Chairman of the Board

Decision No. 96 of 2014 of the Board of Directors of the Egyptian Financial Regulatory Authority dated 22/6/2014

Regarding the Rules and Criteria for Candidacy for the Chairmanship or Membership of the Board of Directors of the Central Depository, Clearing and Securities Registration Company from Non-Representatives of Securities Exchanges

Board of Directors of the Egyptian Financial Regulatory Authority

Having reviewed Law No. 159 of 1981 on Joint Stock Companies, Limited Liability Companies and Partnerships Limited by Shares and its Executive Regulations;

And the Capital Market Law No. 95 of 1997 and its Executive Regulations and decisions issued pursuant thereto;

And the Central Depository, Clearing and Securities Registration Law No. 93 of 2000 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 organizing the management and financial affairs of the Egyptian Exchange;

And Presidential Decree No. 192 of 2009 issuing the Basic Statute of the Egyptian Financial Regulatory Authority,

And Decision No. 33 of 2012 of the Authority's Board of Directors;

And the approval by the Authority's Board of Directors in its meeting No. 12 held on 22/6/2014

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(Article One)

Without prejudice to the Authority's Board of Directors' authority to approve candidates for the chairmanship and membership of the Board of Directors of the Central Depository, Clearing and Securities Registration Company in accordance with Article 46 of the Central Depository, Clearing and Securities Registration Law, the following rules and criteria shall apply regarding candidacy for the chairmanship or membership of the Board of Directors of the Central Depository, Clearing and Securities Registration Company, or those authorized to perform the duties of its Managing Director.

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(Article Two)

Candidacy for the chairmanship or membership of the Board of Directors of the Central Depository, Clearing and Securities Registration Company shall be open to natural persons who meet at least the following conditions:

• a- Of good repute and character, and not previously convicted of a criminal penalty or a penalty restricting liberty for an offense involving honor or trust, or for any of the crimes stipulated in the aforementioned Law on Joint Stock Companies, Limited Liability Companies and Partnerships Limited by Shares, or Commercial Law No. 17 of 1999, or the aforementioned Capital Market Law, or the aforementioned Central Depository, Clearing and Securities Registration Law, unless his reputation has been restored.

• b- Holding a suitable higher qualification.

• c- Having at least seven years of experience in the capital market or in one of the legal, accounting, financial, or technical fields related to the company's activities and operations.

• d- Meeting the legal requirements for membership on the board of directors of companies operating in the securities field.

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(Article Three)

The following conditions shall apply to the shareholder members of the Central Depository, Clearing and Securities Registration Company who are entitled to nominate representatives of the shareholder groups to the company's board of directors:

• a- Having practiced the licensed activity for at least three years.

• b- Not having been previously suspended from practicing the activity, unless two years have elapsed from the date of expiration of the suspension period.

• c- Not having been previously subject to any legally prescribed measures, unless two years have elapsed from the date of expiration of the measure, except for the measure stipulated in item (a) of Article 31 of the Capital Market Law No. 95 of 1997.

The date of closing the submission of candidacy applications shall be considered for calculating the period stipulated in this Decision.

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(Article Four)

The following conditions shall apply to those nominated as expert members from among non-representatives of the shareholder groups:

• a- The conditions stipulated in Article Two of this Decision.

• b- The candidate representing the shareholder group must be a partner operating in securities brokerage, and must serve as Chairman of the Board of Directors or Managing Director of any such company, or hold a position equivalent to or higher than General Manager for candidates representing custodians.

• c- Not having a conflict of interest with the duties of board membership, or having any that could affect his neutrality during deliberations or decision-making.

• d- Not being a shareholder in the capital of any of the shareholder members of the Central Depository, Clearing and Securities Registration Company by more than 0.5%, or holding a position in any of them or in their operating or affiliated companies, in accordance with the concept of the related group stipulated in Law No. 93 of 2000 and its Executive Regulations.

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(Article Five)

The following conditions shall apply to those nominated as expert members from among non-representatives of the shareholder groups of the Central Depository, Clearing and Securities Registration Company who are eligible to assume the position of Chairman of the Board or Managing Director:

• a- The conditions stipulated in Article Four of this Decision, except for item (d).

• b- Not having an employment or contractual relationship with any of the shareholder member companies of the Central Depository, Clearing and Securities Registration Company, or having served on the board of directors of any of the company's shareholder members or its holding, subsidiary, or sister companies within the full year preceding his candidacy, nor being the spouse or second-degree relative of any of them.

• c- Having at least fifteen years of experience in capital markets, financial services, banking, or information systems, including at least three years in a leadership position.

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(Article Six)

The Central Depository, Clearing and Securities Registration Company shall prepare four lists of candidates and submit them to its Board of Directors for approval, as follows:

1. List of candidates for the company's chairmanship.
2. List of candidates for representatives of the shareholder groups of the company.
3. List of expert candidates eligible to assume the position of Managing Director.
4. List of expert candidates eligible to assume the position of Managing Director.

The following shall be required for the validity of voting at the General Assembly meeting:

• Selecting one candidate from the list referred to in item (1).
• Selecting the required number of candidates from the list referred to in item (2) as stipulated in the Basic Statute of the Central Depository, Clearing and Securities Registration Company.
• Selecting at least one candidate from the list referred to in item (3), with the remaining expert members selected according to the majority of votes received by candidates in either of the lists referred to in items (3) and (4).

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(Article Seven)

The Managing Director of the company must devote himself exclusively to management affairs, and the same ruling shall apply to the Chairman of the Board of Directors when performing executive duties.

In all cases, the Chairman of the Board, the Managing Director, the expert members, and the shareholder members of the Central Depository, Clearing and Securities Registration Company and their representative on its board of directors shall undertake not to combine the chairmanship or membership of the company's board of directors with membership on the board of directors of the Egyptian Exchange or membership on the board of directors of the Securities Dealing Insurance Fund for non-commercial risks arising from the activities of companies operating in securities.

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(Article Eight)

Decision No. 33 of 2012 of the Authority's Board of Directors is hereby repealed.

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(Article Nine)

This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall take effect from the date of its publication in the Egyptian Gazette.

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Chairman of the Board
Sherif Samy

46076

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Egyptian Financial Regulatory Authority
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Giza Governorate, Postal Code: 12577

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Email: info@efsa.gov.eg
Website: www.efsa.gov.eg