Regulatory Alerts2021-01-01
Board Resolution No. 105 of 2021 Regarding the Regulation of Guarantees Provided by Clients of Non-Banking Financial Entities
The General Authority for Financial Supervision issued Board Resolution No. 105 of 2021 to regulate guarantee management by licensed non-banking financial entities. The resolution mandates complete data in client contracts, prohibits accepting safekeeping receipts or blank-signed documents as financing security, and requires prudent handling and prompt return of guarantees upon transaction closure. Compliance with these provisions is explicitly established as a mandatory condition for the continued validity of operating licenses.
The Egyptian Gazette - No. 157 dated July 14, 2021 27
General Authority for Financial Supervision Board Resolution No. 105 of 2021 dated June 20, 2021 regarding the regulation of guarantees provided by clients of entities operating in non-banking financial activities
The Board of Directors of the General Authority for Financial Supervision Having reviewed Law No. 10 of 2009 regulating supervision over non-banking financial markets and instruments; and Resolution No. 53 of 2018 of the Board regarding licensing conditions, continuity, and share ownership rules for companies operating in non-banking financial activities; and Resolution No. 31 of 2015 regarding rules and standards for microfinance activities by associations and civil society organizations; and Resolution No. 186 of 2020 regarding rules and standards for medium and small enterprise financing activities by associations and civil society organizations licensed to conduct both medium/small enterprise financing and microfinance; and after the approval of the Board at its meeting held on June 20, 2021;
HAS RESOLVED: ( Article One ) Entities licensed by the Authority to conduct non-banking financial activities shall complete all data contained in the contracts concluded between them and their clients, along with attachments and related guarantees, without leaving any of this data incomplete.
The Egyptian Gazette - No. 157 dated July 14, 2021 28
( Article Two ) The entities referred to in Article One of this Resolution are obligated to provide financing to their clients for the designated purpose, in accordance with the laws governing those activities according to each entity's type. They are also obligated to observe prescribed legal rules when obtaining guarantees from their clients, and are prohibited from obtaining safekeeping receipts from clients or guarantors, or obtaining any other papers signed in blank as security for financing. They must exercise the care of a prudent person in maintaining guarantees provided by their clients, and deliver these guarantees to clients immediately upon the conclusion of related transactions.
( Article Three ) Compliance with the provisions of this Resolution constitutes one of the conditions for the continuity of the license to conduct the activity.
( Article Four ) This Resolution shall be published in The Egyptian Gazette and on the Authority's electronic website, and shall take effect from the day following its publication date in The Egyptian Gazette.
Chairman of the Board of Directors Dr. Mohamed Omran