economic and Monetary Union;
• UMOA: West African Monetary Union;
• Union: West African Economic and Monetary Union or West African Monetary Union.

Article 2: Subject Matter

This Instruction sets out, on the one hand, the conditions for approval by the AMF-UMOA of the Deposit and Trust Funds in their capacity as Account Keepers for assets arising from inactive accounts and ownerless assets on the UMOA regional financial market, and defines, on the other hand, the procedures for the management of assets arising from inactive accounts and ownerless assets by the Deposit and Trust Funds.

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TITLE II: CONDITIONS FOR APPROVAL OF DEPOSIT AND TRUST FUNDS BY THE AMF-UMOA AS ACCOUNT KEEPERS FOR ASSETS FROM INACTIVE ACCOUNTS AND OWNERLESS ASSETS

Article 3: Approval Criteria

The Deposit and Trust Funds or the bodies acting in their stead in the member States of the Union are authorized, subject to approval by the AMF-UMOA, to carry out the activity of Account Keeper in the context of managing assets arising from inactive accounts and ownerless assets on the UMOA financial market.

However, the approval by the AMF-UMOA of the Account Keeper activity is subject to the Deposit and Trust Funds complying with the specifications annexed to this Instruction (hereinafter "the Specifications").

Article 4: Approval Application File

The Deposit and Trust Funds requesting approval from the AMF-UMOA to carry out the Account Keeper activity on the UMOA financial market must provide the following documents:

a) constituent deeds; b) composition of governing bodies, list and curriculum vitae of executives; c) for pre-existing Deposit and Trust Funds, financial statements for the last three fiscal years, accompanied by audit and control reports from external control bodies; d) documents describing: - the situation of own funds; - the general organization of the Deposit and Trust Fund; - the organization and resources of the management or department in charge of the account-keeping and custody activity for assets arising from inactive accounts and ownerless assets on the UMOA financial market; - the organization and resources implemented to ensure effective internal control; - the identity of each person designated to perform an internal controller function, as well as the qualifications and aptitudes justifying their appointment to the position; - the identity and qualifications of each person designated to perform an Account Keeper function, as well as the qualifications and aptitudes justifying their appointment to the position; - professional card application files for persons designated to perform the functions of head of the management or department in charge of account-keeping, internal controller, and Account Keeper; - provisions aimed at preventing money laundering, terrorist financing, and proliferation of weapons of mass destruction (ML/TF/Proliferation); e) a declaration of conformity (i) by the legal representative of the Deposit and Trust Fund certifying the compliance of the Deposit and Trust Fund or the bodies acting in their stead with the Specifications annexed to this Instruction and (ii) containing their commitment to comply with said specifications and any future evolution of the related regulatory framework; f) and any other supplementary document requested by the AMF-UMOA.

Article 5: Processing Period for the Application

The AMF-UMOA has a maximum period of three (03) months from receipt of the application to render its decision on the Account Keeper approval application submitted by a Deposit and Trust Fund. The General Secretariat of the AMF-UMOA may request the applicant to transmit additional information and/or documents.

In this case, the three (03) month period provided for processing the application is suspended until receipt of all requested documents and/or information.

Article 6: Decision on Approval of the Account Keeper

The AMF-UMOA's approval is granted based on the Deposit and Trust Fund's compliance with the Specifications, on the one hand, and its capacity to manage the assets arising from inactive accounts and ownerless assets transferred to it, on the other hand.

The approval decision, which is notified to the Deposit and Trust Fund, is published.

Any modification concerning the following characteristic elements of the approval application must be reported to the AMF-UMOA within thirty (30) days of its occurrence:

• constituent deeds, particularly modifications regarding the legal status, powers, and missions of the Deposit and Trust Fund;
• the organization of the management or department in charge of the account-keeping and custody activity for assets arising from inactive accounts and ownerless assets on the UMOA financial market;
• the risk management framework for the account-keeping and custody activity for assets arising from inactive accounts and ownerless assets on the UMOA financial market;
• the technical software dedicated to the account-keeping and custody activity for assets arising from inactive accounts and ownerless assets on the UMOA financial market.

Article 7: Supervisory Powers of the AMF-UMOA

The AMF-UMOA is vested with all inspection powers to ensure that the Deposit and Trust Fund complies with the clauses and conditions of the Specifications. In this context, it may require the communication of any document or information deemed useful for the accomplishment of its mission.

The AMF-UMOA may, as needed, conduct any investigation into alleged breaches by Deposit and Trust Funds holding approval to carry out the Account Keeper activity on the UMOA financial market.

The AMF-UMOA may take the following measures against the Deposit and Trust Funds referred to in paragraph 2 of this Article in case of breaches: a) withdraw its approval; b) adopt appropriate measures to ensure that the concerned DTF continues to comply with its legal obligations; c) publish breaches of the obligations provided for by this Instruction; d) refer the matter to the supervisory authority of the State where the concerned DTF is headquartered or to the UMOA Council of Ministers, where applicable.

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TITLE III: TREATMENT OF ASSETS FROM INACTIVE ACCOUNTS AND OWNERLESS ASSETS

CHAPTER I: DEPOSIT AND MANAGEMENT OF ASSETS FROM INACTIVE ACCOUNTS

Article 8: Procedures for Depositing Assets

Approved Account Keepers on the regional financial market are required to transfer assets arising from inactive accounts to the Deposit and Trust Funds of the State where the account was opened. This transfer must take place within a maximum period of two (02) months from the date the account became inactive.

The Deposit and Trust Funds are required to issue, within a period not exceeding one (01) month, a receipt or discharge confirming the nature and, where applicable, the amount of the assets transferred by the approved Account Keeper on the regional financial market.

The deposit is only effective from the issuance of the aforementioned receipt by the Deposit and Trust Fund.

Article 9: Maintenance and Custody of Deposited Securities and Cash Accounts

The Deposit and Trust Funds are authorized to maintain and custody deposited securities and cash accounts in their books, as specified in Articles 3 to 5 of this Instruction.

To this end, the Deposit and Trust Funds benefit from a custodian account with the Central Depository / Clearing Bank to receive the transfer of any value registered in its books as part of the deposit of assets arising from inactive accounts.

Article 10: Obligations of the Deposit and Trust Funds

Upon receipt of assets arising from inactive accounts and ownerless assets, the Deposit and Trust Funds are subject to the following obligations:

• to conserve the securities and assets transferred by approved Account Keepers;
• to continue searching for holders by all means. The Deposit and Trust Funds must conduct searches for holders or entitled persons of assets arising from inactive accounts under their management at least once a year;
• to ensure sound and transparent management of deposited assets;
• to establish a register of inactive accounts and ensure access to persons demonstrating a legitimate interest;
• to publish, annually, the list of holders of deposited assets in the official journals of the Union member States and on public information websites, notably in the Official Stock Bulletin of the Regional Securities Exchange;
• to respond diligently to any claim;
• to return to identified holders or their entitled persons the assets due to them;
• to liquidate assets subject to prescription and proceed to their restitution to the Fund for the Protection of Savers and Financial Education, in the proportions set forth in Article 16.

Article 11: Management of Deposited Inactive Assets

The Deposit and Trust Funds ensure transparent management of cash assets and the income from deposited securities accounts in their books. These assets are individualized in securities and cash accounts registered in their books.

Article 12: Management of Income and Liquidity of Deposited Assets

The Deposit and Trust Funds collect all income related to held securities as well as repayments of debt securities. They proceed with the investment of available liquidity according to internal management rules.

A minimum remuneration at an annual rate equal to the regulated savings product rate, reduced by two hundred (200) basis points, must be ensured by the Deposit and Trust Funds on cash assets of inactive accounts in their books.

Article 13: Restrictions on the Management of Deposited Assets

Deposited securities assets cannot be subject to any sale, exchange, pledge, or presented as collateral for any commitment of the Deposit and Trust Funds.

The Deposit and Trust Funds are not responsible for the effects of financial market price fluctuations on the value of assets under deposit.

Any operation other than the restitution of assets to holders or entitled persons, or the liquidation of assets upon expiration of the thirty-year prescription period, for the remittance of funds to the DTF of the State of the account holder's nationality and to the Fund for the Protection of Savers and Financial Education of the UMOA regional financial market, is prohibited on the custodian account opened in the books of the DC/BR.

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CHAPTER II: RESTITUTION OF DEPOSITED ASSETS AND PRESCRIPTION OF ASSETS FROM INACTIVE ACCOUNTS AND OWNERLESS ASSETS

Article 14: Application for Restitution of Deposited Assets

Any person demonstrating a right to deposited assets may submit to the Deposit and Trust Fund of the country where the account was managed, electronically or by post, a restitution request, accompanied by a file containing the following elements:

• identity documents of the applicant;
• the notarial deed justifying the status of entitled person(s), in the case where the request is made on behalf of an entitled person(s);
• a confirmation from the Account Keeper of the last balance held in its books prior to the transfer to the DTF.

For natural persons, proof of the identity of the applicant is provided by presenting a valid national identity card, passport, or any original official document serving as such, bearing a photograph. In the case of an estate or joint ownership, the interested party must produce, in addition to the required documents, any document legally justifying their status as entitled person or joint owner. Furthermore, they must attach to their petition a document authorizing them to receive the assets on behalf of co-owners, notably a mandate issued by them. When the claim is made by a lawyer, notary, or authorized third party, the mandate granted to them must be attached to the request.

For legal persons, the representative must present documents attesting to the powers conferred upon them. Furthermore, they must provide proof of their identity by presenting a valid national identity card, passport, or any original official document serving as such, bearing a photograph. Proof of the representative's professional or residential address is provided by presenting any document capable of establishing it. They must also provide, on the one hand, the original, certified copy, or certified true copy of the statutes, the extract from the Trade and Movable Credit Register or, failing that, the certificate of declaration of existence or any other act attesting to the legal form of the concerned legal person and its registered office, as well as the document justifying their right to the assets.

The DTF is authorized to require the applicant to provide any additional information and supporting documents necessary to establish their rights to the assets for which restitution is requested.

The DTF is authorized to request information and documents from Account Keepers useful for the examination of requests and restitution procedures. It may submit to the applicant a restitution request form to be completed to support their file.

Article 15: Processing of Restitution Applications

The DTF shall render a reasoned decision and notify it to the applicant within two (02) months following the date of receipt of the request.

A request for supplementary information by the DTF shall extinguish the two (02) month period referred to in paragraph 1 of this Article. Upon receipt of the information and documents necessary for the decision, the DTF has a new period of two (02) months to render a reasoned decision and notify it to the applicant.

In any case, a pending request cannot be subject to prescription within a period of twelve (12) months.

The applicant may file an appeal with the AMF-UMOA in the absence of a decision within two (02) months following the transmission of a restitution request or the transmission of all elements necessary for the DTF's decision.

The DTF shall effect any restitution by transfer or wire to an account opened, in the name of the applicant, with an Account Keeper or a credit institution approved in the Union.

Article 16: Prescription of Assets from Inactive Accounts

Securities and cash assets held in inactive accounts are subject to prescription after thirty (30) years of inactivity, i.e., after ten (10) years in the books of an Account Keeper and twenty (20) years in the books of the Deposit and Trust Fund of a member State.

Upon expiration of the thirty-year prescription period, the aforementioned assets fall into public ownership and are distributed as follows: 70% to the Deposit and Trust Fund of the State of the account holder's nationality for UEMOA zone residents and of the State where the Account Keeper is headquartered for non-UEMOA residents, and 30% to the Fund for the Protection of Savers and Financial Education of the UMOA regional financial market.

The Deposit and Trust Funds are required to liquidate the concerned assets in their books and proceed to their distribution as indicated above within a maximum period of three (03) months.

Article 17: Prescription of Ownerless Assets

Ownerless assets that have accumulated ten (10) years in the books of an Account Keeper fall into public ownership. They must be remitted at 70% to the Deposit and Trust Fund of the State where the account was opened and at 30% to the Fund for the Protection of Savers and Financial Education