Chairman of the Board of Directors

Decision No. (745) of 2014

dated 18/9/2014

Regarding the Rules and Procedures for Selecting Representatives of Securities Companies

in the Board of Directors of the Investor Protection Fund against Non-Commercial Risks

Chairman of the General Authority for Financial Supervision:

After reviewing Law No. (159) of 1981 on Joint Stock Companies, Companies Limited by Shares, and Limited Liability Companies and its executive regulations;

And Law No. (17) of 1999 on Commerce;

And Law No. (95) of 1992 on the Capital Market and its executive regulations;

And Law No. (93) of 2000 on the Central Depository and Registration of Securities and its executive regulations;

And Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments;

And Presidential Decree No. (191) of 2009 on the rules governing the management and financial affairs of the Egyptian Exchange;

And Presidential Decree No. (192) of 2009 issuing the Statutes of the General Authority for Financial Supervision;

And Prime Minister's Resolution No. (1576) of 2014;

And Minister of Investment Resolution No. (138) of 2004 regarding the rules and procedures governing the selection of representatives of securities companies in the board of directors of the Participants Protection Fund against Non-Commercial Risks arising from the activities of securities companies;

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Decided

(Article One)

The selection of the members of the Board of Directors of the Investor Protection Fund against Non-Commercial Risks (hereinafter referred to as the "Fund"), as stipulated in item (2) of Article Four of Prime Minister's Resolution No. (1576) of 2014, shall be by election in accordance with the rules and procedures set forth in the following articles.

(Article Two)

The following conditions must be met by a member company of the Fund entitled to participate in nominating a representative for its membership on the Fund's Board of Directors:

1. The company must have paid all its dues or obligations to the Fund according to the last due date preceding the submission date of the nomination request.

2. Its activities must not have been previously suspended pursuant to Article (30) of the aforementioned Capital Market Law, nor have any of the measures stipulated in Article (31) of said Law been issued against it in connection with a financial violation related to a financial activity, unless six years have elapsed since the execution of the suspension or measure decision or the removal of the violation, whichever is earlier, except for the measure stipulated in item (a) of Article (31) of the Capital Market Law.

3. The company must not be among those for which the Fund previously intervened to cover its obligations due to its failure to fulfill them within the specified deadlines, unless six years have elapsed since the date of the Fund's intervention to cover its obligations.

4. The company must not be among those previously suspended from trading by the Settlement Guarantee Fund, unless three years have elapsed since the end of the suspension.

The counting of the aforementioned periods shall commence from the date of closing the window for receiving nomination requests.

(Article Three)

A member company of the Fund and its subsidiaries, or member companies of the Fund under the actual control of a natural or legal person, shall not submit more than one candidate for membership on the Fund's Board of Directors.

(Article Four)

The following conditions must be met by the natural person whom a member company of the Fund may nominate:

• a- He must have a good reputation and record, and must not have previously been convicted of a criminal penalty or a liberty-restricting penalty for an offense involving honor or trust, or for any of the crimes stipulated in the Law on Joint Stock Companies, Companies Limited by Shares, and Limited Liability Companies, or the Commercial Law, or the Capital Market Law, or the Central Depository and Registration of Securities Law, unless his reputation has been restored.

• b- He must hold a higher qualification from one of the Egyptian faculties or one of the foreign universities, with the degree recognized by the Supreme Council of Universities.

• c- His experience in the capital market, insurance, or one of the legal, accounting, or financial fields must not be less than seven years.

• d- The candidate must be the Chairman of the Board of Directors of the company or a Managing Director thereof, and the functional grade of the candidate representing the custodians must not be lower than that of a General Manager or its equivalent.

(Article Five)

The Fund shall publish in a widely circulated morning newspaper, at its own expense, and announce on the websites of the Authority, the Egyptian Exchange, and the Fund, the date of commencing the acceptance of nomination requests, at least one week prior to the specified nomination start date. The acceptance of nomination requests shall continue for one week from the date of commencing acceptance.

(Article Six)

The nomination request shall be submitted to the General Administration of the Technical Office of the Authority's Chairmanship, signed by the Chairman of the Board of Directors of the company. The request shall be recorded in a special register specifying the hour and date of its receipt, and the submitter shall be issued a receipt confirming submission. The nomination request shall be accompanied by the following:

• a- A declaration confirming that the candidate meets the conditions stipulated in item (a) of Article Four, in the form of the candidate's criminal status.

• b- A certified copy from the candidate's employer of the academic certificate demonstrating compliance with the condition stipulated in item (b) of Article Four.

(Article Seven)

A committee formed by the Chairman of the Authority by decision shall examine the nomination requests submitted to the Authority for this purpose on the day following the expiry of the specified deadline for accepting nomination requests, as follows:

First: Examine the nomination requests and verify the compliance of the member company and its candidate with the conditions, excluding any that fail to meet a condition, within a period not exceeding five working days from the date of expiry of the nomination request acceptance period.

Second: Notify the nomination applicants of the examination results via the method determined by the Committee within one working day from the date of expiry of the aforementioned period.

Third: Prepare two lists of candidates, one for securities brokerage companies and the other for other member companies of the Fund excluding brokerage companies, and publish them on the websites of the Fund and the Authority within two working days from the date of expiry of the period mentioned in the first item.

(Article Eight)

Any member company of the Fund entitled to membership on the Authority's Board of Directors may appeal against the nomination right regarding the inclusion of any candidate in the candidate lists within one week from the date of announcing the lists. Likewise, any excluded candidate may appeal within the same period, all before the Authority's Appeals Committee.

(Article Nine)

The Appeals Committee referred to in Articles (50, 51) of the Capital Market Law shall rule on the appeals within a period not exceeding two weeks from the date of expiry of the appeal period. Its decision shall be final and enforceable, and the concerned parties shall be notified of the Committee's decision within a maximum of two working days from the date of its issuance.

(Article Ten)

The Nomination Request Examination Committee referred to in Article Seven shall, within the two working days following the date of the Appeals Committee's decision (if any) or the expiry of the appeal period – whichever applies – prepare and publish the final two lists of candidates for membership on the Fund's Board of Directors as representatives of the member companies, as follows:

1. List of candidates for securities brokerage companies.

2. List of candidates for other member companies of the Fund excluding brokerage companies.

These two lists shall be published, and the venue and date of the election shall be specified on the websites of both the Fund and the Authority. The election shall be held within one week from the publication date as stated above.

(Article Eleven)

A committee to supervise the election shall be formed by decision of the Chairman of the Authority as follows:

(a) Two members representing the Authority, one of whom shall be appointed Chairman of the Committee.

(b) One member representing the Egyptian Exchange.

(c) Two members representing the Fund.

This Committee shall undertake the tasks of election preparation, attendance registration, verifying compliance with Article Twelve of this Decision regarding voting eligibility, supervising the integrity of voting, conducting vote counting after excluding invalid votes, preparing a minutes report on the election results and the votes obtained by each candidate, and announcing the results.

(Article Twelve)

The right to vote in the election is restricted to the Chairman of the Board of Directors of the member company, who may delegate the Managing Director of the company or one of its senior management officials to vote pursuant to a power of attorney signed on the company's letterhead and stamped with the company seal.

(Article Thirteen)

The following must be complied with for the vote to be valid:

1. The ballot paper must include the two lists stipulated in Article Nine of this Decision.

2. Voting shall be conducted by selecting three candidates, including at least one candidate from the list referred to in item (2) of Article Nine. The Election Supervision Committee shall announce the results after counting the valid votes obtained by each candidate as follows:

(a) The candidate obtaining the highest number of votes from the list referred to in item (2) of Article Nine.

(b) The candidates obtaining the highest number of votes in either of the lists referred to in item (a). In case of a tie in votes between two candidates, a re-election shall be held between these two candidates on the day of the election.

(Article Fourteen)

Any candidate may appeal the election results or procedures within two working days from the date of their announcement. The Appeals Committee referred to in Article Thirteen of this Decision shall have jurisdiction to rule on appeals against the election results or procedures in light of the rules and procedures set forth in this Decision, within a period not exceeding fifteen days from the date of submission. Its decision shall be final and enforceable.

(Article Fifteen)

The final result of selecting the members of the Fund's Board of Directors as representatives of securities companies shall be announced on the day following the expiry of the period for ruling on the appeals referred to in the preceding article. In the absence of any appeals, the result shall be announced on the next working day following the expiry of the submission period for the regulations.

(Article Sixteen)

In the event of the revocation of the license of the company represented by a Board member, the termination of the relationship between the company and its representative on the Board, or the Board member failing to meet any membership condition, their membership on the Fund's Board of Directors shall be terminated. The next candidate in the vote count from the last election for the Board shall replace them. Their term of membership shall be the remainder of their predecessor's term.

(Article Seventeen)

This Decision supersedes Minister of Investment Resolution No. (138) of 2004, and repeals any provision conflicting with the provisions of this Decision.

(Article Eighteen)

This Decision shall be published in the Egyptian Gazette and on the websites of the Authority, the Egyptian Exchange, and the Fund, and shall take effect from the day following its issuance. Competent authorities are tasked with its implementation.

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Chairman of the Authority
Sherif Samy