Instruction No. 43/2010 on the Approval of Credit Securitization Common Funds, Visa of Their Information Notes, and Placement Modalities for Their Securities on the UMOA Regional Financial Market

WEST AFRICAN MONETARY UNION

crepmf

CONSEIL REGIONAL DE L'EPARGNE PUBLIQUE ET DES MARCHES FINANCIERS

*

INSTRUCTION NO. 43/2010

ON THE APPROVAL OF CREDIT SECURITIZATION COMMON FUNDS (FCTC), REGARDING THE VISA OF THEIR INFORMATION NOTES AS WELL AS THE PLACEMENT MODALITIES FOR THEIR SECURITIES ON THE UMOA REGIONAL FINANCIAL MARKET

*

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 Council");

Having regard to the Annex to the Convention on the composition, organization, functioning and powers of the Council;

Having regard to the General Regulation on the Organization, Functioning and Supervision of the UMOA Regional Financial Market;

Having regard to Regulation CM/02/2010/CM/UEMOA on Credit Securitization Common Funds and securitization operations in the UEMOA;

Having regard to Decision No. CM/11/09/2009 dated 25 September 2009 by the UEMOA Council of Ministers appointing the President of the Regional Council;

Having regard to the deliberations of the Regional Council at its session on 18 May 2010;

HAS ADOPTED

Article 1: Approval of the FCTC and Visa of the Information Note

Any financial operation relating to Credit Securitization Common Funds (hereinafter "FCTC") is subject to the prior approval of the FCTC by the Council and the visa of its information note.

This information note is made available to investors.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org

*

Instruction No. 43/2010

Article 2: Content of the Approval and Visa Application File

Any application file for FCTC approval and visa of its information note shall include:

1. The information note, which must follow the standard template attached to this Instruction and contain all information specified therein;
2. The FCTC regulations;
3. A technical note, where applicable, if the FCTC presents specific features;
4. The procedure adopted for issuing FCTC securities in accordance with Article 5 below;
5. A description of the contractual relationships between the various stakeholders;
6. The commercialization modalities for the securities (syndication, firm commitment, placing network, etc.);
7. The duties to be performed by the FCTC's Statutory Auditor;
8. A description of the FCTC's cash management mechanisms;
9. A description of the procedures for monitoring the regularity of the management company's decisions by the depositary.

When the offer of FCTC securities is reserved exclusively to a maximum of one hundred (100) qualified investors as part of a private placement, the file must additionally contain the list of said investors. After the Council's visa, this list cannot be modified by replacing or adding investors.

Article 3: Filing of the Application

The visa application file may only be submitted to the Regional Council by an approved management company or a company applying for status as an FCTC management company. In the latter case, the application for approval of the management company is submitted to the Regional Council jointly with the application for FCTC approval and visa of its information note.

Article 4: Notification of the Visa

When the requirements of this Instruction are met, the Regional Council grants approval to the FCTC and affixes its visa on its information note. A notification letter is sent to the management company.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 2/12

*

Instruction No. 43/2010

Article 5: Amendment of Approval and Visa Conditions

Any modification affecting the characteristic elements of the FCTC approval file is subject to prior authorization by the Regional Council.

Any subsequent modification of the FCTC's information note shall be submitted to the Regional Council for prior approval and brought to the attention of security holders through dissemination channels approved by the Regional Council.

Article 6: Dissemination of the Information Note

The information note may not be disseminated to the public prior to obtaining the Regional Council's visa.

The dissemination of the information note must take place no later than the day subscription opens.

In case of a public offering, the information note must be published through dissemination channels approved by the Regional Council. Investors may obtain a copy free of charge from the management company and the structures responsible for collecting subscriptions. They may also obtain, free of charge, communication of the FCTC regulations.

Article 7: Issuance of Securities

The management company must send to the Regional Council, no later than three (03) days before the opening of subscriptions, three (03) copies of the definitive information note intended for subscribers.

In case of a public offering, the subscription period may not begin before the approval of all communication materials by the Regional Council.

The issuance of securities is preceded by a placement carried out according to one of the modalities described below:

Firm Commitment

Before the expiration of a one (01) month period from the notification of the visa, the firm commitment institutions for the issuance shall deposit into the FCTC account held in the books of the depositary the amounts corresponding to the planned issuance amount.

The depositary issues a certificate confirming the deposit of these amounts and notifying the Regional Council.

The management company acquires, on behalf of the FCTC, the receivables in accordance with the modalities provided in the information note.

The management company must notify the Regional Council of the date of acquisition of the receivables. The FCTC is deemed to be constituted on this date.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 3/12

*

Instruction No. 43/2010

From this same date, the placement of securities takes place within a six (06) month period, except in the case of private placement where it takes place within a maximum of three (03) months.

Placement and Performance Guarantee

Before the expiration of a one (01) month period from the notification of the visa and after the constitution of the guarantee syndicate, of which notification is sent to the Regional Council by the management company or the Depositary, the institutions responsible for placing the securities or the performance guarantors have a maximum of one (01) month, if the proceeds are reserved exclusively to qualified investors, and three (03) months in case of a public offering, to proceed with the placement or subscription of FCTC securities.

At the end of the subscription period, the management company acquires, on behalf of the FCTC, the receivables in accordance with the modalities provided in the information note.

The management company must notify the Regional Council of the date of acquisition of the receivables. The FCTC is deemed to be constituted on this date.

Article 8: Duties to be Performed After the Issuance of Securities

The management company must, within eight (08) days from the date of closure of subscriptions, notify the Regional Council of the amount of subscriptions collected.

Article 9: Fee Schedule

The fee schedule applicable by the Regional Council for FCTC approval and visa of its information note is set as follows:

Approval of the FCTC: three million (3,000,000) FCFA

Visa of the information note:

• 1‰ for issuances less than or equal to one billion FCFA,
• 3‰ for issuances between 1 and 10 billion FCFA,
• 2.5‰ for issuances between 10 and 20 billion FCFA,
• 2‰ for issuances greater than 20 billion FCFA.

Article 10: Entry into Force

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

Done in Abidjan, on 31 August 2010

The President,
Léné SEBGO

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 4/12

*

Instruction No. 43/2010

ANNEX I
STANDARD TEMPLATE OF AN INFORMATION NOTE

The content of the information note intended for a public offering placement must cover, without limitation, the main sections below:

I - COVER PAGE

1. Nature of the document: "information note"
2. Description of the FCTC:
   • Name;
   • Nature of receivables eligible for acquisition by the FCTC;
   • Subscription period;
   • Characteristics of issued securities: total nominal amount, unit nominal amount, nature, issue price, nominal rate, actuarial yield or actuarial margin (specifying the forward-looking nature of these data), forward maturity, rating(s), etc.;
   • Name and title of the management company, name and title of the depositary, name and title of the lead manager of the guarantee or firm commitment syndicate(s).
3. Visa of the Regional Council
   In application of Article 4, paragraph 3 of Regulation No. 02/2010/CM/UEMOA on Credit Securitization Common Funds and securitization operations, the Regional Council has affixed to the information note visa No. .... dated ../../..
4. Mention of places where these documents can be obtained free of charge

II - RESPONSIBLES OF THE INFORMATION NOTE

1. Persons assuming responsibility for the information note

This section will indicate the names, first names, functions and signatures of the legal representatives of the management company and depositary who assume responsibility for the information note.

Their signature is preceded by the following formula:

"To our knowledge, the data in this information note are accurate. They include all necessary information for investors to base their judgment on the rules governing the FCTC and, where applicable, the compartment, its financial situation as well as the financial conditions of the operation and the rights attached to the offered securities. They do not contain any omissions likely to affect their scope."

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 5/12

*

Instruction No. 43/2010

2. Persons assuming responsibility for the statutory audit of accounts

Name(s) and address(es) of the Statutory Auditor(s);

Specify:

• date of commencement of the first term,
• duration and expiration date of the current term.

III - DESCRIPTION OF GENERAL SECURITIZATION PRINCIPLES

Reminder of the general principles of securitization and notably the following mentions:

• FCTC securities cannot be subject to solicitation;
• security holders cannot request redemption of their securities by the FCTC;
• the management company, pursuant to paragraph 1 of Article 25 of Regulation CM/02/2010/CM/UEMOA on Credit Securitization Common Funds and securitization operations, represents the FCTC vis-à-vis third parties and in any legal action, whether as plaintiff or defendant;
• subscription to the securities entails adherence to the FCTC regulations and, where applicable, the compartment regulations. These regulation(s) are available to security holders who may obtain them free of charge.

It must also be mentioned:

• the extent of liability of the management company and depositary vis-à-vis security holders;
• the consequences of the co-ownership legal regime for security holders.

IV - STAKEHOLDERS IN THE OPERATION

The name, title and role of each stakeholder must be indicated. Organizations acting primarily in the functioning of the FCTC and, where applicable, the compartment are subject to a simplified presentation comprising a description of their activities and some representative figures.

Finally, the paragraph on the management company must be followed by the following formula: "security holders may obtain communication of the annual accounts of the management company at its registered office and with the registry of the court of ...".

V - ASSETS OF THE FCTC OR, WHERE APPLICABLE, THE COMPARTMENT

This paragraph describes exhaustively the receivables that will be acquired by the FCTC and, where applicable, allocated to the compartment.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 6/12

*

Instruction No. 43/2010

The following data must appear in this paragraph:

1. Information on receivables:
   • Historical and statistical data;
   • Characteristics of the receivables with indication, in particular, of the existence or not of prepayment risk;
   • Presentation of any guarantees attached to the receivables;
   • Procedures for collecting the receivables.
2. Information on debtors: type of debtors (legal or natural persons), object of financing
3. Total nominal amount and sale price of the receivables

VI - SECURITIES

This paragraph describes the characteristics of securities issued by the FCTC within the framework of the presented operation.

A - Characteristics of issued securities (presentation in table form is recommended)

• Description of the different categories of securities;
• Total issuance amount and nominal amount of each category of securities;
• Unit nominal amount of the securities;
• Subscription period;
• Value date and settlement date;
• Issue price of the securities;
• Nominal rate of the securities;
• Interest payment schedule and, where applicable, payment dates;
• Capital amortization schedule;
• Forward amortization dates;
• Final amortization date of the securities;
• Redemption price;
• Actuarial rate or actuarial margin at issuance;
• Average life of the securities at issuance;
• Payment flow schedule for security holders;
• Ratings assigned by one or more rating agencies and mention of the basis on which these ratings were assigned;
• Placement methods.

When certain data are forward-looking, the information note provides for the modalities of making updated schedules available.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 7/12

*

Instruction No. 43/2010

B - Firm commitment, performance guarantee and admission to trading

The information note must mention:

• the constitution of a firm commitment syndicate and its members;
• the constitution of a placement guarantee syndicate and the names, titles of the lead manager(s) or performance guarantors of the operation;
• the securities for which listing is planned;
• the provisions or commitments taken by the institutions involved in the operation with a view to market making for the secondary market of the securities, if applicable.

C - Risk assessment and hedging mechanisms

• Indication of risks related to holding FCTC securities, notably accelerated amortization risk and credit, interest rate, liquidity risks, etc., assumed by security holders;
• Description of hedging mechanisms and indication of the safety level.

D - Taxation applicable to security holders

The mention: "Tax regime in force as of ..." must appear in the information note.

VII - FUNCTIONING OF THE FCTC OR, WHERE APPLICABLE, THE COMPARTMENT

1. FCTC operating rules

The information note indicates, in particular:

• remuneration and amortization principles for the securities;
• recharging principles: conditions and implications of the recharging procedure;
• reinflation principles: modalities;
• borrowing principles with indication of the object, limits and conditions.

2. Cash flow allocation rules

The information note may indicate the application of these rules, as applicable, between different categories of a single issuance or different series of securities that may be issued by the FCTC.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 8/12

*

Instruction No. 43/2010

VIII - CASH OF THE FCTC OR, WHERE APPLICABLE, THE COMPARTMENT AND INVESTMENT RULES

• Investment rules for temporarily available or pending funds;
• Financial instruments eligible for acquisition.

IX - FEES AND COMMISSIONS

The details and calculation method of fees and commissions must be presented.

X - COMPETENT COURTS IN CASE OF DISPUTE

These courts must be clearly indicated.

XI - INFORMATION RELATING TO THE FCTC AND, WHERE APPLICABLE, THE COMPARTMENT

A - Financial situation of the FCTC, where applicable, the compartment and events occurred

The information contained in the information note must give investors a true image of the financial situation of the FCTC and, where applicable, the compartment.

Information on receivables transferred to the FCTC and issued securities is adapted to the nature of these receivables and the characteristics of the FCTC and, where applicable, the compartment.

Information relating to receivables and securities must be presented in table form.

1. Asset position
   • on receivables held by the FCTC:
     The information includes in particular the total amount of receivables held by the FCTC and their nature, the average remaining life of the receivables and the indication, where applicable, of the weighted average rate. These data must be established on the calculation date preceding the visa acquisition date.
   • on cash:
     The amount and distribution of the FCTC's cash, where applicable, the compartment, on the calculation date preceding the visa acquisition date.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 9/12

*

Instruction No. 43/2010

• on recharges carried out:
  The number, amount, distinguishing if necessary, the nature of the receivables and the transferor.

2. Liability position

   • on issued securities:
     The total remaining nominal value of the securities issued by the FCTC, distinguishing the categories of securities and specifying their main financial conditions (initial and remaining term; nominal rate and payment frequency; amortization date, method and schedule). In the case where the FCTC has issued securities with a life of less than one (1) year for which there are unamortized securities, information on these securities must be distinguished to allow appreciation of in particular the total amount of these issuances, the total unamortized amount, and the weighted average life by outstanding balance.
   • on borrowings:
     If the FCTC or, where applicable, the compartment has contracted loans during the period, the information note must recall the ceiling of the loan(s) and indicate their object, the quality and name of the lenders, the cumulative amount used, the average outstanding balance, the number of draws, the unamortized amount, the weighted average life by outstanding balance, and the financial conditions of the loans. The above data must be established on the calculation date preceding the visa acquisition date.

3. Events occurred

The information note must mention events that have occurred during the period having or likely to have an impact on the financial situation of the FCTC and notably, where applicable, the compartment and the offered securities.

B - Periodic information published

The information published by the management company, their frequency and dissemination modalities must be presented.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 10/12

*

Instruction No. 43/2010

ANNEX II
TEMPLATE OF A SIMPLIFIED INFORMATION NOTE

This simplified information note is intended for declared subscribers as part of a private placement.

Responsibility for the information note

• Number and date of visa of the information note, if applicable, indication of a warning.

I. STAKEHOLDERS AND TRANSFEROR'S ACTIVITY

1. General information concerning stakeholders:
   1.1 Status
   1.2 Function
   1.3 Mission
2. Information concerning the transferor's activity
   2.1 Brief description of the transferor's activity
3. Inventory, where applicable, of all conventions relating to the operation and their object

II. ASSETS OF THE FCTC AND, WHERE APPLICABLE, ASSETS OF THE COMPARTMENT

1. Information concerning the nature and characteristics of FCTC assets and, where applicable, compartment assets
   1.1 Nature of receivables
   1.2 Amount of receivables
   1.3 Eligibility criteria for receivables
   1.4 Pre-selection rules for receivables
   1.5 Brief description of accounts opened in the depositary's books, intended to receive flows regarding receivables
   1.6 General description of guarantees that may be attached to the receivables

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org 11/12

*

Instruction No. 43/2010

III. SECURITIES

1. Form, name and characteristics of the securities
   1.1 Synthetic description of the different categories of securities that may be issued by the FCTC
   1.2 Initial unit and total principal amount
   1.3 Final maturity of the different categories of securities that may be issued by the FCTC
   1.4 Average life of the securities
   1.5 Amortization modalities
   1.6 Ranking of the securities (Mention, where applicable, of the ranking of the securities within a single issuance and between different issuances)

IV. FUNCTIONING OF THE FCTC AND, WHERE APPLICABLE, THE COMPARTMENT

1. Remuneration and amortization principles for the securities
2. Recharging principles, where applicable
3. Reissuance principles, where applicable
   3.1 Synthetic description of cash flow allocation rules (functioning of the different accounts of the FCTC or compartment)

V. INFORMATION RELATING TO THE FCTC AND, WHERE APPLICABLE, THE COMPARTMENT

Brief description of the FCTC compartments (nature of receivables, characteristics of securities, hedging means), where applicable.

Financial situation of the FCTC and/or compartment (outstanding balance of receivables, remaining principal of securities, use or non-use of hedging means), where applicable.

*

Avenue Joseph ANOMA 01 B. P.: 1878 Abidjan 01/Côte d'Ivoire TEL.: (225) 20215742/20215179 Fax: 20221657 presidence@crepmf.org - www.crepmf.org