Instruction No. 63/2020 on the Issuance of Public Securities on the UMOA Regional Financial Market

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WEST AFRICAN MONETARY UNION crepmf REGIONAL COUNCIL FOR PUBLIC SAVINGS AND FINANCIAL MARKETS

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INSTRUCTION NO. 063 / CREPMF / 2020

ON THE ISSUANCE OF PUBLIC SECURITIES ON THE UMOA REGIONAL FINANCIAL MARKET

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The Regional Council for Public Savings and Financial Markets,

Having regard to the Convention of 3 July 1996 establishing the Regional Council for Public Savings and Financial Markets (hereinafter "Regional Council" or "CREPMF") and its Annex on the Composition, Organization, Operation and Functions of the Regional Council for Public Savings and Financial Markets, particularly Article 19;

Having regard to General Regulation No. 001/97 of 28 November 1997 on the Organization, Operation and Supervision of the UMOA Regional Financial Market, particularly Articles 136 and 137;

Having regard to Decision No. CM/DAC/04/04/2017 of 14 April 2017 by the UMOA Council of Ministers appointing the President of the Regional Council;

Having regard to Instruction No. 36/2009 of 23 November 2009 on public savings calls within the UMOA;

Having regard to Decision No. CM/13/12/2011 of 16 December 2011 setting the fees of the CREPMF;

Having regard to the recommendations of the West AFRITAC Mission on strengthening the syndicated issuance procedure for public securities;

Having regard to the deliberations of the Regional Council in its 36th extraordinary session on 29 November 2019;

ORDERS

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Instruction No. 063 CREPMF / 2020

TITLE 1 - PRELIMINARY PROVISIONS

Article 1: Definitions

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

• Public Savings Call: The issuance procedure for securities defined in Article 19 of the Annex to the Convention on the composition, organization, operation and functions of the CREPMF.
• Arranger: Any entity remunerated for its advisory or placement role that holds a mandate from a securities issuer to structure and arrange the relevant issuance operation.
• Exceptional Circumstances: The situation created by unpredictable and irresistible events of natural or non-natural origin, independent of the will of the author or administrative procedures, which may affect or extend the time limit for completing public securities issuance operations as provided in Article 4 of this Instruction.
• Closing Date: The date marking the end of the subscription period.
• Subscription Date: The date following the obtaining of the operation's registration.
• Interest Start Date (Date de jouissance): The date from which interest begins to accrue. It may not coincide with the fund disbursement date.
• Registration: The mandatory administrative formality of a Member State with the CREPMF, aimed at assigning a number to a bond issuance initiated by that State on the Regional Financial Market.
• International Securities Identification Numbers (ISIN): The identification code for a security in the registry of the Association of National Numbering Agencies (ANNA).
• Registration Number: The tracking number assigned by the Regional Council under which a public securities issuance operation is registered.
• Information Note: The information document provided for in Articles 136 and 137 of the General Regulation on the Organization, Operation and Supervision of the Regional Financial Market dated 28 November 1997.
• Operation Note: The document for executing a financial operation that specifies the characteristics of the issuance, placement and/or stock exchange listing.

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Instruction No. 063 CREPMF / 2020

• Securities Settlement and Delivery: Cash settlement is irrevocable after the submission of the operation report and confirmation by the Management and Intermediation Company (SGI), as bookrunner of the retained subscriptions to syndicate members. It is manifested by the transfer, by the SGI (Bookrunner or Registrar) of the sum of retained subscriptions into the account indicated by the Public Treasury of the issuing State. The registration of equivalent securities to the accounts of SGI members of the placement syndicate occurs after confirmation by the Public Treasury of the issuing State of the receipt of funds.
• Subscription: The manifestation of an investor's intention to acquire a defined number of securities that are the subject of an offer or placement.
• Over-subscription: The portion of subscription exceeding the proposed offer.
• Syndication: The procedure by which an issuer places securities on the market through a placement syndicate at a consensus price or rate.
• Public Security: The bond issued solely by a Member State or a group of Member States of the Union on the Regional Financial Market as provided for in Section 3 on public securities of Title II of the General Regulation.

Article 2: Object and Scope

This Instruction governs the registration, issuance, placement and quotation of public securities issued via syndication by Member States on the Regional Financial Market.

Article 3: Steps in the registration and execution process for syndicated public securities issuances

The registration and execution process for public securities issuances on the Regional Financial Market proceeds according to the following six (6) steps:

1. The referral to the CREPMF by the concerned Member State or the Arranger SGI for the submission of a registration application file;
2. The request for an ISIN code assignment by the Central Depository/Settlement Bank (DC/BR);
3. The transmission by the Regional Council to the Arranger and Public Treasury of the decision registering the operation;
4. The transmission to investors of the communication materials for the registered operation by the Regional Council;
5. Subscription, placement of securities, allocation of offers, closing of subscriptions and their settlement;
6. The request for listing of the bond on the Regional Securities Exchange (BRVM).

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Instruction No. 063 CREPMF / 2020

Article 4: Maximum duration for the execution of issuances

The duration for executing syndicated public securities issuances may not exceed twenty-three (23) business days as described in the Annex 1 diagram, except in cases of exceptional circumstances subject to the Regional Council's discretion.

This duration begins to run from the day following the notification of the operation's registration until the listing of the issued bonds.

Exceptional circumstances must be duly justified by the Bookrunner of the placement syndicate. The latter must request an extension of the operation from the CREPMF, no later than two (2) business days before its closing.

If the operation's extension is granted, the total duration of the operation's execution may not exceed a maximum period of twenty-eight (28) business days.

The number of business days is determined based on the official calendar of the issuer's country.

TITLE 2 - CONDITIONS AND PROCEDURES FOR THE ISSUANCE OF PUBLIC SECURITIES

Article 5: Prerequisites

The issuance of public securities via syndication begins with the referral to the CREPMF.

To this end, every Member State is required to submit a registration application file for an operation or issuance program comprising the documents and information provided for in Article 7 below.

The State or group of States designates a Management and Intermediation Company (SGI) as Bookrunner for the placement syndicate of the securities.

The authorized national Public Treasury services communicate their country's issuance program to the CREPMF at the beginning of each year.

Article 6: Principle of single issuance or issuance program

The Information Note may cover a single issuance or an issuance program.

The issuance program is necessarily annual. The corresponding file is, where applicable, communicated to the CREPMF at the beginning of each year.

The issuance program documentation consists of an Information Note containing the elements provided for in Annex 2 of this Instruction and an Operation Note recalling the main characteristics of the projected operation as provided for in Annex 3.

During the duration of the issuance program, the Information Note is modified as soon as new macroeconomic data, a new rating report or any significant political event concerning the issuer becomes available.

Regarding the Operation Note, it is produced by the issuer upon each issuance provided for in its issuance program.

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Instruction No. 063 CREPMF / 2020

Article 7: Composition of the registration application file

The registration application file must include the following documents and information:

• the Information Note of the Issuing State;
• the Operation Note, where applicable;
• the decision of the competent authority of the State authorizing the operation and/or issuance program;
• the current year's finance law covering the projected issuances or the current year's budget framework;
• the mandate(s) granted to the different categories of participants in the operation;
• the communication materials for the operation as provided for in Article 114 of the General Regulation;
• any other relevant document, where applicable.

Article 8: Content and renewal of the Information Note

The Issuing State's Information Note covering multiple issuances does not include specific information related to each issuance.

These specific details must therefore appear in an Operation Note produced by the issuer upon each issuance covered by the Information Note as provided for in Article 9.

The Operation Note must contain at least the information provided for in Annex 2.

The Information Note, covering an issuance program, must be renewed at the beginning of each calendar year and submitted to the CREPMF for registration by the Issuing State.

Article 9: Content of the Operation Note

The Operation Note must contain at least the information provided for in Annex 3.

Furthermore, the issuer must provide concurrently an update of the Information Note data as provided for in Article 6 of this Instruction.

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Instruction No. 063 CREPMF / 2020

Article 10: Content of the warning to be inserted in the Information Note and mandatory mentions on communication materials

The Information Note and/or Operation Note must state the following warning:

« The registration by the Regional Council implies neither approval of the operation's suitability, nor the authentication of the economic and financial elements presented, nor a guarantee or certification of the disseminated information. The [Operation] Information Note subject to registration is prepared solely under the responsibility of the issuer, and the registration number is assigned only after verification that this [Operation] Information Note is complete and comprehensible, and that the information it contains is relevant and coherent in the context of the operation proposed to subscribers. The CREPMF registration number does not constitute a guarantee against the risk of non-repayment of security maturities. »

The cover page of the [Operation] Information Note must specify the following mention: « The original of this [Operation] Information Note for the operation was registered by the CREPMF under number..., on.... ».

Furthermore, other communication materials bear the following mention: « This operation was registered by the Regional Council for Public Savings and Financial Markets (CREPMF) under number ............. on ......... ».

Article 11: Procedure, timeframe and registration of the issuance or issuance program by the CREPMF

The CREPMF verifies the issuer's file compliance. It assigns a registration number within the timeframes provided below.

The preparation and validation of the Information Note content and the consistency of the data it contains fall under the responsibility of the Issuer and the Arranger.

• Use of an Information Note for a single issuance

The CREPMF referral file for registering a single public securities issuance includes the Information Note indicated in Annex 2, which also specifies the main characteristics of the operation as well as related procedures as provided for in Annex 3 regarding the Operation Note.

For this type of operation, the CREPMF verifies file compliance and assigns a registration number within a maximum timeframe of five (5) business days following the submission date of supporting documents.

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Instruction No. 063 CREPMF / 2020

• Use of an Information Note for an issuance program

Any State that has already registered its Information Note covering more than one public securities issuance during the calendar year is required to submit an Operation Note provided for in Annex 3 when it plans an issuance on the market during the period.

In this case, the CREPMF verifies file compliance and proceeds to register the issuance within twenty-four (24) hours following receipt of the request accompanied by all required supporting documents.

In both aforementioned cases, the Decision and registration number are notified to the issuer, whose mention must be inscribed on the Information Note and/or Operation Note as well as on the operation's communication materials.

TITLE 3 - CONDITIONS FOR THE EXECUTION OF THE OPERATION

Article 12: Referral to the DC/BR for ISIN code assignment

Upon submission of the registration application to the CREPMF, the issuer or its representative simultaneously refers to the Central Depository/Settlement Bank for ISIN code reservation.

An ISIN code is reserved for each issuance.

Article 13: Timeframe for ISIN code reservation by the DC/BR

The ISIN code is reserved by the Central Depository within a timeframe of forty-eight (48) hours, from receipt of the request, for a duration of thirty (30) days.

It is definitively assigned upon the registration of securities in the DC/BR's books.

Article 14: Placement of securities and bookrunner reporting obligation

Once the registration number is affixed to the definitive operation materials, the placement of securities may proceed.

During the securities placement period, the Bookrunner SGI is required to inform the General Secretariat of the Regional Council about the progress of the operation on a weekly basis or any other periodicity fixed in the operation's registration Decision, particularly regarding subscription levels.

TITLE 4 - SUBSCRIPTION TO PUBLIC SECURITIES ISSUANCES

Article 15: Place of subscription for public securities issuances

Legal or natural persons, regardless of their place of residence, subscribe exclusively within the UMOA to public securities issuances through the Bookrunner or members of the placement syndicate retained by the issuer for the operation.

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Instruction No. 063 CREPMF / 2020

Article 16: Start and duration of the subscription period

Subscription to the operation begins no later than ten (10) business days following the obtaining of the CREPMF's Registration Decision for the issuance.

After this deadline, a new registration number request must be made.

The subscription period is contained within fifteen (15) business days from registration to the operation's closing.

TITLE 5 - ALLOCATION OF SECURITIES AND CLOSING OF THE OPERATION

Article 17: Closing modalities for the operation

The operation may be closed in advance. In this case, the timeframes for other steps must be accelerated.

Article 18: Cases of over-subscription for issuances

In case of over-subscription, the issuer may decide to retain an amount higher than that announced upon opening the subscription period. However, it must inform investors via syndicate members before the operation's closing.

The number of additional securities to be issued may not exceed 10% of the initial amount.

The SGI regularly informs the issuer about subscription evolution and levels to facilitate raising the amount.

In the aforementioned case, the issuer informs the CREPMF of the new retained amount, provided it is covered in the Information or Operation Note. To this end, the Regional Council issues a supplementary Registration Decision.

Article 19: SGI commitment for the operation and allocation of securities

Subscriptions retained after securities allocation irrevocably bind the Bookrunner and each member of the placement syndicate.

Bonds are allocated based on modalities defined in the Information or Operation Note.

When the issuing State decides, in the presence of over-subscription, to stick to the initially sought number of bonds, allocation is made in accordance with provisions provided for in the Information Note.

Article 20: Issuance report

After securities allocation, the Bookrunner prepares a synthetic issuance report whose format is specified in Annex 4.

The synthetic report must be sent to the CREPMF no later than the end of the allocation day. It is also published via electronic press within the same timeframe.

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Instruction No. 063 CREPMF / 2020

A detailed report containing issuance statistics, the model for which is provided by a Circular, must be sent to the CREPMF with a copy to the DC/BR, no later than three (3) business days following the allocation date. The CREPMF acknowledges receipt.

TITLE 6 - SETTLEMENT OF RETAINED SUBSCRIPTIONS AND DELIVERY OF SECURITIES

Article 21: Settlement of retained subscriptions

Payment to the issuer of retained subscriptions, net of agreed commissions and other fees, occurs no later than five (5) business days following the date on which subscribers are informed that their subscriptions have been retained.

If the settlement date is a public holiday in one of the UMOA Member States, it is deferred to the next business day for that country.

Article 22: Liability of syndicate members in case of non-settlement of retained subscriptions

Retained subscriptions after securities allocation irrevocably bind syndicate members for their respective portion of securities. In case of a subscriber's default, the syndicate member that received its subscription is required to substitute said subscriber.

Article 23: Interest start date (Date de jouissance)

The security's interest start date is the settlement date to the issuer of funds mobilized by the placement syndicate.

It corresponds to the date from which bond interest is calculated.

Article 24: Delivery of securities

The DC/BR receives from the Bookrunner, Registrar or issuer the final issuance report for securities delivery.

The DC/BR delivers, on the first business day, the securities after receiving from the Registrar SGI the category-by-category distribution of accounts opened in its books.

Article 25: Sanctions provided for in case of breach

Any placement syndicate member that has not transmitted to the issuer the total amount of funds collected following retained subscriptions by the settlement date is subject to a penalty of 10% of commissions related to the unreversed portion, payable to the issuer.

The CREPMF reserves the right to sanction a Bookrunner or syndicate member involved in inappropriate behavior or non-compliance with this Instruction's provisions.

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Instruction No. 063 CREPMF / 2020

TITLE 7 - ADMISSION OF PUBLIC SECURITIES TO THE BRVM QUOTATION AND RELATED OBLIGATIONS

Article 26: Quotation timeframe for securities upon delivery completion

Securities quotation on the secondary market begins on the first business day following the registration of securities with the DC/BR.

Article 27: Publication of important information

The State whose securities are quoted on the Regional Securities Exchange (BRVM) is required to publish in the Official Quotation Bulletin (BOC) and in a newspaper authorized to receive legal announcements, in press release form, any important information and/or likely to impact securities quotation.

TITLE 8 - TRANSITIONAL AND FINAL PROVISIONS

Article 28: Final provisions

This Instruction, which will be published wherever necessary, repeals contrary provisions of Instruction No. 36/2009 of 23 November 2009.

It takes effect from the date of its signature.

Done in Abidjan, on 25 MAR. 2020

For the Regional Council The President

(Signature) Mamadou NDIAYE

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Instruction No. 063 CREPMF / 2020

Annex 1: Diagram for the execution of a syndicated public securities issuance

Activities to be carried out	Business days
- Information Note for an issuance program submitted to the CREPMF	-
- The CREPMF verifies if the Information Note complies with registration requirements (5 days)	-
Documentation
- The Issuer / Bookrunner SGI submits the Operation Note	J-21
- The CREPMF verifies compliance of the Operation Note and assigns a registration number. The interest rate and amount are fixed, as well as other characteristics.	J-20
- The Issuer / Bookrunner SGI requests an ISIN code from the DC/BR	J-19
- The Issuer / Bookrunner SGI publicly announces the intention to issue.
Subscription
- Subscription begins no later than ten (10) business days after the operation's registration by the CREPMF (the timeframe allowing a marketing period, if necessary).	J-10
- Subscription begins with the public announcement of the interest rate and issuance amount. This information must be communicated to the CREPMF before opening.
- The subscription period may not exceed fifteen (15) business days.
Closing
- Just before closing, each placement syndicate member ensures its clients' subscriptions. After offer allocation, SGIs are responsible for settling their clients' retained subscriptions.
- Subscription closing is formalized by sending, on the same day, to the CREPMF and DCBR a simplified report with final loan modalities (term sheet). The CREPMF must confirm receipt of the report.	J-5
- Information regarding placement amounts by SGIs is transmitted the following day to the DCBR and CREPMF.	J-4
Settlement
- Funds are received in the Issuing State's Public Treasury account, no later than five (5) business days after allocation.	J
- The DC/BR delivers securities to investors via the SGI after receiving confirmation from the Issuer of fund receipt.	J+1
- The CREPMF receives the complete report with placement statistics.
Quotation:
- Start of securities quotation on the BRVM	J+2

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Instruction No. 063 CREPMF / 2020

Annex 2: Content of the Information Note

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