Regulatory Alerts2019-01-01
FRA Board Decision No. 74 of 2019 Amending Decision No. 53 of 2018 on Licensing Conditions and Share Ownership Rules for Non-Banking Financial Companies
The Financial Regulatory Authority (FRA) of Egypt issued Board Decision No. 74 of 2019 to amend Decision No. 53 of 2018 regarding licensing conditions and share ownership rules for non-banking financial companies. The amendment exempts companies engaged in establishing or capitalizing other firms from the mandatory ownership structure requirements previously imposed on non-banking financial activity operators. Additionally, it revises the capital contribution table for securities rating and classification firms by mandating a minimum 10% international ownership stake while removing the requirement for legal entities or financial institutions to serve as founders.
Financial Regulatory Authority
Financial Regulatory Authority
Chairman of the Authority
Decision of the Board of Directors of the Financial Regulatory Authority
No. (74) of 2019 dated 20/6/2019
Regarding the amendment of the Authority's Board Decision No. (53) of 2018
Regarding the conditions for granting and maintaining licenses and the rules for share ownership of companies operating in non-banking financial activities
Board of Directors of the Financial Regulatory Authority
Having reviewed the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations;
and the Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments;
and the Presidential Decree No. (192) of 2009 issuing the Basic Law of the Financial Regulatory Authority;
and the Authority's Board Decision No. (53) of 2018 regarding the conditions for granting and maintaining licenses and the rules for share ownership of companies operating in non-banking financial activities;
and upon the approval of the Authority's Board of Directors in its meeting held on 20/6/2019:
Decided
(Article One)
The establishment and licensing of companies that engage in the activity of establishing or participating in the establishment of companies or in increasing their capital (existing companies) shall be in accordance with the regulations stipulated in Chapter Three of the Capital Market Law issued by Law No. (95) of 1992 and the decisions issued in implementation thereof, without being bound by the ownership structure conditions required for companies wishing to practice one of the non-banking financial activities, as stipulated in item 2 of Article Four of the Authority's Board Decision No. (53) of 2018 regarding the conditions for granting and maintaining licenses and the rules for share ownership of companies operating in non-banking financial activities.
(Article Two)
The item regarding securities rating, classification, and arrangement companies included in Table No. «1» attached to the Authority's Board Decision No. (53) of 2018 regarding the conditions for granting and maintaining licenses and the rules for share ownership of companies operating in non-banking financial activities is hereby amended as follows:
Page 2
| Activity | Percentage of Contribution by Legal Entities or Financial Institutions |
|---|---|
| Companies Operating in the Securities Field | |
| -1 Rating, Classification, and Arrangement of Securities | It is required that the contribution percentage owned by one of the international entities in the credit rating field shall not be less than 10% of the capital of the securities rating, classification, and arrangement company, and it is not required that legal entities or financial institutions be present among the company's founders. |
(Article Three)
This Decision shall be published in the Egyptian Gazette and on the websites of the Authority and the Egyptian Exchange, and shall take effect from the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors of the Authority
Dr. Mohamed Omran
46076
Smart Village, Building 136, B. Giza, Egypt
Postal Code: 12577
Tel.: +202 35345350 - Fax.: +202 35370036
info@fra.gov.eg
Smart Village, Building no. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036
www.FRA.gov.eg