Économie et Finance

AMMC: The Enforcement Committee, more discipline for greater peace of mind

le 4 décembre 2017

On Wednesday 8th November, in one of Casablanca’s luxury hotels, before a packed audience of industry professionals comprising the most senior representatives of brokerage firms, mutual fund management companies, investment banks and other listed companies, Mrs Nezha Hayat, Chairperson of the Moroccan Capital Markets Authority (AMMC), presented what is now a vitally important body within this major institution, namely, the Enforcement Committee.

One of the speakers was Mrs Marie-Hélène Tric, Chairperson of the Enforcement Committee of France’s Financial Markets Authority (AMF), which had provided support in setting up the AMMC’s Enforcement Committee, thereby ensuring that our capital markets regulator was entirely in step with its international peers!

The Moroccan Capital Markets Authority is now in the final phase of a comprehensive reform process aimed at ensuring that it is entirely independent! It now has two governance bodies, namely, a Board of Directors and the Enforcement Committee.

It is worth recalling that Mrs Nezha Hayat chairs a Board comprising Mrs Faouzia Zaaboul, Director of Treasury and External Finance, representing the Administration, Mr Hassan Boubrik, Chairman of the Supervisory Authority of Insurance and Social Welfare, Mrs Hiba Zahoui, Director of Banking Supervision at Bank Al-Maghrib, representing the central bank, together with three independent board members appointed intuitu personae, namely Mr Abdelaziz Tazi, Mr Soulaymane Kachani and Mrs Rachida Banabdallah.

After publishing its Rules of Procedure in the Official Journal, Mrs Hayat had, as long ago as March, constituted the Enforcement Committee, the second weapon in the new market regulator’s armoury for ensuring its independence.

As clearly stated by the Chairperson, Mrs Nezha Hayat, in her opening address, “The Enforcement Committee, acting entirely independently and comprising independent experts, is tasked with ensuring that cases which might constitute a breach or violation of legal and regulatory provisions are investigated”.

The Committee is also responsible, at the end of the investigative procedure, for recommending and proposing to the AMMC Chairperson, who is responsible for pronouncing the sanction or transferring the case to the courts, how the case in question should be handled”.

The Enforcement Committee occupies a central role within the AMMC’s professed remit, as highlighted by the AMMC Chairman, “… from now on, this body alone will be authorised to investigate cases relating to breaches or violations”.

A central role

The Enforcement Committee comprises three standing members and is chaired by a judge, appointed by the Finance Minister upon the proposal of the Minister of Justice.

The other two members are appointed intuitu personae by the AMMC Board on the basis of their expertise in legal and financial matters.

Enforcement Committee members are appointed on a 4-year tenure, which may be renewed once. The AMMC Chairperson pronounces the sanctions.

This Committee meets with the Board of Directors at least once a year to review its work.

Lastly, Enforcement Committee members are subject to the same rules of professional ethics as those applicable to Board members and to the regulatory authority’s employees.

In addition to the ethical rules and the obligation to maintain professional secrecy and confidentiality to which AMMCE members are bound, members of the collegial bodies are also bound to maintain secrecy in respect of their deliberations as well as guarding against conflicts of interest.

Eminent members

The Committee is now operational due to it being officially presented by the AMMC. It comprises three eminent figures.

Its Chairman is none other than Mr Hassan El Afoui, a judge renowned for his experience and skills and described by the Chairperson, Nezha Hayat as “one of Morocco’s iconic judges”. He is an authority on banking and financial litigation. He has 35 years’ experience, having occupied several senior judicial posts and is currently Chairman of the Casablanca Commercial Court having served as the Chairman of the Rabat Commercial Court”.

The second member of the Committee is the lawyer, Azzedine Kettani, “one of the leading barristers at the Casablanca Bar. A university professor, author, a nationally and internationally renowned arbitrator, he has participated and contributed to many of Morocco’s reforms (labour law, company law, arbitration law, insurance law etc.). He is also an expert in capital markets regulation, having provided support and counsel to corporations in a large number of major financial transactions” said the AMMC Chairperson.

The third member of the Enforcement Committee is Mr Abdeljalil Chraïbi, who Mrs Hayat justifiably refers to as “an experienced practitioner of company law, banking law and insurance. He has enormous experience in management as well as in corporate governance, having been a director and board member of several well-known public and private bodies”.

Getting down to work!

At the official presentation of the Enforcement Committee, its Chairman, Mr Hassan El Afoui, also gave a speech highlighting the remit of this AMMC body, offering a valuable insight into its modus operandi.

The judge El Afoui said: “As soon as the Rules of Procedure came into force, we got down to work and have held several meetings to examine and investigate the various cases referred to us by the AMMC Chairperson”.

The various cases being investigated are all at different stages of completion depending on their referral date and the nature of the case in question as well as consideration for the complexity of the facts presented and even the attitude of the person or persons under investigation.

Some cases are in their final stage, meaning that the investigation is complete and that recommendations are being prepared. In other cases, work is in the initial stage with notification of the objections made against the persons under investigation.

Regarding the sanctions procedure and its application, it is worth noting that the Committee is determined to proceed in a disciplined and speedy manner because, as judge El Afoui stated, “to ensure that AMMC acts effectively with regard to the violations and breaches identified, it must act quickly and to achieve this dual goal of speed and efficiency, deadlines have been set in respect of the majority of the procedural deeds to be dealt with by the Committee or the party under investigation”.

Mr Chraïbi informed the audience that, since it was formed, the Committee of which he was a member had reviewed every case inherited from the CDVM so as to understand the type of problems dealt with and to learn from these cases, and even to go so far as developing a kind of jurisprudence!

The Law, the whole Law and nothing but the Law

But neither the AMMC nor the Enforcement Committee are in favour of depriving those individuals or companies involved in these procedures of their legal rights and any possible recourse provided by legislation relating to the AMMC, on the pretext of imposing time limits.

Although time limits have been set to ensure that investigative procedures do not drag on for longer than is necessary to examine the facts and make a well-considered recommendation, they are not opposed to other considerations which must also be taken into account such as respecting the right of defence of the person under investigation during the proceedings.

As a result, the Moroccan Capital Markets Authority strives to respect the will of the legislator who does not wish to simply attain the goals of speed and efficiency at the expense of the rights of the party under investigation.

In fact, what is important is the adversarial nature of the procedure where the person under investigation is entitled to be informed in advance about the objections made against him and to have sufficient time to become acquainted with the case, prepare his defence and request a hearing, if so desired.

Lastly, though possessing wide-ranging prerogatives and independence enshrined by law, the AMMC does not have the power to exceed the legal provisions which strictly define the remit and powers of the regulatory authority and its Enforcement Committee. In fact, the Committee, when issuing its recommendations to the AMMC Chairperson, may only propose sanctions that are prescribed by the law. Furthermore, it must justify its recommendations and explain to the Chairperson the underlying reasons for the recommended sanctions.

We can clearly see that the Enforcement committee’s modus operandi, the quality of its members, the precise definition of its remit within a framework which is transparent, legal and fair, provide the final touch to an edifice built under the aegis of the AMMC Chairperson, Mrs Nezha Hayat and her staff, enabling them to fulfil the responsibilities entrusted by law to this capital markets authority effectively and efficiently.

The AMMC is also in the process of recruiting around 15 new expert inspectors to form a team of specialists who will be able to participate even-handedly, as a function of the cases under investigation or in relation to a specific assignment determined by the Chairperson.

The AMMC is imposing change to which industry professionals must adapt, by ensuring that their procedures are compliant and that their employees are well versed. The Regulatory Authority will help them in this regard by approving various categories of practitioner.

This is indeed necessary, despite the fact that Casablanca’s financial services industry is renowned for the large number of young and brilliant finance professionals who work there.

And, as stated by Mrs Marie-Hélène Tric, Chairperson of AMF’s Enforcement Committee, she has only had to deal with twenty or so cases in 2017. If one were to extrapolate by market size, that would imply that Morocco’s Enforcement committee would have to deal with just ten or so cases or a year.

This should provide peace of mind to our financial services industry while reminding each person of their responsibilities…

Afifa Dassouli

Original article : https://lnt.ma/ammc-college-sanctions-plus-de-rigueur-plus-de-serenite/