BANKY FOIBEN'I MADAGASIKARA (CENTRAL BANK OF MADAGASCAR)

INSTRUCTION NO. 001-DDI/2018

GOVERNING THE PROCEDURES FOR GRANTING APPROVAL AS A CREDIT INFORMATION BUREAU (BIC)

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 Law No. 2017-045 of February 15, 2018, governing the activity and supervision of Credit Information Bureaus; Having regard to Decree No. 2014-1684 of October 29, 2014, appointing the Governor of the Central Bank of Madagascar;

DECIDES

Article 1. General Provisions

This Instruction aims to:

• specify the procedure for submitting and processing approval applications;
• establish the list of documents and information constituting the application file for approval as a Credit Information Bureau (BIC) within the territory of the Republic of Madagascar.

Only an entity duly incorporated as a public limited company (société anonyme) is authorized to submit an approval application as a BIC to the Central Bank of Madagascar.

Documents constituting the approval application file

The application file is prepared in paper and electronic versions, and submitted to the Central Bank of Madagascar by the entity's legal representative or a duly authorized person.
The file includes a written application addressed to the Governor of the Central Bank of Madagascar, according to the model set out in Annex 1, accompanied by the documents and information listed in Annex 2, as well as letters prepared according to the models presented in Annexes 3 and 4 of this Instruction. The documents and information constituting the file must be presented in the order specified in Annexes 1, 2, 3, and 4 of this Instruction and deposited at the Head Office of the Central Bank of Madagascar. The deposit is effective only after verification of the completeness of the files.

Article 2.

Article 3. Procedures for processing approval applications

An Approval Committee at the Central Bank of Madagascar is responsible for processing the file and prepares a report with recommendations.

3.1 The file is subsequently submitted to the Governor of the Central Bank of Madagascar for decision.
3.2 The maximum time limit prescribed by Article 9 of Law No. 2017-045 of February 15, 2018 governing the activity and supervision of Credit Information Bureaus runs from the date of notification by the Central Bank of Madagascar, by any means leaving a written record, of the completeness of the deposited files. 3.3 Approval is granted by a Decision taken by the Governor of the Central Bank of Madagascar and published on its website and in the Official Journal of the Republic of Madagascar, based on the report and recommendations of the Approval Committee. 3.4 The approval decision specifies the authorized activities for the BIC throughout the territory of the Republic of Madagascar. It states, where applicable, the time limit for implementing the project and the specific conditions for the decision to take effect. 3.5 Under the publication procedure provided for in paragraph 2 of Article 16 of Law No. 2017-045 of February 15, 2018, the Official Journal of the Republic of Madagascar or the website of the Central Bank of Madagascar indicates: the name of the entity approved as a BIC and the references of the decision issued by the Governor. 3.6 Any refusal of approval by the Central Bank of Madagascar must be duly reasoned and notified to the applicant. 3.7

Article 4. Supplementary documents or information

4.1 In accordance with Article 10 of Law No. 2017-045 of February 15, 2018 governing the activity and supervision of Credit Information Bureaus, the Central Bank of Madagascar reserves the right to request any supplementary documents or information it deems useful for processing the approval file. 4.2 Any request for supplementary information suspends the time limit for processing the approval application. This time limit resumes from the date of receipt of the requested elements. 4.3 The applicant has a maximum time limit of fifteen (15) calendar days, from the date of notification of the corresponding correspondence from the Central Bank of Madagascar, to submit the supplementary documents or information referred to in the first paragraph above. 4.4 Upon expiration of the fifteen (15) day time limit referred to in paragraph 3 above, and failing communication of all required documents or information, the application may be rejected by the Central Bank of Madagascar and notified to the applicant. 4.5 In application of Article 10 of Law No. 2017-045 of February 15, 2018 governing the activity and supervision of Credit Information Bureaus, and in case of required supplementary documents or information, the Central Bank of Madagascar may extend the initial time limit for examining the approval application by a maximum of thirty (30) days. This new time limit runs from the date of deposit of the required supplementary documents or information by the applicant. The legal representative will receive notification of this extension decision.

Article 5. Suspensive conditions

The Central Bank of Madagascar may subject the effectiveness of a granted approval to the fulfillment of one or more so-called "suspensive conditions". The object and nature of such conditions are entirely at the discretion of the Central Bank of Madagascar.

5.1 The full release of share capital may be considered a suspensive condition.
5.2 To justify the fulfillment of suspensive conditions, the applicant submits to the Central Bank of Madagascar the required documents before the expiration of the time limit set by the approval decision. 5.3 However, it may request in writing an extension of the time limit for fulfilling suspensive conditions no later than one (1) month before the expiration of the time limit set in the approval decision. The Central Bank of Madagascar may grant a new time limit. 5.4 The Central Bank of Madagascar conducts prior control of the effective fulfillment of the requirements registered as suspensive conditions. If the documents are conclusive, the Central Bank of Madagascar informs the applicant entity, by any process leaving a written record, of the lifting of suspensive conditions. 5.5 Failing fulfillment of suspensive conditions and where no extension request is made, the approval decision becomes void. The promoter or authorized legal representative will be informed in writing.

Article 6.

6.1 Minimum share capital amount of a BIC
6.2 The minimum capital of a BIC is set at one billion Ariary (1,000,000,000.00 Ariary).
6.3 The capital structure of the BIC, decision-making and administrative bodies must be identical to those of the legal entity stipulated in paragraph 2 of Article 1 of this Instruction.

Article 7. Guarantee deposit

7.1 In virtue of Article 17 of Law No. 2017-045 of February 15, 2018 governing the activity and supervision of Credit Information Bureaus, the promoter of the BIC is required to open an account with the Central Bank of Madagascar and make a non-interest-bearing guarantee deposit by transfer. This deposit is allocated to the payment of fines in case of eventual sanctions. 7.2 The amount of the guarantee deposit is equivalent to 5% of the minimum share capital amount of the BIC.

Article 8. Authorization for data delocalization

8.1 Under the conditions provided by Article 35 of Law No. 2017-045 of February 15, 2018, the Central Bank of Madagascar authorizes the applicant company to delocalize processed data - its databases and backup sites - if the host country guarantees a legal protection level at least similar to that granted to Madagascar. 8.2 The applicant must specify the country where delocalization will be carried out. 8.3 The authorization takes the form of a written letter signed by the Governor of the Central Bank of Madagascar and enters into force on the date of its notification to the applicant.

Article 9. Code of conduct

9.1 Following the approval decision, the entity has a time limit of one (1) month to submit for the approval of the Central Bank of Madagascar a draft Code of Conduct to be signed with data suppliers and users. 9.2 The aforementioned draft Code of Conduct must have been previously discussed with all stakeholders.

Article 10. Quality of declaration and obligation to update

10.1 All information and data communicated by the applicant company must be up-to-date and accurate at the time of the approval application.
10.2 The applicant company is required to notify the Central Bank of Madagascar without delay in case of change or modification of communicated data or any information likely to affect the exercise of BIC activities. 10.3 The updated list of approved and authorized BICs operating in Madagascar, with their approval decisions and registration numbers, is published on the website of the Central Bank of Madagascar. 10.4 All commercial documents, publications, and correspondence from the BIC must contain its registration number issued by the Central Bank of Madagascar.

Article 11. Entry into force

This Instruction, including its annexes which form an integral part thereof, enters into force upon its publication on the website of the Central Bank of Madagascar.

Done at Antananarivo, 23 July 2018
The Governor,
Alain H. RASOLOFONDRAIBE

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ANNEX 1 LETTER MODELS

DOCUMENT NO. 01

Model letter for application for approval as a Credit Information Bureau

Place and date
To the attention of the Governor of the Central Bank of Madagascar Antananarivo - Madagascar Subject: Application for approval as a Credit Information Bureau

Mr. Governor,
I have the honor to request from the Central Bank of Madagascar the approval of the company, in the capacity of Credit Information Bureau, carrying out the following operations:

1. collect and store credit information and personal data;
2. process and update Credit Information and personal data;
3. cross-reference, merge different information sources and produce solvency reports including the practice of Scoring;
4. distribute Credit Information and solvency reports to users;
5. develop and commercialize Value-Added Services for users;
6. other [specify clearly].

To this effect, please find enclosed the application file in accordance with Instruction No. [____].
I certify the sincerity of these statements and declare that, to my knowledge, there are no other important facts of which the Central Bank of Madagascar must be informed.
Please accept, Mr. Governor, the assurance of my high consideration.

Enclosures:
Certified signature (and possibly seal)
1 Indicate the signatory's title: President, Managing Director, Manager, Other corporate officer or, authorized representative (attach certified justification of this authorization Cf. model document No. 2). 2 To be specified clearly.

DOCUMENT NO. 02

Model proof of signature authority

Mr. Governor,
We, the undersigned,
(First and last name of each shareholder and/or representative of shareholders, as indicated on identification documents), acting in our capacity as founding shareholders of the company [], principals, declare hereby granting power of attorney to (First names and last name of the representative, as indicated on identification documents), born on [] and residing at [____], acting as representative to represent us and in accordance with our interests. By this power of attorney, the representative is entitled to deposit, follow up and sign all documents relating to the company's application for approval as a Credit Information Bureau, and to carry out all related administrative formalities with any competent authority for this purpose. For what it may concern. We request you to accept, Mr. Governor, the assurance of our high consideration. Certified signatures of shareholders and/or authorized representative of shareholders

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ANNEX 2: LIST OF DOCUMENTS AND INFORMATION TO BE PROVIDED REGARDING THE APPLICANT ESTABLISHMENT

N.B.: All documents must be provided in French, original and presented in order according to the references below:

O/N	OBSERVATIONS	DOCUMENTS AND INFORMATION REQUIRED	SECTIONS (Columns reserved for BFM)
I. GENERAL PRESENTATION
1. Authorized representative	1.1. Application for approval duly signed by the authorized representative in accordance with the model in Annex 1, with proof of signatory's authority (document 1 and 2)	1.1.
2. Applicant establishment	1.2. Certified copy of a valid identity document	1.2.
	1.3. Updated, dated and signed curriculum vitae	1.3.
	1.4. Certificate of good conduct dated less than 3 months ago	1.4.
	2.1. Contact details (corporate name; legal form; registered office; managers) and date of incorporation	2.1.
	2.2. Tax registration receipts and National Register of Commerce and Companies receipt	2.2.
	2.3. Notarized declaration of full capital subscription	2.3.
	2.4. Articles of Association and Internal Regulations, code of good governance or ethics to which administrators, executives and staff will be subject	2.4.
	2.5. Minutes of the Constituent General Meeting and the first regulated Board of Directors meeting	2.5.
	2.6. Information on regulated professions in which the applicant is engaged (bank; insurance; others): - If the applicant is engaged in another regulated profession, specify the name and contacts of the regulatory authorities for this activity, - Specify if the applicant company is engaged in other commercial activities.	2.6.
	2.7. Council and control: - Name and contacts of the applicant company's Lawyers, - Name and contacts of external Auditors.	2.7.
2.2. Shareholding	2.1. Summary table of shareholding indicating the participation level of each, type of contributions (in cash or in kind), nationality, voting rights, and address. If natural persons: 2.1. Letter in accordance with the model in Annex 1 (document 3)	2.1.
	2.2. Certified copy of a valid identity document	2.2.
	2.3. Dated and signed curriculum vitae	2.3.
	2.4. Certificate of good conduct dated less than 3 months ago or equivalent act	2.4.
	2.5. Shareholders' agreements, if any.	2.5.
	2.6. Sworn statement regarding the lawful nature of funds used for capital subscription.	2.6.
If legal persons: 2.7. Letter in accordance with the model in Annex 1 (document 3)	2.7.
	2.8. Corporate name and registered address	2.8.
	2.9. Capital amount with indication of participation level, nationality	2.9.
	2.10. Financial situation with the last three certified financial statements attached	2.10.
	2.11. Sworn statement regarding the lawful nature of funds used for capital subscription.	2.11.
	2.12. Capital distribution: The capital structure, names and first names of shareholders (or corporate name for legal persons) holding at least 5% of the capital, Description of all existing legal, financial or commercial links between shareholders (direct family ties, links with executives of legal persons, participations or other financing, agreements, shareholders' pacts, etc.) Their nationality and their share in absolute and relative value, Shareholders must be grouped into homogeneous categories: 1) National shareholding ■ Legal persons ■ Natural persons 2) Foreign shareholding ■ Legal persons ■ Natural persons 3) Total = (1) + (2) Comments on capital distribution, future developments envisaged, including capital increases, control links between shareholders, existence of share transfer agreements: a firm or optional sale commitment. Indicate if part of the capital is to be subject to a public offering. In this case, specify the procedure envisaged for the operation.	2.12.
2.3. If entity belongs to a group: 2.1. Group description with list of main companies	2.1.
	2.2. Group organizational chart and capital link	2.2.
	2.3. Description of activities and social capital amount for each entity in the group	2.3.
	2.4. Consolidated financial statements of the group	2.4.
	2.5. Group control procedure by the parent company.	2.5.
	2.6. List of supervisory authorities to which the group's credit information bureaus fall under.	2.6.
3. Corporate executives: 3.1. Letter in accordance with the model in Annex 1 (document 4)	3.1.
	3.2. Certified copy of a valid identity document for each proposed executive	3.2.
	3.3. Updated, dated and signed curriculum vitae	3.3.
	3.4. Certificate of good conduct dated less than three months ago or equivalent.	3.4.
	3.5. Certified copy of the executive appointment document or equivalent.	3.5.
	3.6. Detailed description of corporate executives' functions.	3.6.
4. Members of social bodies: If natural person: 4.1. Certified copy of a valid identity document	4.1.
	4.2. Updated, dated and signed curriculum vitae	4.2.
	4.3. Certificate of good conduct dated less than three months ago or equivalent act.	4.3.
If legal person: 4.1. Corporate name, legal form, registered address, country of establishment	4.1.
	4.2. Articles of Association	4.2.
	4.3. Composition of social bodies	4.3.
	4.4. Identity and CV of the representative within the applicant establishment	4.4.
5. Statutory auditors: Identity of the Statutory Auditors, minutes of the General Meeting appointing them.	5.1.
6. Organizational structure: 6.1. Functional organizational chart	6.1.
7. Guarantee deposit: 7.1. Deposit certificate with BFM	7.1.
II. PROJECT DESCRIPTION
1. General policy and objectives pursued by promoters: 1.1. Brief description of the implementation strategy and management of Credit Information processing	1.1.
2. Activity program: 2.1. For installation and operationalization of the BIC	2.1.
	2.2. For basic services (solvency reports)	2.2.
	2.3. For value-added services (notably scoring models and risk management tools)	2.3.
	2.4. For services targeted at consumers	2.4.
	2.5. Other services to be provided	2.5.
3. Technical architecture: 3.1. Synthetic presentation of the information system (global architecture, software to be used, backup means to be implemented, indicative realization dates, procedures and tools for data integration and IT security, collection, processing, audit, and conservation methods, sharing of information and data from suppliers, IT strategy, etc.)	3.1.
	3.2. Description of elements to verify compliance with all technical security standards	3.2.
	3.3. Technical assistance agreement, if applicable	3.3.
	3.4. Description of all types of insurance coverage necessary for exercising its activities.	3.4.
4. Policy and operating manuals: 4.1. Brief description of policies and procedures regarding: Security and confidentiality of data, Control and monitoring of transmitted data quality, compliance with laws and regulatory requirements; operational risk management, including legal and reputation risks, technological and cyber-attack risk control, capital and financial resource management, staff selection and integration procedure (at the beginning and throughout the project), business continuity and security plan; (including backup facilities and disaster recovery plans), code of conduct and ethics, provisions for setting up a backup site, Monitoring and control of data access by users as well as for authorized purposes, Handling customer complaints, Procedure for managing credit information collected from data suppliers.	4.1.
	4.2. Scoring methodology	4.2.
5. Envisaged resources: 5.1. Description and number of human resources	5.1.
	5.2. Target organizational charts with indication of headcount	5.2.
	5.3. Possible financing or partnership agreement	5.3.
	5.4. Description of material and technological resources to be implemented	5.4.
6. User protection: 6.1. Draft standard agreements and code of conduct with suppliers and users referred to in Article 36, 37 and 39 of Law No. 2017-045 of February 15, 2018 governing the activity and supervision of Credit Information Bureaus.	6.1.
7. Financial projections: 7.1. Five (5) year forward-looking financial statements with assumptions (low, medium and high) indicating parameters used for establishing forecasts	7.1.
	7.2. Opening balance sheet, specifying the date of its establishment.	7.2.
8. Data conservation in another country or under another jurisdiction: In case data and Credit Information storage or conservation takes place in another country or under another jurisdiction, the bidder must produce all details regarding provisions proposed for such storage, including: 8.1. Details concerning the proposed storage establishment: name, addresses, owner, jurisdiction, functionalities in terms of management and services	8.1.
	8.2. Details of terms and conditions governing the use and storage of credit information deposited with this storage establishment	8.2.
	8.3. Details of security measures applicable to credit information stored in this storage establishment	8.3.
	8.4. Proposed methods for transmission and exchange of credit information to and from this storage establishment	8.4.
	8.5. Proposed provisions for management and administration of the planned storage establishment	8.5.
	8.6. Details of laws and other legal obligations that may govern the use and storage of credit information as well as personal data in this country or under this jurisdiction	8.6.
	8.7. Details of supervisory mechanisms that may apply to the storage establishment.	8.7.