The Tunisian financial market is investing for the future

SGSS Tunisia – which was established as the result of a collaboration between the global SGSS business line and Societe Generale's subsidiary in Tunisia, UIB – offers custody services to domestic and international clients.

The Tunis Stock Exchange (BVMT), which has been a full member of the World Federation of Exchanges since October 2018, lists 81 stocks and has a market capitalisation of 21.9 billion dinars (as at the end of Q2 2020), or nearly €6.5 billion.

The Tunisian market is classified as a “Frontier Market” by FTSE Russell and MSCI.

A number of initiatives have been undertaken by the Tunisian market to approach the future with renewed momentum.

Modernisation of the regulatory framework

Firstly, the regulatory framework defined by law 94-117 of November 1994 and applied by the Financial Market Council (CMF), the Tunisian regulatory authority, is currently being overhauled.

An initial version was presented in 2019 which provides greater flexibility and authorises the introduction of new products, such as derivative instruments, and new practices inspired by international standards.

Mr Bilel Sahnoun, CEO of the Tunis Stock Exchange (BVMT), explains:

The project involves the implementation of a legal framework inspired by the UNIDROIT Principles of 2013 and covering both the OTC and the regulated markets, which is conducive to the development of the market for hedging instruments (derivative products). The legal validity of derivative products is required, especially for the enforceability of close-out netting clauses, or the delivery of collateral in the case of collective proceedings by a participant, etc.

The final versions of the texts will be published in the coming months.

Modernisation of the Tunis Stock Exchange (BVMT)

The Tunis Stock Exchange is making progress and accelerating its development. The main priorities of the modernisation project are to expand issuers’ access to the stock market and to modernise market infrastructures.

This will be achieved with a new trading platform, Optiq, developed by Euronext. This new multi-trading platform will introduce new types of orders and market-management rules, as well as the ability to manage the derivatives markets.  The launch of Optiq is planned for December 2020.

Kevin Davis, Head of Technology Solutions at Euronext, emphasises:

Some stock markets across the world have to manage their markets locally. In this case, our licensed Optiq solution integrates the specific local features of the market, which is what we did with the BVMT and in other countries in the Middle East. Optiq is already operational across all asset classes, such as equities and bonds, structured products, ETFs, equities derivative products and commodities.

Digitisation and simplification of transaction disclosures

Until 2018, in order to protect the national currency, if a non-resident acquired securities and financed their purchase by importing currency, the paying agent for the transaction had to submit an investment form to the Central Bank of Tunisia. The income from such an investment (dividends and/or sale proceeds) could thus be freely transferred out of the country. The end investor was not directly involved in the disclosure process.

Beginning at the end of 2018, an IT platform digitised this process but the responsibility for disclosure fell upon the non-resident investor. In order to streamline this new process, the Central Bank of Tunisia has since authorised investors’ custodian banks to populate the platform under a mandate granted by the investor.

Modernisation of post-trade infrastructures

Tunisie Clearing – the central securities depository and manager of the settlement/delivery system and corporate actions on the Tunisian market – has been working to set up a new IT system for some years now which will automate transactions with custody account keepers. Although only the banks have SWIFT codes, all exchanges using the new system will be in SWIFT ISO15022 / MX20022 format in order to comply with international standards. The final go-live date has been set for 25 September 2020.

Wajih Gacem, Head of SGSS Tunisia, has been actively involved in the market working group. SGSS Tunisia is a major player in securities custody, as shown by the Best Sub-Custodian award received from Global Finance in 2019. SGSS Tunisia was also ranked number one on the Tunisian market in Global Investors’ 2019 Sub-Custody Survey. Wajih Gacem declares:

In addition, from September 2020, Tunisie Clearing will act as the central registrar for listed stocks, replacing companies or their broker representatives. The continuity plan will be strengthened for securities-custody activities as well as issuer services to provide better security for transactions. This is a key factor in improving the attractiveness of the Tunisian market for investors.

Click here to read the Tunisian Stock Exchange’s note on the modernisation of the legal framework for Tunisian capital markets.


Jean-François Marchand SGSS International Country Supervision, Africa & India Societe Generale Securities Services