The mutual fund is the co-ownership of transferable securities and deposits whose shares are issued and redeemed, as the case may be, at the request of subscribers or shareholders, at the net asset value plus or less expenses and fees, where applicable. The fund shall not have legal personality.
The provisions of the Civil Code relating to co-ownership shall not apply to the Fund; neither shall the provisions relating to joint ventures provided for by the OHADA Uniform Act relating to Commercial Companies and Economic Interest Groups.
The provisions above shall apply to heirs, their rightful claimants and creditors.
Wherever the provisions of the laws governing companies and transferable securities require the specification of the full name and domicile of the security holder, as well as for all transactions undertaken on behalf of the co-owners, the name of the fund may be validly substituted for the names of all the owners.
Mutual funds shall be governed by the laws and regulations applicable to public calls for capital, subject to the provisions of the law.
The shares of mutual funds shall be transferable securities.
The mutual fund shall be formed through the joint initiative of 2 (two) distinct corporate bodies, namely:
- A management company responsible for managing the fund, in accordance with the conditions provided for in Section 31 of the law;
- A depositary meeting the conditions specified in Section 36 of same law responsible for safekeeping of the assets of the fund.
The management company and the depositary shall jointly appoint the auditor of the mutual fund from the list drawn up by the Financial Market Commission and, in the absence of such list, upon the approval of that Commission.
The management company and the depositary shall draw up the management regulations of the mutual fund.
The management regulations shall determine notably the lifespan of the investment fund, the rights and obligations of shareholders, the management company and the depositary, the terms and conditions for safekeeping of the assets of the fund, as well as the rules and procedures for amending the management regulations.
The regulations of the Fund shall stipulate that its assets shall be kept by a single depository, distinct from the management company, and which shall ensure the regularity of the decisions of the said company.
The subscription or acquisition of the shares of a mutual fund shall imply acceptance of its management regulations.
A regulation of the Financial Market Commission shall specify the mandatory information to be included in the fund's management regulations.
The mutual management regulations of the fund shall come into force only after its approval by the Financial Market Commission.
The amendment of the management regulations of the Fund shall be subject to prior approval by the Financial Market Commission. The amendment shall enter into force after a period of 3 (three) months following its notification to shareholders.
The minimum amount of assets a mutual fund must have at the time of its incorporation shall be fixed by order of the minister in charge of finance, upon the recommendation of the Financial Market Commission.
The auditor shall evaluate and enter the assets in a report, under the conditions laid down by regulation of the Financial Market Commission. The auditor shall verify and ascertain the value of contributions in kind and prepare a report thereof.
Prior to receipt of security or cash deposits by the mutual fund, the management company shall prepare a background note based on the model adopted by the Financial Market Commission.
The acceptance of security or cash deposits shall be subject to the approval of the management regulations of the mutual fund by the Financial Market Commission.
The management regulations of the Fund shall fix the minimum amount of net assets below which it shall not be authorized to redeem shares. Such amount may not be less than the threshold fixed by order of the minister in charge of finance, upon the recommendation of the Financial Market Commission.
Where the net assets remain less than the minimum amount fixed by the management regulations for a period of 30 (thirty) days, the management company shall dissolve the fund or take one of the actions provided for in Section 16 of the law.
Mutual fund co-ownership rights shall be exclusively represented by registered units.
Each unit shall correspond to a share of the assets value of the mutual fund.
The management company shall be bound to issue to each subscriber a statement showing the amount of securities belonging to him, according to a periodicity fixed by the Financial Market Commission.
Shareholders, their heirs, rightful claimants or creditors may not cause the sharing of the Fund.
Shareholders shall be liable only for the co-ownership debts corresponding to the assets of the mutual fund and in proportion to their shares.
Where exceptional circumstances and shareholder interests so warrant, the management company may temporarily suspend the buyback by the mutual fund of its own shares and the issuance of new shares, under the conditions laid down by management regulations of the Fund.
Under the same circumstances, where the transfer of some assets is found not to be in the interest of shareholders, the said assets may be transferred to a new fund.
Asset’s separation shall be decided by the management company and notwithstanding the provisions of Section 30 of the law, separation shall not be subject to the approval of the Financial Market Commission, but shall be declared to it without delay.
Each shareholder shall receive a number of shares of the new fund equal to the shares he held in the former fund. The fund established may not issue new shares. The shares of the new fund shall be amortized as and when its assets are traded, under the conditions defined by a regulation of the Financial Market Commission.
A regulation of the Financial Market Commission shall determine the other cases where and conditions under which the management regulations of the mutual fund stipulate, as appropriate, that the issuance of shares shall be temporarily or permanently suspended.
The management company may, in agreement with the depositary, contribute all or part of the assets of a mutual fund, even where under liquidation, to one or more other funds it manages.
The management company may, in agreement with the depositary, split a fund, even where under liquidation, into two or more others which it manages.
Contribution or separation transactions may be effected only upon prior authorization by the Financial Market Commission.
All shareholders of the mutual fund absorbed or split shall become holders of shares of the fund(s) accepting the assets.