Instruction No. 39/2009 on the Conditions for Establishing Market Participants of the UMOA Financial Market Outside Their Home State

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

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INSTRUCTION No. 39/2009
RELATING TO THE CONDITIONS FOR ESTABLISHING MARKET PARTICIPANTS OF THE UMOA FINANCIAL MARKET OUTSIDE THEIR HOME STATE

The Regional Council for Public Savings and Financial Markets,

Having regard to the Convention 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, Operation and Powers of the Regional Council;

Having regard to the General Regulation relating to the Organization, Operation and Control of the regional financial market of the UMOA;

Having regard to the deliberations of the Regional Council at its ordinary session on November 17, 2009;

ORDERS

Article 1: Definitions

For the purposes of this Instruction, the following terms shall mean:

a) "Liaison or Representation Office": an office whose exclusive purpose is to prospect a market, establish contacts, gather information, and ensure publicity and promotion of the Market Participant;

b) "Delegation of Activity": a mode by which the realization of all or part of an activity is entrusted to another entity, the delegatee;

c) "Subsidiary": any entity defined under Article 179 of the Uniform Act relating to commercial company law and GIE;

d) "Market Participants": the market participants referred to in Article 3 of this Instruction having their principal establishment in one of the countries of the Union;

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e) "General Regulation": the General Regulation relating to the organization, operation and control of the regional financial market;

f) "Branch": any entity defined under Article 116 of the Uniform Act relating to commercial company law and GIE.

Article 2: Purpose

This Instruction sets out the conditions for the establishment of Market Participants outside the State of their seat.

Article 3: Scope of Application

This Instruction applies to all Market Participants approved by the Regional Council.

Article 4: Forms of Establishment

The establishment of a Market Participant in another State of the Union may take the form of a Subsidiary, a Branch, or a Representation Office.

The applicable legal regime is determined by the form of establishment.

Article 5: Subsidiary

The constitution by a Market Participant of a Subsidiary for the purpose of exercising a regulated activity on the regional financial market is subject to the prior approval of the Regional Council.

Regarding Investment and Intermediation Companies (SGI), when the Subsidiary is 100% owned, it is exempt from any approval procedure if it was constituted exclusively for the purpose of a delegation of activity in accordance with Article 37 of the General Regulation. However, the delegation must be previously authorized by the Regional Council.

Article 6: Branch

The opening of a Branch by a Market Participant is subject to the prior authorization of the Regional Council.

The Market Participant is required to declare to the Regional Council in advance any operation involving the closure or transfer of a Branch. In this context, it is required:

• to take charge of the securities domiciled in the books of the Branch, without in any case imposing costs on the clientele for the transfer or closure of their securities accounts;

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• to inform the clientele attached to the Branch individually by any written communication means, at least 90 days before the closure date;

• to inform the public within the same period by means of a press release published in the Official Bulletin of the Quote (BOC) of the Regional Securities Exchange (BRVM) and in a legal announcements newspaper.

Article 7: Liaison or Representation Office

Any project to open a Liaison or Representation Office is subject to the formality of prior declaration to the Regional Council.

This declaration must include the precise address of the Liaison or Representation Office, the identity of the persons responsible for its management, and indications on the objectives pursued by opening the Liaison or Representation Office. The premises housing the Liaison or Representation Office must be identifiable by the public and meet minimum security requirements.

The following documents must be attached to the declaration; a copy of the following documents must be attached:

• the decision to open taken by the competent body;
• a detailed description of the activities of the Liaison or Representation Office and its control system;
• the curriculum vitae and criminal record extracts dated less than three months for the persons who will be responsible for its management;
• proof of the registration of the Liaison or Representation Office in the commercial register and the movable property credit register.

Article 8: Conditions for Approval of the Subsidiary

The Market Participant creating a Subsidiary must submit an application for approval to the Regional Council.

The letter of application for approval must be signed by a duly authorized executive of the Market Participant. A complete file containing all constituent documents defined by Instruction of the Regional Council for each category of Market Participant must be attached to this application.

Article 9: Conditions for Authorization of the Branch

9.1 The authorization issued by the Regional Council for the opening of a Branch is subject to the establishment of human and technical resources including:

For SGI:

• As regards human resources

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• a Manager, authorized to represent the company,

• an Internal Controller,

• a Trader and Clearing Agent,

• a Accountant and Custodian,

• a Client Service Officer, if applicable.

• As regards technical resources

• trading software,

• client management and account keeping/custody software.

For Wealth Management Companies (SGP), Collective Investment Scheme Management Companies for Securities (SGO) and UCITS:

• As regards human resources

• a Manager, authorized to represent the company,

• an Internal Controller,

• a Portfolio Manager,

• a Client Service Officer, if applicable.

• As regards technical resources

• portfolio management software.

For other Market Participants:

• proof of professional competence of the person authorized to manage the Branch,
• adequate technical resources.

The Branch must, in addition, satisfy all legal, administrative and fiscal obligations resulting from its opening.

The Market Participant must, furthermore, undertake to transmit to the Regional Council a certificate of extension of the insurance policy covering the risks of its operation.

The premises housing the Branch must be identifiable by the public, meet minimum security requirements and be permanently connected to the principal establishment by means of any communication and data exchange method.

9.2 The agencies or Branches of a bank approved as an Accountant/Custodian on the UMOA financial market may not exercise the activity of account keeping/custody until they have been authorized by the Regional Council. This authorization is subject to the existence of

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human and technical resources necessary for the conduct of this activity and in particular:

• a person dedicated to account keeping,
• account keeping/custody software.

Article 10: Conditions for Delegation of Activities

Delegations of activities by an SGI made in accordance with the provisions of Article 37 of the General Regulation are authorized only under the following conditions:

1. In the case of delegation of the trading/clearing activity

The Subsidiary must be constituted as a public limited company with a Board of Directors with a minimum capital of fifty million (50,000,000) FCFA and must justify all human and technical resources necessary for the conduct of this activity and in particular:

• a Manager, duly authorized to represent the company,
• a Trader/Clearing Agent,
• an Internal Controller,
• management and trading software.

2. In the case of delegation of the account keeping/custody activity

The Subsidiary must be constituted as a public limited company with a Board of Directors with a minimum capital of one hundred million (100,000,000) FCFA and must justify all human and technical resources necessary for the conduct of these activities and in particular:

• a Manager, duly authorized to represent the company,
• an Accountant/Custodian,
• an Internal Controller,
• management and account keeping/custody software.

Article 11: Entry into Force

This Instruction, which enters into force as of the date of signature, will be published wherever necessary.

Done in Abidjan, on November 23, 2009

The President
Léné SEBGO