Regulatory Alerts2012-05-13
Prohibiting the ownership of shares in non-financial companies with a value exceeding 40% of the company’s issued capital
In compliance with the Central Bank of Egypt's regulatory measures, Commercial International Bank (CIB) has issued a notice to its clients on October 29, 2009, detailing that it will cease to acquire shares in non-banking companies whose share capital exceeds 40% of the company's total capital. In case a client's bank account holds stocks in such a company and the percentage of these stocks exceeds 40% of the total capital, CIB will calculate the loss resulting from this situation according to the International Financial Reporting Standards (IFRS). The loss shall not be less than the amount representing the excess over 40% of the company's total capital. The notice also mentioned that this calculation would start on July 1, 2010, and added that it is a provisional measure, which may be subject to further amendments or changes at any time. The Central Bank of Egypt has issued similar directives for other banks as well, reflecting the country's commitment to maintaining financial stability and ensuring investor protection.