Law No. 2020-37 of August 6, 2020, on Crowdfunding

No. 81 Journal Officiel de la République Tunisienne — 18 August 2020 Page 1743

Law No. 2020-37 of 6 August 2020 on "Crowdfunding" (1)

In the name of the people,

The Assembly of People's Representatives having adopted, The President of the Republic promulgates the law whose text follows:

CHAPTER ONE General Provisions

Article 1 - This law aims to organize "Crowdfunding" to provide the necessary financing for projects and companies in order to promote investment, entrepreneurship, creativity, and innovation.

Art. 2 - For the purposes of this law, the following terms are defined:

• "Crowdfunding": the financing method based on raising funds from the public via a dedicated internet platform in order to finance projects or companies through investment in securities, loans, donations, or liberalities.
• "Crowdfunding" Provider: a company specialized in the "Crowdfunding" activity, through the creation and administration of online platforms connecting the public with companies and projects whose sponsors wish to obtain financing. The "Crowdfunding" Provider is an internet platform operator within the meaning of the legislation in force.
• "Crowdfunding" Platform: a website or mobile application made available to users for the purpose of connecting the public with the company and project to benefit from "Crowdfunding" services.
• Contributor: any natural or legal person, resident or non-resident, who contributes to the financing of a company or project through "Crowdfunding".

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(1) Preparatory work: Discussion and adoption by the Assembly of People's Representatives in its session of 21 July 2020.

• Project Sponsor: any natural or legal person wishing to obtain financing through "Crowdfunding".
• The Project: each profit-making initiative presented by the project sponsor to obtain "Crowdfunding" financing. The project presented on the "Crowdfunding" internet platform must be carried out in Tunisia.
• Regulatory Authorities: the Financial Market Council, the Central Bank of Tunisia, and the Microfinance Control Authority.

Art. 3 - "Crowdfunding" is distinguished into: • "Crowdfunding" in investment in securities, • "Crowdfunding" in loans, • "Crowdfunding" in donations and liberalities.

Art. 4 - The "Crowdfunding" activity must necessarily be carried out through the creation of an anonymous company whose registered office is located in Tunisia.

It is prohibited for the "Crowdfunding" provider company to engage in more than one category of "Crowdfunding" activity.

The minimum capital and the conditions for its release for each form of "Crowdfunding" provider companies are fixed by government decree.

Art. 5 - The main activity of the "Crowdfunding" provider company consists of the administration of the "Crowdfunding" platform, notably through:

• The publication of the project presentation note on the platform,
• The preparation of the standard contract relating to "Crowdfunding" operations,
• The securing of the transfer of funds collected from contributors to the benefit of the project sponsor or the company through the intermediary of the account-holding depositary,
• The publication of the platform's technical architecture and its information system.

The "Crowdfunding" provider company may also provide services related to its main activity, namely:

• The provision of advice to the project sponsor,
• Advertising exclusively via the platform for projects presented to it.

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Art. 6 - Any "Crowdfunding" operation must be the subject of a contract concluded between the project sponsor and the contributor, according to a standard contract drawn up by the "Crowdfunding" provider company.

The standard contract is subject to the approval of the regulatory authorities.

Art. 7 - The project sponsor must present a project presentation note to the "Crowdfunding" provider company, which includes all legal, financial, and technical information relating to the project to be carried out, as well as the determination of the amount and structure of the financing he wishes to collect through the "Crowdfunding" operation.

Art. 8 - The "Crowdfunding" provider company collects funds in a special separate account opened in its name with a bank or the national postal office, in which funds are deposited, pursuant to a contract between the "Crowdfunding" provider company and the account-holding depositary. The contract mentioned determines notably the conditions for the management of funds deposited in the account.

The account-holding depositary divides it into sub-accounts linked to each project.

It is prohibited to carry out any transaction on the account without the authorization of the "Crowdfunding" provider company.

Art. 9 - The account-holding depositary must hold a record of "Crowdfunding" operations carried out and verify that the operations carried out by the "Crowdfunding" provider company on the account correspond to the terms of the contract provided for in the first paragraph of Article 8 of this law.

The account-holding depositary must also notify the regulatory authorities of any violation observed in application of the provisions of the first paragraph of this article.

Art. 10 - It is prohibited for the "Crowdfunding" provider company to present the same project on more than one "Crowdfunding" platform of the same category at the same time.

Art. 11 - It is prohibited for the "Crowdfunding" provider company to use funds collected for a project or company for purposes other than those for which they were collected.

Funds collected under "Crowdfunding" cannot be subject to attachment for the benefit of the creditors of the "Crowdfunding" provider company.

Art. 12 - The Chairman of the Board of Directors, the General Manager, the Deputy General Manager, the member of the board of directors, and the member of the supervisory board of a "Crowdfunding" provider company must justify the scientific qualifications and skills required for the functions they are called upon to exercise, in accordance with the conditions fixed by government decree.

The "Crowdfunding" provider company must notify the regulatory authorities, according to the category of activity to which it belongs, of any project of appointment to the functions mentioned in the first paragraph of this article, accompanied by documents justifying compliance with the required conditions.

The regulatory authority may, within a period of one month from the date of its notification, oppose the project of appointment based on the conditions fixed by the government decree provided for in the first paragraph of this article. The opposition must be motivated.

Art. 13 - No one may create, direct, manage, administer, or control a "Crowdfunding" provider company who:

• has been the subject of an irrevocable judgment for forgery, fraud, theft, breach of trust, fraud, or extortion committed by a public official or similar, a public depositor, or a public accountant, or for a tax debt due to them, issuance of a check without provision, or tax evasion or participate in all these infractions or violation of exchange regulations or legislation relating to the fight against the financing of terrorism and money laundering,
• has been the subject of an irrevocable judgment of bankruptcy or if he has been a manager or agent of a company declared bankrupt, condemned under articles 288 and 289 of the Penal Code relating to bankruptcy,
• has been the subject of a sanction of expulsion or deprivation of the exercise of an activity governed by a legislative or regulatory text,
• has been the subject of a sanction of cessation of administration or management of a company imposed by a regulatory authority.

It is prohibited to combine the administration, direction, or management of a "Crowdfunding" provider company with the administration, direction, or management of a bank, a financial institution, or an insurance company.

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It is prohibited to combine, directly or through company subsidiaries, the activity of banks, financial institutions, insurance institutions, or microfinance with the "Crowdfunding" activity.

Art. 14 - The "Crowdfunding" provider company must take the necessary measures to ensure the collection of funds from contributors by electronic fund transfer and bank transfer, and any payment system authorized by the Central Bank of Tunisia.

It is prohibited for the "Crowdfunding" provider company to receive funds from contributors by any other means than those provided for in the first paragraph of this article.

CHAPTER II Obligations of the "Crowdfunding" provider company regarding the exercise of its activity

Art. 15 - The "Crowdfunding" provider company ensures the proper functioning of the "Crowdfunding" platform, notably through:

• The presentation of sufficient guarantees regarding organization, technical means, and human resources.
• The implementation of an effective governance device that ensures the sustainability of the platform and preserves the interests of contributors and project sponsors.
• The exercise of the activity with the diligence of a prudent entrepreneur and an honest agent for the benefit of contributors.
• The avoidance of conflicts of interest, and if necessary, their resolution in an equitable manner, taking into account the interest of contributors.
• The implementation of means and measures capable of ensuring the supervision of activities to ensure respect for rules of good conduct in all aspects of the relationship with contributors.
• The identification of the financial capacities, objectives, and financial aspirations of contributors.
• The guarantee of the protection of personal data and computer security in accordance with the legislation in force.

The regulatory authorities fix the implementation modalities of the provisions of the first paragraph of this article.

Art. 16 - The "Crowdfunding" provider company must publish on the first page of the "Crowdfunding" platform in a legible manner and indicate in all its documents and communication means the company name, the address of its registered office, its email address, its registration number in the National Business Register, and the reference of the approval granted to it and its date, as well as the name and address of the account-holding depositary holding its accounts provided for in Article 8 of this law.

Art. 17 - The "Crowdfunding" provider company must allow the public to consult the projects presented on the platform and to register to participate in these projects in a clear, transparent, and simplified manner. The regulatory authorities fix the implementation conditions of the provisions of this article in accordance with the regulations in force.

Art. 18 - The "Crowdfunding" provider company must, before presenting a project on the platform, exercise the necessary diligence to:

• Verify the identity of the project sponsor, shareholders, and administrators of the company, and the beneficial owner, and the absence of legal and judicial prohibitions against them, and fulfill the legal conditions relating to the realization of the project,
• Ensure the real existence of the project and the capacity of the natural person or company concerned to incur debt.
• Inform the project sponsor of the risks related to the "Crowdfunding" operation and the obligations arising therefrom, notably towards contributors.

Art. 19 - The "Crowdfunding" provider company must exercise the necessary diligence to verify the identity of each contributor before registering him on the platform and inform him of the following data:

• the financing conditions of the project to which he wishes to contribute.
• inform contributors of the risks related to the nature of the operations they wish to carry out, notably the risks related to the loss of invested capital or funds made available in the form of a loan.
• the responsibilities and rights of all stakeholders in the "Crowdfunding" operation such as the "Crowdfunding" provider company, the project sponsor, and the contributor.
• inform contributors of the cases and modalities for recovering their money.

Art. 20 - The "Crowdfunding" provider company must inform contributors via the platform in a clear manner of the following:

• The bank or postal account in which the collected funds will be deposited, the conditions of their management for each project, and the repayment conditions regarding "Crowdfunding".

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• Any information, document, or decision from the competent regulatory authorities.

Art. 21 - The financial statements of "Crowdfunding" provider companies are subject to certification by a statutory auditor registered on the roll of the Order of Chartered Accountants of Tunisia.

The statutory auditor is appointed for a period of three years renewable once.

Art. 22 - The "Crowdfunding" provider company must draw up an annual report on its activities, comprising the financial statements and the report of the statutory auditor relating thereto, which must be published on the electronic site of the platform, within a period not exceeding three months from the closing of the accounting year, and send a copy to the regulatory authority to which it belongs.

The competent regulatory authorities, each insofar as it concerns them, fix the content of the annual report.

Chapter III Conditions for the exercise of the "Crowdfunding" activity

First Section Conditions for the exercise of the "Crowdfunding" activity in investment in securities

Art. 23 - The exercise of the "Crowdfunding" activity in investment in securities is subject to an approval granted by the Financial Market Council in accordance with the conditions fixed by government decree.

The Financial Market Council proceeds with the publication of the decision granting the approval in its official bulletin and on its electronic site.

Art. 24 - Stockbrokers and portfolio management companies for third parties and venture capital investment companies managing funds for third parties, approved by the Financial Market Council, may exercise the "Crowdfunding" activity in investment in securities provided they inform the Financial Market Council in advance.

The persons mentioned in the first paragraph of this article are subject, in the context of the exercise of the activity, to the professional obligations incumbent on "Crowdfunding" provider companies.

Art. 25 - The Financial Market Council may withdraw the approval provided for in Article 23 of this law or suspend the authorized activity in accordance with the provisions of its Article 24 in the following cases:

• at the request of the holder of the approval or the persons who have exercised the "Crowdfunding" activity in accordance with the provisions of Article 24 of this law.
• not having commenced the exercise of the activity within a maximum period of twelve (12) months from the date of granting the approval or the information of exercise of the activity in accordance with the provisions of Article 24 of this law,
• the interruption of the exercise of the main activity for a period of twelve (12) months continuously. This period may be extended by six (6) additional months only once.

The decision to withdraw the approval indicates its effective date.

Art. 26 - The Financial Market Council keeps a list of "Crowdfunding" provider companies in investment in securities approved to exercise the activity, comprising all the necessary data allowing the identification of the form of the company, its trade name, the address of its head office as well as the list of its shareholders, its managers, the members of its board of directors, the members of its executive board, and the members of its supervisory board.

The Financial Market Council proceeds with the publication of this list on its electronic site.

The "Crowdfunding" provider company in investment in securities must communicate to the Financial Market Council all the necessary documents for the maintenance and updating of this list.

The Financial Market Council proceeds with the publication of the decision to withdraw the approval or the temporary suspension of the exercise of the activity on its electronic site and the updating of the list of "Crowdfunding" provider companies in investment in securities provided for in the first paragraph of this article.

Art. 27 - The contributions of contributors to the company presented on the "Crowdfunding" platform must take place in the form of subscription to ordinary shares, sukuks, or bonds.

The securities of the presented companies must not be admitted to the listing of the Tunis Stock Exchange and must not have previously been the subject of an offer covered by the Financial Market Council.

The investment conditions in securities via "Crowdfunding" platforms are fixed by government decree.

Art. 28 - "Crowdfunding" in investment in securities does not constitute a portfolio management activity for third parties.

Art. 29 - The companies using a "Crowdfunding" platform are not considered as companies making a public offering of securities within the meaning of Article 1 of Law No. 94-117 of 14 November 1994 relating to the reorganization of the financial market.

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It is prohibited to resort to canvassing to advertise the project presented on the "Crowdfunding" platform. The project sponsor can only resort to advertising concerning the presented project through the platform.

These provisions apply to stockbrokers and portfolio management companies for third parties as well as to venture capital investment companies managing funds for third parties exercising a "Crowdfunding" activity.

Art. 30 - The projects presented on the "Crowdfunding" platform in investment in securities are exempt from the obligation to prepare a prospectus.

Project sponsors must submit an abbreviated note to the Financial Market Council which notably comprises the description of the project, the company's activity, its capital structure, and the related financial data, in accordance with the model fixed by regulation of the Financial Market Council.

Project sponsors must also publish the note provided for in the second paragraph of this article on the platform before proceeding with the collection of funds.

The Financial Market Council may request any additional information it deems necessary to help contributors in making decisions.

Art. 31 - The "Crowdfunding" provider company in investment in securities must submit to the Financial Market Council all the information and statistics it requests regarding its activity.

A regulation of the Financial Market Council determines the content, periodicity, and modalities of transmission of the information and statistics requested.

Section 2 Conditions for the exercise of the "Crowdfunding" activity in loans

Art. 32 - The exercise of the "Crowdfunding" activity in loans is subject to an approval granted by the Governor of the Central Bank of Tunisia, in accordance with the conditions fixed by government decree.

The Central Bank of Tunisia proceeds with the publication of the decision granting the approval on its electronic site.

Art. 33 - The Central Bank of Tunisia may withdraw the approval mentioned in Article 32 of this law in the following cases:

• at the request of the holder of the approval,
• not having commenced the exercise of the activity within a maximum period of twelve (12) months from the date of obtaining the approval,
• the interruption of the exercise of the main activity for a period of twelve (12) months continuously. This period may be extended by six (6) additional months only once.

The decision to withdraw the approval indicates its effective date.

Art. 34 - The Central Bank of Tunisia keeps a special register for "Crowdfunding" provider companies in loans approved to exercise the activity, comprising all the necessary data allowing the identification of the form of the company, its trade name, the address of its head office as well as the list of its shareholders, its managers, the members of its board of directors, the members of its executive board, and the members of its supervisory board.

The Central Bank of Tunisia proceeds with making this register available to the public on its electronic site.

The "Crowdfunding" provider company in loans must submit to the Central Bank of Tunisia all the documents necessary for the maintenance and updating of this register.

The Central Bank of Tunisia proceeds with the publication of the decision to withdraw the approval on its electronic site and the updating of the register of "Crowdfunding" provider companies in loans provided for in the first paragraph of this article.

Art. 35 - The maximum amount of loans with or without interest that the project sponsor can obtain through a "Crowdfunding" platform or that the contributor can grant, is fixed by government decree.

The operations of depositing funds by contributors via the "Crowdfunding" platform within the limits of the amounts fixed by the government decree mentioned in the first paragraph of this article are not considered as loan operations within the meaning of Law No.

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