Prime Minister's Decree

No. 1576 of 2014

Prime Minister Having reviewed the Constitution:

And the Law on Supervision and Control of Insurance in Egypt issued by Law No. 10 of 1981 and its Executive Regulations:

And the Law on Joint Stock Companies, Companies Limited by Shares, and Limited Liability Companies issued by Law No. 159 of 1981:

And the Capital Market Law issued by Law No. 95 of 1997 and its Executive Regulations:

And the Central Bank, Banking System, and Monetary System Law issued by Law No. 88 of 2003 and its Executive Regulations:

And the Law Regulating Supervision over Non-Banking Securities and Financial Instruments issued by Law No. 10 of 2009:

And Presidential Decree No. 191 of 2009 on the Rules Governing the Management of the Egyptian Exchange and its Financial Affairs:

And Presidential Decree No. 197 of 2009 Issuing the Statutes of the Financial Regulatory Authority:

And Presidential Decree No. 293 of 2014 on Delegating Certain Authorities:

And considering that the Prime Minister is the Minister responsible for implementing the provisions of Law No. 10 of 2009 Regulating Supervision over Non-Banking Securities and Financial Instruments:

And Prime Minister's Decree No. 1764 of 2004 Establishing a Fund to Insure Securities Market Participants against Non-Commercial Financial Risks Arising from the Activities of Companies Operating in the Securities Field:

Upon the proposal of the Board of Directors of the Financial Regulatory Authority:

And upon what was presented by the Chairman of the Financial Regulatory Authority:

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Decided:

(Article 1)

The Fund to Insure Securities Market Participants against Non-Commercial Risks Arising from the Activities of Companies Operating in the Securities Field is an independent, non-profit legal entity, abbreviated as the "Investor Protection Fund against Non-Commercial Risks," with its headquarters in Cairo or an adjacent city.

A decree establishing the Fund's statutes shall be issued by the Board of Directors of the Financial Regulatory Authority upon the proposal of the Fund's Board of Directors.

(Article 2)

The Fund shall include in its membership every company operating in the securities field that conducts one or more of the following activities:

1. Execution and brokerage in securities transactions, central depository, and central registry.
2. Formation and management of securities portfolios.
3. Management of investment funds.
4. Securities brokerage.
5. Dealing, brokerage, and dealing in bonds.
6. Custodianship.

The Prime Minister may, upon the proposal of the Board of Directors of the Financial Regulatory Authority, add other activities stipulated in the Capital Market Law to these activities.

(Article 3)

Without prejudice to the status of existing companies, the membership contribution to the Fund's resources for companies commencing their activity after the effective date of this Decree shall be 0.001% of the company's activity volume during the year preceding the membership start date, with a minimum of 1,000,000 (one hundred thousand pounds) Egyptian pounds. The membership contribution shall be formed if its value exceeds this minimum according to the company's activity volume during the first year of operation.

Fund members shall pay their periodic contributions to the Fund's resources according to their activity volume and in accordance with Table No. (1) attached to this Decree.

In the event a Fund member delays paying the membership contribution or periodic contributions by the stipulated deadlines, the Fund shall notify them via a registered letter with acknowledgment of receipt. If the member fails to pay within fifteen days from the notification date, they shall be liable for a daily delay fee calculated based on the discount rate announced by the Central Bank of Egypt, plus three percentage points annually.

The Fund's Board of Directors may, in light of market conditions, market evaluation indicators, risk assessment models, and available fund resources, propose adjustments to periodic contributions, provided such adjustments take effect only after approval by the Board of Directors of the Financial Regulatory Authority, endorsement by the competent Minister, and publication in the Official Gazette.

In all cases, membership contributions or periodic contributions paid by members to the Fund shall not constitute a debt owed to the Fund or refundable insurance, nor may they be assigned, seized, or set off as collateral.

(Article 4)

The Fund shall be managed by a Board of Directors constituted by a decision of the competent Minister as follows:

1. One member representing investors in the securities market, appointed by the competent Minister.
2. Three members representing companies that are members of the Fund, at least one of whom must be a non-securities brokerage company, with their selection following rules and procedures issued by a decision of the Chairman of the Financial Regulatory Authority.
3. One member representing the Egyptian Exchange, appointed by the Chairman of the Exchange's Board of Directors.
4. One member representing the Clearing & Securities Company, appointed by its Chairman.
5. Three experts appointed by the Board of Directors of the Financial Regulatory Authority.

The term of office for the members referred to in items (1, 2, 5) shall be three years, renewable once.

Members of the Fund's Board of Directors shall receive attendance, travel, and annual bonus allowances issued by a decision of the Board of Directors of the Financial Regulatory Authority, which shall not exceed the allowances received by members of the Financial Regulatory Authority's Board of Directors, except for the Chairman who may receive a different amount for performing their duties.

The Chairman may invite experts to attend Board meetings without having a voting right in deliberations.

The Fund's Board of Directors shall convene upon the Chairman's call at least once every two months. A meeting is valid with the attendance of two-thirds of its members, including the Chairman, and decisions shall be issued by an absolute majority of the attending Board members.

The Chairman of the Financial Regulatory Authority may invite the Fund's Board of Directors to attend for the purpose of reviewing specific topics.

(Article 5)

The Chairman of the Fund's Board of Directors shall be selected from among the expert members with the approval of an absolute majority of the Board members.

The Chairman of the Fund's Board of Directors shall manage its affairs, conduct its business, and represent it before courts and others.

The Board of Directors may entrust the Chairman with the Fund's executive management duties, specifying the financial compensation for such duties.

(Article 6)

The Fund's Board of Directors is authorized to implement the provisions of this Decree, execute transactions, and take necessary measures to achieve its objectives, including specifically:

• Proposing the Fund's statutes or amending them, subject to approval by the Financial Regulatory Authority.
• Approving financial, administrative, and employee regulations, the organizational structure, and job descriptions.
• Approving the Fund's annual and quarterly financial statements and its budget draft.
• Taking measures to ensure the safety and preservation of the Fund's assets and funds.
• Approving fund management and investment policies, and periodically reviewing the performance of the Fund's portfolio investments.
• The Board may form one or more committees from among its members to perform specific tasks related to its competencies.

(Article 7)

The Fund covers the actual financial risks of members' clients against non-commercial risks within the limits specified in this Decree, arising from the member's activity in securities listed on Egyptian exchanges. Coverage includes the following risks:

• Bankruptcy or default of a Fund member, with the state of default determined by a decision issued by the Fund Board of Directors in accordance with the assessment issued by the Financial Regulatory Authority in this regard.

(Article 8)

Fraud, negligence, or deceit by the member, its authorized agent, or its actual manager or employees, whether individually or jointly with others, as confirmed by investigations conducted by the Financial Regulatory Authority or other judicial or regulatory authorities.

The coverage limit shall be a maximum of 500,000 pounds per client, covering the securities the client trades with the member as well as the credit balance in the client's account resulting from securities transactions with the member, not exceeding 100,000 pounds.

In all cases, the Fund shall not be liable to compensate beyond the amount its funds can bear. If the required coverage exceeds the available amounts according to the aforementioned capacity, the available amounts shall be distributed pro-rata among all members based on the value of each member's securities and credit balance.

The Fund shall not be liable to compensate for any financial losses resulting from third-party actions affecting the market value of the client's securities or resulting from the loss of investment funds managed by the member.

The Fund may compensate clients of Fund members directly for the value of their securities equal to the compensation owed to them by the Fund, according to rules issued by a decision of the Fund's Board of Directors.

The Fund's Board of Directors may, in light of available funds and after conducting necessary studies, prepare a draft to adjust the coverage limit, subject to approval by the Board of Directors of the Financial Regulatory Authority. Such draft shall not take effect until published in the Official Gazette.

(Article 9)

Compensation shall be paid upon the client's request after an investigation by a committee formed by the Fund's Board of Directors. The investigation and reasoned decision shall not exceed fifteen days from the date of submitting the request with supporting data and documents. This period shall be thirty days for compensation requests submitted by thirty or more clients against one or more Fund members.

Compensation is limited to financial damages and excludes moral damages.

When determining the compensation amount, any amounts the client received from the member or third party due to the fault subject to compensation shall be considered. When paying compensation, any amounts owed by the client to the member shall be deducted.

The Fund shall pay the client's dues within thirty days from the date of the decision on the compensation request.

The client's right to compensation shall be established.

Compensation shall constitute a final settlement of the client's dues against the Fund regarding the compensated incident, without prejudice to the client's right to recourse against the member to claim compensation for amounts exceeding what the Fund paid.

(Article 10)

Any interested party may appeal the decisions of the committee referred to in the preceding article before the Fund's Board of Directors within fifteen days from the date of notification of the compensation decision or its rejection.

The Fund's Board of Directors shall rule on the appeal within fifteen days from the date of its submission, provided all necessary documents for ruling are attached.

(Article 11)

When the Fund compensates a client, the member shall be notified of the compensation amounts paid to this client, plus the expenses incurred by the Fund. The member must respond to these amounts within five working days from the notification date, without prejudice to the Fund's right to take any measures it deems necessary to recover its rights from the member.

In cases where the Financial Regulatory Authority suspends the member's activity, the member shall be obligated to repay all compensation amounts the Fund paid to its clients before resuming its activity.

(Article 12)

The Fund's financial year shall begin on January 1 and end on December 31 of each year.

(Article 13)

The Fund's funds and resources shall be deposited in one or more accounts at banks registered with the Central Bank of Egypt.

(Article 14)

The Fund's Board of Directors shall prepare an investment plan for its resources based on the Chairman's proposal, ensuring careful risk management in investment operations and maintaining appropriate liquidity to meet client compensation requests.

The Fund shall be obligated to monitor the controls stipulated in this Decree regarding the proportions and areas of its fund investments.

(Article 15)

The Fund shall be obligated to invest its funds in the following areas:

1. Bank deposits, certificates of deposit, and investment certificates.
2. Government bonds and treasury bills.
3. Bonds and securitization bonds issued by companies and public entities, provided their credit rating is below BBB.
4. Open-end investment funds that conduct investment activities in money markets or invest in debt instruments.

The Fund's Board of Directors must prepare a study on the maximum limits for the Fund's investments in items (3) and (4), relative to the issue size and the Fund's portfolio size, subject to prior approval by the Board of Directors of the Financial Regulatory Authority.