Law on the Modernization of Capital Markets

Islamic Republic of Mauritania Honor – Fraternity – Justice

Presidency of the Republic

VISA: D.G.L. / F.E.J.O VISA LEGISLATION

2024 - 044

LAW No. ……………… / PR/ LAW ON THE MODERNIZATION OF CAPITAL MARKETS

The National Assembly has adopted; The President of the Republic promulgates the law whose text follows:

Preliminary Title: Definitions

Share: is a title of ownership representing a fraction of a company's capital and giving its holder the right to vote at general meetings, the right to profits, and the right to information.

Registered Share: is a share registered in the company's register, which thus knows the exact identity of the shareholder.

Shareholder: is a natural or legal person who, by investing in a company's capital, holds a portion in the form of shares. These shares give them a right to oversee decisions taken by the company and allow them to receive dividends in exchange for the financial risk taken. A shareholder is therefore a co-owner — along with other shareholders — of a company's capital.

Approval: is the authorization granted by the Financial Markets Authority or by the Central Bank of Mauritania for the exercise of certain professions or for the realization of certain financial operations.

Stock Exchange: is a market where investors can buy and sell financial instruments. For a company to be listed on a stock exchange, it must meet certain criteria and regulations.

Guarantee: is a form of commitment; the person or company that guarantees (the guarantor) undertakes to fulfill the obligation of another person or company if the latter is unable to do so.

Associate Certificate: designates a capital title, conferring no rights on the reserves of the Deposit and Resolution Guarantee Fund defined in Title VI of this law.

Certificate of Deposit: also called a guaranteed placement certificate or term deposit, is a title indicating that an investor has lent money to a financial institution. Certificates of deposit generate interest income.

ISIN (International Securities Identification Number): is the official identity number of a security. It generally comprises 12 characters, the first two of which are letters designating the nationality of the company (MR for Mauritania, for example).

Financial Holding Company: is a financial institution whose subsidiaries are exclusively or primarily one or more credit institutions or investment firms or financial institutions. At least one of these subsidiaries is a credit institution or an investment firm.

Futures Contract: exists in two forms: exchange-traded futures contracts and over-the-counter (OTC) futures contracts. In both cases, it is a legal commitment to buy or sell a specific quantity of an asset element (for example, oil, wheat, or financial products such as a stock index) at a price and date fixed in advance. The characteristics of exchange-traded futures contracts are chosen by the exchange. A clearing house acts as an intermediary between the buyer and the seller and guarantees that the contracts are respected. Conversely, the characteristics of OTC futures contracts are chosen by the persons who sign these contracts. Generally, there is no clearing house that guarantees the credit of the parties involved. The parties involved can therefore choose the contract maturity, its duration, the quantity of the good delivered, the place of exchange, etc.

Hedging: is the set of protections covering a given risk, for example, the fluctuation in the price of a financial instrument.

Coupon: is the sum of money paid to the holder of a bond (the creditor) and corresponding to interest.

Depositor: is a person who deposits sums into an account.

Custodian: is a financial institution, usually a bank or a trust company, that safely keeps the securities and assets of clients or a listed company.

Central Securities Depository (CSD): is an entity where securities, securities, negotiable debt instruments, held in their own name or on behalf of their clients, by authorized investment service providers are recorded.

Deposit: is a sum entrusted to a financial institution and which can subsequently be withdrawn.

Debt: is a sum of money that a person or company must repay, generally with interest.

Shared Electronic Registration System: designates a system that ensures the registration and integrity of entries and allows, directly or indirectly, to identify the owners of the securities, the nature and number of securities held. Entries made in this electronic registration system are subject to an updated business continuity plan, including an external periodic data conservation device. When securities are registered in this electronic registration system, the owner of these securities may have access to statements of operations specific to them.

Diversification: is an investment strategy consisting notably in choosing different types of investment to reduce risk.

Dividend: is the part of profits, after tax, that a company distributes to its shareholders in proportion to the shares they hold.

Issuer: is a company that offers securities to the public.

Investment Firm: is a legal entity, other than a credit institution, whose usual and main profession is to provide investment services.

FCC: designates a Common Credit Fund, a co-ownership whose exclusive purpose is to acquire claims and issue shares representing these claims.

Float: is the proportion of shares actually tradable on the market compared to the total amount of a company's shares. Its level influences the real "liquidity" of a share. To go public, a company must commit to having a certain level of float.

Alternative Fund: is a Fund using multiple strategies to reduce risk while increasing its return.

Securitization Fund: is a securitization entity constituted in the form of co-ownership. It does not have legal personality.

Financial Institution: is a company or organization that offers financial services to the public or to companies.

Financial Intermediary: designates a professional to whom investors turn to sell or buy securities on financial markets.

Mandate: is a directive given by one person to another to perform a legal act on their behalf.

Mandatory: is the