Instruction No. 5/97 on the Approval of Wealth Management Companies

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

INSTRUCTION NO. 5/97 RELATING TO THE APPROVAL
OF WEALTH MANAGEMENT COMPANIES

Having regard to the Convention of July 3, 1996 establishing the Regional Council of Public Savings and Financial Markets, hereinafter the Regional Council,

Having regard to Article 21 of the annex to the said Convention,

Having regard to Decision No. 001/97 of the Council of Ministers of the West African Monetary Union in its session of November 28, 1997 adopting the General Regulation relating to the Organization, Operation and Control of the regional financial market of the UMOA, hereinafter the General Regulation,

Having regard to Article 69 of the said General Regulation,

Having regard to the decision of the Regional Council in its session of November 29, 1997,

THE REGIONAL COUNCIL DECIDES:

Article 1: Wealth Management Companies are considered to be legal persons who, through placements and stock market transactions carried out by Securities Investment Firms (SGI), intervene discretely in the management of securities entrusted to them based on a management mandate established with their clients. These companies must not hold the securities and/or funds of their clients.

The preceding provisions do not concern persons mandated on a non-professional basis by the holder of a securities account under a standard power of attorney or a court decision.

No one may exercise wealth management activities without being authorized by the Regional Council.

Article 2: The application file for the authorization of a Wealth Management Company is submitted to the Regional Council. It must include the following documents and papers:

a) the articles of association of the company, which must be constituted in the legal form of a public limited company (société anonyme) and have its registered office on the territory of the West African Monetary Union,

b) the amount and distribution of the share capital,

c) the composition of the corporate bodies,

d) the list of corporate officers and their criminal records,

e) the guarantees and sureties provided,

f) a detailed description of the means implemented for the exercise of the activity,

g) an insurance policy covering operational risks,

h) a written commitment from the company whereby it undertakes to know the expectations of its clients and to provide them with clear, rapid, and complete information on the operations to be processed or processed on their behalf,

i) for pre-existing companies, the certified accounts and balance sheets of the last three financial years by an auditor approved by the Regional Council,

j) the amount of net assets defined as follows:
. paid-up share capital,
. + reserves,
. + provisions with a reserve character,
. + carried forward credit balance,
. + first-demand guarantees and within the limit of the share capital amount, . - carried forward debit balance, . - projected result for the current financial year, if it is a deficit.

k) any other supplementary document that the Regional Council deems necessary.

Article 3: The minimum share capital of a Wealth Management Company is set at 40 million CFA francs. In addition, the minimum net assets of Wealth Management Companies cannot be less, during the course of their existence, than an amount of 40 million CFA francs.

Article 4: Wealth Management Companies must immediately inform the Regional Council of Public Savings and Financial Markets of modifications relating to the characteristic elements of their situation that were included in the initial approval application.

The Regional Council assesses whether these modifications are likely to call into question the approval that was granted.

Article 5: The approval granted by the Regional Council is subject to the payment of a sum whose amount is fixed by instruction.

Article 6: The approval of a Wealth Management Company is the subject of a notice published in the official bulletin of the stock exchange.

Done in Ouagadougou on, November 29, 1997

For the Regional Council
The President
L. NAKA