Specifications for Treasury Securities Specialists

SPECIFICATIONS FOR TREASURY SECURITIES SPECIALISTS

The present Specifications are adopted pursuant to Article 6 of Regulation No. 03/08/CEMAC/UMAC/CM regarding Free-Subscription Public Securities issued by the member states of CEMAC. The Specifications define the main tasks assigned to Treasury Securities Specialists (SVT), namely:

• participate in the auctions of security issuances;
• contribute to the smooth conduct and success of public security auctions organized by the BEAC;
• promote liquidity in the secondary market for Treasury securities;
• provide the Treasury with high-quality advice and relevant information regarding debt issuance policy;
• promote Treasury securities. In this regard, the purpose of the Specifications is to clarify the framework for SVT activities. To this end, it defines in particular:
• the conditions and procedures for their selection;
• the rights and obligations of SVTs;
• the relationship between SVTs and the Treasury;
• the oversight of SVTs. Under penalty of being excluded from participating in Treasury security auctions, SVTs formalize their commitment to comply with these Specifications by submitting to the Minister in charge of Finance a signed copy of this document, bearing the signature of a duly authorized representative empowered to bind the credit institution vis-à-vis third parties. A copy of the signed document is also sent to the National Directorate of the BEAC. Failure to sign the Specifications by the SVT within three months of the approval notification will result in the Minister in charge of Finance revoking the SVT status from the concerned credit institution.

I – Selection of Treasury Securities Specialists 1 – Conditions for Acquiring SVT Status a) Nature and Location of the SVT Pursuant to Regulation No. 03/08/CEMAC/UMAC/CM regarding Free-Subscription Public Securities issued by CEMAC member states, only credit institutions (banks and financial establishments), as defined in Article 4 of the Annex to the Convention of January 17, 1992 on the harmonization of banking regulation in Central African States, are eligible to acquire SVT status. This applies to all credit institutions authorized by the Monetary Authority, established within the CEMAC, and possessing a sound financial standing corresponding to at least a rating of 2 in the Central African Banking Commission's (COBAC) rating system (SYSCO). b) Holding an Account at the BEAC The credit institution must hold a current account at the BEAC. c) Material and Human Resources SVTs must have adequate and sufficient material, human, and financial resources to participate in the market for Treasury securities issued via auction. They must maintain a structured and efficient organization covering administrative, accounting, technical, and risk control services. The SVTs must establish adequate structures corresponding to their front office (trading), middle office (risk control), and back office (post-market operations) activities. d) Organization of SVT Activities SVTs must organize their activities to cover all functionalities necessary for trading and promoting State debt, including front, middle, and back office activities as well as economic research. They must clearly separate the portfolio of State securities from other portfolios they manage and/or hold. To this end, they must maintain accounting specific to their intervention activities in auction-issued Treasury securities, compliant with regulations regarding securities accounting for custodian institutions. 2 – Validity Period of Approval

SVTs are selected for a two-year term, renewable by tacit renewal provided they meet the requirements of these Specifications. 3 – Selection and Evaluation Procedures for SVTs SVTs are selected by a Regional Selection and Evaluation Committee, which is the Ministerial Committee of the Monetary Union of Central African States (UMAC). Credit institutions submit an approval application file, which is deposited in duplicate against a receipt at the National Directorate of the BEAC in their country of establishment. This file must specify in particular the chosen internal organization, activity forecasts, planned technical and financial resources, and the country/countries where the applicant institutions wish to operate as SVTs. The BEAC (Central Services) processes approval applications on behalf of the National Treasuries, with COBAC's support. It verifies whether the applicant meets the conditions defined in Section I-1 of these Specifications. Within this procedure, the BEAC is authorized to collect any information deemed useful for processing the approval application. Files deemed eligible following the BEAC's processing procedure are transmitted for review to the UMAC Ministerial Committee. Following the Committee's meeting, the list of credit institutions eligible for approval is published. The decision to grant approval is issued by decree by each Minister in charge of Finance and individually notified to each applicant credit institution. Rejection of approval is also notified by the Minister in charge of Finance to the applicant credit institution. The Regional Selection and Evaluation Committee continuously ensures SVT compliance with the Specifications. II – Rights and Obligations 1 – Rights of SVTs a) Access to Treasury Security Auctions SVTs are granted the exclusive right to participate in public security auction sessions organized by the BEAC.

b) Information Provided to SVTs SVTs are informed by the Minister in charge of Finance at the beginning of each year of the forecasted Treasury security issuance program. The BEAC communicates to SVTs, at least three days before each auction, the characteristics of the relevant issuance, including the type of securities to be issued, their maturity, the issuance amount, submission deadlines, and auction conditions. SVTs are also informed by the BEAC, prior to each auction launch, of the issuing State's available borrowing margin relative to its statutory advance ceiling. SVTs are consulted by the Treasury regarding any potential changes to public security issuance policy. The BEAC also informs them of any significant changes to the organization of auctions. 2 – Obligations of SVTs a) Participation in Treasury Security Auctions SVTs are responsible for ensuring the success of Treasury security auctions. They commit to:

• participate in all auction sessions;
• submit bids or rates for each auctioned tranche;
• ensure significant participation in each category of auctioned security tranches. The SVTs must take all necessary measures to guarantee settlement of their subscriptions on the settlement/delivery date of the auctioned securities. In case of payment default, the defaulting SVT is subject to penalties, the rate of which is determined by the Convention on the Participation of Treasury Securities Specialists in Free-Subscription Public Security Auctions, without prejudice to other applicable sanctions. b) Market Making in the Secondary Market for Treasury Securities As part of their market-making activities, SVTs commit to facilitating liquidity in the market for auction-issued Treasury securities. To this end, they are obligated to sell or buy, upon request from any investor, free-subscription public securities. To guarantee market transparency, SVTs are permanently required to:
• display at their counters the bid and ask prices for auction-issued Treasury securities;
• execute transactions at the displayed prices;
• provide buyers who request them with receipts indicating all characteristics of the subscribed securities and a statement that these securities are eligible for trading until maturity at any SVT counter. Quotations are conducted in accordance with market rules and practices. SVTs must employ all measures conducive to promoting liquidity in the Treasury securities market, including displaying quotations on any appropriate platform (website, etc.). Furthermore, SVTs commit to contributing to the development of new State debt products. c) Promotion of Treasury Securities SVTs strive to develop the Treasury securities market as part of their commercial strategy, targeting a broad and diversified investor community. To this end, they employ professionals, including economists capable of regularly informing investors about developments in the Emission Zone's economies. In this regard, they commit to contributing to promotional activities organized by the Treasury and to organizing joint promotional campaigns for Treasury securities, the terms of which are mutually agreed upon. The Treasury may also, at the SVTs' request, participate in their promotional activities. The SVTs thus contribute to promoting Treasury securities to enable the State to improve its issuance policy. In this light, they provide the Treasury with information that could clarify potential investor profiles, both resident and non-resident, to aid in formulating its debt strategy. d) Establishment of a Treasury Securities Specialists Association SVTs shall establish a Treasury Securities Specialists Association (ASVT). Its purpose is to define, promote, and implement, on matters of common interest, any action likely to improve the proper functioning of the public securities market and the profitability of SVT activities. To this end, SVTs commit to participating in the association's activities and jointly financing it. For its part, the Ministry in charge of Finance maintains a continuous and close dialogue with the ASVT, particularly on any matters concerning Treasury securities. It takes into account, to the extent possible, the association's proposals aimed at ensuring the proper functioning of the Treasury securities market. e) Ethics and Market Practices SVTs shall establish, within their association, a Code of Conduct that they commit to respecting, which specifies the ethical rules specific to this activity. The SVTs commit to doing everything necessary to deliver, under all circumstances, their counterparty in Treasury securities. III - SVT - Treasury Relations SVTs are the Treasury's preferred partners, advising and assisting it in defining and implementing its issuance policy, as well as on any matters concerning the proper functioning of primary and secondary markets. They contribute to Treasury information by regularly reporting on market developments, prevailing conditions, transaction volumes, and, where applicable, their own positions. 1 – Permanent Consultation The Treasury and SVTs establish permanent contact between their respective departments. To this end, both designate their respective correspondents for monitoring the Treasury securities market. The Treasury convenes all SVTs at least once per quarter to review market developments. It informs them without delay of any decisions concerning matters of common interest. 2 – Statistical Information SVTs report quarterly to the Treasury on their activity in the secondary market for Treasury securities. This report distinguishes activity by maturity, client type, and geographic location. The SVTs make available to the Treasury or any person authorized by it all information useful for verifying the reliability of their declarations.

Statistically aggregated information provided by the Treasury is communicated to SVTs. The Treasury reserves the right to use this data for debt promotion purposes. The Treasury communicates quarterly to each SVT its market share in auctions and on the secondary market, broken down by product type and/or maturity. For objective investor information, the Treasury publishes annually the list of SVTs whose auction participation exceeds a certain average. 3 – Advisory on Debt Issuance Policy SVTs advise the Treasury on its issuance policy and propose, in particular, any changes likely to improve market efficiency and enhance the appeal of Treasury securities. To this end, they allocate specific resources to this activity. The Treasury consults SVTs, primarily through their professional association, and where appropriate in coordination with market authorities, regarding the organization of the Treasury securities market and any proposals to improve its functioning. IV – Monitoring and Oversight of SVTs Monitoring and oversight of SVTs are conducted under the conditions and procedures set forth in Regulation No. 03/08/CEMAC/UMAC/CM regarding Free-Subscription Public Securities issued by CEMAC member states and its subsequent texts. To this end, SVT activities are subject to oversight by the Ministry in charge of Finance and the BEAC. This oversight may also be conducted through COBAC. In case of non-compliance with regulatory and contractual provisions, as well as ethical rules applicable to the auction-issued Treasury securities market, the Minister in charge of Finance may, at any time and depending on the severity of the breach, issue a warning to the SVT, suspend, or revoke its approval. Done at , on . The Minister in charge of Finance