Without prejudice to the penalties applicable (Law No. 2016/010 of 12 July 2016) to public limited companies under financial markets, the Financial Market Commission may impose administrative and monetary penalties against a UCITS, trust company, depositary or managers for failure to comply with the provisions of this law.
Administrative Penalties under the Financial Markets in Cameroon
The Financial Market Commission may impose the following administrative penalties:
- Warning;
- Formal notice.
- Caution;
- Reprimand;
- Suspension consisting of a restriction or temporary ban on activities, not exceeding 12 (twelve) months;
- Withdrawal of authorization;
The withdrawal of authorization is carried out on the basis of a detailed and reasoned report.
The Financial Market Commission may, on its own initiative or at the request of the beneficiary, withdraw the authorization of any UCITS, management company or depository that:
- Fails to use the authorization within 12 (twelve) months from the date of its notification;
- Stops operating for 12 (twelve) months;
- Is found guilty of serious breach of the law or regulations in force.
In case of withdrawal of authorization, the undertaking or the company shall, in accordance with the regulation in force, enter into liquidation within 1 (one) year from the notification of the decision to withdraw the authorization.
Any statutory auditor who fails to fulfil his professional obligations under the law or under the regulation in force may be liable to temporary or permanent ban from exercising his duties in any UCITS.
The temporary or permanent ban shall be pronounced by the Financial Market Commission after summoning and hearing the statutory auditor in question. The duration of the temporary ban shall not exceed 3 (three) years.
The statutory auditor shall be summoned by any means leaving a paper trail within a minimum period of 30 (thirty) days before the date of their hearing. He shall have the right to consult the case file no later than 7 (seven) days prior to their hearing by the Financial Market Commission. The offender may be assisted by a member of his corporation or any counsel of his choice.
The decision of the Financial Market Commission may be tantamount to a complaint to the State Counsel. In that regard, it shall be authorized to institute civil proceedings.
Any penalty decision by the Financial Market Commission shall be immediately enforceable notwithstanding any appeal before the administrative judge. Such appeal should be lodged in accordance with the procedures and deadlines laid down by the laws in force.
Any stay of enforcement decision by the administrative judge shall be subject to payment by the company or the person sanctioned, of twenty-five percent (25%) of the amount of the monetary sentence imposed by the Financial Market Commission.
Monetary Penalties Applicable to the Financial Market of Cameroon
Without prejudice to the disciplinary sanctions provided for in Sections 73 and 74 of the law, the Financial Market Commission may impose monetary penalties of up to 5 (five) times the amount involved, with a minimum of CFAF 1 (one) million,
Anyone who, either in his/her individual capacity or as a partner to an auditing company, accepts, performs or keeps the mandate of statutory auditor in violation of the incompatibility rules provided for under the regulation in force shall be punished with fine of from CFAF 1 (one) million to CFAF 5 (five) million.
Any SICAV manager or board member who violates the provisions of Sections 886 to 891 of the Uniform Act relating to the Law on Commercial Companies and Economic Interest Groups shall be punished with fine of from CFAF 5 (five) million to CFAF 15 (fifteen) million or imprisonment for from 3 (three) months to 5 (five) years, or with both such fine and imprisonment.
Manager
Any manager of a depositary, as well as anyone under his/her authority, who implements the regulations of a SICAV or management company in violation of the provisions of this law or of the articles or management regulation of the said undertakings shall be punished with imprisonment for from 1 (one) to 12 (twelve) months or fine of from CFAF 1 (one) million to CFAF to 10 (million), or with both such imprisonment and fine.
Any manager of a SICAV or trust company or any depositary of a UCITS who:
- Indulges in operations other than those related to the purpose of these companies;
- Fails to comply with obligations relating to UCITS investment policy.
shall be punished with fine of from CFAF 5 (five) million to CFAF 20 (twenty) million.
Any manager of a trust company of a mutual investment fund who fails to appoint a statutory auditor of the Fund in accordance with the provisions of the law shall be punished with imprisonment for from 2 (two) years or with fine of from CFAF 1 (one) million to CFAF 10 (ten) million, or with both such imprisonment and fine.
Auditor
Any statutory auditor who, either in his/her individual capacity or as a partner in a firm of statutory auditors, provides or confirms misleading information on the situation of the UCITS, or who fails to reveal to the public prosecutor criminal offences known to him/her, shall be punished with imprisonment for from 2 (two) to 5 (five) years or with fine of from CFAF 1 (one) million to CFAF 10 (ten) million, or with both such imprisonment and fine.
Management Company or Corporate Body
SECTION 84: Any manager of a management company or the corporate body that is depositary of a UCITS and anyone under their authority, who obstructs the conduct of audits or control by statutory auditors or refuses on-the-spot disclosure of documents that are useful in the discharge of their duties and, in particular, contracts, books, accounting documents and minutes registers, shall be punished with imprisonment for from 2 (two) to 5 (five) years or with fine of from CFAF 1(one) million to CFAF10 (ten) million, or with both such imprisonment and fine.
Without prejudice to prosecution for misappropriation of corporate assets, managers of a SICAV or of a trust company or the depositary of a Mutual Investment Fund who deduct or are accessory to the deduction of fees or management fees exceeding the amounts provided for in the articles of incorporation or management regulations shall be punished with fine of from CFAF 1 (one) million to CFAF 10 (ten) million.
De Jure or De Facto Manager
Any de jure or de facto manager of a body who undertakes transactions falling under the activities of undertakings for collective investment in transferable securities without authorization from the Financial Market Commission in accordance with the provisions of the law, or who continues such activities after withdrawal of their authorization, shall be punished with imprisonment for from 6 (six) months to 2 (two) years or with fine of from CFAF 10 (ten) million to CFAF 20 (twenty) million, or with both such imprisonment and fine.
In case of a repeat offence, the criminal penalties provided for in this law shall be doubled.
Any final conviction, pursuant to the provisions of this law, of managers of the management company or the depositary shall automatically result in the termination of their duties and their disqualification from performing such duties.
The statutory auditor shall accordingly inform the Financial Market Commission which shall take all the necessary measures to convene the General Assembly Meeting of the company to replace the disqualified manager.
The court seized for liability action provided for Section 38 of the law may at the request of any unit holder, order the dismissal of the managers of the management company or the depositary.
In the two (2) cases above, the competent court shall, on the proposal of the President of the Financial Market Commission, appoint an interim administrator till the appointment of new managers or liquidation, where such appointment seems impossible.
In the event of a final conviction of an administrator, the shareholders shall be bound to convene an extraordinary General Assembly Meeting within thirty (30) days to decide on the changes to be made to the management of the company or its dissolution, where appropriate.
Final conviction judgments resulting from the penalties provided for under the law shall be published in full or in the form of excerpts in the Official Bulletin of the Financial Market Commission and in legal notices newspapers, at the expense of those convicted.