General Regulations of the Tunis Securities Exchange

GENERAL REGULATIONS OF THE TUNIS SECURITIES EXCHANGE

The College of the Financial Markets Council,
Having regard to Law No. 94-117 of November 14, 1994, and in particular its Articles 2, 4, 7, 23, 29, 31, 35, 48, 51, 66, 68, 70, 71, 75 and 87, adopts the present General Regulations of the Stock Exchange, which establish in particular:

• the rules applicable to market participants in market management and to the Market Guarantee Fund;
• the rules relating to the organization and operation of the market and the suspension of trading;
• the rules relating to the admission of securities to the list, trading, and delisting of securities;
• the rules relating to the registration and declaration of transactions;
• the rules relating to the conditions under which takeover bids for blocks of control and blocks of securities are declared and carried out,
• the cases of mandatory and voluntary public offers, the conditions under which they are initiated, accepted, carried out and settled, as well as the procedures to be followed and the means of defense and guarantee.

TITLE I
RULES APPLICABLE TO MARKET PARTICIPANTS IN MARKET MANAGEMENT

SUBTITLE 1: THE TUNIS SECURITIES EXCHANGE

Article 1 (new) (Decree of the Minister of Finance of August 15, 2019, Art. 1):
The Tunis Securities Exchange, hereinafter referred to as "the Exchange", is responsible for taking decisions within its area of competence relating to:

• trading rules published in the form of Floor Rules;
• the procedures for registering companies within the compartments of the listed market segments;
• internal measures concerning stock exchange intermediaries or issuing companies;
• opinions of interest to the public.
  The Exchange's decisions are published in the Exchange Bulletin, referred to in Article 2 below.

Article 2
The Exchange publishes a daily bulletin titled "Official Stock Exchange Bulletin". This bulletin must include in particular the information referred to in paragraph 5 of Article 68 of Law No. 94-117 of November 14, 1994 on the reorganization of the financial market.

Article 3
The Exchange ensures that persons under its direct authority or acting on its behalf comply with their professional obligations.

1 as referred to by the Decree of the Minister of Finance dated 13/2/97 and amended by the Decrees of the Minister of Finance of 9/9/99, 24/09/2005, 24/09/2007, 15/04/2008, 12 January 2016 and 15 August 2019.

2

Article 4 (new) (Decree of the Minister of Finance of April 15, 2008, Art. 1).
The market surveillance function at the Exchange requires the possession of a professional card. The conditions for issuing said card are set by a general decision of the Financial Markets Council.

Article 4 bis (Decree of the Minister of Finance of April 15, 2008, Art. 2).
Each stock exchange intermediary must designate a head of traders who serves as the main contact with the Exchange and other intermediaries for all transactions executed on the electronic quotation system.

Article 5
All activities carried out at the Exchange and related to market operations are conducted with diligence, fairness, neutrality, and impartiality.
These activities are carried out while respecting market integrity.

Article 6
Any person placed under the authority of the Exchange or acting on its behalf is bound by professional secrecy and the obligation of reserve.

Article 7
The persons referred to in the preceding article must obtain express authorization from the Chief Executive Officer of the Exchange to conduct stock exchange transactions for their own account or for the account of their minor children. They may only hold one securities account to conduct these transactions at one of the establishments approved by the CMF. Each transaction carried out under this framework must be declared to the CMF and the Exchange by the beneficiary, under penalty of disciplinary sanctions. The aforementioned establishments must report the status of said transactions to the CMF quarterly.

Article 8
Stock exchange transactions conducted for their own account by the persons referred to in Article 6 cannot be carried out under preferential conditions compared to those available to the entire client base of stock exchange intermediaries. To this end, orders must be transmitted, executed, and recorded in a format and according to rules that allow verification of compliance with the principles set forth in Article 5 above.

Article 9
Persons responsible for market surveillance functions may not trade for their own account or for the account of their minor children on the securities for which they are responsible.

Article 10
The Exchange's management ensures compliance with the rules set forth in Articles 5 to 9 and informs, where applicable, the CMF of any irregularities observed.

Article 11
The Exchange establishes an internal regulations document, including the code of ethics applicable to its staff. This document sets the conditions for respecting the principles set forth in Articles 5 to 10 and any other rules established in this regard by the Exchange. The Exchange may impose additional restrictions on transactions carried out for their own account by its staff members.

SUBTITLE 2: THE MARKET GUARANTEE FUND

Article 12
Stock exchange intermediaries must establish a Market Guarantee Fund intended exclusively to guarantee, among themselves, the proper completion of transactions negotiated on the market in the event of settlement or delivery default, and only after exhausting other avenues and means provided for by stock exchange regulations. The Fund's administration is ensured by the Association of Stock Exchange Intermediaries. The Fund's regulations are drawn up by the Association of Stock Exchange Intermediaries and approved by the CMF.

Article 13
By delegation, the financial management of the Market Guarantee Fund is ensured by the Exchange. The Fund's resources and expenditures are recorded in a separate accounting system. The Fund's funds may be placed in demand deposits.

Article 14
Stock exchange intermediaries who cease their activities permanently, for any reason whatsoever, are entitled to a refund of their contributions, according to the procedures set by the Fund's administration, after the extinction of all their contracted commitments.

Article 15
The financial contributions to the Market Guarantee Fund imposed on stock exchange intermediaries are:

• the initial contribution
• the regular provision
• the exceptional contribution.

Article 16 (new) (Decree of the Minister of Finance of September 9, 1999, Art. 2).
The initial contribution is the first payment made by each stock exchange intermediary, the amount of which is set by the Fund's administration.
This contribution is periodically readjusted according to the procedures set by the Fund's administration or the institution delegated to do so.

Article 17 (new) (Decree of the Minister of Finance of September 9, 1999, Art. 2).
The regular provision is the proportional contribution that each stock exchange intermediary must pay, based on the risk it poses to the market. The rate and procedures for calculating and paying this contribution are set by the Fund's administration. This provision is calculated at the end of each trading session by the Fund's administration or the institution delegated to do so. Depending on the stock exchange intermediary's position, the Fund's administration or the delegated institution proceeds, as applicable, to calls for funds or refunds. The procedures for calling and refunding funds are set by the guarantee fund regulations provided for in Article 12 above.

Article 18
The exceptional contribution is the one that all stock exchange intermediaries must pay, the amount and date of which are determined by the Fund's administration, when its balance fails to cover the total amount due, according to the procedure described in Article 19 below.

Article 19
In the event that a stock exchange intermediary's default requires the intervention of the Market Guarantee Fund, the sums used to cover the observed defaults are, in order of priority:

1. • the regular provision of the defaulting intermediary;
2. • the initial contribution of the defaulting intermediary;
3. • the regular provisions of all active intermediaries;
4. • the initial contributions of all active intermediaries;

4
5) - the call for exceptional contributions from all intermediaries to cover the shortfall.

Article 20
The intervention of the Market Guarantee Fund is subject to the confirmation by the body responsible for compensation of the stock exchange intermediary's default, regardless of the cause.
The procedures for implementing the Fund's intervention procedure are set by the Fund's regulations.

Article 21
In the event of the Fund's intervention following a stock exchange intermediary's default, the latter prepares a report on the circumstances of the default and its resolution, and transmits it to the CMF. Until the CMF takes a decision regarding the defaulting stock exchange intermediary, the decision to close access to the quotation system against it, in accordance with the provisions of Article 215 of these regulations, remains in force.

TITLE II
ORGANIZATION AND OPERATION OF MARKETS

SUBTITLE 1: THE EXCHANGE LIST

Chapter 1: The listed markets

Article 22 (new) (Decree of the Minister of Finance of August 15, 2019, Art. 1):
Securities are admitted to the Exchange's list in one of the following markets:

• Equity markets, which include the main market and the alternative market;
• The bond market;
• The funds market;
• The sukuk market.
  The Exchange's listed markets may be organized into compartments according to criteria and procedures set by decision of the Exchange.

Article 23 (new) (Decree of the Minister of Finance of August 15, 2019, Art. 1):
The main market is open to joint-stock companies that meet criteria for public openness, size, performance, liquidity, transparency, and good governance as provided for in Section 2 of Chapter 2 of this subtitle.

Article 24 (new) (Decree of the Minister of Finance of August 15, 2019, Art. 2):
The alternative market is reserved for joint-stock companies that have chosen access to this market by admitting their securities to trading through a capital increase without recourse to a public offering for sophisticated investors. Admission to the alternative market may also be requested by a joint-stock company as part of a total or partial transfer, to sophisticated investors, of holdings held by venture capital companies, venture capital mutual funds, or seed funds in its capital. The following are considered sophisticated investors:
1- Institutional investors as defined in Article 39 of these regulations when acting for their own account; 2- Any company meeting at least two of the following three conditions:

• an average annual workforce exceeding 200 persons,
• a total balance sheet exceeding 20 million dinars
• net turnover or revenue exceeding 40 million dinars.
  This is based on the consolidated accounts of the last fiscal year and, failing that, published financial statements and, where applicable, audited by the statutory auditor.
  3- Any natural person investor who has made an initial subscription of at least 100,000 dinars and meets at least one of the following two conditions:
• having held a management position for at least two years in the financial sector, and providing proof of acquired knowledge of securities portfolio management strategies,
• holding a portfolio of securities or deposits with a total value equal to or greater than one (1) million dinars,
  4- Any natural person investor who has made an initial subscription equal to or greater than one (1) million dinars.
  5- Management companies, banks, stock exchange intermediaries, and venture capital companies when acting on behalf of sophisticated investors, and where the latter may waive their status as sophisticated investors at any time under the management agreement. For the application of the provisions of this article, collective investment schemes other than venture capital mutual funds and seed funds are not considered sophisticated investors.

Article 25 (new) (Decree of the Minister of Finance of August 15, 2019, Art. 1):
The bond market is open to debt securities issued by the State, Local Authorities, and public establishments, as well as to all other debt securities issued by private law entities admitted to trading on this market.

Article 25 bis (Decree of the Minister of Finance of April 15, 2008, Art. 2)
The mutual fund for receivables market is open to securities issued by mutual funds for receivables.

Article 25 ter (Decree of the Minister of Finance of August 15, 2019, Art. 2):
The sukuk market is open to shares issued by sukuk mutual funds and to sukuk issued by the State, Local Authorities, public establishments and enterprises, and private sector enterprises.

Chapter 2: Admission of securities to the list

Section 1: Common provisions

Article 26 (new) (Decree of the Minister of Finance of August 15, 2019, Art. 1):
Except for debt securities issued by the State and Local Authorities, which are admitted to the list according to the procedure defined in Article 75, paragraph 3 of Law No. 94-117 of November 14, 1994, any other security must be the subject of an admission application presented:

• jointly by the issuer and a stock exchange intermediary for admission to the Main Market;
• jointly by the issuer and a listing sponsor for admission to the alternative market;
• by a stock exchange intermediary for the bond market;
• by the manager for the mutual fund for receivables market;
• by the issuer or the manager for the sukuk market.
  For the application of the first and second indents of the first paragraph of this article, the relationships between the parties must be the subject of a written convention signed by them. A copy of the signed convention must be filed with the Financial Markets Council and the Tunis Securities Exchange.

Article 27 (new) (Decree of the Minister of Finance of August 15, 2019, Art. 1):
The admission application covers all securities belonging to the same category, already issued or to be issued as part of the admission operation.

Article 28
The admission file to the list includes the legal, economic, financial, and accounting documents of the company or fund requesting admission (Decree of the Minister of Finance of August 15, 2019, Art. 1). The list and content of these documents are fixed by the Exchange. The Exchange is authorized to request the issuing entity to produce any complementary information.

Article 29
In addition to the obligations arising from current regulations, the entity requesting admission of its securities to the list undertakes the following commitments:

• prior to the introduction of its securities to trading, justify the deposit of securities with the Tunisian Interprofessional Company for Compensation and Deposit of Securities, hereinafter referred to as STICODEVAM, and the handling of settlement-delivery operations by the latter.
• obtain CMF approval to set the issuance and subscription calendar for any financial operation involving pre-emptive rights or priority rights;
• transmit to the CMF and the Exchange all communications and notices of a financial nature and publications to be disseminated by the entity, as well as any economic or financial information document that the entity may be required to publish and obtain CMF approval for their dissemination;
• propose, where applicable, to the market authorities, a liquidity contract for its listed securities signed by a stock exchange intermediary. The intervention of the stock exchange intermediary is carried out through a contract concluded with the Exchange, the objective of which is to provide liquidity to the market according to the practical and technical conditions set by the floor rules. (Decree of the Minister of Finance of August 15, 2019, Art. 1)
• ensure, free of charge, by itself or by an authorized body, for the holders, the securities service and the payment of dividends or interest, and notify the CMF, STICODEVAM, and the Exchange of any modification in the designation of the cashiers responsible for financial services;
• if the entity's securities are quoted abroad, ensure that the CMF and the Exchange receive information at least as complete as that intended for the authorities of the concerned markets;
• designate, within its structure, a body responsible for shareholder affairs and relations with the CMF, the Exchange, and STICODEVAM.

Article 30
In the interest of the market and savers, the Exchange may subordinate the admission of a security to any particular condition communicated to the requesting entity.

Article 31
Without prejudice to the CMF's prerogatives, the Exchange may reject the admission application of a security to the list if it considers it contrary to the interest of the market and savers.

Article 32
The Exchange notifies its decision to the requesting entity or its stock exchange intermediary, at the latest, within a period of three months from the receipt of the application or, if the Exchange requests complementary information within this period, within a period of one month following their receipt. The validity period of an admission decision is four months. At the entity's request, the Exchange may extend the validity of its decision by an additional two months.

Article 33
The Exchange sets the trading and quotation conditions for newly admitted securities.

Article 34 (new) (Decree of the Minister of Finance of September 24, 2005, Art. 2)
The admission of a security is announced by a notice published by the Exchange in its bulletin, specifying the trading conditions, the date of the first quotation, and the introduction procedure.

Section 2 (new)
Admission of equity securities to the main market (Decree of the Minister of Finance of September 24, 2007, Art. 1)

Article 35
Equity securities are considered to be ordinary or preferred shares, shares with priority dividend rights without voting rights, and investment certificates.

Article 36 (new) (Decree of the Minister of Finance of September 24, 2005, Art. 2)
The company must have published the certified financial statements of the two fiscal years preceding the admission application.
However, the Exchange may grant a waiver for companies whose commencement of activity is less than 2 years.
The company must present forward-looking information for five (5) years accompanied by the underlying assumptions.
These information prepared by the board of directors or management board, as applicable, and under their responsibility, must be accompanied by the opinion of the Statutory Auditor. This opinion is issued based on the performance of due diligence in accordance with professional standards in force regarding the verification of forward-looking information. If, on the date of the admission decision, the last fiscal year was closed for more than eight months, the company's board of directors or management board must prepare and publish, under their responsibility, the accounts for the first semester. These accounts must be accompanied by the opinion of the Statutory Auditor. The last two fiscal years must be profitable. The condition of achieving profits is not required for the company requesting admission of its securities to the market through the direct registration procedure following a public capital increase. (Decree of the Minister of Finance of September 24, 2007, Art. 4)

Article 37
The company whose securities are the subject of an admission application must present an asset valuation report carried out by an expert member of the Tunisian Order of Chartered Accountants, other than the company's Statutory Auditor, or by any other expert whose valuation is recognized by the CMF.

Article 38 (new) (Decree of the Minister of Finance of September 24, 2005, Art. 2)
The company whose securities are the subject of an admission application to the market must justify the existence of:

• a procedure manual for the organization, management, and disclosure of financial information;
• an internal audit structure that must be assessed by the Statutory Auditor in its report on the company's internal control system;
• a management control structure;
• a minimum capital of three million dinars on the day of introduction. (Decree of the Minister of Finance of September 24, 2007, Art. 2)
• a statutory clause providing for the separation of the functions of Chairman of the Board of Directors and Chief Executive Officer. (Decree of the Minister of Finance of August 15, 2019, Art. 2)
  (Decree of the Minister of Finance of August 15, 2019, Art. 2):
  The company's board of directors or supervisory board must include, throughout the period its securities remain on the main market, at least two independent members and a representative of minority shareholders. An independent member is considered any member having no link with the company, its shareholders, or its management that could compromise the independence of their decision or lead to a real or potential conflict of interest. Minority shareholders are understood to mean the public as defined in Article 39 of these regulations. A general decision of the Financial Markets Council sets the criteria and procedures for the designation of independent directors and the representative of minority shareholders.

Article 39 (new) (Decree of the Minister of Finance of September 24, 2005, Art. 2)
The securities of companies held by the public and for which admission to the market is requested must be distributed among at least two hundred shareholders, at the latest on the day of introduction. By public, it is understood as shareholders holding individually no more than 0.5% of the capital and institutional investors holding individually no more than 5% of the capital. (Decree of the Minister of Finance of August 15, 2019, Art. 1) Institutional investor is understood as:

• The Tunisian State and local authorities;
• International and regional financial institutions;
• Banks acting for their own account and financial establishments;
• Insurance and reinsurance companies, acting