Code of Collective Investment Schemes

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LAW NO. 2001-83 OF JULY 24, 2001
PROMULGATING THE CODE OF COLLECTIVE INVESTMENT SCHEMES¹ In the name of the people, The Chamber of Deputies having adopted, The President of the Republic promulgates the law as follows:

Article 1. –
The texts annexed to this law, relating to collective investment schemes under the title "Code of Collective Investment Schemes", are hereby promulgated.

Article 2. –
The Code of Collective Investment Schemes repeals and replaces Title II of Law No. 88-92 of August 2, 1988, on investment companies, as amended and supplemented by Law No. 92-113 of November 23, 1992, and by Law No. 95-87 of October 30, 1995, and Title I of Law No. 92-107 of November 16, 1992, establishing new financial products for savings mobilization, as amended and supplemented by Law No. 94-118 of November 14, 1994.

Article 3. –
Articles 1 and 2 of the aforementioned Law No. 88-92 are repealed and replaced by the following provisions:
Article 1 (new): Investment companies are joint-stock companies whose mission contributes to promoting investments and developing the financial market.
Article 2 (new): Investment companies may be established under either of the following two categories:

• variable capital investment companies.
• risk/venture capital investment companies.
  They are governed by the prevailing legislation and regulations unless otherwise provided by this law.

Article 4. –
Variable capital investment companies approved prior to the promulgation of this law are granted a six-month period to comply with the provisions of the Code of Collective Investment Schemes.
The present law shall be published in the Official Journal of the Tunisian Republic and executed as a law of the State.
Tunis, July 24, 2001.

¹ Preparatory works
Discussion and adoption by the Chamber of Deputies in its session on July 10, 2001.

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CODE OF COLLECTIVE INVESTMENT SCHEMES²
Article 1
The following are considered collective investment schemes:

• securities investment funds, which include variable capital investment companies and securities investment funds (FCPs);
• loan/credit funds.

TITLE ONE
COLLECTIVE INVESTMENT SCHEMES IN SECURITIES
CHAPTER I
Variable Capital Investment Companies

Article 2
Variable capital investment companies are joint-stock companies whose sole object is the management of a portfolio of securities.
The resources of variable capital investment companies consist of their own funds to the exclusion of any other source. They are governed by the prevailing legislation on commercial companies unless otherwise provided by this Code.

Article 3
The capital of variable capital investment companies may not, upon incorporation, be less than one million dinars.
The capital amount shall at all times equal the net asset value, less distributable sums as defined in Article 27 of this Code.
The minimum capital amount below which share repurchases authorized by Article 5 of this Code may not be carried out shall not be less than five hundred thousand dinars. The board of directors or management board must proceed with dissolution if its capital remains, for ninety days, below one million dinars.

Article 4
The shares of variable capital investment companies are issued without pre-emptive subscription rights.
These companies are prohibited from creating founder's shares or issuing preferred shares.
The shares become negotiable only after the definitive incorporation of the variable capital investment company.

Article 5
The bylaws of variable capital investment companies must expressly specify that the capital is subject to increase resulting from the issuance of new shares and to decrease consequent to the repurchase by the same company of shares requested by holders.
They must also state that any shareholder may, at any time, obtain the repurchase of their shares by the company, at a price determined in accordance with Article 25 of this Code, except for the case provided by its Article 3.

Article 6
The capital variation provided for in Article 5 of this Code may be effected without amendment to the bylaws and without the need to submit this variation to the general meeting of shareholders or to proceed with the publicity prescribed by the prevailing legislation on commercial companies.

Article 7
Variable capital investment companies may hold no other real estate than that necessary for their operations.
They may not establish reserves or provisions.
The ordinary general meeting meets and deliberates validly regardless of the fraction of capital represented. Likewise, the extraordinary general meeting meets upon second notice and deliberates validly regardless of the fraction of capital represented.
A natural person may simultaneously direct three variable capital investment companies in addition to what is permitted by the commercial companies code.

Article 8
Variable capital investment companies must prepare, within thirty days from the end of each quarter, an inventory of their assets under the supervision of the depositary provided for in Article 28 of this Code.
They are required to publish the composition of their assets in the official bulletin of the Financial Markets Council, within thirty days from the end of each quarter. The statutory auditor certifies its accuracy before publication.
Variable capital investment companies are required to prepare financial statements in accordance with the prevailing accounting regulations and publish them in the Official Journal of the Tunisian Republic at least thirty days before the meeting of the ordinary general meeting. They are required to republish them after the general meeting, in case the latter modifies them. The board of directors or management board of the variable capital investment company appoints the statutory auditor.

Article 9
In all documents issued by the company and intended for third parties, variable capital investment companies must append their designation with the mention "variable capital investment company", as well as the reference to the law promulgating this Code, the number of the Official Journal of the Tunisian Republic where it was published, and the approval by the Financial Markets Council provided for in Article 32 of this Code.

² As supplemented by Law No. 2005-105 of December 19, 2005 on the creation of venture capital investment funds and modified by Law No. 2008-78 of December 22, 2008 modifying the legislation on risk capital investment companies and securities investment funds, extending their scope of intervention, and by Decree-Law No. 2011-99 of October 21, 2011, modified and supplemented by Law No. 2019-4 of May 29, 2019 on improving the investment climate.

CHAPTER II
Securities Investment Funds (FCPs)

Article 10
A securities investment fund is a co-ownership of securities.
A securities investment fund does not have legal personality. The provisions of the code on real rights regarding undivided ownership, as well as the provisions governing partnerships in name, do not apply to it.

Article 11
In all cases where the legislation on commercial companies or securities requires the indication of the titleholder's identity, as well as for all operations conducted on behalf of the co-owners, the designation of a securities investment fund may validly substitute that of the co-owners.

Article 12
The minimum amount that a securities investment fund must raise upon its incorporation is set at one hundred thousand dinars.

Article 13
The rights of the co-owners are expressed in units; each unit corresponds to an equal fraction of the securities investment fund's assets. The fund's units are securities.
Ownership of the units results from registration on a list maintained by the fund manager referred to in Article 16 of this Code. This registration gives rise to the issuance of a registered certificate to the subscriber.

Article 14
A securities investment fund is established jointly by the manager and the depositary referred to in Article 28 of this Code, who draft the internal regulations.
The internal regulations set the duration of the securities investment fund and the rights and obligations of unit holders and the manager. Its mandatory statements are fixed by regulation of the Financial Markets Council.
Subscription to units of a securities investment fund constitutes acceptance of its internal regulations after having reviewed them.

Article 15
The number of units increases through the subscription of new units and decreases due to the repurchase by the securities investment fund of previously subscribed units. However, new units may not be issued once the original value of outstanding units reaches an amount set by decree³. Likewise, previously subscribed units may not be repurchased if the original value of outstanding units decreases to fifty thousand dinars. And, when the original value of all outstanding units remains, for ninety days, below one hundred thousand dinars, the manager must proceed with the fund's dissolution.

Article 16
The manager of a securities investment fund is either a bank or a stock exchange intermediary in the form of a joint-stock company, or the management company referred to in Article 31 of this Code. The manager ensures the fund's management on behalf of unit holders, in accordance with the provisions of this Code and as provided by its internal regulations. In this framework, it represents unit holders in any legal action, both as plaintiff and defendant, as well as for all acts concerning their rights and obligations, and it exercises, in particular, the rights attached to the securities comprised in the fund. The manager may not borrow on behalf of a securities investment fund.

Article 17
Unit holders, their heirs, beneficiaries, and creditors may not demand partition during the existence of a securities investment fund.
Any contrary stipulation is deemed unwritten.

Article 18
The manager and the depositary are individually or jointly liable, as applicable, towards third parties and unit holders for violations of the applicable legislative and regulatory provisions of a securities investment fund, violation of its internal regulations, or faults regarding its interest.

Article 19
Any final condemnation pronounced under the penal provisions of this Code against the directors of the manager or depositary of a securities investment fund automatically results in the cessation of their functions and incapacity to exercise said functions. The court seized of the liability action provided for in Article 18 of this Code may pronounce, upon request by a unit holder, the dismissal of the manager's or depositary's directors. Likewise, the depositary may request the court to dismiss the manager's directors; it must inform the statutory auditor. In these three cases, the court appoints an interim administrator until the designation of new directors or, if such designation appears impossible, until liquidation.

Article 20
At the close of each fiscal year, the manager prepares an inventory of the various asset elements of a securities investment fund. This inventory is submitted to the depositary for certification.
The manager prepares the financial statements of a securities investment fund in accordance with prevailing accounting regulations. It fixes, if applicable, the amount of distributable sums provided by Article 27 of this Code and their distribution date. It prepares a report on the fund's management during the past fiscal year. These documents are audited by a statutory auditor who certifies their fairness and regularity. The financial statements, the statutory auditor's report, as well as the manager's report, are made available to unit holders at the manager's registered office within a maximum period of three months from the fiscal year-end date. A copy of these documents is filed with the Financial Markets Council. A copy is also sent to any unit holder who requests it. The manager is required to publish the composition of a securities investment fund's assets in the official bulletin of the Financial Markets Council within a maximum period of three months from the fiscal year-end date. The board of directors or management board of the manager appoints the statutory auditor of a securities investment fund.

Article 21
The manager deposits, in advance, with the Financial Markets Council all documents of a securities investment fund intended for publication or dissemination.
The Financial Markets Council may, if applicable, order the correction of submitted documents in case they contain inaccuracies. It may also prohibit their publication or dissemination.
The Financial Markets Council may request the manager to communicate all documents necessary for it to fulfill its mission.

Article 22
The dissolution of a securities investment fund is triggered upon expiration of the period for which it was established or in the cases provided by Articles 15 and 33 of this Code.
The conditions for liquidation as well as the asset distribution procedures are determined by the internal regulations. The manager assumes the functions of liquidator; otherwise, the liquidator is designated by the court.

CHAPTER II bis
Risk/Venture Capital Investment Funds
(Inserted by Law No. 2005-105 of December 19, 2005)

Article 22 bis (new) (Decree-Law No. 2011-99 of October 21, 2011 Art. 3)
Risk/venture capital investment funds are securities investment funds whose object is, on behalf of unit holders and with a view to their buyback or sale, to strengthen the investment opportunities and equity of companies. Risk/venture capital investment funds are required, within a period not exceeding the end of the second year following the year in which the units were paid up, to invest at least 80% of their assets in companies established in Tunisia and not listed on the Tunis Stock Exchange, except those operating in the residential real estate sector. Newly issued shares on the alternative market of the Tunis Stock Exchange are also taken into account for calculating the employment rate provided by the first paragraph of this Article, up to a limit of 30% of said rate. When shares of a company in which a risk/venture capital investment fund holds a participation are admitted to the main market of the Tunis Stock Exchange, they continue to be taken into account for calculating the employment rate provided by the first paragraph of this Article for a duration not exceeding five years from the admission date.

Article 22 ter (new) (Law No. 2019-47 of May 29, 2019 Art. 16)
The fund-of-funds is considered a securities investment fund whose assets consist exclusively of subscriptions in units of risk/venture capital investment funds, subscriptions in seed fund units, or subscriptions in units of specialized investment funds. The fund-of-funds carries out its investments on behalf of sophisticated investors. The fund-of-funds may comprise one or several compartments, each corresponding to a distinct part of its assets. The internal regulations of the fund-of-funds must provide and fix the object of each of its compartments. Each compartment must have a simplified approval in accordance with Article 22 quinquies of the Code of Collective Investment Schemes. The fund must also maintain separate accounting for each compartment. The assets of the referred compartments are subscribed in national currency or convertible foreign currency. Assets subscribed through foreign currencies may be registered to non-resident Tunisian or foreign investors under the exchange law, or to resident investors. In this case, obtaining authorization from the Central Bank of Tunisia is mandatory. The decision period must not exceed 90 days from the date of filing a complete application as fixed by a Central Bank circular. The Central Bank's failure to respond after the deadline expires constitutes explicit authorization allowing approved banks to proceed with required procedures for the concerned investors. The fund-of-funds must maintain foreign currency accounting in accordance with the prevailing accounting system for compartments whose assets are denominated in foreign currency. The fund-of-funds may invest the referred compartment assets, denominated in foreign currency, into specialized investment funds. The fund-of-funds may invest outside Tunisian territory the equivalent of subscriptions made in foreign currencies. The provisions of Articles 22 quinquies, 22 octies, and 22 octodecies of the Code of Collective Investment Schemes apply to the fund-of-funds. The specific provisions governing the fund-of-funds are fixed by its internal regulations. The fund-of-funds must act on behalf of the securities investment funds mentioned in the first paragraph of this Article in accordance with the risk distribution principle of amounts subscribed during each subscription period. The internal regulations of the fund-of-funds must provide its intervention thresholds.

Article 22 quater (new) (Decree-Law No. 2011-99 of October 21, 2011 Art. 3)
The risk/venture capital investment funds provided by Article 22 bis of this Code intervene through the subscription or acquisition of ordinary shares or non-voting preferred shares, investment certificates, and by derogation from Article 22 bis, through the acquisition or subscription of partnership units. The participations of risk/venture capital investment funds must be subject to agreements between the management company and promoters, setting out the procedures and deadlines for implementing buyback or sale operations. These agreements must not stipulate off-project guarantees or remuneration whose conditions are not linked to project results. The risk/venture capital investment funds provided by this Article may also intervene through the subscription or acquisition of participatory securities, convertible bonds, and generally all other categories assimilated to equity in accordance with prevailing legislation and regulations. They may also grant advances in the form of associated current accounts. The limits and conditions of these interventions are fixed by decree. Risk/venture capital investment funds are required, upon the buyback or sale of securities subject to their interventions or in case of repayment of advances in the form of associated current accounts, to reinvest the proceeds from these operations under the same conditions and deadlines provided by Article 22 bis of this Code, unless these operations occur during the pre-liquidation period provided by Article 22 undecies of this Code. The proceeds from buyback or sale to be reinvested equal the buyback or sale price less the realized capital gain, taking into account any recorded capital loss.

Article 22 quinquies (Added by Decree-Law No. 2011-99 of October 21, 2011 Art. 4)
The subscription and acquisition of units in risk/venture capital investment funds benefiting from a simplified procedure are reserved for sophisticated investors, as defined by prevailing regulations, as well as directors, employees, or natural persons acting on behalf of the fund's management company and to the management company itself. The simplified procedure is fixed by a regulation of the Financial Markets Council. The establishment and liquidation of said funds are subject to a simplified approval by the Financial Markets Council. The depositary must ensure that the subscriber or acquirer is one of the aforementioned investors. It must also ensure that the subscriber or acquirer has effectively declared being informed that the fund is governed by the provisions of this Article.

Article 22 sexies (Added by Decree-Law No. 2011-99 of October 21, 2011 Art. 4)
Unit holders in funds may not request the repurchase of their units before the expiration of a period fixed in its internal regulations, which may not exceed ten years, and at the end of this period, unit holders may demand fund liquidation if repurchase requests have not been satisfied within a one-year period, from the date of filing said requests with the manager.

Article 22 septies (Added by Decree-Law No. 2011-99 of October 21, 2011 Art. 4)
The number of units increases through the subscription of new units and decreases due to the repurchase by the risk/venture capital investment fund of previously subscribed units.
However, previously subscribed units may not be repurchased if the original value of outstanding units decreases to fifty thousand dinars and when