Decision No. CM/10/09/2022 on Inactive Accounts and Unclaimed Assets in the Books of Securities Account Keepers on the UMOA Regional Financial Market

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WEST AFRICAN MONETARY UNION

COUNCIL OF MINISTERS

THE PRESIDENT

DECISION NO. CM/ 09 / 2022

ON INACTIVE ACCOUNTS AND UNCLAIMED ASSETS IN THE BOOKS OF SECURITIES ACCOUNT KEEPERS ON THE UMOA REGIONAL FINANCIAL MARKET

The Council of Ministers of the West African Monetary Union,

Having regard to the amended UMOA Treaty dated 20 January 2007, particularly Articles 6, 10 and 24;

Having regard to the Convention of 3 July 1996 establishing the Regional Council for Public Savings and Financial Markets (CREPMF) and its Annex;

Having regard to General Regulation No. 001/97 of 28 November 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 27 March 1998 and 5 September 2005;

Having regard to Directive No. 02/2015/CM/UEMOA of 2 July 2015 on the fight against money laundering and terrorist financing in UMOA member states;

Having regard to Decision No. 26 of 02/07/2015/CM/UEMOA of 2 July 2015 adopting the draft Uniform Law on the fight against money laundering and terrorist financing in UMOA member states;

Having regard to the deliberations of the UMOA Council of Ministers in its ordinary session on 30 September 2022;

DECIDES

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Decision No. CM/ /09/2022

TITLE I: GENERAL PROVISIONS

Article 1: Definitions
For the purposes of this Decision, the following terms shall apply:

• Regional financial market actor: Any legal or natural person granted the status of market structure or participant, by approval or authorization from the Regional Council for Public Savings and Financial Markets;
• 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;
• Assets: Financial and monetary assets registered in accounts with a Securities Account Keeper for the benefit of clients;
• Prescribed assets: Securities and cash holdings held in inactive accounts for thirty (30) years;
• Unclaimed assets: Assets registered in suspense accounts or pending on securities and cash reconciliations held by Securities Account Keepers, for which no owner 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 account holder, holds the power to dispose of inactive securities and cash on behalf of the latter;
• BCEAO: Central Bank of West African States;
• BOC: Official Stock Bulletin;
• Deposit and Trust Fund (CDC): Any public financial institution responsible for 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 or cash account linked to a securities account, opened with a Securities Account Keeper approved by the CREPMF;
• Securities Account: Any account opened in the books of a Securities Account Keeper or depository (Custodian Bank or Management and Intermediation Company) approved by the CREPMF on the UMOA regional financial market, upon which securities, negotiable debt instruments, units or shares of Collective Investment Undertakings (CIUs), and any financial instrument traded on a regulated market authorized by the Regional Council are deposited;
• Inactive account: An account (securities and cash) is considered inactive when, for at least ten (10) years, no operations have been recorded on said account, apart from the crediting of income generated by portfolio securities and repayments of debt instruments, and during which no contact has been established between the holder (or their agent or an entitled person) and the Securities Account Keeper;
• CREPMF: Regional Council for Public Savings and Financial Markets, hereinafter the Regional Council;
• DC/BR: Central Depository / Settlement Bank;
• Account inactivity: Account inactivity arises from the fact that the holder or entitled person has not carried out any operation (purchase, sale, subscription, pledge and transfer of securities, deposit, withdrawal) on the account and has not made any manifestation, in whatever form, to the Securities Account Keeper for at least 10 years. In case of death, the absence of manifestation is passed on to the heirs, entitled persons or notary. For the purposes of this Decision, 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 any other account held by them with the same Securities Account Keeper, with no manifestation of any kind from their part, 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: A categorization of the client according to their personal or patrimonial financial situation, competence and experience in investing in financial products, risk objectives, profitability and investment horizon;
• Securities Account Keeper: Any participant in the regional financial market authorized to register financial assets on behalf of third parties;
• Holder: Any natural or legal person registered or identified as the holder of one or more accounts by the Securities 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: Object
The present Decision aims to establish the rules applicable to inactive accounts and unclaimed assets held in the books of approved Securities Account Keepers on the UMOA regional financial market.

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Decision No. CM/ /09/2022

Article 3: Scope of Application
This Decision applies to all actors in the regional financial market, particularly Securities Account Keepers and similar actors approved by the CREPMF, as well as the Deposit and Trust Funds of member states of the Union.

TITLE II: ON THE PREVENTION OF ACCOUNT INACTIVITY

Article 4: Identification and monitoring of inactive accounts Without prejudice to other legal and regulatory obligations incumbent upon them, Securities Account Keepers must:

• before establishing a contractual relationship, carry out the required due diligence regarding client knowledge, particularly their profile;
• maintain regular contact with holders and monitor their business relationships vigilantly to prevent accounts from becoming inactive.
  To this end, these Securities Account Keepers must establish an appropriate internal organization to identify accounts likely to become inactive and ensure their monitoring.

Article 5: Information and search for account holders Securities Account Keepers must be equipped with precise rules for informing and searching for account holders or, where applicable, their entitled persons.
When an account has recorded no movement initiated by its holder or agent for eight (08) years, the Securities Account Keeper shall inform, notwithstanding any contrary contractual provision, the holder or, where applicable, the known entitled person, indicating the consequences attached to account inactivity. They send this information to the holder or, where applicable, known entitled persons by any means within three months following the expiration of the eight (08) year period provided for in paragraph 2 above. To this end, they use the data available to them. This information is confirmed by email or registered letter with acknowledgment of receipt sent, within the prescribed period, to the last known address of the holders or, where applicable, known entitled persons by the Securities Account Keepers. It may also be confirmed by email. If Securities Account Keepers become aware of the holder's death or dissolution after transmitting the aforementioned correspondence, they proceed to inform known entitled persons again within one (01) month from the date of knowledge of the death or dissolution, or when entitled persons are not known, from the date of their identification.

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Decision No. CM/ /09/2022

The acknowledgment of receipt signed by the holder or an entitled person is considered a manifestation of their part for the purposes of this Decision.

Article 6: Supplementary searches for account holders or entitled persons In the absence of an operation initiated by the holder or a manifestation from the holder or entitled person within three (03) months following the sending of the email or registered letter with acknowledgment of receipt referred to in Article 5, or if the Securities Account Keeper finds that the available data do not allow for the information provided in Article 7, as applicable, they carry out supplementary searches to contact the holder or identify and, if identified, contact any entitled persons. When the Securities Account Keeper becomes aware of the holder's death or dissolution, they carry out the supplementary searches referred to in paragraph 1 above to identify and, if identified, contact any entitled persons or continue the searches. For supplementary searches, Securities Account Keepers may use third-party services subject by law to a professional secrecy obligation or bound by a written confidentiality agreement.

Article 7: Time limit for searches
Securities Account Keepers have a period of two (02) years to re-establish contact with the client, by all appropriate communication means from the eighth year of account inactivity.

Article 8: Retention of supporting documents for searches Securities Account Keepers retain the supporting documents related to the searches carried out until the deposit of the relevant assets with the Deposit and Trust Fund.

Article 9: Reactivation of inactive accounts Securities Account Keepers must put in place appropriate procedures to reactivate inactive accounts from the first day of inactivity until the tenth year.
When a holder initiates an operation again on an inactive account, the Securities Account Keeper applies particular vigilance and ensures the systematic updating of information related to the business relationship.
For the purposes of this Decision, operations not carried out at the initiative of the holder, their agent, or entitled person are not taken into consideration.

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Decision No. CM/ /09/2022

In case of multiple holders for the same account, operations carried out by a single holder or contact established with one of them is considered sufficient to maintain the active status of the account.

Article 10: Costs of searching for account holders or entitled persons The costs incurred to recontact the client or find potential heirs are borne by Securities Account Keepers. In any case, they are not authorized to charge them to the debit of the concerned accounts.

TITLE III: ON THE TREATMENT OF INACTIVE ACCOUNTS

Article 11: Liability of Securities Account Keepers The obligation to carry out supplementary searches ceases when Securities Account Keepers find, after two (02) years from the eighth year of inactivity, that despite the steps taken, they are clearly unable to contact the holders or identify and, if identified, contact any entitled persons. In this case, Securities Account Keepers have a maximum period of two (02) months to transfer the assets from said accounts to the Deposit and Trust Fund of the State where the account is opened. They are guarantors of the full transfer to the Deposit and Trust Fund of the State of their headquarters or representation, of the assets held in inactive accounts upon expiration of the search period. Unless there is an error or fault by the Securities Account Keeper, the transfer to the Deposit and Trust Fund of assets from an inactive account releases the Securities Account Keeper from all obligations towards the holder, authorities and any third party. The transfer of assets from the inactive account to the Deposit and Trust Fund results in the automatic closure without fees of said account with the Securities Account Keeper. Securities Account Keepers are required to retain until the return or prescription of assets deposited with the Deposit and Trust Fund, a copy of the account opening documents and supporting documents for operations on the client's account.

Article 12: Procedures for depositing assets Under the conditions set out in Article 11, Securities Account Keepers transfer securities and cash assets as held in their books to the Deposit and Trust Fund, within a maximum period of two (02) months from the day the account became inactive. To this end, the concerned institutions transmit to the Deposit and Trust Funds all available information and documentation related to transferred inactive accounts.

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Decision No. CM/ /09/2022

The deposit covers the entirety of assets in inactive accounts. Portfolio securities (shares, bonds, negotiable debt instruments, units or shares of Collective Investment Undertakings, etc.) of the concerned clients are transferred as-is to the Deposit and Trust Fund of the State where the account is opened. Cash assets may be reduced exclusively by transfer fees charged by the Central Depository/Settlement Bank (DC/BR). When Deposit and Trust Funds receive securities and cash assets for deposit, they issue within a period not exceeding one (01) month, an acknowledgment or receipt confirming the nature and, where applicable, the amount of assets deposited by the Securities Account Keeper. The deposit is effective only from the issuance of the aforementioned acknowledgment by the Deposit and Trust Fund of a member state.

Article 13: Billing of fees on transfer operations Securities Account Keepers are not authorized to charge fees related to the deposit formalities for inactive assets, particularly transfer fees for securities. However, transfer fees charged by the DC/BR may be charged to the debit of the concerned accounts.

Article 14: Obligations of Deposit and Trust Funds Upon receipt of inactive assets, Deposit and Trust Funds are subject to the following obligations:

• to conserve securities and cash assets transferred by Securities Account Keepers;
• to continue searching for holders by all means. Deposit and Trust Funds conduct at least once every five (05) years, search actions for holders or entitled persons of inactive assets under their management;
• to ensure sound and transparent management of deposited assets;
• to put in place a register of inactive accounts and ensure access for persons with legitimate interest;
• to publish, each year, the list of holders of deposited assets in the official journals of member states of the Union and on public information websites, notably the Official Stock Bulletin of the UMOA Regional Securities Exchange;
• to respond diligently to any claim requests;
• to return to identified holders or their entitled persons, the assets due to them;

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Decision No. CM/ /09/2022

• to liquidate prescribed assets and proceed with their return to the Investors Protection Fund and Financial Education Fund, in the proportions set out in Article 18.

Article 15: Management of inactive assets
Deposit and Trust Funds ensure transparent management of cash assets and the income from deposited inactive securities held in their books. These assets are individualized in securities and cash accounts, registered in their books. They collect all income related to held securities as well as repayments of debt instruments. They have the liquidity from said accounts for their placement and investment activities according to their internal management rules. In any case, a minimum remuneration at the rate of remuneration for regulated savings products, reduced by two hundred (200) basis points, must be ensured by Deposit and Trust Funds on cash assets of inactive accounts in their books. However, securities cannot be subject to any sale, exchange, pledge operations, nor presented as collateral for commitments of said Funds. Deposit and Trust Funds cannot be held responsible for the effects of financial market price fluctuations on the value of assets under deposit.

Article 16: Derogation for exercising the Securities Account Keeping activity To better ensure their missions, Deposit and Trust Funds are authorized to exercise, on a derogatory basis, the keeping and conservation of deposited securities and cash accounts in their books under this Decision. The conditions for an adequate organization to be put in place to ensure this activity will be fixed through a specification document issued by Regional Council Instruction. Each CDC respecting the specification document benefits, to this end, with a custodian account at the Central Depository/Settlement Bank, to receive the transfer of any value registered in the books of the latter within the framework of depositing assets from inactive accounts. Any operation other than the return of assets to holders or entitled persons or the liquidation of assets for the handover of assets due to the Investors Protection Fund and Financial Education Fund of the UMOA regional financial market is prohibited on the aforementioned custodian account. In the absence of an adequate organization in accordance with the specification document, assets to be received by a Fund will be transferred to one or more approved Securities Account Keepers designated by it for conservation. In this case, it becomes the agent of the concerned accounts but does not have powers

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Decision No. CM/ /09/2022

to transfer securities registered therein, except at the initiative of the Holder or their entitled person or the CREPMF upon expiration of the prescription period.

Article 17: Return of deposited assets
Any person proving a right to deposited assets under this Decision may submit to the Deposit and Trust Fund of the country where the account was managed, by electronic or postal means or by depositing a simple letter of request for return with discharge at the CDC Secretariat, a request for return, accompanied by a file whose content is fixed by a CREPMF Instruction. The Fund is authorized to require from the claimant any additional information and supporting documents necessary to establish their rights to the assets for which return is requested. Furthermore, the Fund is authorized to request information and documents from Securities Account Keepers for the examination of return requests and return procedures. Securities Account Keepers collaborate with the Fund to facilitate the identification of the claimant and the analysis of their rights. The Fund takes a reasoned decision and notifies it to the claimant within two (02) months of receiving the request or, if incomplete, within two (02) months of receiving the necessary information and documents for the decision. The claimant may appeal to the Regional Council in the absence of a decision within two (02) months of introducing a return request containing all necessary elements for the Fund's decision. Furthermore, the appeal is open to the claimant in case of a refusal decision by the Fund. The appeal period is two (02) months, starting either from the expiration of the response period or from the notification to the claimant of the refusal decision. The Fund carries out any return by transfer or credit to an account opened, in the name of the claimant, with a Securities Account Keeper or credit institution approved in the Union.

Article 18: Prescription
Securities and cash assets held in inactive accounts prescribe after thirty (30) years of inactivity, i.e., ten (10) years in the books of a Securities 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, 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 zone residents, and of the State where the Securities Account Keeper is headquartered for non-UMOA residents; and 30% to the Investors Protection Fund and Financial Education Fund of the UMOA regional financial market. Deposit and Trust Funds are required to liquidate the concerned assets in their books and proceed with distribution as indicated above within a maximum period of three (03) months. Furthermore, unclaimed assets having accumulated ten (10) years in the books of a Securities Account Keeper fall into public ownership. They must be remitted to the extent of 70% to the Deposit and Trust Fund of the State where the account is opened, and 30% to the Investors Protection Fund and Financial Education Fund of the UMOA regional financial market. Securities Account Keepers have a maximum period of three (03) months to make these remittances after liquidation of securities. Conversely, in countries that have not yet established a Deposit and Trust Fund, prescribed assets as well as unclaimed assets having accumulated ten (10) years in the books of a Securities Account Keeper are remitted to the Public Treasury and the Investors Protection Fund and Financial Education Fund of the UMOA regional financial market, in the same proportions and following the same criteria as provided for in paragraph 2 above.

TITLE IV: ON INFORMATION TO THE CREPMF

Article 19: Information obligations of Deposit and Trust Funds Deposit and Trust Funds publish annually in the BOC, a report on market assets under deposit pursuant to this Decision. This report and the list of holders of deposited assets are sent beforehand to the CREPMF no later than 31 March of the following year. The report...