Instruction No. 76/AMF-UMOA/2023 on the Governance of the Central Securities Depository/Settlement Bank

AMF-UMOA
WEST AFRICAN MONETARY UNION FINANCIAL MARKETS AUTHORITY

INSTRUCTION NO. 76/AMF-UMOA/2023
ON THE GOVERNANCE OF THE CENTRAL SECURITIES DEPOSITORY / SETTLEMENT BANK (CSD/SB)

The West African Monetary Union Financial Markets Authority,

Having regard to the Revised Treaty of the West African Monetary Union (UMOA) of July 12, 2019, which entered into force on October 1, 2022, modifying the name of the Regional Council for Public Savings and Financial Markets (CREPMF) to the West African Monetary Union Financial Markets Authority (AMF-UMOA);

Having regard to the Convention of July 3, 1996 establishing the Regional Council for Public Savings and Financial Markets (hereinafter the "Regional Council") and its Annex on the composition, organization, functioning, and powers of the Regional Council for Public Savings and Financial Markets, particularly Article 21;

Having regard to General Regulation No. 001/97 of November 28, 1997, relating to the organization, functioning, and control of the regional financial market, particularly Articles 10 and 16;

Having regard to the OHADA Uniform Act relating to commercial company law and economic interest groups of January 30, 2014;

Having regard to Instruction No. 3/97 of November 29, 1997, relating to the authorization of the Central Securities Depository/Settlement Bank;

Having regard to Decision No. 004 of April 29, 2021/CM/UMOA appointing the President of the Regional Council for Public Savings and Financial Markets;

Having regard to the deliberations of the AMF-UMOA at its 98th ordinary session held on December 23, 2023, in Cotonou, Republic of Benin;

HEREBY ADOPTS:

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TITLE 1. GENERAL PROVISIONS

Article 01: Definitions
For the purposes of this Instruction, the following terms shall mean:

a) Administrator: a natural person designated by the bylaws or by the General Assembly, in accordance with the provisions of commercial company law applicable to the Central Securities Depository / Settlement Bank. He is a member of the deliberative body. The natural person, permanent representative of a corporate administrator, is assimilated to administrators.

b) Independent Administrator: an administrator who has no relationship of any kind with the CSD/SB or its group, likely to alter his judgment independence or place him in a situation of apparent or potential conflict of interest.

c) Non-executive Administrator: an administrator who has no management responsibility within the CSD/SB.

d) General Assembly: the body bringing together the shareholding forming the share capital of the CSD/SB. It has the power to take any decision concerning the CSD/SB, subject to the powers or authorities legally devolved to the executive body or the deliberative body. To this end, it deliberates under the quorum conditions defined by the applicable company law for the CSD/SB and the bylaws.

e) Conflicts of Interest: a situation where the personal interests of a member of the governance bodies or a member of the staff or those of persons with whom they have a family relationship are not compatible with the interests of the CSD/SB and could, therefore, influence the impartiality expected of them in the performance of their duties.

f) Corporate Governance Statement: A statement covering all key information relating to the application of the CSD/SB's governance rules during a year.

g) Central Securities Depository / Settlement Bank or CSD/SB: The company authorized, by approval of the AMF-UMOA, to exercise, throughout the territory of the Union States, the following activities: the book-entry conservation and circulation of securities admitted to its operations, the management of the settlement-delivery cycle, the cash payment, in the capacity of Settlement Bank, of balances resulting from clearing related to stock market transactions.

h) Chief Executive Officer (CEO): a natural person, appointed by the body legally empowered to do so, notably the Board of Directors, to ensure the management of the CSD/SB and represent it in its relations with third parties. The CEO is vested with the broadest powers to act on behalf of the CSD/SB, within the limits of the corporate object and subject to those expressly attributed to the General Assemblies or specifically reserved for the deliberative body by legal or statutory provisions.

i) Executives: Persons who are members of the executive body, notably those holding the title of director, head of branches or representative offices or subsidiaries, provisional administrator, and liquidator.

j) Corporate Governance: the set of relations between the executive body of the CSD/SB, its deliberative body, its shareholders, and other stakeholders which establish the framework within which the objectives of the CSD/SB are set as well as the means to achieve them and control their realization. Governance determines the attribution of powers and responsibilities as well as decision-making mechanisms within the framework of internal texts governing the CSD/SB;

k) Family Relationship: the relationship between two persons belonging to the same family, notably spouses, parents in direct and collateral line up to the fourth degree, which are parents, grandparents, great-grandparents, children, grandchildren, great-grandchildren, brothers and sisters, uncles and aunts, great-uncles and great-aunts, nephews and nieces, first cousins;

l) Duty of Diligence: the obligation, for any administrator and any member of the executive body, to make decisions and act in an informed and prudent manner regarding the CSD/SB. The duty of diligence refers to the prudence with which the administrator or member of the executive body would manage his own affairs;

m) Duty of Loyalty: the obligation, for any administrator and any member of the executive body, to act in good faith in the interest of the CSD/SB. Under this obligation, the administrator or member of the executive body must not act in his own interest or in the interest of a person or group, to the detriment of the CSD/SB and the entire regional financial market of the UMOA;

n) Governance Bodies: the deliberative body, including its specialized committees, as well as the executive body;

o) Deliberative Body: the Board of Directors in joint-stock companies or the collegiate body in companies constituted under another form. It is invested with all powers to act in all circumstances on behalf of the CSD/SB, within the limits of the corporate object and the powers reserved for the General Assembly;

p) Executive Body: the set of structures that contribute to the day-to-day management of the CSD/SB and ensure the effective implementation of the activity orientation defined by the deliberative body. The Chief Executive Officer, Deputy Chief Executive Officers, the Secretary General, the Heads of control functions, the Directors of Departments grouping together Directions, and the Directors of Directions directly attached to the Chief Executive Officer are notably considered as members of the executive body.

q) Related Parties: natural and legal persons who are directly or indirectly linked to the CSD/SB. Related parties include notably:
i. the parent company of the CSD/SB and any entity over which the latter exercises exclusive control, joint control, or significant influence;
ii. any entity over which the CSD/SB exercises exclusive control, joint control, or significant influence;
iii. a natural person who exercises exclusive control, joint control, or significant influence on the CSD/SB;
iv. a natural or legal person who holds at least 10% of the voting rights within the CSD/SB;
v. the administrators and executives of the CSD/SB;
vi. private companies in which the natural persons referred to in points iii), iv), and v) above exercise management, administration, or directorship functions, or hold more than 25% of the share capital;
vii. persons having a close family relationship with the natural persons referred to in points iii), iv), and v) above.

Terms that are not defined in this Instruction or its Annexes shall have the meaning usually attributed to them.

Article 02: Object and Scope
This instruction sets out the minimum rules on governance to be observed by the Central Securities Depository / Settlement Bank (CSD/SB).

TITLE 2. GOVERNANCE STRUCTURE AND GUIDING PRINCIPLES

Article 03: Guiding Principles of Corporate Governance
The CSD/SB must:

1. have objectives focused on its security and efficiency that explicitly support the stability of the financial system and the development of the regional financial market.
2. have provisions relating to its governance that are documented and define clear and direct levels of responsibility. These provisions should be communicated to shareholders, competent authorities, stakeholders, and, more generally, to the public.
3. clearly state the roles and responsibilities of the Board of Directors and the procedures governing the functioning of said board, particularly the procedures for identifying, managing, and resolving conflicts of interest of its members, should be documented. The board must examine annually both its overall performance and the performance of its various members.
4. designate within its Board of Directors members possessing appropriate skills, integrity, and incentives to fulfill their roles.

Article 04: Principles of Proportionality and Transparency
The CSD/SB puts in place a transparent governance system adapted to its size, structure, the nature and complexity of its activities, as well as its risk profile, and, where applicable, that of the group to which it belongs.
The governance framework must be adapted to its scope and the consequences of its potential failure on the stability of the regional financial market of the UMOA.
The governance system must notably:

• be developed and implemented taking into account, among other things, the security of information systems, the coverage of all risks incurred by the CSD/SB, and potential conflicts of interest;
• establish and formalize the strategies, policies, and procedures to be put in place, to define and organize the various means necessary to achieve sound governance;
• define the roles and obligations of stakeholders;
• meet the needs of the CSD/SB as a whole and of each of its organizational and operational units;
• integrate mechanisms aimed at maintaining and/or restoring its functioning in the event of discontinuity;
• reflect, over time, changes resulting from the characteristics of the CSD/SB and its external environment as well as developments regarding best practices in governance;
• provide mechanisms to ensure the integrity and commitment of stakeholders, who must be numerous enough, competent, and have a good knowledge of the activities, risks, and legal obligations of the CSD/SB.
  The bylaws of the CSD/SB must integrate the principle of transparency regarding the dissemination of information to stakeholders.

Article 05: Corporate Governance Organizational Structure
The CSD/SB is equipped with a Board of Directors and Specialized Committees. It is led by a Chairman of the Board of Directors and a Chief Executive Officer.

Article 06: Corporate Governance Charter
The CSD/SB must have a Corporate Governance Charter, which reproduces the principles and rules on the basis of which the Board, its administrators, and its committees operate. This charter must be approved by the Board of Directors of the company.
This charter must include at minimum the provisions of the model in the annex to this Instruction.

TITLE 3. BOARD OF DIRECTORS AND SPECIALIZED COMMITTEES

Article 07: General Responsibilities of the Board of Directors
The Board of Directors of the CSD/SB must:

1. define and approve the overall strategy of the CSD/SB, its general governance framework, its corporate culture, as well as its principles and values;
2. clearly state the roles and responsibilities of the executive body;
3. define a clear and documented risk management framework, including the CSD/SB's risk tolerance policy, assigning responsibility for risk-related decisions and addressing decision-making in crisis or emergency situations. Governance provisions should enable risk management and internal control functions to have sufficient power, independence, resources, and access to the board;
4. ensure that the design, rules, overall strategy, and major decisions of the CSD/SB appropriately take into account the legitimate interests of its direct and indirect participants, as well as those of other concerned stakeholders. Major decisions should be clearly communicated to concerned stakeholders and made public in case of repercussions on the market as a whole.
   The Board of Directors assumes ultimate responsibility for the financial soundness of the CSD/SB and its compliance with the legal and regulatory provisions governing its activities.
   It must be effectively involved in the activities of the CSD/SB, in accordance with its legal, regulatory, and statutory powers. It is required to this end, to inform itself of significant changes resulting from the economic or operational environment of the CSD/SB and to act in a timely manner to protect the long-term interests of the regional financial market and the CSD/SB.

Article 08: Specific Responsibilities of the Board of Directors
In the context of implementing its specific responsibilities, the Board of Directors must notably:

1. ensure, on an ongoing basis, the adequacy of capital levels vis-à-vis defined commitments, particularly within the framework of the public service concession granted to the CSD/SB;
2. monitor the design and implementation of the CSD/SB's remuneration system as well as the associated control processes;
3. ensure that transactions with related parties, including intra-group transactions, are identified, assessed, and subject to appropriate requirements;
4. promote a corporate culture valuing ethical behavior, adhere to these values, and ensure their respect by the executive body and the staff of the CSD/SB;
5. ensure that the CSD/SB maintains regular relations with the AMF-UMOA;
6. ensure the realization of necessary investments to ensure business continuity and guarantee performance objectives;
7. take note of the reports and Decisions of the AMF-UMOA and follow up on the implementation, within the required deadlines, of the Decisions and recommendations contained therein.
   The Board of Directors must notably approve:
8. all policies of the CSD/SB;
9. the General Regulations of the CSD/SB and its implementing texts;
10. the CSD/SB's risk appetite level and risk limits;
11. decisions on outsourcing activities and the use of new products or services, substantial modifications of existing products or services, as well as important strategic initiatives and operations such as major acquisition operations, modification of systems, processes, and business model;
12. risk and internal control governance devices. It is required to ensure that the implementation of said devices is compliant with all the requirements set out respectively in the Instruction on risk management and that on internal control.

Article 09: Obligations of the Deliberative Body vis-à-vis the Executive Body
In addition to the powers and obligations devolved to it, the Board of Directors must supervise the management of the activities of the executive body of the CSD/SB.
To this end, the Board of Directors must notably:

1. monitor and evaluate the performance of the Chief Executive Officer, Deputy Chief Executive Officers, and heads of control functions;
2. ensure compliance with the requirements of the public service concession granted by the Member States of the Union to the CSD/SB;
3. ensure the evaluation of the tariffs applied by the CSD/SB;
4. ensure the implementation of innovative actions and development activities;
5. set performance objectives and remuneration levels for the executive body that are adequate and consistent with the long-term strategy and financial soundness of the CSD/SB.

Article 10: Delegation of Powers and Competences of the Board of Directors
The Board of Directors may delegate certain of its powers and competences to specialized committees.
The delegation of powers or the outsourcing of certain activities of the CSD/SB does not exempt the deliberative body from its responsibilities.

Article 11: Composition of the Board of Directors
The Board of Directors must be composed, in a balanced manner, of administrators with complementary skills and experiences in the areas of interest of the CSD/SB. Without prejudice to legal or statutory provisions, the number of members of the Board of Directors takes into account the principle of proportionality and is subject to periodic reviews. Non-executive administrators must represent, at all times, at least three quarters (3/4) of the members of the Board of Directors. The Board of Directors must be composed of at least two (02) independent administrators.

Article 12: Qualification Criteria for an Independent Administrator
Without prejudice to the definition set out in Article 01, the criteria to qualify an administrator as independent are as follows:

1. not be or have been during the four preceding years an employee or member of the executive body of the CSD/SB;
2. not be an employee, or administrator of the parent company of the CSD/SB or a company that it controls during the four preceding years;
3. not be a member of the executive body of a company where the CSD/SB holds directly or indirectly a mandate within the deliberative body or in which a member of the executive body of the CSD/SB, currently serving or having served during the last four years, holds a mandate within its deliberative body;
4. not be a member of the deliberative and executive bodies of a significant client, member, affiliate, or supplier of the CSD/SB or its group, or for which the CSD/SB or its group represents a significant part of the activity;
5. not have directly or indirectly, with the CSD/SB, a business relationship ongoing or during the four preceding years;
6. not have a close family link with a member of the executive body or a member of the Board of Directors representing a private shareholder of the CSD/SB;
7. not have been statutory auditor of the CSD/SB during the four preceding years;
8. not be a member of the Board of Directors of the CSD/SB for more than ten years;
9. not hold an elective mandate of a political nature or ministerial functions;
10. be free from any influence, of political or patrimonial origin internal or external to the CSD/SB, which could compromise the exercise of his freedom of judgment.
    The status of independent administrator is reviewed annually by the Board of Directors or the dedicated nomination committee, where applicable.
    The AMF-UMOA may decide that an administrator, although meeting the criteria mentioned above, should not be qualified as independent when he is in a situation of real, apparent, or potential conflict of interest. In the event that this decision does not allow for the required minimum number of independent administrators, the CSD/SB must proceed, within a period of six (06) months, to the co-option or appointment of a new independent administrator taking into account the observations justifying the decision of the AMF-UMOA.

Article 13: Competences of Board of Directors Members
Members of the deliberative body must individually or collectively possess appropriate skills in the areas of stock market operations, depository, banking, financial analysis, information technology, strategic planning, governance, risk management, internal control, capital markets, or remuneration policies, or any other field deemed relevant for the development of the CSD/SB.

Article 14: Process for Selecting Board of Directors Members
The Board of Directors must have a formalized process to identify, evaluate, and select administrators who will be designated by the bylaws or, where applicable, by the General Assembly.
Members of the Board of Directors have obligations vis-à-vis the interests of the CSD/SB as a whole, regardless of the body that appoints them. In this regard, the Board of Directors must be endowed with powers enabling it to ensure that administrators appointed by shareholders are qualified for the position.

Article 15: Strengthening the Capacities of Board of Directors Members
The Board of Directors is required to put in place continuing training programs for administrators or take all measures aimed at ensuring their access to the knowledge necessary to fully exercise their responsibilities.
Members of the Board of Directors must also have the possibility to resort, if necessary, to external consultants and experts to acquire, maintain, and improve their knowledge and skills in order to fulfill their responsibilities.

Article 16: Organization and Functioning of the Board of Directors
The Board of Directors formalizes and updates, at least once every three (03) years, the rules and procedures governing its organization and functioning, its rights, its obligations, and its essential activities.
The Board of Directors establishes, drawing on international best practices, specific rules for the renewal of mandates of its members and those arising from cross-shareholdings, as well as rules for renewal at the level of responsibilities within committees.
The AMF-UMOA may require modifications in the composition of the Board of Directors if it finds that some of its members do not fulfill their obligations, in accordance with the provisions of this Instruction.
The minutes of the Board of Directors meetings must be transmitted to the AMF-UMOA.

Article 17: Chairmanship of the Board of Directors
The Chair of the Board of Directors must in particular:
a) be a non-executive director or an independent director; b) ensure the proper functioning of the body by ensuring compliance with the rules established for this purpose and for decision-making; c) have proven experience and skills in areas deemed relevant for the development of the DC/BR, as well as personal qualities enabling them to fully exercise their duties; d) ensure that decisions taken by this body are based on precise rules and are sufficiently substantiated; e) promote a culture of debate within the body, in particular by establishing a relationship of trust with members and ensuring the expression and examination of divergent opinions; f) be available to exercise their responsibilities.

Article 18: Evaluation of the Board of Directors
At least once a year, the deliberative body alone or with the help of external experts, conducts an evaluation of the deliberative body as a whole, its specialized committees, and each of its members. The results of this evaluation must be recorded in a report presented to the General Assembly and communicated to the AMF-UMOA. Every three (3) years, a formal evaluation is undertaken, under the direction of an independent director, with the assistance of an external expert with references in this field.

Article 19: Specialized Committees
The Board of Directors may establish, within its ranks, as many specialized committees as necessary, particularly in the areas of audit, risk, remuneration, nomination, ethics, and compliance.
The deliberative body must have at least:

• an audit committee;
• a risk committee;
• a nomination committee;
• a remuneration committee; and
• an ethics and deontology committee.
  The audit and risk committees may be merged into a single Committee. Similarly, the remuneration, nomination, ethics, and deontology committees may be merged into a single committee.

Article 20: Powers of Committees and Relationship with the Board of Directors

1. Advisory Power
   Committees have a purely advisory power, upon referral by the Board of Directors or the General Assembly, to carry out tasks determined by the Board of Directors or the General Assembly relating to the company, its management, its strategy, and the implementation of its corporate purpose. Tasks are assigned to committees whenever deemed necessary by the Board of Directors or the General Assembly.

2. Relations between the Committee(s) and the Board of Directors
   Committees prepare work and reports transmitted to the Board of Directors.
   Committees are not a fragmentation of the Board of Directors. They may, within the framework of their work, contact the company's departments, after having previously informed the General Manager and the Chair of the Board of Directors or the Board of Directors.

Article 21: Composition, Organization, and Operation of Specialized Committees
The Board of Directors fixes, in writing, the mandate and composition of the specialized committees. It ensures that said committees interact and report to it at least twice a year.
These Committees must be exclusively composed of non-executive directors and at least one independent director. A director cannot belong to more than two specialized committees at the same time.
The Chair of each specialized committee is chosen from among the members of said Committee. They cannot be the Chair of the Board of Directors or of another committee. They must have in-depth knowledge in the field of activity of the committee they chair.
Each Specialized Committee must have a Charter or an equivalent document outlining its mandate, the scope of its work, and the terms of its operation. Specialized Committees meet at least twice a year, and as needed. The deliberations, decisions, and recommendations of the meetings, as well as divergent opinions expressed, are recorded in a minutes or report signed by the Chair of the Committee. The DC/BR must adopt a system for the periodic rotation of seats and the chairmanship of these committees.

Article 22: Audit Committee
The Audit Committee assists the Board of Directors in the areas of financial information and internal control, including internal audit. For the exercise of its duties, the Audit Committee must be composed of members with proven experience in audit, financial information, or accounting. The secretariat of the Audit Committee is provided by the head of the audit function. The Audit Committee must in particular:

• ensure the deployment and proper implementation of the DC/BR's Internal Control System;
• approve internal control procedures and ensure the monitoring of their effectiveness;
• ensure the reliability of financial information;
• supervise, examine, and approve the internal and external audit programs of the DC/BR;
• ensure that the executive body takes, within deadlines, measures to remedy identified internal control deficiencies;
• sanction non-compliance by staff with applicable policies and legal texts and resolve any other identified issues;
• propose or recommend to the Board of Directors, for approval, the appointment, remuneration, and dismissal of Statutory Auditors through appropriate channels.

Article 23: Risk Committee
The Risk Committee assists the Board of Directors in its mission of monitoring the implementation of the DC/BR's risk management system. For the exercise of its duties, the Risk Committee must be composed of members with proven experience in audit or risk management. The secretariat of the Risk Committee is provided by the head of the risk function. The Risk Committee must in particular:

• ensure the definition of a risk management policy by the deliberative body;
• ensure the implementation within the DC/BR of an integrated risk management system compliant with regulatory requirements;
• participate in the development of risk management strategies and conduct an annual review, both on an aggregated basis and by type of risk;
• submit to the deliberative body, for approval, proposals regarding the current and future risk appetite at the DC/BR level as well as limits regarding the acceptance or maintenance of the relationship with a member or participant;
• ensure that the executive body takes the necessary measures to control and manage all significant risks in accordance with the approved strategies and risk appetite;
• review, at least once every three (03) years, the DC/BR's risk policies and procedures in light of developments in its activities and ensure they are adapted to the strategies and risk appetite approved by the deliberative body.

Article 24: Nomination Committee
The Nomination Committee assists the Board of Directors in the process of selecting new directors and appointing members of the executive body.
The Nomination Committee must in particular:

• ensure that the nomination and renewal process is organized in a rigorous, objective, professional, and transparent manner;
• ensure the implementation and respect of the nomination procedure for members of governance bodies;
• ensure that the DC/BR has an adequate succession plan for management positions;
• identify, address, or even eliminate conflict of interest situations arising from the nomination process to ensure the objectivity and independence of the Board of Directors through adequate selection of its members;
• formulate opinions and recommendations to the Board of Directors on the DC/BR's human resources policy.

Article 25: Remuneration Committee
The Remuneration Committee assists the Board of Directors in its mission regarding the remuneration of directors, the General Manager, other members of the executive body, and senior management of the DC/BR.
The Remuneration Committee must at a minimum:

• develop the remuneration policy for directors, members of the executive body, and senior management of the DC/BR;
• monitor the development and implementation of the DC/BR's remuneration system;
• examine, analyze, and monitor, at least once a year, the plans, procedures, and results of the remuneration system at the DC/BR level;
• work in close collaboration with the Risk Committee, which must also determine if the incentives generated by the remuneration system duly take into account the DC/BR's risk profile, its capital and liquidity needs, and its revenue forecast;
• integrate the results of its work into the annual report addressed to the Ordinary General Assembly.

Article 26: Ethics and Deontology Committee
The Ethics and Deontology Committee assists the Board of Directors in its mission of monitoring the implementation of the DC/BR's ethics and deontology system. The Ethics and Deontology Committee is composed of members with proven experience in deontology and risk management. The secretariat of the Ethics and Deontology Committee is provided by a person designated as "Ethics and Deontology Responsible Person". This person coordinates with other committees and agents all actions related to the implementation of ethics and deontology within the DC/BR. The Ethics and Deontology Committee may, on its own initiative or at the request of the General Manager or the Board of Directors, investigate facts or information relating to a breach of ethics or deontology. The Ethics and Deontology Committee must in particular:

• ensure the implementation within the DC/BR of a monitoring system for the provisions of the Code of Ethics and Deontology compliant with regulatory requirements;
• update the Code of Ethics and Deontology according to the procedures for evaluating the implementation of the code and the Governance Charter and the evolution of the DC/BR's activities;
• submit to the deliberative body for approval and presentation to the Annual Ordinary General Assembly, proposals regarding updates to the Deontology Code, procedures for evaluating the application of the Code, and measures to be taken for effective application of the Code;
• ensure the implementation of mechanisms to raise awareness among agents, representatives, and subcontractors of the DC/BR regarding ethics and deontology issues;
• ensure the establishment of an ethics report by the General Management addressed to the deliberative body.

TITLE 4: EXECUTIVE BODY

Article 27: Qualification of Members of the Executive Body
Members of the executive body must possess the professional skills, integrity, experience, and personal qualities necessary to manage the activities of the DC/BR and the personnel under their authority.
Members of the executive body must benefit from a continuous training program to ensure their knowledge is up to date in the exercise of their responsibilities.

Article 28: Responsibilities of the Executive Body
The executive body must in particular:

• communicate to the Board of Directors all relevant information and data necessary for its decision-making;
• put in place an organization that holds DC/BR staff accountable and promotes transparency;
• have, at all times, sufficient information on the nature and degree of risk taken by the DC/BR, understand the interrelationships between these different risks, and grasp the capital levels and measures required to cover these exposures;
• be able to continuously monitor and manage risks related to new activities, new products, and system modifications;
• continuously ensure the proper functioning of internal control and risk management systems and take necessary measures to remedy any deficiency or insufficiency identified in a timely manner;
• ensure that the roles and obligations of the different functions within the executive body, including those of the General Manager, are clearly defined;
• work for the adherence of all personnel to principles of ethics and professionalism as well as sound governance practices;
• maintain regular relations with the General Secretariat of the AMF-UMOA and other supervisors.

Article 29: Responsibilities of the General Manager
The General Manager is responsible for the day-to-day management of the DC/BR's activities.
To this end, they must in particular:

• ensure that the DC/BR's activities are consistent with the strategic directions set by the Board of Directors, the risk appetite, the remuneration policy, and other policies approved by this body;
• continuously ensure compliance with internal policies as well as legal and regulatory requirements governing the DC/BR's activities;
• implement the risk strategy approved by the Board of Directors, actively engage in the control, management, and monitoring of all significant risks incurred by the DC/BR, and ensure that adequate resources are dedicated to them;
• respect and promote the independence of control functions and not interfere in the exercise of their assigned responsibilities;
• ensure that all responsibilities of the executive body, set out in Article 28 above, are adequately respected by the concerned actors;
• select, supervise, and if necessary, replace staff members, without prejudice to the provisions set out in Articles 9 and 33 of this Instruction.
• communicate to the Board of Directors or the Specialized Committee in charge of strategy, if applicable, a quarterly report on the implementation of the DC/BR's strategy, in addition to reports required by commercial company law and applicable regulations, regarding management and accounts.

Article 30: Control Functions
The DC/BR must have at a minimum the functions of internal audit, risk management, and compliance.
The roles and obligations of each control function must be clearly defined as well as common areas of intervention, to better coordinate their activities.
The responsibilities of the compliance function may be exercised by an independent function from operational units, other than internal audit.

Article 31: Responsibilities of Control Functions
Each control function, placed under the authority of a distinct manager, must in particular:

• be equipped with competent and quantitatively sufficient human resources to carry out its mission;
• keep acquired knowledge up to date and ensure continuous and updated training for each member of the personnel assigned to it;
• be independent and permanent;
• have sufficient notoriety and authority for managers to discharge their duties;
• detect and manage actual, apparent, and potential conflicts of interest;
• communicate accurate, up-to-date, and intelligible information to governance bodies to enable them to make informed decisions.

Article 32: Reporting of Control Function Managers
Control function managers report hierarchically to the General Manager and functionally to the Board of Directors, which is responsible for their selection, supervision of their performance, and dismissal.
Each control function manager must be able to access the Board of Directors directly or, if applicable, the specialized committees emanating from it, and the Statutory Auditors of the DC/BR, to discuss their opinions, findings, and conclusions from their work.

Article 33: Appointment, Transfer, and Dismissal of Control Function Managers and Internal Auditors
The appointment, transfer, or dismissal of managers of control functions other than internal audit must be submitted for prior approval by the Board of Directors, upon a duly motivated proposal from the General Manager.
The appointment, transfer, or dismissal of the manager of the internal audit function must be submitted for prior approval by the Board of Directors, upon a duly motivated proposal from the Audit Committee.
The appointment, transfer, or dismissal of the manager of internal auditors must be submitted for prior approval by the Board of Directors, upon a duly motivated proposal from the Head of the Internal Audit Function.
These decisions must be brought to the attention of the AMF-UMOA.

Article 34: Internal Audit
The internal audit function is responsible for providing governance bodies with reasonable assurance on the effectiveness of the internal control system, governance systems, and risk management systems, to enable them to have better control over the DC/BR's activities and risks incurred. The specific responsibilities of the internal audit function are detailed in the Instruction on the internal control and risk management system of the DC/BR.

Article 35: Risk Management
The risk management function supervises risks taken across all activities of the DC/BR.
The specific responsibilities of the risk management function are detailed in the Instruction on the internal control and risk management system of the DC/BR.

Article 36: Compliance
The compliance function's role is to ensure that the DC/BR conducts its activities in an honest manner and in compliance with applicable legal texts and internal policies.
The specific responsibilities of the compliance function are detailed in the Instruction on the internal control and risk management system of the DC/BR.

TITLE 5: MANAGEMENT OF CONFLICTS OF INTEREST AND PRINCIPLES OF GOOD CONDUCT

Article 37: Policies on Conflicts of Interest
Members of governance bodies must avoid placing themselves in situations likely to generate conflicts of interest. The deliberative body must ensure that the executive body develops and implements a policy and procedures aimed at detecting apparent and potential conflicts of interest and, when they cannot be prevented, managing them appropriately. It must also put in place a process to monitor compliance with this policy. This policy, applicable to all staff as well as members of the executive and deliberative bodies, must in particular provide for:

• the obligation to maintain independence of analysis, judgment, and decision at all times;
• avoiding being directly or indirectly in a situation that could give rise to an apparent or potential conflict of interest;
• explicit provisions regarding the approach to be adopted to quickly inform hierarchy or the deliberative body when a member of the DC/BR's body is faced with an apparent or potential conflict of interest;
• a rigorous process of examination and approval by the deliberative body, which applies to any member of governance bodies wishing to sit on another deliberative body, or undertake activities that could create conflicts of interest;
• the prohibition for any member of the deliberative body to participate in debates and decision-making on subjects that put them in a situation of conflict of interest or that could compromise their objectivity and independence;
• examples of conflict of interest situations likely to arise in the context of the exercise of different activities within the DC/BR;
• procedures that adequately regulate transactions with related parties so that they respect the provisions provided for this purpose in the Instruction on risk management;
• the modalities and conditions for handling cases of non-compliance with this policy.

Article 38: Declarations of Conflicts of Interest and Honor
Prior to taking office and each year during their term, the director submits to the Board of Directors a declaration of conflicts of interest regarding links of any nature that they maintain directly or indirectly with the DC/BR, its management, partners, and competitors.

Article 39: Duties of Diligence and Loyalty
Members of governance bodies as well as personnel under their authority have a duty of diligence and a duty of loyalty towards the DC/BR, shareholders, investors, and other stakeholders. Directors appointed by dominant influence shareholders must maintain their impartiality and fully exercise their duties of diligence and loyalty towards the DC/BR.

Article 40: Solvency of Members of Governance Bodies
Members of governance bodies must not be in default of payment on their commitments to the DC/BR or in a situation of banking prohibition in the UMOA. In such cases, they must be suspended from their duties.
The Regulator must be informed by the Chair of the Board of Directors as soon as it occurs. The lifting of this suspension can only take place when the debt becomes sound again, in accordance with accounting rules in force in the UMOA or the banking prohibition is lifted. The AMF-UMOA must also be informed of this lifting of suspension, by correspondence accompanied by necessary supporting documents. The duties of the suspended member of the deliberative or executive body must be transferred to other counterparts according to predefined procedures. A member of the governance body subject to a banking prohibition in the UMOA or whose default of payment lasts more than one year without being regularized or whose default has occurred more than once on their commitments to the DC/BR over the last five years, must be dismissed and replaced according to the DC/BR's procedures. This situation may entail a prohibition from exercising a function as a director or manager within an entity supervised by the AMF-UMOA, in accordance with the provisions of the regulation in force in the UMOA.

TITLE 6: TRANSPARENCY AND INFORMATION DISSEMINATION

Article 41: Communication Mechanism
Governance bodies must ensure the timely dissemination of accurate information on all significant matters concerning the DC/BR, including its shareholding and governance. Shareholders, members, investors, and other stakeholders must have access to all relevant and useful information enabling them to assess the effectiveness with which governance bodies administer and manage the DC/BR.

Article 42: Mode of Information Dissemination
Information must be accessible on the DC/BR's website, in its annual and periodic financial reports, and by any other adequate means.

TITLE 7: TRANSITIONAL AND FINAL PROVISIONS

Article 43: Vacancies in the Positions of Chairman of the Board of Directors and Chief Executive Officer
The vacancy of the positions of Chairman of the Board of Directors and Chief Executive Officer, as well as the reasons for such vacancy, must be notified to the AMF-UMOA within twenty-four (24) hours following the occurrence of this event. The interim of the positions of Chairman of the Board of Directors and Chief Executive Officer may be ensured by a replacement designated in accordance with the regulations in force.

Article 44: Repeal
This Instruction repeals and replaces all previous and contrary provisions dealing with the same subject.

Article 45: Transitional Provisions
The DC/BR has a maximum period of two (02) years from the date of its signature to comply with the provisions of this Instruction.

Article 46: Sanctions
Non-compliance with the rules provided by this Instruction is sanctioned by the AMF-UMOA, in accordance with the regulatory provisions in force on the UMOA Regional Financial Market.

Article 47: Publication and Effective Date
This Instruction, which will be published wherever necessary, enters into force as of its date of signature.

Done in Abidjan, on 29 DEC. 2023
For the UMOA Financial Markets Authority
The President
Badanam PATOKI

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ANNEX
MINIMUM PROVISIONS OF THE CORPORATE GOVERNANCE CHARTER

Legal Name: ......

1. INTRODUCTION
   This Corporate Governance Charter sets out the principles and rules on which the Board, its directors, and its committees operate.
   The evolution of practices and governance rules of entities similar to the DC/BR, as well as the current situation of the Company, requires the establishment of a reference code (the "Corporate Governance Charter" or the "Charter").
   This Charter is consistent with the recommendations on corporate governance of market infrastructures, the regulations on financial markets, and the Uniform Act relating to commercial company law and GIEs of the OHADA Treaty.

2. BOARD OF DIRECTORS
   2.1 Powers and Responsibilities of the Board of Directors
   The missions of the Board of Directors (hereinafter the "Board"), in addition to those provided for by the Uniform Act relating to commercial company law and GIEs of the OHADA Treaty and the DC/BR's bylaws, are:

2.1.1 Control Responsibilities
(i) Ensure that an internal control system and procedures are put in place, including an adequate system for identifying and managing risks and procedures aimed at ensuring compliance with laws; (ii) Monitor the functioning and adequacy of the internal control system and procedures, taking into account the review conducted by the audit committee; (iii) Take the necessary measures to guarantee the integrity of the financial statements.

2.1.2 Evaluation
(i) Evaluate the performance of executives;
(ii) Monitor and evaluate the effectiveness of the Board's specialized committees; (iii) Monitor the activities of the Statutory Auditors and the internal audit function, taking into account the review conducted by the Audit Committee; (iv) Examine the composition and remuneration of the Executive Body and the members of the Committees; (v) Decide on the principles governing the remuneration of the members of the Executive Body and the Committees. The Executive Body is defined as the set of structures that contribute to the day-to-day management of the DC/BR and ensure the effective implementation of the activity defined by the deliberative body. In particular, the General Manager, Deputy General Managers, the Secretary General, the Heads of control functions, the Directors of Departments grouping Directions, and the Directors reporting to the General Manager are considered members of the Executive Body.

2.1.3 Corporate Strategic Plan
(i) Regularly review the business plan (or business plan) prepared by the General Manager, notably (a) by acquiring an in-depth knowledge of the business conducted, (b) by ensuring understanding and questioning the underlying assumptions of the plan and forming an independent opinion on the likelihood that the plan can be achieved, and (c) by monitoring the company's performance against strategic objectives and the business plan; (ii) Examine, approve, and monitor the DC/BR's financial objectives.

2.1.4 Delegations of Authority
(i) Decide on the principles governing the delegation of authority within the DC/BR; (ii) Examine, approve, and monitor delegations of authority; (iii) Decide on any delegation of authority to the specialized committee.

2.1.5 Information to the Board
The Board will take the necessary measures to ensure it is informed regularly:
(i) of the progress in the implementation of the business plan, notably through quarterly reports prepared by the Executive Body on the activities and financial aspects of this implementation; (ii) of significant developments in activities and the most important decisions taken by the Committees and by the General Manager, through comparative, quarterly, and unaudited income and cash flow statements, established in accordance with the rules in force and accompanied by a report prepared by Management, which discusses and analyzes these developments and decisions.

2.2 COMPOSITION OF THE BOARD
2.2.1 General Provisions
The composition of the Board must ensure that the DC/BR respects the requirements regarding conflicts of interest and independence, as well as the provisions on incompatibilities.
The Board must take these provisions into account when considering nomination proposals, or when it is called upon to present a candidate for nomination or election.
The composition of the Board of Directors must ensure that decisions are taken in the interest of the DC/BR, and that both executive directors, non-executive directors, as well as independent directors of the Board have the necessary skills, experience, and expertise to discharge their responsibilities. The skills profile of the directors, the Board of Directors is maintained in Annex 1. Corporate officers of the DC/BR, intuitu personae or representatives of legal entities, cannot be corporate officers of another DC/BR, without prejudice to other incompatibilities that may be applied to them.

2.2.2 Nomination
Members of the Board of Directors are appointed in accordance with the provisions of the DC/BR's Bylaws. The Board will only propose candidates who have been proposed by the Remuneration and Nomination Committee for nomination by the General Meeting.
The Chairman of the Board of Directors ensures that the Board of Directors has, before examining this candidacy, sufficient information on the candidate, such as a curriculum vitae, an evaluation of the candidate based on a preliminary interview, a list of other positions held by the candidate, positions currently held, and, when the candidate is presented for election as an independent director, any other information necessary to assess the independence of the candidate.

2.2.3 Shareholders' Right of Proposal
Each shareholder or group of shareholders (or several SGI) holding at least 15% of the DC/BR's shares has the right to propose a candidate for nomination as a director on a pro rata basis of their participation.
The number of directors for whom a shareholder may propose candidates under this right of proposal (if any) is calculated on January 1st of the year in which the vacant positions are to be filled. Mandates currently held within the Board of Directors, for which this shareholder has exercised their right of proposal, are subtracted from this number. The result of the pro rata calculation is always rounded down to the nearest whole number. To avoid any ambiguity, changes in the shareholding structure occurring between January 1st and the date of the General Meeting in question will not be taken into account for the calculation of the number of Board mandates for which a shareholder may exercise their right of proposal. If there are not enough vacant director positions due to the rule that the Board of Directors must always have at least two (02) independent directors, the number of directors that each shareholder has the right to propose will be reduced pro rata to the number of vacant positions to be filled. The result of the pro rata calculation is always rounded down to the nearest whole number. The calculation of the threshold for the right of proposal, the shares held by a shareholder and by companies directly controlled by them (within the meaning of Article 174 of the OHADA Uniform Act relating to commercial companies) will be added together. When proposing candidates for a mandate on the Board of Directors, shareholders must take into account the skills profile of the Board of Directors.

2.2.4 Independent Directors
At least two (02) directors must meet the independence criteria provided for by the Instruction on the governance of Market Infrastructures, which is the reference in these provisions.
Vacant positions to be filled by candidate-directors who are not proposed by a shareholder must be filled by independent directors.
An independent director who no longer meets one of the independence criteria must inform the Board in writing immediately. It is expected that this director resigns from their mandate within the month following the loss of this status.

2.2.5 Term of Office and Age Limit
Directors are appointed for a period of three (03) years, renewable without prejudice to restrictions for independent directors, as set out in this Charter. The term of office of a director will terminate immediately after the General Meeting following their 75th birthday. It is expected that this director resigns from their mandate at this General Meeting.

2.2.6 Vacancy of a Director Position
In the event of a vacancy of a director position, the Board, in accordance with Article 429 of the OHADA Uniform Act relating to commercial companies and the company's bylaws, fills it provisionally until a definitive appointment is made in accordance with the bylaws. The candidate for the vacant position is proposed by the Remuneration and Nomination Committee. In the event of a vacancy of a director position proposed for nomination by a shareholder in accordance with the right of proposal described above, the Board may only appoint a new director, in order to provisionally fill the vacant position on the proposal of this shareholder.

2.2.7 Chairman
The Chairman of the Board of Directors is appointed and, if applicable, removed from their chairmanship in accordance with the provisions of the bylaws.
The Chairman is responsible for the leadership of the Board of Directors. The Chairman takes the necessary measures to develop a climate of trust within the Board that allows for open discussions, constructive criticism, and support for the decisions taken by the Board of Directors. They ensure that the Board functions effectively and in accordance with the bylaws and the Corporate Governance Charter.

2.2.8 Other Mandates and Functions
It is permitted for Board members to sit on the boards of other companies, and to hold other mandates or functions, except at another DC/BR, provided that (i) the provisions of the bylaws are respected, (ii) these mandates or functions do not interfere with the member's capacity to fulfill their duties as a member of the DC/BR Board, and (iii) they do not accept more than five director mandates in non-listed companies (including their mandate as a member of the Board). Changes regarding these other mandates or functions of Board members are communicated to the Chairman when they occur. Any director, including the General Manager, appointed to a new external mandate must inform the Remuneration and Nomination Committee. Any new external mandate that the General Manager wishes to exercise is subject to the prior approval of the Board of Directors, acting on the recommendation of the Remuneration and Nomination Committee.

2.3 OPERATION OF THE BOARD
The Board meets in accordance with the provisions of the DC/BR's Bylaws and the Corporate Governance Charter, and the deliberations, conclusions, and decisions resulting from its work are recorded in minutes.
The minutes contain a summary of the deliberations, specify the decisions taken, and mention any abstention or reservation expressed by any director. The meeting minutes are prepared and communicated to the Board of Directors members within fifteen (15) calendar days following the date of the meeting. If a Board member wishes certain modifications to be made to the minutes, they may request this within ten (10) working days from the receipt of the draft minutes. The minutes will be definitively approved at the next Board meeting. The minutes are signed in accordance with the provisions of the OHADA Uniform Act relating to commercial companies. To facilitate the drafting of minutes, Board meetings may be recorded, provided that these recordings are destroyed under the responsibility of the meeting secretary, after approval of the minutes of the relevant meeting.

3. EVALUATION
   Under the direction of the Chairman, the Board of Directors regularly evaluates the extent of its activities, its composition, its performance, and that of its committees, as well as the interaction with the Executive Body. If necessary, the Chairman will propose the necessary measures to remedy any deficiencies of the Board of Directors or its committees.

4. DIRECTORS' CONDUCT
   4.1 Independence
   Each member of the Board of Directors is required:
   4.1.1 to take as their exclusive guide the general objective of the DC/BR Board of Directors to pursue the long-term success of the DC/BR and to ensure that all decisions are taken in the social interest of the DC/BR.
   4.1.2 to maintain their independence in judgments, decisions, and actions at all times.

4.2 Conflicts of Interest
4.2.1 Board members are required to avoid any action, situation, or participation that would place them in a situation of conflict, or appearance of conflict, with the interests of the DC/BR or one of its subsidiaries. Before accepting their nomination to the Board of Directors, prospective directors must ensure that neither they nor any members of their family (including their spouse or other life partner, biological or by-law parents up to the second degree, and adopted children) have a personal, professional, or financial interest related to the DC/BR that places them in a permanent or recurring situation of conflict of interest with the DC/BR.
4.2.2 If such a situation arises after nomination, the Board of Directors assesses the situation and may recommend that the shareholder or shareholders who appointed or proposed the concerned director take all necessary measures so that they are replaced. Each member of the Board organizes their personal and professional affairs in a manner to avoid any conflict of interest of a personal, professional, or financial nature with the DC/BR, directly or through members of their family (as defined above).
4.2.3 If a member of the Board of Directors has, directly or indirectly, an opposing interest of a patrimonial nature to a decision or operation within the Board's purview, the director does not participate in the discussion nor vote on the matter in question. The minutes of the Board of Directors meeting reproduce the statements of the director having an opposing interest, as well as a description by the Board of the opposing interest and the nature of the decision or operation in question. Furthermore, the minutes include a justification by the Board of the decision or operation and a description of the financial consequences for the DC/BR. The minutes are reproduced in the Board's annual report. The Board member in a situation of conflict of interest also informs the Ethics and Deontology Committee in their annual report of the financial consequences of the decision regarding which a conflict of interest arose.
4.2.4 Operations and/or business relationships between directors and the DC/BR or one or more of the companies linked to it that do not strictly fall within the scope of this charter must always be concluded under normal market conditions. The concerned director must inform the Chairman of such operations prior to their occurrence.

4.3 Transactions on DC/BR Shares
Directors will fully comply with the provisions of the DC/BR's Charter and bylaws.

4.3.1 Service Contracts
Non-executive directors cannot conclude, directly or indirectly, contracts for the supply of goods or services, for valuable consideration, with the DC/BR or one of its subsidiaries, without the express authorization of the Board. Any service rendered by the DC/BR or one of its subsidiaries to a Board member is exclusively under commercial conditions conforming to prevailing market conditions.

4.3.2 Interactions with the Executive Body
Directors may contact the Executive Body of the DC/BR subject to the following guiding principles. At the initiative of the Chairman or two or more directors, Board members may be asked to give an opinion on specific questions related to the management of the company's affairs and to contact the concerned member(s) of management. The Chairman ensures that directors receive relevant, clear, and timely information. The Executive Body is required to provide this information, but when clarifications or additional information are necessary, directors must request them. Board members are invited to consult the General Manager before any contact with another member of the Executive Body and to exercise discernment, so that these contacts do not harm the conduct of business and the management responsibilities exercised by members of the Executive Body.

4.3.3 Interactions with Third Parties
Directors may, at the request of the Chairman or the General Manager or in consultation with them, participate in the DC/BR's communication activities. In particular, directors are expected to support, in public and private spheres, the Board's position regarding the strategy, policies, and actions of the DC/BR.

4.3.4 Confidentiality
Open discussions during Board meetings between directors and other participants (observers, invited experts, management members) are protected by the confidentiality of information and deliberations, in accordance with legal provisions and subject to them.

5. GENERAL MANAGEMENT
   5.1 GENERAL MANAGER
   The Board appoints and dismisses the General Manager. The General Manager is appointed for a term defined by the Board. This term is renewable once.
   Within the limits of the powers entrusted to them by or pursuant to the company's bylaws, the General Manager may delegate special and limited powers to any person. They may authorize sub-delegation. The General Manager communicates to the Board of Directors the identity of the delegates and the powers delegated.

5.2 OTHER MEMBERS OF GENERAL MANAGEMENT
Executives holding the most important positions in terms of responsibility are members of the Executive Body. They implement the strategy indicated by the Board of Directors under the supervision and responsibility of the General Manager.

6. BOARD COMMITTEES
   6.1 GENERAL
   To effectively fulfill its role and responsibilities, the Board of Directors sets up the Nomination and Remuneration Committee, an Audit Committee, an Ethics and Deontology Committee, and the Risk Committee (hereinafter "Board Committees" or "Committees").
   The existence of Committees alongside the Board of Directors does not affect in any way the Board's capacity to create, if necessary, other ad hoc committees to deal with specific issues, without prejudice to the powers and competencies of the Board.
   The Board is assisted by four (4) mandatory committees: the Risk Committee, the Audit Committee, the Ethics and Deontology Committee, the Remuneration Committee, and the Nomination Committee.
   The Board may constitute a Strategic Committee if it deems it necessary. This committee does not