Law No. 2016-056 on Electronic Money and Electronic Money Institutions

[IMAGE]

PRESIDENCY OF THE REPUBLIC

Law No. 2016-056 On Electronic Money and Electronic Money Institutions

EXPLANATORY STATEMENT

In the National Development Plan (NDP), Madagascar plans to achieve strong and inclusive growth for the benefit of development. This objective requires the institution of an environment that is conducive to the development of the financial sector, meeting the needs of the financial sector as well as those of all economic actors.

With this in mind, work has been carried out over the past few years with all the players in the public and private sectors, with a view to setting up a legal framework governing electronic money and electronic money institutions in Madagascar.

With the adoption of the concept of "electronic money" at the level of digital financial services, Madagascar has been able to benefit from a new leap in technological innovation.

On the one hand, cell phone operators have set up a financial service, usually called mobile money, which allows an individual with a cell phone to have an equivalent amount of cash in the cell phone, to transfer it as needed and to pay merchants or service providers. In addition, banks and new entrants have also expanded their range of services by making prepaid payment cards available to the public as electronic wallets.

Digital financial services over the phone have been a real success around the world. This means of payment is replicated well beyond Africa where it was born.

Thanks to the fluidity of commercial transactions, many developing and emerging countries have significantly improved their economic growth with an increase in the financial inclusion of their population and the multiplication of new income generating activities. As a result, many micro-enterprises have become formalized as they have grown. Throughout the world, thanks to the emergence of digital financial services and financial education, the possibility of building up "mobile savings", in the broadest sense of the term, by the vulnerable population has given them access to financial and non-financial services that were previously unaffordable, including micro-health insurance services, electricity and basic education in particular.

Madagascar's positive law does not include provisions on the concept of "electronic money", "mobile money", the actors in this field and the rules that should govern them, even though the development of this financial service throughout the country is rapid. The

institution of a legal framework on electronic money and electronic money institutions aims essentially to:

• clarify the concept of electronic money, the actors in this field and the rules of the profession;
• promote financial inclusion through alternative channels for the circulation of financial flows;
• progressively formalize the informal sector through the traceability of economic agents;
• to make the financing circuit of the economy more fluid with more secure mechanisms and tools.

From the above, this law is structured around 120 articles and is subdivided into 8 titles:

• Title I on general provisions deals with the purpose, scope and definitions ;
• Title II on electronic money deals with the use of electronic money and transactions ;
• Title II I on the electronic money institution specifies the provisions relating to the characteristics, authorisation, rules of operation and control, suspension, dissolution and liquidation;
• Title IV on the user of electronic money establishes the rules governing the relationship between the user and the electronic money institution, the obligation to accept payment in electronic money, and user protection measures;
• Title V establishing the regulatory and supervisory authority defines its authoritys;
• Title VI relating to the professional association concerns the organisation of the profession;
• Title VII relates to the penal sanctions;
• Title VIII deals with transitional and final provisions.

This is the purpose of the present Law.

LAW ON ELECTRONIC MONEY AND ELECTRONIC MONEY INSTITUTIONS

TITLE I: GENERAL PROVISIONS................................................................................................ 5
CHAPTER I: PURPOSE AND SCOPE OF THE LAW ................................................................. 5
On the purpose of the Law ....................................................................................................... 5
CHAPTER II: DEFINITIONS ....................................................................................................... 6
Electronic money....................................................................................................................... 6
Numericals ............................................................................................................................... 6
The user.................................................................................................................................... 6
Electronic money support .......................................................................................................... 6
Electronic money transactions................................................................................................... 6
Issuance of electronic money .................................................................................................... 6
Management of electronic money.............................................................................................. 6
Transfer of electronic money ..................................................................................................... 7
Electronic money institution ....................................................................................................... 7
TITLE II: ELECTRONIC MONEY................................................................................................ 7
CHAPTER I: THE USE OF ELECTRONIC MONEY ................................................................... 7
Section 1 : Electronic money transactions ................................................................................. 7
Section 2 :Prohibitions............................................................................................................... 8
CHAPTER II: PROVISIONS RELATING TO TRANSACTIONS ................................................. 9
Traceability of operations .......................................................................................................... 9
Settlement of operations............................................................................................................ 9
Refund at any time .................................................................................................................... 9
Refund in case of withdrawal of approval ................................................................................. 9
TITLE III: THE ELECTRONIC MONEY INSTITUTION............................................................... 10
CHAPITRE I : THE CHARACTERISTICS, ORGANISATION AND OPERATION OF
THE ELECTRONIC MONEY INSTITUTION ............................................................................... 10
Section 1 : The characteristics of the electronic money institution............................................. 10
Section 2 : Organisation and control structures of the electronic money institution. 10
Section 3 : Distribution agents ................................................................................................... 11
Section 4 : the change in status of an electronic money institution ........................................... 11
CHAPTER II: LICENSING OF AN ELECTRONIC MONEY INSTITUTION ................................ 11
Section 1 : Licensing requirement.............................................................................................. 11
Section 2 : Of the instruction of the file of request for approval................................................. 12
Section 3 : The accreditation decision....................................................................................... 13
Section 4 : The register of electronic money institutions............................................................ 14
CHAPTER III: OPERATING RULES OF THE ELECTRONIC MONEY INSTITUTION ..... 14
Section 1: Management, accounting and prudential standards.................................................. 14
Section 2: Reporting obligations ............................................................................................... 14
Section 3: The fight against money laundering and terrorist financing ...................................... 14

Section 4: Data protection and conservation obligations............................................................ 15
Section 5 : Professional secrecy ............................................................................................... 15
CHAPTER IV: SUSPENSION OF ACTIVITY, DISSOLUTION AND LIQUIDATION OF AN
ELECTRONIC MONEY INSTITUTION........................................................................................ 16
Section 1 : Suspension of the activity of an electronic money................................................... 16
of an electronic money institution ............................................................................................. 16
Section 2 : Dissolution of an electronic money institution........................................................... 16
Section 3 : Withdrawal of an electronic money institution's licence ........................................... 17
Section 4 : Liquidation ............................................................................................................... 17
TITLE IV: THE USER OF ELECTRONIC MONEY ..................................................................... 19
CHAPTER I : THE RELATIONSHIP BETWEEN AN ELECTRONIC MONEY INSTITUTION
AND A USER............................................................................................................................. 19
Section 1 : Agreement between an electronic money institution and a user.............................. 19
Section 2: The electronic money account .................................................................................. 20
Section 3: The global account The opening of a global account ............................................... 20
Section 4 : Use of electronic money .......................................................................................... 21
Section 5 : Sanctions for the user of electronic money .............................................................. 21
Section 6: The right to open an electronic money account......................................................... 22
CHAPTER II: THE OBLIGATION TO ACCEPT PAYMENT IN ELECTRONIC MONEY.... 22
CHAPTER III : PROTECTION OF THE USER OF ELECTRONIC MONEY ............................. 23
Section 1 : Prior information ...................................................................................................... 23
Section 2: The existence of an agreement between an electronic money institution and a
user............................................................................................................................................ 23
Section 3: User complaints......................................................................................................... 23
TITLE V: THE REGULATORY AND SUPERVISORY AUTHORITY .......................................... 24
CHAPTER I: THE BANKING AND FINANCIAL SUPERVISION COMMISSION....................... 24
CHAPTER II: RESPONSIBILITIES OF THE CSBF ................................................................... 25
SECTION 1 ADMINISTRATIVE AND REGULATORY AUTHORITYS ....................................... 25
Section 2: The authority of supervision...................................................................................... 25
Section 3 : Authority to impose sanctions .................................................................................. 26
TITLE VI: ORGANISATION OF THE PROFESSION.................................................................. 27
TITLE VII: CRIMINAL SANCTIONS ........................................................................................... 27
TITLE VIII: TRANSITIONAL AND FINAL PROVISIONS ............................................................ 28
CHAPTER I: TRANSITIONAL PROVISIONS ............................................................................. 28
CHAPTER II: FINAL DISPOSITIONS......................................................................................... 28

[IMAGE]

PRESIDENCY OF THE REPUBLIC
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Law No. 2016-056
On Electronic Money
and Electronic Money Institutions

The National Assembly and the Senate passed in their respective sessions on December 14 and 16, 2016,

THE PRESIDENT OF THE REPUBLIC,

• In view of the Constitution;
• In view of the decision n°11-HCC/D3 of January 27, 2017 of the High Constitutional Court,

PROMULGATES THE FOLLOWING LAW:

TITLE I: GENERAL PROVISIONS
CHAPTER I: PURPOSE AND SCOPE OF THE LAW

On the purpose of the Law

Article 1. The purpose of this Law is to establish the rules relating to electronic money, the activity and control of electronic money institutions.

The scope of the Law

Article 2. The provisions of this Law apply:

• to electronic money institutions as defined in Article 11 of this Law and authorised to carry out the electronic money operations provided for in Articles 7 to 10 and 12 to 14 of this Law by way of derogation from the banking law;
• credit institutions as defined by the banking regulations, authorised to make means of payment available to the public or to manage them and which, as such, carry out electronic money transactions linked to their banking activities as provided for in Article 15 of this Law
• distribution agents referred to in Article 30 of this law acting in the name and on behalf of an electronic money institution under a mandate agreement.

CHAPTER II: DEFINITIONS

Electronic money

Article 3. Electronic money is a monetary value, as a substitute for fiduciary money stored on an electronic money medium as defined in Article 6 of this Law. It is issued by an electronic money institution, in exchange for the remittance of cash by the users for the purpose of carrying out the operations referred to in article 8 of this law. Electronic money is accepted as a means of payment by a natural or legal person other than the issuing institution. Electronic money represents a claim on the issuing institution. It has a discharge authority and one unit of electronic money is equivalent to one ariary.

Numericals

Article 4 The money paid by the user, as defined in Article 5 of this Law, to the electronic money institution, as defined in Article 11 of this Law, for the purpose of acquiring electronic money, is considered cash.

The user

Article 5. A user is defined as any person who holds e-money under a contract with an issuing institution and has a claim against an issuing institution for the delivery of funds.

Electronic money support

Article 6. Any electronic, magnetic, biometric or computerized instrument that allows the storage of electronic money with a view to carrying out the operations referred to in article 9 of this law is considered an electronic money medium. The provision of electronic money media by an electronic money institution is subject to the prior authorisation of the Banking and Financial Supervisory Commission (CSBF).

Electronic money transactions

Article 7. Electronic money operations include the issuance and management of electronic money as defined in Articles 8 and 9 of this Law.

Issuance of electronic money

Article 8. The issuance of electronic money is the operation by which an electronic money institution puts into circulation electronic money stored on an electronic money medium in exchange for the remittance of cash in an amount equal to the monetary value issued in order to carry out the operations referred to in Article 9 of the present Law.

Management of electronic money

Article 9. The management of electronic money is the operation by which an electronic money institution or a distribution agent offers electronic money services, such as:

• the supply of the electronic money medium,
• the withdrawal of money from the Electronic Money medium,
• the transfer of e-money,
• storage of electronic money.

Transfer of electronic money

Article 10. The transfer of electronic money includes both domestic and international transfers. International transfers are made through authorised intermediaries under the conditions set out in the agency agreement concluded between the electronic money institution acting as agent and the authorised intermediary acting as principal.

Electronic money institution

Article 11. An electronic money institution is defined as any legal entity authorised by the CSBF to carry out electronic money operations as defined in Articles 7 to 10 and 12 to 14 of this Law.

TITLE II: ELECTRONIC MONEY

CHAPTER I: THE USE OF ELECTRONIC MONEY

Section 1: Electronic money transactions

Electronic money transactions by card

Article 12. Users can use electronic money stored in a card to carry out electronic money transactions as defined in Article 9 of this Law, according to the conditions set out in the agreement between the electronic money institution and the user.

To this end, the electronic money institution is required to comply with the provisions governing payment by card provided for by the law in force on electronic transactions and its implementing texts.

The issuance of international cards is subject to the relevant regulations.
Online electronic money transactions

Article 13. Electronic money can be used by the user for online payment operations under the conditions fixed by the agreement between the electronic money institution and the user. To this end, the electronic money institution is obliged to respect the provisions governing online payment provided for by the law in force on electronic transactions and its implementing texts.

Electronic money operations by cell phone

Article 14. An electronic money institution may offer users electronic money services by means of mobile telephony. In this case, the electronic money institution contracts with an operator holding a cell phone license of its choice.

On the provision of banking services through electronic money

Article 15. Only credit institutions are entitled to carry out banking operations authorised by virtue of their license as a credit institution by means of electronic money in accordance with articles 34 and 36 of the present Law. The related transactions are initiated, recorded and monitored in compliance with the banking regulations.

Section 2: Prohibitions

Illegal exercise of electronic money transactions

Article 16. It is forbidden for any natural or legal person, other than the entities referred to in Article 2, under penalty of the application of the penal sanctions provided for by articles 117 and 18 of this Law:

• to provide electronic money services referred to in Article 9 without being licensed as an electronic money institution, credit institution or distribution agent
• using a corporate name, advertising or generally expressions that make it appear that the entity is licensed as an electronic money institution or create confusion in this regard.

The prohibition set forth in the first indent above does not apply to entities that issue electronic money stored in prepaid instruments intended for payment of services on their own premises.

The unlawful performance of banking activities by an electronic money institution

Article 17. It is forbidden for an electronic money institution, under penalty of the application of the penal sanctions provided for in Article 119 of the present Law, to:

• receive funds from the public as a deposit within the meaning of the banking law;
• grant credits,
• granting or charging interest on issued electronic money,
• to advertise that the electronic money defined in Article 3 is considered as a deposit within the meaning of the banking law or savings within the meaning of the law on microfinance

Notwithstanding the provisions of the last indent, electronic money institutions may advertise savings, deposit and credit services offered by credit institutions subject to prior authorisation of such services by the CSBF.

Shareholders and members of the corporate bodies

Article 18. No person may, directly or through an intermediary, be a shareholder or member of a corporate body or director of an electronic money institution, nor have the authority to sign on behalf of such an institution:

1. if he or she has been convicted of a felony or misdemeanor by a judicial decision that has become final;
2. If he or she has been declared bankrupt, unless he or she is discharged;
3. If he has been convicted as a director, de jure or de facto manager of a company, under the legislation on collective procedures for the settlement of liabilities, unless a pardon is granted in his favor;
4. If he has been struck off as a ministerial officer by virtue of a judicial decision;
5. If the Malagasy banking system has doubtful or contentious debts, within the meaning of the accounting plan for credit institutions, on its signature or, at the CSBF's discretion, on that of companies placed under its control or management;
6. If it is on the blacklist drawn up by the competent authority.

The above prohibition shall apply in the event of a decision of bankruptcy, dismissal or final conviction for one of the above-mentioned offenses, pronounced by a foreign court or administration when it is declared enforceable by a Malagasy court.

The prohibition ceases by operation of law when the administrative or judicial

decision which motivated it is completely revoked or overturned in all its provisions by a new decision having acquired the authority of res judicata.

CHAPTER II: PROVISIONS RELATING TO TRANSACTIONS

Traceability of operations

Article 19. An electronic money institution shall ensure the traceability of electronic money transactions. To do so, it records in an electronic register all the transactions relating to the electronic money services it provides and ensures the regular accounting of the operations.

Settlement of operations

Article 20. All electronic transactions involving the operations referred to in article 9 of this law are made in real time. The payment order or commitment given by means of any electronic money medium is irrevocable.

However, payment may be stopped in the event of loss, theft or fraudulent use of an electronic money medium under the conditions set out in article 96 of this law.

Refund at any time

Article 21. The user may, at any time, withdraw all or part of the electronic money stored in the electronic money medium.

In the event of a system failure preventing the settlement of a transaction, the electronic money institution is obliged to reimburse the user the amount of the unauthorised or unexecuted transaction as soon as possible.

As such, it restores the user's electronic money account to the state it is in as if the unauthorised or unexecuted transaction had not taken place.

Refund in case of withdrawal of approval

Article 22. An electronic money institution that has been subject to a withdrawal of license allows the electronic money user to withdraw the electronic money stored in its electronic money account within three (3) months from the decision to withdraw the license. In this respect, the bank returns to the liquidator the funds deposited in the global account referred to in Article 79 of this Law or proceeds to the payment of the user at the request of the liquidator.

The funds not claimed at the end of this period are transferred to the deposit and consignment fund together with the list of users not reimbursed as well as the statement of transactions carried out by the user during the last three (3) months.

TITLE III: THE ELECTRONIC MONEY INSTITUTION

CHAPITRE I: THE CHARACTERISTICS, ORGANISATION AND OPERATION OF THE ELECTRONIC MONEY INSTITUTION

Section 1: The characteristics of the electronic money institution

Article 23. Any existing entity wishing to carry out electronic money activities is required to create a subsidiary with a distinct personality and to apply for approval as an electronic money institution in accordance with Article 33 of this Law.

The provisions of the preceding paragraph do not apply to credit institutions wishing to carry out electronic money operations.

Legal form and registered office

Article 24. An electronic money institution is constituted in the form of a joint stock company with several shareholders.

The electronic money institution shall mention, in all correspondence or publications or any other electronic means used, the obligatory mentions inherent in the legal form, the corporate name, the address, the reference of the approval decision and the registration number in the register of electronic money institutions.

Article 25. The electronic money institution establishes its head office on the territory of the Republic of Madagascar.

Minimum capital

Article 26. An electronic money institution shall ensure that on the day of its incorporation it has a paid-up share capital, the minimum amount of which is fixed by Decree taken on the proposal of the CSBF.

Section 2 : Organisation and control structures of the electronic money institution

Organisation and operation of the electronic money institution

Article 27. The electronic money institution has organisational and operational structures aimed at establishing good governance. The provisions relating thereto are laid down by an instruction of the CSBF.

Article 28. The general management of an electronic money institution is ensured by at least two corporate officers. The latter are natural persons who must be resident in Madagascar. They are responsible in particular for determining the direction of the institution's activities. The authoritys and conditions of appointment of corporate officers are set out in an instruction issued by the CSBF.

Control structures of the electronic money institution

Article 29. An electronic money institution shall set up internal and external control

structures adapted to the specific nature of the electronic money business. The relevant provisions are set out in an instruction issued by the CSBF.

Section 3: Distribution agents

Designation of distribution agents

Article 30. An electronic money institution may entrust the management of electronic money to distribution agents who act in its name and on its behalf by virtue of an agency agreement. The agency agreement defines in particular the rights and obligations of the parties, the nature and the conditions of the operations that the distribution agents are entitled to carry out.

The electronic money institution, before any relationship with its distribution agents, submits a standard agency agreement to the CSBF for validation.

The CSBF shall establish by means of an instruction the criteria for the selection of distribution agents, the mandatory information in the standard agency agreement and the information concerning distribution agents to be communicated to the CSBF.

The obligation to display the authorisation to operate as a distribution agent of an electronic money institution must be included in the agency agreement.

The CSBF is entitled to request the exclusion of a distribution agent that does not meet the selection criteria.

Obligations of electronic money institutions with respect to distribution agents

Article 31. An electronic money institution shall ensure that distribution agents comply with the legal and regulatory provisions concerning them and with those of the laws relating to the fight against money laundering and the financing of terrorism, to electronic transactions and to the protection of personal data.

In this respect, the electronic money institution is obliged to carry out periodic checks on its distribution agents and to ensure the training of the staff of its agents, without prejudice to the checks carried out by the CSBF on distribution agents pursuant to Article 107 of this Law.

Section 4: the change in status of an electronic money institution

Article 32. Any merger, demerger or partial contribution of assets planned by an electronic money institution is subject to prior authorisation by the CSBF. The CSBF sets the conditions and procedures relating thereto by way of instruction.

CHAPTER II: LICENSING OF AN ELECTRONIC MONEY INSTITUTION

Section 1 : Licensing requirement

Application for approval

Article 33. The exercise of electronic money activity, as defined in Articles 7 to 10 and 12 to 14 of this Law, is subject to approval by the CSBF. For this purpose, the promoter

is required to file an application for approval with the General Secretariat of the CSBF, together with an electronic version. The application for approval is signed by a duly authorised person.

The promoter, against delivery of a receipt, shall pay the non-refundable application fee to Banky Foiben'i Madagasikara. The amount of the application fee is fixed by order of the Ministry of Finance on the proposal of the CSBF.

The CSBF determines the content of the application file by means of an instruction.

Exercise of electronic money operations by credit institutions

Article 34. Subject to the provisions of Article 36, credit institutions governed by the Banking law may, through their license, carry out electronic money operations with the prior authorisation of the CSBF.

To this end, they are required to communicate to the CSBF, in particular, a detailed description of the electronic money operations envisaged, the system put in place, the internal control procedures relating thereto and the measures aimed at ensuring the security of the transactions and the protection of consumer users referred to in this Law.

Article 35. Promoters who apply for authorisation as a credit institution and who intend to carry out electronic money operations must present in their file the elements relating to electronic money operations required by the relevant CSBF instruction.

The exercise of electronic money operations by Micro Finance Institutions (MFIs)

Article 36. MFIs governed by the law in force relating to the activity and supervision of microfinance institutions may, with the prior authorisation of the CSBF, carry out electronic money operations under the conditions set by the CSBF. The CSBF determines in the approval or authorisation decision the authorised electronic money operations according to their classification level.

Section 2: The instruction of the request file for approval

The procedure for processing the application

Article 37. The CSBF has a period of six (6) months from the date of receipt of the application for approval to examine the application. It shall verify whether the applicant meets the conditions and obligations stipulated by this Law and its implementing regulations.

It is entitled to collect all information deemed useful for the examination of the application.
The procedures for the examination of the file shall be established by instruction of the CSBF.

Article 38. The CSBF shall close the examination of the file when all the elements required by this law and its implementing regulations have been provided or when the period of six (6) months referred to above has elapsed.

The CSBF shall notify the applicant of the closure of the examination of the file. It has a period of one month from the end of the investigation to give its decision. The approval decision is notified to the duly authorised person.

Refusal of approval

Article 39. The CSBF may refuse the application for approval when the promoter does not respond, within the time limit set, to requests for information deemed useful for the examination of the file or when the promoter does not meet the conditions and obligations required by this law. The decision to refuse approval, with reasons, is notified to the duly authorised person.

If the promoter intends to maintain his project, he must submit a new application with new elements regularizing the reasons for the refusal of approval.

Section 3: The accreditation decision

Notification of the approval decision

Article 40. The authorisation decision is notified to the duly authorised person. The electronic money institution may only carry out the operations provided for in its authorisation decision.

Any project to extend its activity must be the subject of a prior application for authorisation to the CSBF. For this purpose, the electronic money institution shall submit to the CSBF a file containing the elements required by the CSBF according to the nature of the electronic money operation envisaged.

The CSBF has a period of three (3) months from the date of receipt of the application to proceed with the examination of the file on the proposed extension of activity.

Conditions precedent to the approval decision

Article 41. The CSBF may set in the approval decision conditions precedent to the approval and the deadline to allow the promoter to fulfill the said conditions. It shall carry out a preliminary verification of the fulfillment of the conditions precedent and of the accomplishment of the project in accordance with the elements appearing in the application file.

The approval decision is made effective after the CSBF notifies the promoter that the conditions precedent have been lifted.

Article 42. When the realization of the suspensive conditions is not justified at the end of the time limit fixed by the decision and if no request for extension is formulated before the end of this time limit, the decision becomes null and void.

Publication of the approval decision

Article 43. After the lifting of the suspensive conditions, the approval decision is published on the website of Banky Foiben'i Madagasikara, in the Official Gazette and in at least one of the legal announcement newspapers, in the beneficiary's expense. A copy of the decision is posted in all the institution's own operating areas.

Section 4 : The register of electronic money institutions

Maintenance of the register of electronic money institutions

Article 44. The CSBF keeps and updates a register containing a list of electronic money institutions and information about them. A registration number is attributed to each institution after the lifting of the conditions precedent to the approval decision. The updated list is published on the website of Banky Foiben'i Madagasikara.

CHAPTER III: OPERATING RULES OF THE ELECTRONIC MONEY INSTITUTION

Section 1: Management, accounting and prudential standards

Management and accounting rules

Article 45. An electronic money institution is required to adopt sound and prudent administrative, accounting and financial management procedures and adequate internal control procedures. The CSBF sets the relevant rules by way of instruction.

Prudential Standards

Article 46. An electronic money institution must ensure that it has at all times own funds that exceed the minimum capital required of it. It is subject to the prudential norms fixed by instruction of the CSBF with a view in particular to guaranteeing its liquidity, solvency and the balance of its financial structure as well as the protection of users' funds.

Section 2: Reporting obligations

Periodic declarations

Article 47. An electronic money institution shall send to the CSBF information relating to the global account referred to in Article 79, electronic money operations, accounting documents and compliance with prudential requirements. The CSBF shall establish by way of an instruction the periodicity and the related procedures.

Information obligation

Article 48. The electronic money institution is also required to communicate to the information requested by the CSBF, the Ministry in charge of Finance, Banky Foiben'i Madagasikara, the judicial authority acting within the framework of a judicial procedure or any competent authority by virtue of a specific law.

Section 3: The fight against money laundering and terrorist financing

Obligations relating to the fight against money laundering and the financing of terrorism

Article 49. An electronic money institution is obliged to comply with the provisions of the law against money laundering and the financing of terrorism and to ensure that its distribution agents comply with them.

To this end, the electronic money institution is required to have an internal system for preventing and combating money laundering and the financing of terrorism in accordance

with the conditions laid down by an instruction of the CSBF.

Limitation of transactions

Article 50. Electronic money transactions are subject to the legal and regulatory limitations provided for by the regulations in force. The electronic money institution ensures that the relevant provisions are respected.

Section 4: Data protection and conservation obligations

Data protection

Article 51. An electronic money institution is required to guarantee the protection of data during their transmission or storage during the retention period referred to in Article 53 of this Law,

To this end, it must ensure that a system or technical platform is put in place to guarantee the protection, integrity, authenticity and confidentiality of the data and the security of the transactions.

Article 52. The electronic money institution allocates any means of personal identification to users to enable them to access the services provided in a secure manner and to carry out transactions on their electronic money account.

Data storage

Article 53. The electronic money institution must ensure that the system put in place ensures the preservation of the identity of users, accurate and exhaustive records of electronic money operations, the movement of electronic money accounts, the nature and amount of transactions. All such data must be stored on secure back-up media for a period of at least five (5) years.

Obligations of the electronic money institution and the distribution agent

Article 54. The electronic money institution shall ensure that the distribution agents take the necessary measures to ensure the protection and conservation of data on users and transactions in accordance with the relevant law in force.

Article 55. The electronic money institution and its distribution agents are obliged to respect the provisions of the law in force on the protection of personal data and its application texts.

Section 5: Professional secrecy

Respect for professional secrecy

Article 56. Any member of the corporate bodies of an electronic money institution, any person who participates in the management or control of such an institution or its employee, any distribution agent is bound by professional secrecy under the conditions and under the penalties provided for in this respect by the Penal Code. These persons are obliged to respect professional secrecy even after the termination of their assignment.

The non-invocability of professional secrecy

Article 57. Professional secrecy may not be invoked against the CSBF, Banky Foiben'i Madagasikara, the Ministry of Finance, any authority acting by virtue of a specific law, or the judicial authority within the framework of legal proceedings.

Section 6: Respect for competition

Article 58. The electronic money institution and its distribution agents are subject to the provisions of the law in force on competition and on consumption as well as its application texts in the exercise of all their activities.

CHAPTER IV: SUSPENSION OF ACTIVITY, DISSOLUTION AND LIQUIDATION OF AN ELECTRONIC MONEY INSTITUTION

Section 1: Suspension of the activity of an electronic money institution

Declaration of suspension of activity

Article 59. An electronic money institution is required to inform the CSBF and users of the suspension of its activities within two months before the operations are stopped. The date of the cessation of operations is recorded in the register of electronic money institutions published on the website of Banky Foiben'i Madagasikara.

Prior to the suspension of the activity, the electronic money institution shall proceed to the reimbursement of the electronic money in circulation under the conditions fixed by your agreement with the users.

Resumption of activity

Article 60. In the event of resumption of activity, the electronic money institution shall first inform the CSBF within a period of one month before the date of resumption. The suspension may not exceed one year, under penalty of withdrawal of the license.

Section 2: Dissolution of an electronic money institution

Causes of dissolution

Article 61. The dissolution of an electronic money institution is pronounced by the CSBF at the request of the directors, a shareholder or the auditor when the situation of the institution justifies it, or as a disciplinary sanction.

The Commercial Court may also pronounce the dissolution of an electronic money institution after the opinion of the CSBF and under the conditions defined by the law on commercial companies.

Effect of dissolution

Article 62. The dissolution of an electronic money institution entails the withdrawal of its authorisation.

Section 3 : Withdrawal of an electronic money institution's licence

Causes of the withdrawal of approval

Article 63. The CSBF shall withdraw the license in one of the following cases:

• failure to fulfill the conditions precedent to the licensing decision within the time limit set by the CSBF;
• when the institution has not started its activity within six (6) months from the lifting of the conditions precedent;
• transfer of the registered office abroad ;
• cessation of activity for a period exceeding one year or duly noted by the CSBF, whatever the reasons;
• early dissolution provided for in Article 61 of this Law as a disciplinary sanction taken by the CSBF.

Notification of Withdrawal of Approval

Article 64. The CSBF notifies the electronic money institution concerned of the decision to withdraw its approval. In application of Article 108 of the present Law, the decision to withdraw approval is subject to an appeal for annulment before the Council of State. This appeal is not suspensive.

The decision to withdraw the authorisation is published in the Official Gazette, in at least one of the newspapers carrying legal notices at the expense of the electronic money institution concerned and on the website of Banky Foiben'i Madagasikara. A copy of the decision shall be posted in all the institution's operating premises.

Effect of withdrawal of approval

Article 65. Any electronic money institution whose approval has been withdrawn immediately goes into liquidation. The liquidation procedures defined by this Law shall then be applied. If this Law is silent, the banking law will be applied.

The institution concerned must immediately cease to carry out electronic money transactions as soon as its authorisation is withdrawn. It shall proceed to the reimbursement of the electronic money in accordance with Article 22 of this Law.

Section 4 : Liquidation

General provisions

Article 66. Without prejudice to the provisions of the law on commercial companies, the procedures for the liquidation of electronic money institutions are governed by this Law.

Article 67. In application of Article 22 of the present Law, no one can claim the realization of the global account representing the funds given by the users in exchange for the electronic money.

Appointment and replacement of the liquidator

Article 68. On the proposal and request of the CSBF, a liquidator is appointed by order of the President of the Commercial Court of the registered office of the electronic money institution in liquidation. The order of the President of the Commercial Court sets a deadline for the company to close the liquidation operations.

The CSBF may ask the President of the Commercial Court to dismiss or replace the liquidator for legitimate reasons, in particular in the event of incompetence, conflicts of interest, misappropriation of funds, or any other reason noted by the CSBF.

Responsibility and Authoritys of the Liquidator

Article 69. During the liquidation process, the institution remains under the control of the CSBF. The CSBF may carry out on-the-spot verifications. The liquidator is obliged to report to the CSBF on his mission and on the progress of the procedure, once a month and every time the CSBF Chairman asks him to do so. The Chairman of the CSBF is entitled to prescribe specific measures and steps to be taken by the liquidator, who must comply with them.

Article 70. The liquidator acts under his own responsibility on behalf of the institution concerned. He has all the authoritys of administration, management and representation of the legal entity. He can only carry out operations strictly necessary for the settlement of the situation of the institution. He is responsible for the proper execution of the repayment of electronic money provided for in Article 22 of this Law and is required to specify in all his acts that the institution is in liquidation.

The liquidator establishes as soon as possible, and at the latest within three months of his appointment, a summary statement of the assets and liabilities of the institution and submits it to the President of the Commercial Court and to the CSBF.

The liquidator may give notice to the preferred creditors to initiate proceedings for the realization of their securities within a period of one month from the date of the notice. If the preferential creditors fail to do so within this time limit, the liquidator may request the authorisation of the President of the Commercial Court to act in place of the preferential creditors, if such realization makes it possible to preserve the interests of unsecured creditors.

Article 72. Within one month following his appointment, the liquidator shall publish an announcement in at least two newspapers carrying legal notices inviting creditors to produce their claims. Known creditors who, within one month of this publication, have not handed over to the liquidator, against a receipt, their titles with a list of the documents handed over and the sums claimed, must be informed of the withdrawal of approval by registered letter of the liquidator and invited to hand over their titles in the same manner.

The liquidator automatically admits certain debts as liabilities. With the approval of the President of the Commercial Court, he enters, subject to reserve, disputed claims as liabilities, if the creditors concerned have already referred the matter to the competent court, or if they refer the matter to the court within fifteen (15) days of receipt of the registered letter with acknowledgement of receipt sent to them to inform them that their claims have not been automatically admitted.

Distribution to creditors

Article 73. The liquidator, upon authorisation of the President of the Commercial Court, shall proceed to the payment of creditors according to the ranks provided for by common law. The distributions are made on the basis of one cent per franc between the creditors who are equal in right and between the unsecured creditors.

If the creditors fail to validly bring an action before the competent court within the

prescribed time limit, the disputed or unknown claims shall not be included in the distributions to be made.

Article 74. For claims that are subsequently known and admitted, creditors may not claim anything from the distributions already authorised by the President of the Commercial Court, but they shall have the right to deduct from the assets not yet distributed their possible share in the first distributions.

The sums that may accrue in the distributions to the disputed creditors, who have duly brought an action before the competent court within the prescribed time limit, shall be held in reserve until a final decision has been taken on their claims.

Creditors whose claims have been recognized shall have the right to deduct from the sums placed in reserve their possible share in the first distributions, without prejudice to their rights in the subsequent distributions.

Closing of the Liquidation

Article 75. The closing of the liquidation is ordered by the Commercial Court in view of the report of the liquidator, after the opinion of the CSBF, when the distributions have been made to the creditors.

TITLE IV: THE USER OF ELECTRONIC MONEY

CHAPTER I: THE RELATIONSHIP BETWEEN AN ELECTRONIC MONEY INSTITUTION AND A USER

Section 1: Agreement between an electronic money institution and a user

The standard agreement

Article 76. The relationship between an electronic money institution and a user is governed by an agreement concluded between the two parties. For this purpose, the electronic money institution shall submit to the CSBF for prior authorisation a standard agreement and any modification of the clauses of the standard agreement under penalty of nullity.

Under penalty of nullity of the agreement between the electronic money institution and the user, the electronic money institution is required to ensure that the agreement contains the mandatory information referred to in the following article and the clauses provided for in the standard agreement submitted to the CSBF.

Mandatory information in the agreement

Article 77. The agreement concluded between an electronic money institution and a user defines in particular the rights and obligations of the parties as well as the measures for the protection of users.

In the case of the conclusion of an electronic contract, the provisions of the law in

force on electronic transactions are applicable.

Section 2: The electronic money account

Article 78. The issue of electronic money gives rise to the opening of an electronic money account for the benefit of the user. The conditions and modalities of operation of the electronic money account are fixed in the agreement between the parties.

The electronic money institution ensures that the user has access at all times to the balance of his electronic money account, whatever the electronic money medium used.

Section 3: The opening of a global account

Article 79. The funds received from the user by the electronic money institution in exchange for the electronic money are deposited in a current account called a global account with several territorial banks in the country under the conditions laid down by an instruction of the CSBF.

The credit institutions referred to in Articles 34 and 36 authorised to carry out electronic money transactions may hold part of the global account and deposit the remainder with one or more territorial banks under the conditions laid down by an instruction of the CSBF.

The electronic money institution is required to ensure that the balance between the global account and the electronic money in circulation is maintained. In this respect, the electronic money issued on a daily basis may not exceed the balance of the global account, under penalty of the application of article 111 of this Law.

Any electronic money institution or credit institution which has been refused the opening of a global account may refer the matter to the CSBF which shall designate a depository bank for this purpose.

Nature of the global account

Article 80. The global account is kept separate from the balances relating to all other operations within the electronic money institution or with the territorial depository banks. In this respect, the electronic money institution cannot use the funds deposited in this global account.

The equivalent of the electronic money held by the user may be seized by his creditors in accordance with the relevant legal procedures.
For the protection of the user's funds, the global account cannot, under any circumstances, be subject to seizure by the creditors of the electronic money institution.

The fate of the global account in the event of withdrawal of authorisation

Article 81. In case of withdrawal of the authorisation of the electronic money institution, any person is obliged to justify his status as a user of electronic money within the period of three months provided for in article 22 in order to be able to recover the funds deposited in the global account corresponding to the value of the electronic money he holds.

Section 4 : Use of electronic money

Conditions of use of electronic money

Article 82. The user of electronic money uses the electronic money provided by the electronic money institution for the purpose of electronic money transactions in accordance with the conditions laid down in the agreement between the two parties.

Obligations of the user

Article 83. The user shall take all reasonable measures to preserve the electronic money instrument and to ensure the confidentiality of the secret code or any other means of personal identification that enables him to use the instrument.

The user shall notify the Electronic Money Institution without delay after becoming aware of:

• the loss, theft or misappropriation of the electronic money medium and/or the means of identification which enable it to be used;
• the recording on his account of any unauthorised transaction, or any error or other irregularity in the keeping of his account.

Section 5: Sanctions for the user of electronic money

Warning

Article 84. In the event of a fault committed by the user in the use of an electronic money medium put at his disposal, the electronic money institution sends him a warning by any means that leaves a written trace, in order to put an end to the faulty practice that does not comply with the conditions of use of the electronic money medium provided for in the agreement between the two parties.

In this respect, the electronic money institution sends a warning to the user to comply with the conditions of use of the electronic money instrument within three (3) days following the notification.

From the termination of the agreement between the user and electronic money institution

Article 85. If the user does not comply with the warning within the time limit referred to in the preceding article, the electronic money institution may proceed to terminate the agreement. To this end, the electronic money institution shall notify the user of the reactivation of its electronic money account and shall automatically revoke the user's account without prejudice to a judicial decision in case of fraud.

Prohibition of the use of electronic money

Article 86. The revocation of the user of electronic money for fraud pronounced by a court decision entails the automatic application of a ban on the use of electronic money for a period of one year. This prohibition is notified to the user by the electronic money institution by any means that leaves a written record.

The conditions and procedures for lifting the ban are set out in an instruction issued by Banky Foiben'i Madagasikara.

Declaration of revocation

Article 87. Following the revocation of a user, the electronic money institution is required to communicate to the CSBF and to Banky Foiben'i Madagasikara all related information. The information on the revocation of the user is centralized in the Information System of Banky Foiben'i Madagasikara.

The modalities of your notification are set by way of instruction from Banky Foiben'i Madagasikara.

Article 88. In the forms and timeframe defined by Banky Foiben i Madagasikara by way of instruction, the latter shall inform all issuers of electronic money and credit institutions carrying out electronic money operations :

• the list of persons who have been revoked in application of Article 85 of the present Law;
• the cancellation of the declaration of revocation due to a service error or a decision of the Court ordering the cancellation;
• the lifting of the revocation after the one-year period.

Section 6: The right to open an electronic money account

Article 89. Any person who has been refused the opening of an electronic money account by several electronic money institutions and who, as a result, has no electronic money account, may request the CSBF to designate an electronic money institution with which he may open such an account if it is certified that he has not been subject to a sanction pursuant to Articles 84 and 85 of this Law.

CHAPTER II: THE OBLIGATION TO ACCEPT PAYMENT IN ELECTRONIC MONEY

Article 90. Any person carrying out a commercial activity whose annual turnover reaches an amount fixed by decree taken on the proposal of the CSBF, on the day of publication of the present aw, has a period of one and a half years to be equipped with an Electronic Payment Terminal (EPT) or a cell phone or any other electronic instrument allowing to receive payment in electronic money under the conditions fixed by the agreement between the electronic money institution and the above-mentioned person. Any failure to comply with this obligation is noted by the agents of the Ministry of Commerce and Consumption, which then notifies Banky Foiben'i Madagasikara.

On expiry of the above-mentioned time limit, the entity at fault shall be liable to pay interest on arrears for each day of delay, payable to Banky Foiben'i Madagasikara. The amount of this interest shall be fixed by interministerial order of the Ministry of Finance and the Ministry of Trade and Consumer Affairs, on the proposal of the CSBF.

Article 91. Under the conditions set forth in the preceding article, the person subject to the obligation in question may not:

• refuse to receive an electronic payment, under penalty of the sanctions set forth in Article 121, unless the instrument at his disposal does not permit this for technical or operational reasons;
• charging any kind of fee or commission on receipt of an electronic money payment that is not provided for in the service offered by the electronic money institution, under penalty of immediate return of the amount charged to the user.

CHAPTER III : PROTECTION OF THE USER OF ELECTRONIC MONEY

Section 1: Prior information

Article 92. Before making electronic money media available and before concluding an agreement, the electronic money institution must inform users of the following:

• the conditions of use of the electronic money media and services;
• the respective rights and obligations of the electronic money institution and the user;
• the reasonable measures that the user is expected to take to preserve the security of the Electronic Money medium and the means of personal identification;
• the conditions under which the terms of the agreement may be amended;
• the nature of any fees payable by the user or beneficiary, prior to any electronic money;
• transaction, including details of commissions and fees, including the manner in which they are calculated;
• the terms and conditions and procedures for redemption of electronic money;
• the procedures and methods of complaint available to the user;
• the official languages of communication during the term of the agreement.

The electronic money institution is obliged to warn the user of any major incident related to the disruption of the service.

Section 2: The existence of an agreement between an electronic money institution and a user

The conclusion of the agreement

Article 93. Before issuing electronic money to a user, an agreement established in accordance with the model agreement referred to in Article 76 is concluded between the electronic money institution and the user. The agreement must be written in Malagasy and French in clear and easily understandable terms. The user has a period of one week to retract without any cost other than the paid services offered by the electronic money institution.

Modification and termination of the agreement

Article 94. Any modification of the standard agreement is subject to the prior authorisation of the CSBF. The electronic money institution shall inform the user of any modification approved by the CSBF by any means that leaves a written trace at the latest within a period of one month before it takes effect. The electronic money institution shall publish the amendment to the standard agreement on its website.

The electronic money institution and the user may terminate the agreement at any time, subject to contractual notice and settlement of accounts, except in the case of revocation as provided for in Article 85 of this Law.

Section 3: User complaints

Processing of complaints

Article 95. The electronic money institution is required to provide users with a customer service responsible for handling complaints or objections in the event of loss, theft, fraudulent use, unauthorised transactions or any other incident resulting from the malfunctioning of the system. Customer Service must be operational at all times.

Complaints may be made orally and must be confirmed by any method that leaves a written record within five (5) business days from the date of the complaint or objection. The electronic money institution provides the user with the necessary means to confirm the complaint in writing.

Article 96. In case of a stop payment for loss or theft, the electronic money institution immediately takes the appropriate measures to prevent the use of the electronic money medium or the realization of any transactions on the electronic money account which has been reported. The electronic money institution shall inform users, by any means that leaves a written record, of the progress and outcome of their claims.

Any dispute within the framework of the opposition may be brought before the ordinary courts.

Article 97. The rules of procedure relating to the processing of claims or objections are submitted to the CSBF for approval at the time of application for approval.

At the end of each accounting period, the electronic money institution shall send the CSBF a report recording the complaints received.

Proof of complaints

Article 98. When a claim is made at a distance, the electronic money institution confirms to the user that it has received the claim. For this purpose, the electronic money institution is obliged to provide the user with the means of proof of receipt and registration of the claim.

Article 99. If the user claims that a transaction is unauthorised, the electronic money institution provides evidence of the user's order. To this end, the institution shall justify that the transaction is correctly recorded and accounted for and that it is not affected by a technical breakdown or any other failure. The evidence provided by the electronic money institution is without prejudice to evidence to the contrary produced by the user.

Costs related to the processing of claims

Article 100. The claims processing must be free of charge. However, a reasonable fee may be required when expenses are incurred, which are previously communicated to the user, as provided in Article 92.

TITLE V: THE REGULATORY AND SUPERVISORY AUTHORITY

CHAPTER I: THE BANKING AND FINANCIAL SUPERVISION COMMISSION

Article 101. The Banking and Financial Supervision Commission (CSBF) established by the Banking Law is the regulatory and supervisory authority for electronic money institutions. It is responsible for ensuring the proper functioning of electronic money institutions and for issuing rules to guarantee their liquidity, their solvency and the balance of their financial structure and the protection of users of electronic money. It carries out the supervision of electronic money institutions and punishes any infringements that are found.

Article 102. Electronic money institutions participate in the operating expenses of the CSBF and its Secretariat General through an annual contribution, based on the operating result of each institution. The uniform rate of this contribution is fixed by order of the Minister in charge of Finance on the proposal of the CSBF.

CHAPTER II: RESPONSIBILITIES OF THE CSBF

SECTION 1 ADMINISTRATIVE AND REGULATORY AUTHORITIES

ADMINISTRATIVE AUTHORITY

Article 103. The CSBF is responsible for granting authorisation to electronic money institutions, for taking any decision relating to the authorisation and for granting any authorisation required by this Law.

Regulatory authority

Article 104. The CSBF shall establish by way of instruction the rules applicable to electronic money institutions, in particular those relating to:

• the conditions of access to the profession;
• changes in the elements taken into account at the time of licensing;
• the opening and operation of the global account;
• management and prudential standards ;
• accounting and reporting obligations;
• the modification of the shareholding ;
• changes in shareholding;
• the acquisition of holdings;
• operating and control structures ;
• the fight against money laundering and the financing of terrorism; - distribution agents;
• protection of users.

The instructions of the CSBF are enforceable upon notification to the Professional Association of Electronic Money Institutions referred to in Article 112.

Article 105. The CSBF shall specify conjunction with the professional association of electronic money institutions referred to in Article 112, in particular with regard to relations with users and competition.

It shall identify and propose the reforms to be undertaken in the area of regulations applicable to electronic money institutions and electronic money

It is consulted on any proposal or draft text with the same purpose.

Section 2: The authority of supervision

On-the-spot and off-site inspections

Article 106. The CSBF shall carry out documentary and on-site inspections of electronic money institutions with a view to ensuring that these institutions comply with the provisions of this Law. To this end, it is responsible for preventing and controlling the risks associated with the exercise of electronic money activities in order to protect the interests of users.

The CSBF may, as necessary, request from electronic money institutions any information, clarifications or supporting documents necessary for the exercise of its mission. It is emauthorised to define and take all technical measures intended to facilitate documentary and on-site audits.

The General Secretariat of the CSBF carries out, on behalf of the CSBF, documentary and on-site audits of electronic money institutions.

On-site audit

Article 107. The CSBF periodically deliberates on the program of on-site inspections. On-site inspections may be unannounced and extended to distribution agents when circumstances so warrant.

The results of on-site inspections are communicated to the Board of Directors of the institution concerned and are the subject of a special decision of the said Board, which is sent to the General Secretariat of the CSBF.

Section 3: Authority to impose sanctions

Disciplinary sanctions

Article 108. In the event of failure to comply with the provisions of this Law, the Chairman of the CSBF shall send a formal notice or an injunction to electronic money institutions to regularise their situation within a time limit set by the Chairman of the CSBF. If the institution fails to comply with an injunction, the CSBF, after giving its managers the opportunity to present their explanations, pronounces one or more of the following disciplinary sanctions:

• a warning ;
• temporary closure ;
• suspension or dismissal of the officer;
• the appointment of a provisional administrator, the -revocation of an auditor;
• suspension or prohibition of one or more operations;
• the withdrawal of the approval.

Disciplinary sanctions pronounced by the CSBF may be appealed to the Council of State. However, such appeal shall not have suspensive effect unless otherwise ordered by the Court, exceptionally in the event of the filing of a petition for a stay of execution.

Article 109. In case of urgency and when particular circumstances justify it, the President of the CSBF is emauthorised to take one of the above-mentioned sanctions without any adversarial procedure, except for the withdrawal of approval. He reports to the CSBF at its next meeting. The measure is confirmed or lifted by the CSBF upon referral by any shareholder within a time limit set by the CSBF Chairman.

Financial penalties

Article 110. Electronic money institutions that fail to comply with injunctions, information and reporting obligations within the stipulated time limits, or that in any way impede the exercise of supervision by the CSBF, or that transgress instructions issued by the CSBF, shall be required to pay to Banky Foiben'i Madagasikara a fine, the amount of which shall be determined by order of the Minister in charge of Finance upon proposal of the CSBF.

Article 111. In the event that the amount of electronic money in daily circulation exceeds the total amount of the account, the institution concerned is required to regularize the situation within a period of one day under penalty of the aforementioned financial penalty.

TITLE VI: ORGANISATION OF THE PROFESSION

Article 112. Any electronic money institution is required to join the professional association of electronic money institutions set up to defend the interests of the profession within a period of one month following their approval. Any failure to comply with this obligation exposes the electronic money institution to one of the sanctions provided for in Article 08 of the present Law or to the sanctions provided for in the statutes of the Association.

Article 113. The professional association of electronic money institutions is constituted under the regime of simply declared civil associations.

The first two electronic money institutions to obtain approval are required to form the Professional Association within one year of the lifting of the conditions precedent to their approval.

Any other electronic money institution approved after the constitution of the professional association is obliged to join it by means of an act of membership to be sent to the office of the association.

Article 114. The mission of the Association is in particular to:

• represent and defend the collective interests of electronic money institutions to define the ethical rules of the profession in order to ensure the protection of users and the image of the profession, in consultation with the CSBF;
• give its opinion on the regulations applicable to electronic money institutions
• identify the entities illegally carrying on the activity of electronic money and to inform the CSBF of them.

The Association's bylaws determine its operating rules, which are submitted to the CSBF for approval.

TITLE VII: CRIMINAL SANCTIONS

Article 115. The actions listed in the following provisions are considered criminal offenses and expose the perpetrator to the penalties provided for in this article.

When the offense is committed by a legal entity, the competent court may impose additional penalties and the amount of the fine is doubled.

In case of repetition, the maximum of the punishment and the amount of the fines are doubled.

Communication of False Information to the CSBH

Article 116. Any person, acting on his own behalf or on behalf of a third party, who knowingly communicates inaccurate documents or information to the CSBF, Banky Foiben'i Madagasikara or the Ministry of Finance, is liable to imprisonment for a term of three months to two years and/or a fine of 4,000,000 to 100,000,000 ariary.

The illegal exercise of electronic money activities

Article 117. Any person, acting on his own behalf or on behalf of a third party, who carries out the activity of electronic money without the approval of the CSBF, is liable to imprisonment for a period of three months to two years and/or a fine of 4,000,000 to

100,000,000 ariary. The Court also orders the reimbursement of the issued electronic money and the closure of the entity where the infraction was committed.

Confusion as an institution of electronic money

Article 118. Any person who has used a corporate name or advertising or in a general way expressions that make one believe that he is authorised as an electronic money institution or to create confusion in this regard is liable to a prison sentence of three months to two years and a fine of 4,000,000 to 100,000,000 ariary or one of these two penalties.

The illegal exercise of banking activities by an electronic money institution

Article 119. Without prejudice to the disciplinary sanctions that may be taken by the CSBF for the same offence, the managers of an electronic money institution who contravene one of the prohibitions of this article are liable to imprisonment for a period of between three months and two years and a fine of between 4,000,000 to 100,000,000 ariary, or one of these two penalties only, the directors of an electronic money institution that contravenes any of the prohibitions set out in Article 17.

Fraud, forgery on electronic money

Article 120. Any person who commits any of the offenses provided for in the law against cybercrime in the context of the issuance, management or use of electronic money is subject to the penal sanctions stipulated by the said Law.

Refusal of payment by electronic money

Article 121. Any entity referred to in Article 90 that refuses to make any payment by electronic money except for technical reasons beyond its control is liable to a fine of between 70,000 and 750,000 ariary.

TITLE VIII: TRANSITIONAL AND FINAL PROVISIONS

CHAPTER I: TRANSITIONAL PROVISIONS

Article 122. Intermediaries in banking operations provided for by the Banking law are required, within a period of twelve months from the publication of this Law, to apply for authorisation as an electronic money institution to carry out the activity of electronic money for their own account. The agency agreement with the credit institution is terminated as from the lifting of the conditions precedent to the decision of authorisation as an electronic money institution.

Article 123. Any credit institution carrying out the activity of electronic money, before the publication of this law, is required to regularize its situation in relation to this law within a period of one year from the publication of this Law.

CHAPTER II: FINAL DISPOSITIONS

Article 124. The modalities for the application of this Law are established and specified by Decrees, Ordinances and Instructions of the CSBF.

Article 125. The present Law will be published in the Official Gazette of the

Republic.
It shall be executed as a State Law.

Promulgated in Antananarivo, February 02, 2017

RAJAONARIMAMPIANINA Hery Martial

FOR CONFORMED AMPLIFICATION
Antananarivo, February 06, 2017
THE SECRETARY GENERAL
OF THE GOVERNMENT

[IMAGE]

FARATIANA Tsihoara Eugène