[Logo: CENTRAL BANK OF MADAGASCAR]

DIRECTION OF MONETARY OPERATIONS

Instruction No. 00005-DOM/19
Adopting the Code of Good Conduct Applicable to Participants in the Money Market

The Governor of the Central Bank of Madagascar,

Having regard to Law No. 2016-004 of July 29, 2016, supplemented by Law No. 2016-057 of February 2, 2017, establishing the Statutes of the Central Bank of Madagascar;

Having regard to Decree No. 2014-1684 of October 29, 2014, appointing the Governor of the Central Bank of Madagascar;

Having regard to Instruction No. 001-DOM/2019 of May 3, 2019, amending and supplementing certain provisions of Instruction No. 005-DOM/17 of December 19, 2017, regarding the implementation of monetary policy instruments of the Central Bank of Madagascar;

Having regard to Instruction No. 002-DOM/2019 of May 3, 2019, regarding the policy rates of the Central Bank of Madagascar;

Having regard to Instruction No. 003-DOM/2019 of May 3, 2019, setting the rates for the permanent facilities of the Central Bank of Madagascar;

Having regard to Instruction No. 004-DOM/2019 of May 3, 2019, establishing the exchange platform for monetary and interbank operations.

DECIDES

Article 1: OBJECT
This Instruction aims to establish a Code of Good Conduct applicable to participants in the money market, hereinafter referred to as the "Code". It is set out in Annex I to this Instruction.

Article 2: REGIME OF THE CODE OF GOOD CONDUCT The "Code" comprises a set of principles generally recognized as best practices in the money market. These principles give rise to rules, precepts, and prescriptions to which participants in monetary and interbank operations must comply in order to preserve market integrity and prescribe appropriate conduct.

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B.P. 550 Antananarivo (101) - Madagascar ▪ Tel. (261) 20 22 217 51 / 20 22 234 65 ▪ Fax (261) 20 22 345 32 E-mail: banque-centrale@bfm.mg ▪ Website: www.banque-centrale.mg

The "Code" constitutes a reference document ensuring that money market activities are conducted in accordance with the professionalism requirements inherent to it.

Article 3: ADMISSION
In the course of their money market activities, participants are required to adhere to the "Code" and commit to respecting its provisions.

Article 4: DECLARATION OF COMMITMENT
Participants' adherence to the "Code" is formalized by the signature of the declaration of commitment set out in Annex II to this Instruction by the authorized person. Participants have a period of ten (10) business days from the date of entry into force of this Instruction to transmit to the Central Bank of Madagascar the duly dated and signed declaration of commitment.

Article 5: SANCTIONS
The Central Bank of Madagascar (BFM) ensures compliance with the "Code" by participants and sanctions any breach.
Depending on the severity of the alleged facts, the following sanctions may be imposed:

• warning,
• temporary suspension,
• permanent exclusion from the money market.

Article 6: ANNEXES
The Annexes form an integral part of this Instruction.

Article 7: ENTRY INTO FORCE
This Instruction enters into force on the date of its publication on the website of the Central Bank of Madagascar.

Antananarivo, June 17, 2019

[Signature]
THE GOVERNOR
ALAIN H. RASOLOFONDRAIBE

ANNEX I

CODE OF GOOD CONDUCT APPLICABLE

TO PARTICIPANTS IN THE MONEY MARKET

Table of Contents

Chapter I: PREAMBLE ................................................................................................................. 4
Section 1: General Provisions ................................................................................................... 4
Section 2: Subject Participants ................................................................................................ 5
Chapter II: PRINCIPLES BY PILLAR ....................................................................................... 5
Section 1: Ethics ......................................................................................................................... 5
Section 2: Execution .................................................................................................................. 8
Section 3: Information Exchange ............................................................................................. 8

Chapter I: PREAMBLE

Section 1: General Provisions

Definition and Objectives

The Code of Good Conduct applicable to participants in the money market, referred to as the "Code", is a set of best practice principles on the said market, developed to provide common guidelines to foster market participant integrity and make the management of monetary and interbank operations even more efficient. Thus, this Code, which is not intended to serve as an exhaustive guide, aims to set out the principles on which participants base their:

• conduct of activities on the money market;
• establishment and updating of their internal procedures;
• adoption of appropriate behaviors and attitudes.

The "Code" aims to promote a robust, fair, liquid, and sufficiently transparent market in which various participants, relying on a solid infrastructure, are able to efficiently conclude operations with confidence, at prices that reflect market information, and in accordance with acceptable behavioral standards.

Main Pillars

The "Code" revolves around three main pillars:
— Ethics: Money market participants are expected to conduct themselves ethically and professionally to promote fairness and integrity in the money market. — Execution: Money market participants are expected to exercise caution when negotiating and executing operations to promote a robust and liquid money market. — Information Exchange: Money market participants are expected to protect confidential information and be clear and precise in their communications to promote effective communication in service of a fair and sufficiently transparent money market.

The "Code" and Applicable Law:

The "Code" in no case replaces applicable law, nor modifies existing legislation and regulations, nor is it intended to restrict the powers of the BFM. Rather, it intends to complement laws, regulations, and procedures by identifying best practices. This "Code" also cannot constitute a legal defense for participants in case of violation of applicable law. Money market participants must be aware of the laws, regulations, and standards applicable to them and to the money market. It is up to them to establish internal policies and procedures to remain in compliance with applicable law.

Section 2: Subject Participants

Participants in the market subject to the provisions of this "Code" consist of a person or institution that:
(i) is active on the money market in the context of monetary policy operations and interbank exchanges, (ii) manages and operates a mechanism, system, platform, or organization through which participants have the capacity to execute the type of operations described in (i).

Chapter II: PRINCIPLES BY PILLAR

Section 1: Ethics

GUIDING PRINCIPLE
Money market participants are expected to conduct themselves ethically and professionally to promote fairness and integrity in the money market.

Through their ethical and professional conduct, participants essentially exercise judgment, and it is appropriate that they be guided by the general principles below whenever they participate in the money market.

PRINCIPLE 1
Money market participants must strive to observe the most rigorous ethical standards.

Money market participants should:

• act honestly when dealing with the BFM and other market participants,
• act fairly when dealing with the BFM and other market participants by adopting appropriate transparency, and
• act with integrity, particularly by avoiding questionable practices and behaviors.

Maintaining high standards of ethical conduct is the responsibility of:

• institutions, which must promote values and ethical conduct within their organization, support efforts to encourage strict ethical standards across the broader money market, and encourage their staff to engage in such efforts,
• senior management and executives, who must actively work to integrate and support the practice of ethical values in their institution's culture and be ready to provide sound advice to staff, and
• staff, who should exercise judgment when faced with ethical issues, expect to be held accountable for unethical conduct, and seek advice when appropriate. Staff must report and/or alert competent parties internally or externally to their institution on matters of concern, considering the circumstances.

PRINCIPLE 2
Money market participants must strive to observe the most rigorous professional standards.

All money market participants have a common interest in implementing the highest degree of professionalism and the strictest standards in conducting their activities on the money market.

Strict conduct standards rely on:

• sufficient knowledge of applicable law and its respect,
• relevant and sufficient experience, technical knowledge, and qualifications,
• skills and know-how,
• the exercise of professional judgment in observing institutional guidelines and operational procedures, including, without limitation, execution methods, and ethical conduct, and
• efforts to observe the strictest professional standards on the money market.

Institution staff must be properly trained and have the necessary experience to perform their functions professionally.

PRINCIPLE 3
Money market participants must identify potential conflicts of interest and respond to them.

Money market participants should identify actual and potential conflicts of interest that could compromise or be perceived as compromising their ethical or professional judgment. Money market participants must eliminate these conflicts or, if it is not reasonably possible to eliminate them, manage them effectively to promote fair treatment within the money market, which may include refraining from conducting business or acting due to a conflict of interest.

Staff must be aware of risks that could lead to a conflict of interest and comply with their institution's policies in this area.

A conflict of interest may arise under certain conditions, including:

• situations where personal interests may conflict with those of the institution, or where a market participant faces a conflict because their interests risk conflicting with those of another,
• existence of personal relationships,
• offers of gifts and invitations,
• existence of personal transactions,

Money market participants must take appropriate and effective measures to eliminate or manage conflicts of interest. These measures may include:

• separation of tasks and/or reporting lines,
• implementation of information barriers: physical separation of certain departments and/or electronic separation,
• modification of staff tasks when such tasks risk giving rise to a conflict of interest,
• training of concerned staff to enable them to identify and manage conflicts of interest.

When it is established that a particular conflict of interest cannot be reasonably avoided or effectively managed, including by interrupting the service or activity in question, money market participants must communicate sufficient details of this conflict to the concerned parties to allow them to decide in advance whether they wish to proceed with the operation or service.

Section 2: Execution

GUIDING PRINCIPLE
Money market participants are expected to exercise caution when negotiating and executing operations to promote a robust and liquid money market.

All money market participants, regardless of their role in executing operations, must conduct themselves with integrity to support the efficient functioning of the money market.

PRINCIPLE 4
Money market participants should treat operations fairly and transparently.

Participants in the market who process operations should:

• be honest in their statements,
• use clear and unambiguous language,
• refrain from concluding operations with the aim of disrupting the market.

PRINCIPLE 5
Money market participants should identify and resolve operational anomalies as quickly as possible to contribute to the proper functioning of the money market.

Money market participants must establish effective policies and procedures designed to minimize the number of anomalies in operations resulting from their money market activities and must promptly manage such anomalies.

Section 3: Information Exchange

GUIDING PRINCIPLE
Money market participants are expected to protect confidential information and be clear and precise in their communications to promote effective communication in service of a fair and sufficiently transparent money market.

PRINCIPLE 6
Money market participants should clearly and effectively identify confidential information and properly restrict access to it.

The identification of confidential information must comply with any legal or contractual restrictions to which the money market participant may be subject.

Money market participants must limit access to confidential information and protect it.

Money market participants must refrain from disclosing confidential information except to internal or external parties with a valid reason to receive such information, such as to meet risk management requirements, legal obligations, and compliance.

Money market participants must refrain from disclosing confidential information to any internal or external party under any circumstances when it is likely that such party would misuse it.

PRINCIPLE 7
Money market participants must refrain from disclosing confidential information to any external party, except in specific cases.

Money market participants must refrain from disclosing confidential information except under certain specific conditions:

• to agents, or to other market participants to the extent necessary for the execution, processing, clearing, or settlement of an operation,
• to advisors or consultants on condition that they protect confidential information in the same manner as the market participant transmitting such information to them,
• if the counterparty expressly consents to the disclosure,
• in the event of a request from the BFM acting for monetary policy purposes, and
• if disclosure is required by applicable law or its communication is demanded by a judicial authority acting within the framework of judicial proceedings.

PRINCIPLE 8
Money market participants must communicate clearly, precisely, professionally, and without ambiguity.

Communications must be easy for the recipient to understand. Therefore, money market participants must use terminology and language appropriate for the target audience and avoid ambiguous terms.

Money market participants must keep in mind that communications from their staff members bind the reputation of the institution they represent as well as that of the sector as a whole.

PRINCIPLE 9
Money market participants must provide their staff with clear recommendations on dedicated communication methods and channels.

Money market participants must communicate with other market participants using dedicated communication methods that allow for traceability, verification, and archiving of information as well as access control. Information security standards must apply regardless of the communication method used.

Where possible, money market participants must keep an updated list of dedicated communication methods.

ANNEX II

DECLARATION OF COMMITMENT TO RESPECT THE CODE OF GOOD CONDUCT APPLICABLE TO PARTICIPANTS IN THE MONEY MARKET

[Name of the establishment] (the "Establishment") has taken note of the content of the Code of Good Conduct applicable to participants in the money market (hereinafter referred to as the "Code") and acknowledges that the "Code" is a set of principles generally recognized as best practices on the money market.

The "Establishment" confirms that it acts as a money market participant as defined in the "Code" and commits to conducting its activities on the money market in compliance with the principles of the "Code".

To this end, the Establishment has taken appropriate measures to conduct its operations in compliance with the principles of the "Code".

Date: ...........................................................

[Signature and seal of the establishment]
[Name and Title of the person representing the establishment]