Instruction No. 22/99 on the Approval of Collective Investment Schemes in Securities and Public Information

WEST AFRICAN MONETARY UNION
REGIONAL COUNCIL FOR PUBLIC SAVINGS AND FINANCIAL MARKETS

INSTRUCTION NO. 22/99 RELATING TO THE APPROVAL OF COLLECTIVE INVESTMENT SCHEMES IN SECURITIES AND PUBLIC INFORMATION ______ Having regard to the Convention of July 3, 1996 establishing the Regional Council for Public Savings and Financial Markets, hereinafter referred to as the Regional Council, Having regard to Articles 18, 19 and 20 of the Annex to said Convention, Having regard to the General Regulation relating to the Organization, Operation and Control of the regional financial market of the UMOA, adopted by decision No. 001/97 of the Council of Ministers of November 28, 1997, Having regard to Articles 72 to 89 of said General Regulation, Having regard to the decision of the Regional Council in its session of July 2, 1999, THE REGIONAL COUNCIL DECIDES:

Article 1
Collective Investment Schemes in Securities are required to seek the approval of the Regional Council for Public Savings and Financial Markets before beginning their activities.

Article 2
The application for approval of a Collective Investment Scheme in Securities addressed to the Regional Council must include the following elements:
1) the name and legal form of the Collective Investment Scheme in Securities, the sponsoring institution, the management company, if applicable, and the Depositary,
2) the articles of association, if it is a Variable Capital Investment Company,
3) the regulations, if it is a Common Investment Fund,
4) a specification sheet for the management company or the Variable Capital Investment Company containing the information elements specified below:

• the distribution of share capital describing the proportion held by individuals and that held by legal entities. For the latter, the institutions having the status of Depositary will be mentioned,
• an extract from the criminal record and a curriculum vitae of the corporate officers and main executives of the Variable Capital Investment Company or the management company showing their experience in financial matters, other activities exercised notably with the depositary institution and/or the sponsoring group of the Variable Capital Investment Company
• the number and hierarchical level of persons exercising responsibilities in the company as well as persons collaborating in the management of the Variable Capital Investment Company or the Common Investment Fund who are not employed by the Variable Capital Investment Company and/or the management company, mentioning the organization under which they fall,
• the detailed organizational chart of the Variable Capital Investment Company or of the Common Investment Fund,
• the remuneration methods for employees and collaborators exercising responsibilities in the management of the Variable Capital Investment Company or the Common Investment Fund,
• the nature of the contract; ethical provisions applicable to employees, corporate officers and collaborators of the Variable Capital Investment Company or the Common Investment Fund,
• a copy of the delegations granted when the salaried personnel of the depositary institution exercises functions in the Variable Capital Investment Company or the management company,
• the list of equipment used by the Variable Capital Investment Company or the management company distinguishing own equipment from equipment used jointly with other companies. For computer equipment, the main characteristics of the software used will be specified,
• the description of procedures relating to entry or exit rights,
• for Variable Capital Investment Companies, issuance and redemption fees, management fees, issuance and redemption fees.

Article 3
The Collective Investment Scheme in Securities seeking approval must commit in writing to submit to the Regional Council for prior authorization:
a) any project to modify the methods of evaluating shares or units recorded in its assets compared to the method initially communicated to the Regional Council; b) any project for legal and financial restructuring.

Article 4
The Collective Investment Scheme in Securities seeking approval must commit in writing to respect the prudential rules defined by the Regional Council, in terms of coverage and division of risks.
Generally, Collective Investment Schemes in Securities (OPCVM) must present sufficient guarantees regarding their organization, their technical and financial means, the honorability and experience of their managers. They must take measures to ensure the security and transparency of operations.

Article 5
The Regional Council may, if it deems necessary, request that a simulation of operations be carried out prior to the opening to the public of the Collective Investment Scheme in Securities.

Article 6
Management delegations granted to external bodies must be brought to the knowledge of the Regional Council before they enter into force.
The management mandate must specify:
a) the type of delegation granted (administrative management, and/or financial management), b) the distribution of remuneration between the Collective Investment Scheme in Securities and the institutions holding this delegation, c) the presentation of the institution(s) holding a delegation, d) the procedures implemented by the Collective Investment Scheme in Securities or the management company to ensure control of operations performed by the delegatee institution(s) as well as the conditions for revocability of the delegations and the duration for which the management mandate was concluded, e) the criteria retained for the choice of intermediaries charged with executing orders of the Collective Investment Scheme in Securities, indicating notably the conditions under which managers of the concerned Collective Investment Scheme in Securities are associated with these choices, f) the name of the proposed statutory auditor with an annexed summary statement listing the OPCVMs and the management companies of said OPCVMs for which the statutory auditor is already holding a mandate as well as the dates of appointment in the functions exercised.

Article 7
For any issuance of units, Collective Investment Schemes in Securities must establish an information note bearing the visa of the Regional Council for Public Savings and Financial Markets and kept available to the public. This information note must include:

• for Variable Capital Investment Companies, the Articles of Association,
• for Common Investment Funds, the Regulations of the Common Investment Fund,
• for any other form of Collective Investment Scheme in Securities, a Regulation of this structure.

Article 8
The information note may, at the choice of the organisms ensuring the marketing of units of the Collective Investment Scheme in Securities to the public, be disseminated according to one or other of the following modalities:

• if these organisms have chosen to record subscriptions using forms, said forms must include mentions indicating:
• that the subscriber has received the fact sheet of the Collective Investment Scheme in Securities,
• that the subscriber can obtain, from the headquarters of the Collective Investment Scheme in Securities or from establishments authorized to receive subscriptions, the articles of association of the Collective Investment Scheme in Securities, if it is a Variable Capital Investment Company, the regulations, if it is a Common Investment Fund.
• if these organisms have opted for the procedure without subscription forms, the dissemination modalities for articles of association (SICAV) or regulations (FCP) envisaged will be submitted to the appreciation of the Regional Council. The same applies to the modalities for redemption of units.

Article 9
Collective Investment Schemes in Securities must publish quarterly and annual reports containing the following information:

• the composition of net assets,
• a reminder of the orientation of the investment policy,
• the portfolio distribution in percentage and the total amount of assets at the end of the quarter,
• the evolution of net assets, the number of shares and net asset values,
• the revenues distributed over the last three (3) years.

Article 10
The granting of approval to a Variable Capital Investment Company is subject to the payment of a sum of two million (2,000,000 FCFA).

Article 11
The granting of approval to a Common Investment Fund is subject to the payment of a sum of one million FCFA (1,000,000 FCFA).

Article 12
The publication of the approval decision must occur no later than 90 days after its notification by the Regional Council, in the bulletin of the Regional Council and in that of the stock exchange.

Article 13
This instruction shall be published wherever necessary.

Done at Abidjan, on July 2, 1999
For the Regional Council
The President
L. NAKA