Regulation of the Financial Market Council on Public Offers to Savings

REGULATION OF THE FINANCIAL MARKET COUNCIL ON PUBLIC OFFERS TO SAVINGS1 The Financial Market Council, Having regard to Law No. 94-117 of November 14, 1994, reorganizing the financial market and in particular Article 29 thereof, Decides:

GENERAL PROVISIONS Article 1 This Regulation applies to all issuances, admissions of securities and financial instruments by public offer to savings, and to public offers.

Article 2 This Regulation applies:

• to persons making public offers to savings;
• to stockbrokers and persons who, due to their professional activity, intervene in accounting control or legal or financial structuring operations on securities or financial instruments placed by public offer to savings;
• to persons managing individual or collective portfolios of securities or financial instruments;
• to persons responsible for issuing opinions on information intended for the public;
• to executives of the issuer;
• to the securities deposit, clearing and settlement company;
• to investors in securities and financial instruments.

Article 3 In this Regulation, the following terms shall mean:

• « Executive »: any person holding the functions of President - Chief Executive Officer, General Manager or Director, as well as permanent representatives of legal entities acting as directors.
• « Issuer »: any legal entity having the status of issuer making a public offer to savings.
• « Person »: any natural or legal person.
• « Securities »: shares, priority dividend shares without voting rights, investment certificates, participatory notes, bonds, convertible bonds, units of mutual funds for securities, rights attached to the aforementioned securities and other financial instruments negotiable on organized markets.
• « Placement »: any offer or issuance of securities.

Article 4 Information provided to the public must be reliable, relevant, intelligible, comparable, complete and truthful.

Article 5 A breach of good public information constitutes the communication of information that does not meet the conditions cited in the preceding article.

1 As approved by the College of the Financial Market Council on March 2, 2000, endorsed by the Minister of Finance Decree dated November 17, 2000, and amended by the Minister of Finance Decrees dated April 7, 2001, September 24, 2005, July 12, 2006, September 17, 2008 and October 16, 2009, the Minister of Finance Decree dated March 28, 2017, the Minister of Finance Decree dated March 26, 2018 and the Minister of Finance Decree dated May 16, 2022.

TITLE I: THE PROSPECTUS Chapter 1: The visa application. Article 6 Any company or person intending to carry out a public offer or issuance of securities to the public, or admission of a security to the stock exchange listing, is required beforehand to prepare a prospectus subject to the visa of the Financial Market Council.

The visa application is made by depositing three copies of the draft prospectus, drafted in Arabic and French versions accompanied by the documents prescribed by this Regulation, 20 trading days at least before the projected placement or admission date, through the stockbroker or person responsible for structuring the operation. This 20-day period is suspended until the Financial Market Council receives the additional information or diligences it requests.

Article 7 The prospectus must include all necessary information for the public to base its judgment on the issuer's assets, activity, financial situation, performance, evolution of the financial situation and prospects, as well as on the rights attached to the securities. These details are indicated in the annexes of this Regulation according to the nature of the concerned securities and their placement conditions. The prospectus must be signed by the person authorized to commit the company as well as by all persons who issued an opinion or attested to the information contained in the prospectus.

Article 8 (Minister of Finance Decree of September 24, 2005) The draft prospectus is accompanied by the following documents:

• one updated copy of the articles of association;
• the minutes and reports of the body or bodies that decided on the placement;
• identification of the information officer at the issuer;
• list of executives;
• for already established companies, duly certified financial statements accompanied by the auditors' reports of the last two fiscal years for those with more than two years of existence, and of the last fiscal year for those with less than two years. Companies establishing a prospectus upon their incorporation by public offer to savings must submit to the Financial Market Council a prospective financial statement prepared by the company founders and a financing scheme.
• interim financial statements accompanied by the auditor's opinion if the placement occurs more than 7 months from the date of closure of the last period;
• minutes of the constitutive general meeting and general meetings that decided and ratified capital increases or any other amendments to the articles of association;
• a statement containing 5-year prospective information supported by underlying assumptions, prepared by the board of directors or founders as applicable, along with the opinion of the person authorized to examine prospective information. This opinion is issued based on the completion of diligences in accordance with current professional standards for verifying prospective information;
• 2 copies of the draft legal notice to be published in the Official Journal of the Tunisian Republic in Arabic and French versions;
• a copy of the guarantee agreement upon first demand accompanied by the guarantee letter if it concerns a bond placement with guaranteed repayment;
• if rated bonds, a copy of the rating and supporting report accompanied by the rating agency's grid and significance of different ratings.

Article 9 Upon completion of the file examination, the Financial Market Council decides to grant or refuse its visa. It notifies its decision to the stockbroker or person responsible for structuring the operation.

Article 10 When modifications are made to the content of the initial draft prospectus, in accordance with the Financial Market Council's observations, the stockbroker or structuring person must deposit three copies of the new draft with the Financial Market Council, duly signed by the persons assuming responsibility for the prospectus.

Article 11 The Financial Market Council may file a visa application for a prospectus if it does not receive, within 30 days, the documents or additional diligences it requests.

Article 12 When significant new facts, likely to affect the valuation of offered securities, occur between the prospectus visa date and the placement date of the relevant securities, the issuer must prepare a supplementary update document, which is submitted to the Financial Market Council for visa prior to its dissemination. This document is disseminated under the same conditions as the prospectus. If the period between visa issuance and admission to trading or issuance exceeds two months, a new prospectus must be prepared, unless an exemption is granted by the Financial Market Council.

Article 13 The issuer is exempt from preparing a prospectus when the securities for which issuance is requested are capital securities attributed upon incorporation of reserves, or when issued sukuk are not subject to a public placement. However, the issuer must inform the Financial Market Council before carrying out this operation and publish a notice in the Financial Market Council's official bulletin as well as in the Tunis Securities Market bulletin, mentioning the characteristics and implementation deadlines of the operation.

Chapter 2: The reference document. Article 14 An issuer may prepare annually a reference document containing all information required for prospectus preparation, except those related to the securities whose admission or issuance is requested. The document registered with the Financial Market Council is kept free of charge for public consultation; it may be consulted at any time by any person requesting it at the issuer's headquarters or with organizations responsible for ensuring its financial service; a copy of the document must be sent free of charge to any person requesting it and made available to the public during the issuer's financial presentation events and shareholders' general meetings. The reference document is registered by the Financial Market Council when it meets the requirements of Article 8 of this Regulation; registration may be subject to adaptations or additional investigations, under the same conditions as the prospectus visa procedure. The issuer deposits at least 5 trading days before the projected date of obtaining a requested visa a draft prospectus composed of the following elements: a) the registered reference document, including the latest social and consolidated accounts, where applicable, certified; b) an operation note comprising:

• information on the securities whose admission is requested or projected issuance;
• accounting elements, publication of which is required between registration of the reference document and the expected visa date;
• elements on significant new facts occurring between registration of the reference document and the expected visa date, relating to the issuer's activity, financial situation and results. The validity of the reference document extends until the certification or approval by the shareholders' general meeting of new annual or provisional accounts.

Chapter 3: Implementation of placement. Article 15 Dissemination of the prospectus to the public may not occur before obtaining the visa and depositing 20 printed copies of the prospectus in Arabic language and 20 printed copies in French to the relevant services of the Financial Market Council, at least 10 trading days before admission of the securities in question or opening of subscription if it concerns an issuance or offer. The prospectus must be effectively disseminated in one of the following forms: a) publication in one or more national distribution newspapers; b) free availability for consultation of the prospectus to any person requesting it at the issuer's headquarters or with organizations responsible for ensuring the financial service of its securities; a copy of the document must be sent free of charge to any interested party. The issuer publishes a notice in the Official Journal of the Tunisian Republic and a notice in the Financial Market Council's official bulletin to inform the public of the address where the prospectus can be consulted and where a copy may be obtained, as well as, where applicable, the names of newspapers in which the complete prospectus is disseminated. If the content of the prospectus to be disseminated does not conform to that visaed by the Financial Market Council, the latter prohibits dissemination, orders the interested party to postpone, where applicable, the opening date of the operation and to carry out necessary publications.

Article 16 The placement operation may begin only five trading days before the admission date of the securities in question or opening of subscriptions if it concerns an issuance or offer. During this waiting period, the placing person cannot take firm purchase or subscription orders. However, it may receive indications of intent from subscribers or potential buyers.

Article 17 In the case of a firm commitment, the bookrunner deposits with the Financial Market Council, within 30 days following the prospectus visa date, the list of syndicate members with indication of the percentage of issuance allocated to each. The placement syndicate refers to the group of stockbrokers or banks that, after firm commitment, share the issuance for public offer to savings.

Article 18 Placement of a security ends on the date specified in the prospectus. This date must not exceed three months following the subscription opening date. The prospectus must specify the follow-up actions in case of non-success of the operation.

Article 19 Placement advertisements, regardless of their form and dissemination mode, are communicated to the Financial Market Council prior to dissemination. All advertisements refer to the existence of a visaed prospectus and indicate how to obtain it; references to the prospectus include the visa number and its issue date.

Chapter 4: Content of the prospectus Article 20 The following warning must appear on the title page of the prospectus: « Visa No..... of ... by the Financial Market Council given in application of Article 2 of Law No. 94-117 of November 14, 1994. This visa implies no assessment of the proposed operations ».

Article 21 The Financial Market Council may request to modify or suppress certain statements and add supplementary information.

Article 22 The prospectus indicates the name, function and signature of the person(s) who established it. These persons attest that, to their knowledge, the prospectus data conforms to reality and contains no omissions likely to alter its scope. When the public offer is made by the issuer, the latter's auditors attest that these data have been verified by them and must give an opinion regarding recent evolution of the company. Future prospects and orientations are established by the board of directors or founders (in case of a company incorporated by public offer to savings) under their responsibility so that the investor can base its judgment. When the operation is carried out with the intervention of a stockbroker, it attests that it has performed due diligence to ensure the sincerity of the prospectus. When it concerns a public offer of sukuk, members of the Sharia compliance committee and legal advisors intervening in the operation must attest that it, as well as the contracts attached to it, have been verified by them and are in compliance with Sharia principles and prevailing legislation. (Minister of Finance Decree of May 16, 2022)

Article 23 The prospectus presents interim financial statements accompanied by the auditor's opinion if placement occurs more than 7 months from the end of the last fiscal year. If a company controls one or more enterprises within the meaning of Article 10 of Law No. 94-117, it must present in addition to its individual financial statements the consolidated financial statements in accordance with prevailing regulations.

Article 24 If all or part of the proceeds from the public offer to savings is intended to finance the acquisition of a company, the Financial Market Council may require:

1. identification of the acquired company and procedure for the purchase operation;
2. financial statements of the company to be acquired, according to Articles 8 and 23;
3. pro forma financial statements, consolidating as of the latest balance sheet date of the issuer, the assets and liabilities of the issuer and the acquired company;
4. acquisition objectives and their impact on the situation and performance of the enterprise. If all or part of the proceeds from the sukuk public offer is intended to finance a project, the issuing company must provide all documents and information regarding the operation structure requested by the Financial Market Council. (Minister of Finance Decree of May 16, 2022)

Article 25 When the Financial Market Council considers this information useful for savers, it may require, for the year preceding the latest balance sheet of the issuer, or allow, for each of the three years preceding this date, presentation in the prospectus of pro forma financial statements combining:

• income statement of the issuer and that of the acquired company;
• cash flow statement of the issuer and that of the acquired company.

Article 26 The prospectus covering debt securities, priority dividend shares or participatory notes or sukuk must contain information on coverage of commitments by assets and profits.

Article 27 The Financial Market Council may require that financial statements of a company subject to control by another company under Article 10 of Law No. 94-117 be presented separately in the prospectus, whether consolidated or not with the issuer's. When the auditor's report on financial statements of a company subject to control by another company under Article 10 of Law No. 94-117 contains reservations, the report and these financial statements must be deposited with the prospectus.

Article 28 The Financial Market Council may allow presentation in the prospectus of non-consolidated financial statements as supplementary information.

Article 29 The Financial Market Council may require rating of the issuance or admission by a specialized agency recognized by the Financial Market Council during examination of an admission to trading or issuance prospectus covering debt securities or sukuk. It may also require any appropriate guarantee during examination of a prospectus.

Article 30 When a loan or sukuk is subject to guarantee, the prospectus contains, in addition to the required sections for the issuer, a complete presentation of the guarantor, who provides the same information as the issuer, except for those related to securities issued, admitted or offered. When the guarantor is an issuer whose securities are listed on the stock exchange, it may use a reference document or a visaed prospectus less than one year old. Presentation of the guarantor is not required when it is a bank listed on the stock exchange or linked by a rating contract to a rating agency appearing in the list fixed by the Minister of Finance Decree of April 24, 2003. (Minister of Finance Decree of September 24, 2005, art.2) When the guarantor is not a bank listed on the stock exchange, the Financial Market Council may require rating of the guarantor. In all cases, the guarantee contract is freely accessible for consultation to any person requesting it at the issuer's headquarters and with organizations responsible for ensuring the financial service of the loan; a copy of the document must be provided free of charge to any interested party.

Chapter 5: The abridged prospectus Article 31 The abridged prospectus (Annex No. 2 of this Regulation) is provided for in the following cases: 1 - offered securities originate from exercise of rights arising from securities whose issuance has already resulted in establishment of a prospectus. This notably covers conversion of convertible bonds into shares whose issuance has already resulted in establishment of a prospectus; 2 - securities are offered in substitution for shares of the same company and their issuance does not entail a capital increase by the issuer; 3 - The issuer who has obtained a visa relating to a placement less than six months ago and wishes to make a new public offer to savings. However, it must present in the prospectus the financial information provided for in Articles 21 to 26 of this Regulation; 4 - public offer to savings by an issuer to its employees and executives or those of a company in the same group, via placement of its own securities;

Article 32 The issuer cannot establish an abridged prospectus when the contemplated operation entails:

• at least doubling of capital; or - an increase of at least 50% of capital, accompanied by a change of control or significant change in nature of activities; or - significant modification of balance sheet structure.

Article 33 The draft abridged prospectus, drafted in Arabic and French versions, is deposited with the Financial Market Council at least fifteen trading days before the projected date of offer or admission, by the stockbroker or person responsible for structuring the operation unless exempted by the Financial Market Council.

Article 34 The provisions of Articles 7, 10, 11, 12, 15, 16, 17, 18, 19, 20, 21, 22, 29 and 30 of this Regulation apply in the case of an abridged prospectus.

Article 35 The offer initiator, who meets one of the conditions for establishing an abridged prospectus, may choose to establish a prospectus whose content conforms to the requirements of Chapters 1, 2, 3 and 4 of this Regulation regarding prospectus preparation. The requirements of the aforementioned chapters, including provisions related to visa attribution conditions, as well as update, dissemination and advertising, are then applicable to it.

Chapter 6: The prospectus for admission to the alternative market (Minister of Finance Decree of May 16, 2022) Article 35 bis Any company requesting admission of its capital securities to the alternative market of the stock exchange listing is required to establish a prospectus subject to visa by the Financial Market Council in accordance with Annex 2 bis of this Regulation. The visa application is made by depositing the draft prospectus drafted in Arabic and French versions and accompanied by necessary legal and financial documents for its processing twenty (20) trading days at least before the projected admission date, concurrently by the issuer and a stockbroker.