SENEGAL Law and Practice Contributed by: Franck Olivier Allessie, SCP Houda & Associés
According to the above-mentioned provisions, a breach of bank secrecy, for banks, shall be sanctioned by a fine of XOF51-150 million and, for financial institutions, by a fine of XOF16-60 million. A breach of confidential information of which the above-mentioned persons have knowledge in the course of their activity is sanctioned by imprisonment of one month to two years and/ or a fine of XOD10-100 million. In the event of a repeated offence, the maximum penalty will be increased to five years’ imprisonment and a fine of XOF300 million. 8. Insolvency, Recovery and Resolution 8.1 Legal and Regulatory Framework The prudential system completes the Law of 2008. This prudential system was adopted by the WAEMU Council of Ministers on the pro - posal of the BCEAO, pursuant to Article 44 of the Banking Law. In Senegal, in addition to the Law of 2008, Deci - sion No 013-24-06/CM/WAEMU relating to the prudential framework applicable to credit institu - tions (the “Decision”) is intended to establish a prudential framework in force within the WAEMU and in particular in Senegal. The preamble to the Decision states that the WAEMU community framework, and in particu - lar the minimum capital requirements according to risks (credit, operational, market), are based on the Basel II and Basel III rules, and the Basel rules have been transposed taking into account the characteristics of the economies and specifi - cities of the WAEMU banking system.
It consists of a series of provisions organised around three themes: • the conditions for exercising the profession (minimum capital and its representation, spe - cial reserve, accounting regulations); • the regulation of specific operations (share - holdings, fixed assets, loans to main share - holders, managers and shareholders, manag - ers and staff); and • management standards (coverage of risks by effective equity capital, of medium and long-term assets by stable resources, division of risks, liquidity rules, structure of liquidity rules, portfolio structure). Among the requirements of the prudential sys - tem is the integration of operational risk into the process of supervising credit institutions. In this respect, the Banking Commission has proposed two approaches to the evaluation of operational risks based on weightings applied to an insti - tution’s net banking income. These weights are identical to those defined by the Basel Commit - tee, namely 15% for the basic approach and a level varying between 12% and 18% for the standard approach. Among other things, it requires institutions wishing to use the standard approach to set up an operational risk management function with strong involvement of the executive body, which defines the roles and responsibilities of each player. In the area of credit risk, the precise assessment of risk under the standard approach is based primarily on the counterparty weightings set by the French banking commission, which is the ACPR ( Autorité de contrôle prudentiel et de résolution ). These weightings depend on the rat - ings established by External Credit Assessment
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