Regulation of the Financial Markets Council on Venture Capital Investment Companies

Page 2370 Official Journal of the Tunisian Republic — September 9, 2014 No. 73
Decree No. 2014-3271 of September 3, 2014, dismissing Mr. Khalifa Harabi from his functions as president of the special delegation of the commune of Ouled Haffouz.
The Head of Government,
On the proposal of the Minister of the Interior, Having regard to Constituent Law No. 2011-6 of December 16, 2011, on the provisional organization of public powers, as amended and supplemented by Organic Law No. 2014-3 of February 3, 2014 and Organic Law No. 2014-4 of February 5, 2014, Having regard to the Organic Law on communes promulgated by Law No. 75-33 of May 14, 1975, together with the texts that have modified or supplemented it and notably Organic Law No. 2008-57 of August 4, 2008, in its Article 67, Having regard to Decree No. 85-632 of April 23, 1985, establishing the commune of Ouled Haffouz, Having regard to Decree No. 2011-2410 of September 23, 2011, appointing Mr. Khalifa Harabi as president of the special delegation of the commune of Ouled Haffouz, Having regard to Decree No. 2014-413 of February 3, 2014, appointing the members of the government, Having regard to the report from the Governor of Sidi Bouzid dated July 11, 2014, detailing the irregularities attributed to Mr. Khalifa Harabi, president of the special delegation of the commune of Ouled Haffouz, due to his poor performance, lack of responsibility in managing communal affairs, and abuse of power for the free use of cleaning equipment for personal purposes. In addition to complaints from commune agents regarding his poor behavior and mistreatment of them, the accumulation of petitions from citizens complaining notably of his misconduct and his inability to assume his responsibilities. Furthermore, his lack of cooperation with local and regional authorities, and his infringement on public order and the proper functioning of public service. Having regard to the deliberation of the Council of Ministers and after informing the President of the Republic. Decrees:
Article 1 - Mr. Khalifa Harabi is dismissed from his functions as president of the special delegation of the commune of Ouled Haffouz, due to his poor performance, conflictual reports with his subordinates, and infringement on public order.
Art. 2 - The Minister of the Interior is charged with the execution of this decree, which will be published in the Official Journal of the Tunisian Republic.
Tunis, September 3, 2014.
The Head of Government
Mehdi Jomaa

MINISTRY OF ECONOMY AND FINANCES
Ministerial Order of the Minister of Economy and Finance dated June 9, 2014, approving the regulation of the Financial Markets Council regarding venture capital investment companies.
The Minister of Economy and Finance,
Having regard to Constituent Law No. 2011-6 of December 16, 2011, on the provisional organization of public powers, as amended and supplemented by subsequent texts, Having regard to Law No. 88-92 of August 2, 1988 on investment companies, as amended and supplemented by subsequent texts and notably the Decree-Law No. 2011-99 of October 21, 2011, modifying the legislation on venture capital investment companies and venture capital mutual funds and easing the conditions for their intervention, notably its Articles 23 and 24, Having regard to Law No. 94-117 of November 14, 1994 on the reorganization of the financial market, as amended and supplemented by subsequent texts and notably its Articles 28, 31 and 48,

No. 73 Official Journal of the Tunisian Republic — September 9, 2014 Page 2371 Having regard to Decree No. 2012-2945 of November 27, 2012, implementing the provisions of Article 23 of Law No. 88-92 of August 2, 1988 on investment companies and Article 22 quinquies of the Collective Investment Undertakings Code, On the proposal of the Financial Markets Council. Orders:
Article 1 - The regulation of the Financial Markets Council regarding venture capital investment companies, annexed to this order, is approved.
Art. 2 - This order will be published in the Official Journal of the Tunisian Republic.
Tunis, June 9, 2014.
The Minister of Economy and Finance
Hakim Ben Hammouda
Approved
The Head of Government
Mehdi Jomaa

Annex to the ministerial order of the Minister of Economy and Finance approving the regulation of the Financial Markets Council regarding venture capital investment companies
The Financial Markets Council,
Having regard to Law No. 88-92 of August 2, 1988 on investment companies, as amended and supplemented by subsequent texts and notably Decree-Law No. 2011-99 of October 21, 2011, modifying the legislation on venture capital investment companies and venture capital mutual funds and easing the conditions for their intervention, notably its Articles 23 and 24, Having regard to Law No. 94-117 of November 14, 1994 on the reorganization of the financial market, as amended and supplemented by subsequent texts and notably its Articles 28, 31 and 48, Having regard to Decree No. 2012-2945 of November 27, 2012, implementing the provisions of Article 23 of Law No. 88-92 of August 2, 1988 on investment companies and Article 22 quinquies of the Collective Investment Undertakings Code, Decides:
Regulation of the Financial Markets Council regarding venture capital investment companies TITLE I Approval and declaration procedures for venture capital investment companies
CHAPTER I
Approval and withdrawal of approval procedures for venture capital investment companies managing special resources made available to them on behalf of non-professional investors
Section 1 - Approval procedures
Article 1 - The approval of the activity of managing special resources made available to venture capital investment companies on behalf of non-professional investors is subject to the submission to the Financial Markets Council of an approval application and a file conforming to the standard file set by a general decision of the Financial Markets Council.
Art. 2 - The Financial Markets Council processes the approval application within a maximum period of three months from the date of submission of the application accompanied by the necessary documents.
The Financial Markets Council may require the applicant to provide any additional information or documents for the processing of the application. In this case, the three-month period is suspended until the receipt of the requested information or document. Art. 3 - Once approval is granted, and before commencing the activity of managing the special resources made available to it on behalf of non-professional investors, the venture capital investment company must communicate to the Financial Markets Council the documents set by a general decision of the Financial Markets Council. Art. 4 - The venture capital investment company must promptly notify the Financial Markets Council of any modification affecting the main characteristics of the initial approval file for managing special resources made available to it on behalf of non-professional investors, concerning notably the areas of activity, direct or indirect shareholding, management, organization, and management elements. The Financial Markets Council assesses whether these modifications are likely to call into question the approval granted or whether they must be communicated to shareholders and the public.
Page 2372 Official Journal of the Tunisian Republic — September 9, 2014 No. 73
A general decision of the Financial Markets Council sets the implementation conditions of this article, notably concerning the type of modification proposed, the potential consequences of the envisaged modification on the initial approval, as well as the procedures and information obligations related thereto.
Section 2 - Withdrawal of approval
Art. 5 - When the Financial Markets Council decides to withdraw the approval for the activity of managing special resources made available to a venture capital investment company on behalf of non-professional investors, its decision is notified to the company by registered letter with acknowledgment of receipt. This decision specifies the timeframes and implementation conditions for the withdrawal of approval. During this period, the Financial Markets Council appoints, for the safeguarding of investors' interests and the market, a representative among the executives or former executives of establishments authorized and approved to manage venture capital vehicles. The representative will be tasked with ensuring the dispatch of routine business. He reports on his mission to the Financial Markets Council in the manner determined by the latter. During this period, the venture capital investment company may only carry out operations necessary to preserve investors' interests. It must notably inform them of the withdrawal of approval decision and invite them in writing to request the transfer of their resources. Art. 6 - The Financial Markets Council informs the public of the withdrawal of approval decision by an insertion in its official bulletin. The withdrawal decision is also brought to the attention of the public, at the initiative of the venture capital investment company, by publication in two daily newspapers, one of which in Arabic.
CHAPTER II
Declaration procedures for venture capital investment companies managing special resources made available to them on behalf of professional investors Art. 7 - The venture capital investment company managing special resources made available to it on behalf of professional investors must declare this to the Financial Markets Council and inform the latter of its management rules. This declaration must be made within a maximum period of one month from the date of commencement of the activity of managing special resources made available to a venture capital investment company on behalf of non-professional investors, by submitting a file conforming to the standard file annexed to this regulation. Art. 8 - The venture capital investment company must, without delay, declare to the Financial Markets Council any modification affecting the main characteristics of the initial declaration file for managing special resources made available to it on behalf of professional investors, concerning notably its management rules and shareholding.
CHAPTER III
Transitional measures
Art. 9 - Venture capital investment companies in operation must submit to the Financial Markets Council, within a period not exceeding six months from the date of publication of this regulation:

• an approval application accompanied by the necessary documents in accordance with the provisions of Article 1 of this regulation when they manage special resources made available to them on behalf of non-professional investors,
• a declaration in accordance with the provisions of Article 7 of this regulation when they manage special resources made available to them on behalf of professional investors.
  TITLE II
  Information to be transmitted to the Financial Markets Council Art. 10 - Venture capital investment companies managing special resources made available to them on behalf of third parties must send to the Financial Markets Council, within three months following the closing of the fiscal year, their certified financial statements as well as the general and special reports of the statutory auditor. No. 73 Official Journal of the Tunisian Republic — September 9, 2014 Page 2373 Art. 11 - Four weeks after the closing of each quarter and six weeks after the closing of the fiscal year, venture capital investment companies managing special resources made available to them on behalf of third parties must transmit to the Financial Markets Council statistics whose content is specified by a general decision of the Financial Markets Council. TITLE III Rules relating to the protection of investors' assets and the security of operations of venture capital investment companies managing special resources made available to them on behalf of non-professional investors
  CHAPTER 1
  Organization rules
  Section 1 - Company management
  Art. 12 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors is effectively directed and its orientation determined by at least two persons possessing the necessary integrity and competence as well as experience adapted to their functions. At least one of these two persons must be a corporate officer authorized to represent the company in its relations with third parties. The other person may be the chairman of the board of directors or the management board, or a person specifically authorized by the collegiate corporate bodies or the articles of association to direct and determine the company's orientation. They must meet the following conditions:

• have their residence in Tunisia,
• be physically and mentally fit to carry out their activities,
• hold at least a master's degree, bachelor's degree, or equivalent diploma in the financial field,
• have at least 5 years of professional experience in the financial field.
  The sworn certified curricula vitae of these managers are attached to the approval application.
  Section 2 - Technical means and human resources
  Art. 13 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors must:

• permanently possess material, financial, and human means adapted and sufficient for the activity or activities it is authorized to carry out,
• employ personnel possessing the qualifications, knowledge, and expertise required to exercise the responsibilities entrusted to them,
• establish decision-making procedures and an organizational structure clearly and documented specifying hierarchical lines and the distribution of functions and responsibilities as well as an effective hierarchical escalation and information communication system at all levels,
• ensure that persons under its authority or acting on its behalf are fully aware of the procedures to be followed for the exercise of their responsibilities,
• establish appropriate internal control mechanisms designed to guarantee compliance with decisions and procedures at all levels,
• orderly record the details of its activities and internal organization in adequate registers,
• ensure that assigning multiple functions to a single person does not prevent or is not likely to prevent them from properly discharging their functions,
• establish systems and procedures allowing to safeguard the security, integrity, and confidentiality of information appropriately given the nature of the information concerned.
  Section 3 - Compliance and internal control framework
  Art. 14 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors must establish an effective compliance and internal control function exercised independently and comprising the following missions:
• control and, on a regular basis, evaluate the adequacy and effectiveness of the procedures and measures put in place by the company to comply with its professional obligations, notably concerning compliance and internal control mechanisms and actions taken to remedy any detected breach. The controls performed must be formalized,
  Page 2374 Official Journal of the Tunisian Republic — September 9, 2014 No. 73
• advise and assist persons in charge of the management activity so that they comply with the company's professional obligations,
• set up a compilation of all procedures ensuring compliance with professional obligations or follow its implementation and distribute all or part of said compilation to the company's executives and concerned persons. This compilation includes procedures relating to the segregation of duties, the purpose of which is to prevent the undue circulation of confidential information, notably inside information. These procedures notably provide for the physical organization leading to the separation of different entities likely to generate conflicts of interest within the company,
• draw up any report relating to compliance and internal control.
  Art. 15 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors must appoint a compliance and internal control manager in charge of the missions provided for in Article 14 of this regulation. The appointment of the compliance and internal control manager must be approved by the Financial Markets Council. The Financial Markets Council processes the appointment request within a maximum period of two months from the date of submission of the approval application accompanied by the necessary documents. The conditions for nomination, the missions, and the conditions for exercising the compliance and internal control manager function are set by a general decision of the Financial Markets Council. Art. 16 - In order to enable the compliance and internal control manager to discharge his missions appropriately and independently, the venture capital investment company managing special resources made available to it on behalf of non-professional investors must ensure that the following conditions are met:
• the compliance and internal control manager has the necessary authority, resources, and expertise as well as access to all relevant information. He must not be involved in the execution of the services and activities he controls,
• the method for determining the remuneration of the compliance and internal control manager does not compromise and is not likely to compromise his objectivity.
  Art. 17 - The compliance and internal control manager addresses, semi-annually, to the company's board of directors or management board and to the Financial Markets Council a report on the exercise of his activities, within a maximum period of one month from the end of each semester. The content of this report is set by a general decision of the Financial Markets Council. Art. 18 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors must put in place a procedure allowing all its employees and physical persons acting on its behalf to address to the compliance and internal control manager their remarks on malfunctions they have observed in the effective implementation of compliance obligations. Art. 19 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors must without delay inform the Financial Markets Council of the resignation of the compliance and internal control manager or the decision terminating his functions as well as their reasons. The compliance and internal control manager loses his status upon leaving the company.
  Section 4 - Agreements concluded with investors
  Art. 20 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors must inform investors, before concluding a management agreement, of the conditions and modalities of management. Art. 21 - The management agreement concluded between investors and the venture capital investment company managing special resources made available to it on behalf of non-professional investors must mention at least:
• the management objectives,
• the categories of securities that may constitute the managed resources,
  No. 73 Official Journal of the Tunisian Republic — September 9, 2014 Page 2375
• the investor's information modalities regarding the management of his resources, including their nature, frequency, sending modalities (mail or internet), and dates of performance reports,
• the duration, renewal modalities, and termination of the agreement,
• where applicable, the indication that variable remuneration is earned from the first dinar of performance or underperformance when the management fee includes a variable part linked to the outperformance or underperformance of the managed resources compared to the management objective,
• information on the method and frequency of valuation of securities falling under the managed resources,
• a description of any benchmark against which the performance of the management carried out for the benefit of the investor will be compared.
  Art. 22 - The agreement may be terminated at any time by the parties. The denunciation is effected by registered letter with acknowledgment of receipt.
  Termination at the investor's initiative takes effect upon receipt of the registered letter by the company, which ceases to be authorized to initiate new operations.
  Termination by the company takes effect five business days after receipt of the registered letter by the investor.
  At the latest on the effective date of termination, the company prepares a statement of resources and draws up a management report showing the results of the management since the last statement of managed resources.
  Section 5 - Handling of complaints
  Art. 23 - The venture capital investment company managing special resources made available to it on behalf of non-professional investors establishes effective and transparent procedures for the reasonable and rapid handling of complaints addressed by investors and records each complaint