Code for the Provision of Financial Services to Non-Residents

Law No. 2009-64 of August 12, 2009, promulgating the Code for the Provision of Financial Services to Non-Residents¹.

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

Article 1 - Promulgated by virtue of this Law is the "Code for the Provision of Financial Services to Non-Residents".

Art. 2 - Subject to the provisions of Article 3 of this Law, the provisions of Law No. 85-108 of December 6, 1985, on encouraging financial and banking institutions operating essentially with non-residents, are repealed.

A two-year period from the effective date of this Law is granted to non-resident banks established under the law referenced in the first paragraph of this Article, for compliance with the provisions of Article 74 of the Code for the Provision of Financial Services to Non-Residents.

Art. 3 –

1. The provisions of Article 17 of Law No. 85-108 of December 6, 1985, on encouraging financial and banking institutions operating essentially with non-residents remain applicable until December 31, 2010 for non-resident institutions active before January 1, 2011.
2. Non-resident financial service providers operating before January 1, 2011 under the Code benefit from the right to deduct profits from their operations with non-residents realized until December 31, 2010.
3. Institutions operating before January 1, 2011 under conventions concluded in accordance with Article 28 of Law No. 85-106 of December 6, 1985, on encouraging financial and banking institutions operating essentially with non-residents, as well as their civil servants, continue to benefit from the advantages provided by said conventions until December 31, 2010. Said advantages will be revised from January 1, 2011 in accordance with the Code for the Provision of Financial Services to Non-Residents.

Art. 4 - The term "financial and banking institutions operating essentially with non-residents" provided by Law No. 85-108 of December 6, 1985, used in all current texts is replaced by the term "non-resident credit institutions operating under the Code for the Provision of Services to Non-Residents", taking into account discrepancies in expression.

¹ As amended by Law No. 2012-1 of May 6, 2012, on the supplementary finance law for the year 2012.

Art. 5 - The provisions of Article 46 of Law No. 94-117 of November 14, 1994, on the reorganization of the financial market, are repealed and replaced by the following:

Article 46 (new) - The Financial Market Council cooperates with the regulatory authorities of the banking and insurance sectors. To this end, it may conclude agreements with these authorities concerning in particular:

• the exchange of information and experience,
• the organization of training programs,
• joint control operations.

The Financial Market Council may cooperate with its foreign counterparts or authorities exercising analogous missions in accordance with current legislation and regulation. To this end, it may conclude cooperation agreements providing in particular for the exchange of information and cooperation in the field of investigations under the following conditions:

• exchanged information must be necessary for the performance of the requesting counterpart authority's mission and may only be used for this purpose,
• the Financial Market Council cannot invoke professional secrecy regarding information exchange,
• the requesting counterpart authority must safeguard the confidentiality of information and provide necessary guarantees for its protection under conditions at least equivalent to those applicable to the Financial Market Council.

The Financial Market Council refuses information exchange requests in the following cases:

• when information may affect public order or vital interests of Tunisia,
• when judicial proceedings have already been initiated for the same facts and against the same persons concerned by this information before Tunisian courts;
• when the request concerns persons who have received final judgments for the same facts from Tunisian courts;
• when the request may conflict with internal legislation and regulation;
• when the request comes from a counterpart authority that does not cooperate in this field with the Financial Market Council.

This Law shall be published in the Official Journal of the Tunisian Republic and executed as law of the State.
Tunis, August 12, 2009.
Zine El Abidine Ben Ali

CODE FOR THE PROVISION OF FINANCIAL SERVICES TO NON-RESIDENTS

TITLE I
GENERAL PROVISIONS

Article 1
This Code governs the provision of financial products and services, and certain related operations covered in Titles Two and Three, to natural or legal non-resident persons as defined by the current exchange legislation, by non-resident financial service providers defined in Title Four of this Code.

The provision of financial products and services defined by this Code remains subject to current legislation unless otherwise provided by this Code.

Article 2
In the cases and following the conditions defined in this Code, non-resident financial service providers may provide their services to resident persons as defined by the current exchange legislation. They must, for this purpose, comply with the current exchange and foreign trade legislation unless a derogation is provided by this Code.

TITLE II
FINANCIAL PRODUCTS

Chapter 1
Financial Instruments

Article 3
For the purposes of this Code, financial instruments are:
1- Financial securities comprising:

• securities issued in Tunisia as defined by current legislation;
• foreign financial securities traded on a regulated market subject to a regulatory authority that is a member of the International Organization of Securities Commissions (IOSCO). These securities are:
• Equity securities issued by capital companies, including shares and instruments granting or potentially granting access to equity;
• Debt securities, excluding commercial bills and cash certificates;
• Units or shares of collective investment schemes.
  2- Financial derivative contracts traded on a regulated market subject to a regulatory authority that is a member of IOSCO. When their underlying assets are securities, these must be issued on a regulated market subject to an IOSCO member regulatory authority. These contracts include: option contracts, firm forward contracts, swap contracts, future interest rate agreements, and all other derivative contracts relating to financial instruments, commodities traded on foreign markets, currencies, and interest rates backed by bonds.

These contracts must meet conditions set by decree.

Article 4
The Tunis Securities Exchange rules on the admission and listing of financial instruments and products in the non-resident compartment, their delisting, and their tradability on this compartment, unless the Financial Market Council objects.

By way of derogation from Article 87 of Law No. 94-117 of November 14, 1994, on the reorganization of the financial market, non-resident companies with registered offices in Tunisia and whose securities are admitted to the non-resident compartment of the Exchange, as well as their shareholders, are subject to the obligations imposed on them by the legislation and regulation governing the financial market.

Companies with registered offices abroad whose securities are admitted to the non-resident compartment of the Exchange under a dual listing, as well as their shareholders, are subject to obligations regarding periodic and permanent financial disclosure and crossing of participation thresholds. A shareholder is exempt from declaring the crossing of participation thresholds when making this declaration to the regulatory authority where the company's registered office is located. A regulation of the Financial Market Council sets out the implementation modalities and procedures for this Article.

Chapter 2
Expert Funds

Section 1 - General Provisions

Article 5
Expert funds are investment vehicles reserved for certain types of qualified non-resident investors, considered as such due to their status, experience, or investment amount, according to criteria set by decree.

For the purposes of this Code, expert funds are considered as collective investment schemes in securities with reduced investment rules, hereinafter referred to as "OPCVM ARIA", which may invest in the various financial instruments covered by Article 3 of this Code, within the limits authorized by their applicable investment rules.

Article 6
A single depositary is designated in the expert fund's statutes or internal regulations.

The functions of manager and depositary cannot be held cumulatively for the same expert fund.

The expert fund, the manager, and the depositary must act independently for the exclusive benefit of subscribers and provide sufficient guarantees regarding their organization, technical and financial resources, as well as governance, including the integrity and competence of their management.

They must take all necessary measures to ensure the security of operations.

Article 7
The assets of expert funds are held by a single depositary with the status of a non-resident bank established in Tunisia. These assets may also be held by a single depositary with the status of a resident bank, in accordance with conditions set by decree.

The depositary ensures:

• the regularity of decisions made by the expert fund's manager;
• that the subscriber or acquirer of shares or units in the expert fund is an investor as defined in Article 5;
• that the subscriber or acquirer has effectively declared being informed that this institution is governed by the provisions applicable to expert funds.

Article 8
The manager of an expert fund may delegate the management of said fund to an entity subject to the control of a regulatory authority that is a member of IOSCO and signatory to the IOSCO Multilateral Memorandum of Understanding concerning consultation, cooperation, and information exchange.

The depositary of an expert fund's assets may delegate this custody function to an entity with the status of a non-resident bank established in Tunisia or in a member state of the Financial Action Task Force (FATF), or to a resident bank, in accordance with conditions set by decree.

This delegation does not exempt the manager or depositary from their liability.

The implementation modalities for this Article are set by regulation of the Financial Market Council.

Article 9
The financial statements of expert funds are certified by an auditor registered with the Tunisian Order of Chartered Accountants as a member.

Article 10
When taking the form of common investment funds, expert funds are established jointly by:

• a depositary as provided in Article 7;
• an investment management company responsible for their management.

The depositary and manager establish the fund's internal regulations. Subscription or acquisition of units in a common investment fund constitutes acceptance of the internal regulations after review.

Article 11
The establishment, transformation, merger, division, or liquidation of an expert fund in accordance with current legislation is subject to the approval of the Financial Market Council.

Approval for an expert fund is granted or refused by the Financial Market Council within a maximum period of one month from the date of submission of the application accompanied by necessary documents.

The implementation modalities for this Article are set by regulation of the Financial Market Council.

Article 12
The Financial Market Council may withdraw approval granted to an expert fund either at the request of the approved beneficiary or on its own initiative after hearing the beneficiary when:

• approval has not been used within twelve months from the date of grant;
• or if the beneficiary no longer meets the conditions that led to the grant of approval;
• or if it has committed a serious breach of current legislation or regulation.
• or if approval was obtained through false declarations or any other irregular means.

In case of withdrawal, the expert fund must be liquidated in accordance with current legislation within one year from the date of the withdrawal decision.

Article 13
The expert fund may receive subscriptions only after the establishment of a prospectus, submitted for the visa of the Financial Market Council.

The implementation modalities for this Article are set by regulation of the Financial Market Council.

Section 2 - Collective Investment Schemes in Securities with Reduced Investment Rules (OPCVM ARIA)

Sub-section 1 - Common Provisions

Article 14
OPCVM ARIA are established as variable capital investment companies with reduced investment rules (hereinafter "SICAV ARIA") or as common investment funds with reduced investment rules (hereinafter "FCP ARIA").

Article 15
Shares of the SICAV ARIA or units of the FCP ARIA are issued and redeemed at any time upon request by shareholders or unit holders, at net asset value increased or decreased, as applicable, by commissions.

The modalities for subscription, acquisition, and redemption of shares or units issued by the SICAV ARIA or FCP ARIA are set by regulation of the Financial Market Council.

Article 16
The statutes or internal regulations of an OPCVM ARIA set the original value of the share or unit.

Article 17
OPCVM ARIA may include different categories of shares or units under conditions set, as applicable, by the statutes of the SICAV ARIA or the regulations of the FCP ARIA.

A regulation of the Financial Market Council sets the categories of shares or units that OPCVM ARIA may include.

Article 18
The statutes or internal regulations of OPCVM ARIA may provide for the possibility for the board of directors, management board, or manager to temporarily suspend redemption and issuance operations when exceptional circumstances require it or if the interest of shareholders or unit holders dictates, provided that these statutes or regulations set the conditions for taking the suspension decision and provide for the obligation to inform shareholders or unit holders under modalities set by these statutes or regulations.

A regulation of the Financial Market Council sets other cases and conditions under which the statutes of the SICAV ARIA or internal regulations of the FCP ARIA provide, as applicable, for the temporary or permanent suspension of share or unit issuance.

The statutes or internal regulations may provide, under conditions set by regulation of the Financial Market Council, that share or unit redemption may be capped at each net asset value calculation date to a fraction of the shares or units issued by the institution.

The Financial Market Council must be informed without delay of the suspension or capping decision and its reasons.

Article 19
The assets of an OPCVM ARIA include, under conditions and limits set by decree:
1- Financial instruments as defined in Article 3; 2- Deposits placed with credit institutions having the status of banks; 3- As an ancillary component, liquidity.

SICAV ARIA may only own real estate necessary for their operation in accordance with current legislation and cannot create reserves or provisions.

Article 20
An OPCVM ARIA may:

• invest up to 35% of its assets in securities of a single issuer;
• borrow cash up to 10% of its assets;
• hold up to 35% of the same category of financial instruments from a single issuer;
• conclude contracts constituting financial derivative instruments;
• grant guarantees on its assets necessary for concluding contracts related to its activity, including in the form of sale with repurchase agreements.

A decree sets the cases in which the above rates may be increased, as well as the categories of financial instruments from a single issuer and the limits and modalities under which OPCVM ARIA may conclude derivative contracts and grant guarantees on their assets.

Article 21
Creditors whose claims arise from the custody or management of assets of a SICAV ARIA or FCP ARIA have recourse only to these assets.

The personal creditors of the manager and depositary cannot pursue payment of their claims against the assets of a SICAV ARIA or FCP ARIA.

Article 22
The statutes of a SICAV ARIA or the internal regulations of an FCP ARIA specify the accounting period duration, which must be twelve months. However, the first period may extend over a different duration not exceeding eighteen months.

Article 23
An OPCVM ARIA may maintain its accounting in the convertible currency of its subscription.

Article 24
For distribution OPCVM ARIA, the distribution of distributable amounts is carried out within a maximum period of five months following the closing of the accounting period.

Statutes and internal regulations set payment deadlines for subscription and redemption operations, conditions for distributing distributable amounts, and asset valuation conditions.

Article 25
OPCVM ARIA must communicate to the Central Bank of Tunisia the information necessary for the preparation of monetary statistics.

Article 26
Without prejudice to the information obligations in this Code, a regulation of the Financial Market Council sets the procedures by which OPCVM ARIA must inform their subscribers, as well as the conditions for their use of advertising and solicitation.

Article 27
The board of directors or management board of the SICAV ARIA, or the manager of the FCP ARIA, designates the auditor for a period of three accounting periods.

The auditor is required to submit to the Financial Market Council within six months following the closing of each accounting period, a report concerning the audit conducted.

The auditor is further required to send a copy of the report intended, as applicable, for the general assembly of the SICAV ARIA or to the manager.

Independently of legal obligations, the auditor is required to notify the Financial Market Council without delay of any fact or decision concerning an OPCVM ARIA of which it becomes aware in the course of its mission, capable of:
a) constituting a violation of applicable legislative or regulatory provisions likely to have significant effects on the financial situation, results, or assets of the institution; b) affecting its operational continuity; c) leading to qualifications or refusal of account certification.

The auditor's liability cannot be engaged for the disclosure of information or facts, in application of this Article.

Article 28
The Financial Market Council may, after hearing the interested party, issue a reasoned decision prohibiting any auditor failing to meet its obligations from exercising functions with OPCVM ARIA, either provisionally for a duration not exceeding three years, or definitively. The auditor is informed of the decision by any means leaving a written record.

Article 29
Shares or units of OPCVM ARIA may be admitted to trading on a regulated market subject to a regulatory authority that is a member of IOSCO.

A regulation of the Financial Market Council sets the categories of SICAV ARIA and FCP ARIA admitted to this market, as well as admission conditions.

Sub-section 2 - Provisions relating to variable capital investment companies with reduced investment rules

Article 30
SICAV ARIA are public limited companies.

The share capital of a SICAV ARIA cannot, upon establishment, be less than the convertible currency equivalent of 15 million dinars.

The capital is at all times equal to the net asset value of the company, minus distributable amounts.

The minimum capital below which share redemption authorized by Article 15 cannot proceed cannot be less than the convertible currency equivalent of 7.5 million dinars. The board of directors or management board must proceed with dissolution if its capital remains, for ninety days, below the convertible currency equivalent of 15 million dinars.

The statutes of SICAV ARIA must expressly specify that the capital is variable.