Instruction No. 36/2009 Amending and Cancelling Instruction No. 33/2006 on Public Offers to the Savings of the UMOA

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

INSTRUCTION No. 36 / 2009

AMENDING AND CANCELLING INSTRUCTION No. 33/ 2006 RELATING TO PUBLIC OFFERS TO SAVINGS WITHIN THE UMOA

The Regional Council for Public Savings and Financial Markets,

Having regard to the Convention of 3 July 1996 establishing the Regional Council for Public Savings and Financial Markets (hereinafter the "Regional Council");

Having regard to the Annex to the Convention on the Composition, Organization, Functioning and Powers of the Regional Council;

Having regard to the General Regulations relating to the Organization, Functioning and Control of the UMOA Regional Financial Market;

Having regard to the deliberations of the Regional Council at its ordinary session of 26 October 2009;

ORDERS

CHAPTER I - GENERAL PROVISIONS

Article 1

The following shall be deemed to make a public offer to savings: States or any other entity:

a) whose securities are dispersed beyond a circle of one hundred persons, having no legal link between them, b) which, in order to offer the public of the UMOA investment products, resort either to an investment syndicate or to any means of soliciting the public, including in particular advertising and door-to-door solicitation, c) whose securities are listed on the Regional Securities Exchange.

Article 2

Public offers to savings operations on the UMOA regional financial market are subject to the prior visa of the Regional Council.

The formality of the prior visa is not required for loans issued by a State or a group of States.

The visa granted by the Regional Council must be widely disseminated throughout the UMOA territory.

Article 3

Any entity or person intending to make a public offer to savings in the context of an issuance or transfer is required:

• to prepare an information note, subject to the mandatory visa of the Regional Council, with the exception of that prepared by a State or a group of States,
• to designate a Management and Intermediation Company (SGI) as the Lead Manager of the investment syndicate for the securities.

Article 4

The decision of the Regional Council granting the visa for a public offer to savings operation and for the information note, mentioned in Articles 2 and 3 above, must contain a warning drafted as follows:

"The granting by the Regional Council of its visa does not imply approval of the appropriateness of the operation, nor authentication of the accounting and financial elements presented, nor guarantee or certification of the information disseminated. The information note subject to visa is established under the sole responsibility of the issuer and the visa is granted only after verification that this information note is complete and understandable and that the information it contains is relevant and coherent in the perspective of the operation proposed to investors. The visa of the Regional Council does not constitute a guarantee against the risk of non-repayment of the securities whose issuance by public offer to savings is thus authorized."

CHAPTER II - DUE DILIGENCE IMPOSED ON ISSUERS, OTHER THAN STATES AND LOCAL AND TERRITORIAL PUBLIC AUTHORITIES

Article 5

Any issuer, other than States and local or territorial public authorities, intending to carry out a public offer to savings, must obtain authorization from the Regional Council. To this end, it submits a file comprising in particular:

• a certified true copy of the statutes or any other document serving as such,
• the minutes of the meeting of the duly authorized body, having authorized the operation,

Instruction No. 36 / 2009

• the financial statements of the last three financial years certified by a Statutory Auditor as well as, where applicable, the certified consolidated accounts, for existing companies in the case of capital operations,
• the financial statements of at least two financial years certified by a Statutory Auditor or, failing that, a guarantee deemed sufficient by the Regional Council, in the case of debt operations,
• the information note,
• any other document requested by the Regional Council in the context of the file processing.

The Regional Council may have independent experts, at the expense of the requesting issuer, carry out any audit deemed necessary.

Article 6

The information note must contain in particular the information required below:

1. General information concerning the issuer
   1.1. the name or corporate name,
   1.2. the legal status,
   1.3. the registered office,
   1.4. the description of activities,
   1.5. the list of corporate officers, with mention of their names and first names, titles, addresses, etc.,
   1.6. the amount of share capital as well as the identity and description of the activities of shareholders holding more than 10% of the capital each,
   1.7. the names, first names, addresses, as well as the description of the activities of the founders (for companies in the process of incorporation),
   1.8. the certificate of the person responsible for the information note,
   1.9. the certificate of the Statutory Auditors on the financial information contained in the information note.

2. Characteristics of the operation
   2.1. the amount of the envisaged operation and the number of securities to be issued,
   2.2. the nature of the securities (shares, bonds, etc.),
   2.3. the form of the securities,
   2.4. the nominal value and the issue price,
   2.5. the tax regime applicable to the securities,
   2.6. the indicative duration of the investment,

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2.7. the purpose of the operation as well as the detailed description of the projects to be financed specifying their nature, their amount, the implementation deadlines, etc.,
2.8. the competent courts in case of dispute,
2.9. the last rating report, where applicable,
2.10. the additional information below, when it is the issuance of debt securities:

• the name of the security,
• the nominal interest rate and the duration,
• the repayment schedule,
• the interest date,
• the redemption clauses, where applicable,
• the guarantees offered, where applicable.

3. Accounting information
   3.1. the certified financial statements of the last two financial years, for debt operations, or of the last three financial years for capital operations,
   3.2. the projected operating statements for the five financial years following the one for which the file was deposited or, failing that, the financial prospects of the issuer,
   3.3. the indication of the existence, where applicable, of founder's shares, preferred shares, convertible bonds, etc.

Article 7

Any issuer that has carried out a public offer to savings operation is required to publish periodic information.

The Regional Council sets, by Instruction, the deadlines and the periodic information to be published.

Article 8

Any issuer, other than States and local or territorial public authorities, that makes a public offer to savings, must be rated by a rating agency duly approved by the Regional Council.

For any issuance of debt securities by public offer to savings or other securities representing debt, issuers undertake to be rated for the duration of the life of the securities. In the event of inability to produce a sufficient "investment grade" rating attributed by a rating agency, issuers must provide a first-demand guarantee for the benefit of subscribers.

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In the absence of a rating, the amount of the guarantee must fully cover the principal and interest of the security concerned, and its duration must correspond to that of the amortization of said security.

This guarantee must be issued by a guarantor approved by the Regional Council and benefiting from a rating deemed satisfactory, attributed by a duly approved rating agency.

CHAPTER III - DUE DILIGENCE IMPOSED ON STATES OR GROUPS OF STATES

Article 9

Prior to any public offer to savings, the State or group of States prepares an information note which is submitted to the Regional Council before its dissemination. This must contain, among other things, the following information:
1 - the name of the State or group of States,
2 - the description of the securities offered and their characteristics, 3 - the destination of the funds collected, 4 - the terms of placement of the securities with the public.

CHAPTER IV - DUE DILIGENCE IMPOSED ON LOCAL OR TERRITORIAL PUBLIC AUTHORITIES

Article 10

Local or territorial public authorities intending to make a public offer to savings must obtain authorization from the Regional Council. To this end, they submit a file comprising in particular:

1. the joint approval of the operation by the Minister in charge of finance and the Minister in charge of local authorities,
2. the authorization of the issuance by the deliberative body or bodies,
3. the texts defining the status of the authority and its capacity to contract,
4. the annual budgets of the last three (3) financial years,
5. the financial statements of the last three (3) financial years, approved by the authorized body,
6. the budgets for the next five (5) years, balanced in revenue and expenditure,
7. an information note.

The information note must contain the following information:

1. the name and geographical location of the local or territorial public authority or group of local or territorial public authorities,

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2. the list of elected officials,
3. the description of the securities offered and their characteristics,
4. the administrative and financial organization as well as the description of the technical services,
5. the description of the tax regime,
6. the investment program to be financed by the loan,
7. the economic development plan of the authority,
8. the evaluation of financial resources and the cash position,
9. the rating of the issuance or, where applicable, the guarantees offered.

CHAPTER V - DIFFUSION OF INFORMATION AND DOCUMENTS TO THE PUBLIC

Article 11

The information note must be widely disseminated throughout the UMOA territory by the issuer as soon as the visa is granted or its registration by the Regional Council.

It must be made available to the public at the headquarters of the Regional Council, the issuer, and the establishments members of the investment syndicate for the operation.

Article 12

Leaflets, inserts, and advertising announcements intended for the public or the press, as well as, where applicable, the texts of radio or television announcements, must previously obtain the visa of the Regional Council before their publication or dissemination when the information note to which they refer is subject to this formality.

Article 13

When an information note and the documents accompanying it are not disseminated to the public within a period of three (3) months after the date of affixing the visa of the Regional Council, they must be updated and submitted again to the Regional Council for approval before their dissemination.

Article 14

Certain information required of States and local or territorial public authorities may not appear in the information note when they are likely to jeopardize national defense, internal security, foreign policy, public order, or the fundamental interests of one of the Member States of the UMOA.

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The nature of the information referred to above must be previously brought to the knowledge of the Regional Council.

CHAPTER VI - CONDUCT OF THE OPERATION

Article 15

The SGI Lead Manager of the placement operation is required to inform the Regional Council, on behalf of the issuer, of the progress of the subscription operations, according to a periodicity specified at the time of the granting of the visa.

Article 16

The Regional Council may, at any time, after the issuance of its visa and during the period of placement of the securities, suspend the operation for serious reasons such as, in particular, the revelation of incomplete or erroneous information, likely to harm the interests of savers. These reasons are immediately brought to the knowledge of the issuer and the public.

CHAPTER VII - PUBLIC OFFER TO SAVINGS BY A NON-RESIDENT ENTITY

Article 17

Any non-resident entity intending to make a public offer to savings in the UMOA is required to address the Regional Council in order to obtain prior authorization.

To this end, it is required to produce the concurring opinion of the authority in charge of exchange control control required.

CHAPTER VIII - VISA FEES

Article 18

The granting of the visa is subject to the payment of a sum whose amount is fixed by Instruction of the Regional Council.

Similarly, the visa of advertising documents relating to operations subject to the authorization of the Regional Council gives rise to the collection of a commission whose amount is fixed by Instruction of the Regional Council.

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CHAPTER IX - TRANSITIONAL AND FINAL PROVISIONS

Article 19

Issuers whose securities are listed on the Regional Securities Exchange have a period of three years to comply with the provisions of Article 8 of this Instruction.

Article 20

This Instruction, which will be published wherever necessary, repeals Instruction No. 33/2006 of 23 November 2007 and takes effect as of the date of its signature.

Done in Abidjan, on 23 November 2009

The President

(Signature)
Léné SEBGO