Regulatory Alerts2023-08-24
Instruction No. 20/99 on the Securities Account Agreement
The Regional Council for Public Savings and Financial Markets of the West African Monetary Union issued Instruction No. 20/99 to mandate a formal securities account agreement for all approved management companies, banks, and clearing agents. The regulation specifies mandatory contractual clauses covering party identification, confidentiality, liability, applicable law, and account termination, while detailing requirements for securities registration, tax obligations, order execution, and periodic reporting. Furthermore, it requires prior written notification for any operational modifications and obligates companies to manage these accounts in their clients' best interests, with publication provisions ensuring regulatory compliance across the region.
WEST AFRICAN MONETARY UNION REGIONAL COUNCIL FOR PUBLIC SAVINGS AND FINANCIAL MARKETS
INSTRUCTION NO. 20/99 ON THE SECURITIES ACCOUNT OPENING AGREEMENT
Whereas the Convention of July 3, 1996 establishing the Regional Council for Public Savings and Financial Markets, hereinafter referred to as the Regional Council, Whereas Articles 18 and 22 of the Annex to said Convention, Whereas the General Regulation on the Organization, Operation and Supervision of the Regional Financial Market of the UMOA, adopted by decision No. 001/97 of the Council of Ministers on November 28, 1997, Whereas Articles 140 to 144 of said General Regulation, Whereas the decision of the Regional Council in its session on July 2, 1999, THE REGIONAL COUNCIL RESOLVES:
Article 1 The opening of a securities account by Management and Intermediation Companies, banks approved by the Council as record-keepers and clearing agents, or any other body approved by the Regional Council must necessarily be subject to an account agreement concluded between such company and its client.
Article 2 The securities account agreement must specify the following mandatory details:
- Details concerning the parties to the agreement:
- identity and address of the contracting parties,
- confidentiality obligations of the account management company,
- liability of the parties to said agreement,
- applicable law,
- choice of domicile,
- mandatory signature of the agreement by the account management company and the account holder.
- Details concerning securities and securities accounts:
- form and nature of securities registered in the account,
- availability of securities upon first request,
- tax obligations relating to securities registered in the account,
- obligation to communicate tariffs,
- transmission of a copy of the securities management mandate contract, if it involves delegated management,
- operating conditions for joint accounts,
- conditions for closing the securities account,
- conditions for termination of the agreement.
- Details concerning orders and their execution:
- periodicity of securities account statements,
- execution conditions for stock exchange transactions:
- transmission and receipt of instructions, prior funding,
- information regarding execution of instructions,
- handling of income from registered securities.
Article 3 Any modification to the account's operation must be subject to prior notification by one of the parties, via registered letter with acknowledgment of receipt from either party.
Article 4 Companies must manage the securities account agreement in the best interests of their clients.
Article 5 This instruction shall be published wherever necessary.
Done at Abidjan, on July 2, 1999 For the Regional Council The President L. NAKA