BANQUE CENTRALE DU CONGO

THE GOVERNOR

INSTRUCTION No. 20 (TO BANKS)

Modification No. 5, effective March 14, 2014 Concerns: Issuance by auction of the Congo Central Bank Bond (Bon BCC)

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TITLE I: General Provisions

In the framework of implementing monetary policy and pursuant to Articles 8 and 9 of its statutes, the Congo Central Bank issues the following new provisions regarding the issuance by auction of the Congo Central Bank Bond, Bon BCC for short, open to banks.

SECTION 1: Definition and Characteristics of the Bon BCC

Article 1: Definition The Congo Central Bank Bond is a short-term debt instrument issued by the Central Bank and negotiable over-the-counter on the secondary market. It is eligible for refinancing at the Issuing Institute.

Article 2: Characteristics The essential characteristics of the Congo Central Bank Bond are as follows:

• Subscription Amount: The subscription amount of the Congo Central Bank Bond is the amount ceded by the bank to the Congo Central Bank for its own account. The subscription amount is CDF 1,000,000 or in multiples of this amount.
• Interest Rate: The interest rate of the Congo Central Bank Bond is the rate applied to each accepted submission. This rate is annual, based on a 360-day year, with two decimal places, and applies to the subscription maturity.
• Repayment Amount: The repayment amount is the subscription value increased by interest.
• Maturity: The maturities of the Congo Central Bank Bond are 7, 28, and 84 days from the subscription date. Depending on monetary policy needs, issuances may be carried out on other maturities.
• Due Date: The due date is the repayment date of the instrument.
• Tax Regime: The interest generated by the subscription to the Congo Central Bank Bond is exempt from all taxes and levies.

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TITLE II: Bon BCC Operations on the Primary Market

SECTION 1: Subscription

The auction for the Bon BCC is open to all authorized banks holding a current account and a securities account (Bon BCC) in the books of the Congo Central Bank.

Article 4: Form of Subscription The subscriptions of Bon BCC by banks are dematerialized. They are held in "Bon BCC" securities accounts in the books of the Central Bank.

Article 5: Unit Nominal Value The unit nominal value of the Bon BCC is fixed at CDF 1,000,000 or in multiples of this amount.

Each accepted submission is identified by a number whose determination method is fixed by the Congo Central Bank.

Article 6: Issuance Range The issuance range is determined by the Congo Central Bank, considering monetary regulation imperatives.

Article 7: Frequency of Auctions The frequency of issuances is a function of monetary liquidity regulation objectives. Each auction covers a single maturity.

The Congo Central Bank reserves the right to organize fine-tuning liquidity operations in case of necessity.

Article 8: Announcement of Auctions The Congo Central Bank communicates to the public via a notice the characteristics of the issuance (Annex 1 / Bon BCC A001-BCC), namely: the nature of the auction, the identification number of the relevant issuance, the date of the auction, the due date of the securities, the issuance range, the unit value, the deadline date and time for submissions, the settlement date, as well as the amount due from the previous auction.

The calls for tenders as well as the results of the auctions are announced via the press and on the website of the Congo Central Bank.

Article 9: Submission Modalities Banks are the only eligible counterparties for the auction operations of the Congo Central Bank Bond with the Congo Central Bank.

In this context, the bidder may submit multiple different offers in terms of interest rate levels. Each offer comprises the proposed amount as well as the associated interest rate. Interest rate offers are expressed in multiples of 25 basis points.

Any interest rate proposal not respecting this principle is rounded down to the nearest unit.

Article 10: Maximum Submission Interest Rate The Congo Central Bank's policy rate constitutes the maximum submission interest rate. Any offer above this rate is reduced to the policy rate.

Article 11: Individual Submission Limit The Congo Central Bank may, if it deems necessary, impose a maximum limit representing a certain fraction of the total announced amount of the auction.

This fraction, if necessary, appears in the call for tenders. The Congo Central Bank rejects all offers from a bidder if the cumulative amount of their submissions exceeds the maximum limit thus established.

Article 12: Deposit of Submissions Bidders submit to the Congo Central Bank a form (Annex II / Bon BCC A002-BCC) indicating information on the submissions.

Submissions must be sent via the ATB application to the Directorate of Banking Operations and Markets no later than the Kinshasa date and time indicated in the call for tenders notice. After the deadline for receiving submissions, no submission can be withdrawn or modified. Respect for the deadline is at the discretion of the Central Bank.

The transmission of submissions is effected via the ATB application by ordinary mail, fax, or any other channel retained by the Congo Central Bank.

Article 13: Adjudication Committee The issuance by auction of the Congo Central Bank Bond is managed by an Adjudication Committee.

This Committee is composed of:

• 1 President: The General Director in charge of Monetary Policy and Banking Operations;
• 1 Vice-President: The Head of the Directorate of Banking Operations and Markets;
• 1 Secretary: The Deputy Head of the Directorate of Banking Operations and Markets in charge of Markets;
• 10 Members: 5 from Banking Operations and Markets, 2 from Economic Analysis, 1 from the Research and Statistics Directorate, and 2 Risk Auditors.

The members of the Adjudication Committee are responsible for the proper execution and transparency in the course of the auction. They are bound by professional secrecy.

The operating procedures of said Committee are defined by a Service Order.

The tallying of the auctions is carried out at the Congo Central Bank immediately after the submission deadline.

The Adjudication Committee proceeds to the electronic tallying of submissions and authenticates the banks' submissions.

It then determines the total amount of offers received (Annex 2 / Bon BCC A003-BCC) and makes the cumulative total (Annex 3 / Bon BCC A004-BCC) by interest rate and by subscription amount, according to the formula in the annex.

Offers are accepted starting with the submissions accompanied by the lowest interest rate. Each accepted submission is remunerated at its proposed rate.

The rate corresponding to the last accepted offer is called the marginal rate.

In the event that submitted offers exceed the maximum announced issuance volume, the marginal rate is the rate for which the cumulative amount equals or exceeds the amount put up for auction.

In this case, submissions expressed at rates lower than the marginal rate are fully accepted. Those expressed at the marginal rate are accepted proportionally to the amount necessary to absorb the amount put up for auction.

In the event that submitted offers are inferior to or equal to the amount put up for auction, the marginal rate is the highest rate offered. All submissions are then accepted. Accepted submissions are communicated to the banks at the end of the tallying, supported by Annex 4 / Bon BCC A005-BCC.

Article 15: Settlement/Delivery of Subscriptions On the value date of the auction, the settlement of the Bon BCC by authorized banks is effected simultaneously by the automatic debit of their current accounts and the credit of their securities accounts with the Congo Central Bank in its double capacity as Settlement Bank and Central Securities Depository.

Article 16: Provision Requirement It is necessary for the bank to have sufficient provision in its current account to ensure the settlement of the Bon BCC.

Article 17: Refinancing Prohibition Every subscriber is prohibited from using the Bon BCC as collateral for refinancing at the Central Bank on the same day as the settlement of its submission.

No bank can simultaneously subscribe to the Bon BCC and resort to refinancing at the Central Bank for the same amount.

In the event of a violation, the refinancing is cancelled, and the market is attributed to the subscriber ranked first. The bank is subject to all penalties applicable to the violation of the rules, at the rate of the penalty rate, plus the amount of the fine. The authors are liable for any damages.

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SECTION 2: Repayment

Article 19: Repayment Settlement On the due date, repayments are effected simultaneously by the automatic credit to the current account and the Bon BCC securities account of the concerned bank at the Congo Central Bank.

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TITLE III: Bon BCC Operations on the Secondary Market

Article 21: Acquisition and Cession of the Bon BCC Authorized banks may acquire or sell the Congo Central Bank Bond on the secondary market. In both cases, they are required to display the purchase and sale prices at which they are willing to execute these transactions.

Article 22: Central Bank Intervention The Central Bank ensures the clearing of these operations between intermediaries holding a current account and a Bon BCC securities account in its books.

Clearing is organized according to the principle of double notification (Annex 5 / Bon BCC A006-BCC and Annex 6 / Bon BCC A007-BCC), the objective being to ensure the simultaneous settlement of the delivery and payment of Bon BCC securities.

Thus, for a given transaction, each contracting party sends a notification to the Central Bank mentioning the main characteristics of the operation:

• The identity of the seller and the numbers of their current account and Bon BCC account;
• The identity of the buyer and the numbers of their current account and Bon BCC account;
• The number of Bon BCC and the references of the relevant issuance (codes);
• The net amount to be settled;
• The value date of the operation, fixed at day j+1 maximum.

If the two instructions are identical, they are definitively cleared on the value date agreed upon by the parties. In case of discrepancy between the elements provided by the two parties, the Central Bank suspends the operation and notifies both parties for correction.

The Central Bank ensures the existence of sufficient provisions before executing the requested clearings.

The transmission of notifications is effected at the choice of the interveners by ordinary mail, fax, or any other channel retained by the Central Bank.

The Central Bank may intervene in the secondary market by directly becoming the purchaser at maturity.

Article 23: Information Related to Secondary Market Operations Authorized banks are required to communicate monthly to the Congo Central Bank the global volume as well as the average rate of transactions realized on the Bon BCC for purchase and sale.

The Congo Central Bank synthesizes this information and communicates it to the entire banking system.

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TITLE IV: Transitional and Final Provisions

Article 24: Dispute Settlement Any dispute opposing natural or legal persons, arising from the interpretation of the validity or execution of this Instruction, shall, failing amicable settlement, be brought before the competent jurisdictions of the place of subscription of the Bon BCC.

This Instruction enters into force on the date of its signature and abrogates all prior provisions contrary to it.

Done in Kinshasa, on

[Signature]

The Governor