Regulatory Alerts2020-01-01
Board of Directors Decision No. (93) of 2020
The Financial Regulatory Authority (FRA) of Egypt issued Board Decision No. 93 of 2020 to amend the executive corporate governance rules for licensed leasing and factoring companies. The decision mandates that these companies establish independent audit and risk committees, specifying minimum membership requirements, independence thresholds, and expertise qualifications for both committees. Licensed entities must fully align their internal structures with these revised governance standards by December 31, 2020, with the decision taking effect immediately upon publication in the Egyptian Gazette.
Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Financial Regulatory Authority Board of Directors Decision No. (93) of 2020 dated 2/6/2020
Amending the Authority's Board of Directors Decision No. (164) of 2018
Regarding the Executive Rules for Corporate Governance of Companies Licensed to Conduct Leasing and Factoring Activities
The Board of Directors of the Financial Regulatory Authority
Having reviewed Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments;
And Law No. (176) of 2018 organizing leasing and factoring activities;
And the Authority's Board of Directors Decision No. (164) of 2018 regarding the executive rules for corporate governance of companies licensed to conduct leasing and factoring activities;
And after approval by the Authority's Board of Directors in its meeting held on 3/6/2020;
Decided
(Article One)
The texts of clauses (2-1) and (2-3-1) of the Authority's Board of Directors Decision No. (164) of 2018 regarding the executive rules for corporate governance of companies licensed to conduct leasing and factoring activities are hereby replaced with the following texts:
2-2 Audit Committee
The Board of Directors is required to form an audit committee consisting of an odd number of members, not less than three, drawn from the non-executive members of the Board of Directors. The committee may include members from outside the company, and the majority of its members must be independent, with the committee chair being one of them. In all cases, committee members must be recognized for their competence and expertise in the company's field of activity, and at least one member must have experience in financial and accounting affairs. The committee may also invite the external auditor or any other suitable person to attend its meetings, even if they are not members.
2-3 Risk Committee
The Board of Directors is required to form a risk committee consisting of an odd number of members, not less than three, with the majority drawn from non-executive board members and independent members. The committee may include members from outside the company, and the committee chair must be a non-executive or independent member.
(Article Two)
Companies conducting leasing and factoring activities that are in operation on the effective date of this decision must align their arrangements with its provisions within a maximum period of December 31, 2020.
(Article Three)
This decision shall be published in the Egyptian Gazette and on the Authority's website, and shall take effect from the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors
Dr. Mohamed Omran
Smart Village, Building No. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax: (00202) 35370036
www.FRA.gov.eg
Smart Village, Building No. B-136, Giza, Egypt
Postal Code: 12577
Tel.: +202 35345350 - Fax: +202 35370036
info@fra.gov.eg