Decision of the Minister of Investment and International Cooperation No. 95 of 2017 on Rules for Electing Egyptian Exchange Board Members from Securities and Listed Companies

Egyptian Official Gazette - Issue No. 113 (Continued) on 17 May 2017

Ministry of Investment and International Cooperation Decision No. 95 of 2017 Concerning the Rules and Procedures Governing the Election of Members of the Board of Directors of the Egyptian Exchange from Representatives of Companies Operating in the Securities Sector and Companies Listed on the Egyptian Exchange

Minister of Investment and International Cooperation:

Having reviewed the Constitution; Having reviewed the Capital Market Law issued by Law No. 95 of 1992; Having reviewed Law No. 10 of 2009 on Regulating Supervision over Non-Banking Financial Markets and Instruments; Having reviewed Presidential Decision No. 191 of 2009 on the Rules Governing the Management of the Egyptian Exchange and Its Financial Affairs; Having reviewed Presidential Decision No. 387 of 2015 Designating the Prime Minister as the Minister Competent to Apply the Provisions of Law No. 10 of 2009; Having reviewed Presidential Decision No. 92 of 2017 Amending the Composition of the Cabinet of Ministers; Having reviewed Prime Ministerial Decision No. 2573 of 2015 Delegating to the Minister of Investment the Authority to Exercise the Competencies of the Minister Competent to Apply the Provisions of Law No. 10 of 2009; Having reviewed Minister of Investment Decision No. 34 of 2013 Concerning the Rules and Procedures Governing the Election of Members of the Board of Directors of the Egyptian Exchange from Representatives of Companies Operating in the Securities Sector and Companies Listed with Securities on the Egyptian Exchange; Having reviewed the Rules for Listing and Delisting Securities on the Egyptian Exchange issued by the General Authority for Financial Supervision Board of Directors Decision No. 11 of 2014 and its amendments; Having reviewed the proposal of the Chairman of the Board of Directors of the Egyptian Exchange; Having reviewed the opinion of the General Authority for Financial Supervision;

Decided:

(Article 1) The nomination and selection of members of the Board of Directors of the Egyptian Exchange from representatives of companies operating in the securities sector, and from representatives of companies listed on it, shall be conducted through direct elections, in accordance with the rules and procedures stipulated in this Decision. It shall be ensured that no affiliated group may comprise more than one member of the Board of Directors – with "affiliated group" carrying the meaning specified in Article (37) of the Deposit and Central Clearing and Registration Law issued by Law No. 93 of 2000 – nor may membership on the Board of Directors of the Egyptian Exchange be combined with membership on the Board of Directors of Egypt for Clearing, Deposit and Registration Company or membership on the Board of Directors of the Securities Dealing Non-Commercial Risks Insurance Fund (excluding public juridical persons).

(Article 2) Companies operating in the securities sector shall be represented by three members on the Board of Directors of the Egyptian Exchange, at least one of whom must be from brokerage companies and at least one from other securities companies. The nomination and voting for selecting representatives of these companies shall be conducted in a single ballot.

(Article 3) The right to nominate candidates for the election of representatives of companies operating in the securities sector to the Board of Directors of the Egyptian Exchange is restricted to those nominated by companies meeting the following conditions: First: Having practiced the designated activity for at least the preceding two years. Second: The company must not have been suspended from practicing its activity pursuant to Article (30) of the Capital Market Law, unless three years have elapsed since the expiration of the suspension period.

(Article 4) Companies listed on the Egyptian Exchange shall be represented by two members on its Board of Directors, one of whom shall represent medium and small enterprises listed on the Exchange, in accordance with the definition of medium and small enterprises provided in the Presidential Decision Governing the Management of the Egyptian Exchange and Its Financial Affairs. The nomination and voting for selecting representatives of each group shall be conducted in separate ballots.

(Article 5) The right to nominate candidates for the election of representatives of companies listed on the Egyptian Exchange is restricted to those nominated by companies meeting the following conditions: First: They must not be securities companies. Second: Their shares must have been listed on the Egyptian Exchange for at least two years, or at least six months for medium and small enterprises, and they must not be companies with preliminary listing status. Third: They must be active companies according to the standards approved by the General Authority for Financial Supervision.

(Article 6) Without prejudice to the provisions governing the conflict of interest principle and the Code of Ethics for Members of the Board of Directors of the Egyptian Exchange, the right to represent companies on the Board of Directors of the Egyptian Exchange is restricted to the chairpersons of the boards of directors of those companies or their board members who are authorized delegates, provided that: First: They have a good reputation and clean record, have not been convicted by a final judgment of a crime involving moral turpitude unless their reputation has been restored, and have not been subject to any judicial rulings or requests for criminal prosecution by the General Authority for Financial Supervision resulting from violations concerning market manipulation, unless they have settled the matter and a full year has elapsed since the settlement. Second: They hold a higher education degree. Third: They have practiced work as a board chairman or authorized delegate for a securities company or a listed company during the year preceding the closing date for nomination applications.

(Article 7) The opening and closing of the nomination period for membership on the Board of Directors of the Egyptian Exchange shall be announced at a prominent location in the main file of the Egyptian Exchange, as well as on the Exchange's electronic website and notice board, and published in two widely circulated daily morning newspapers. This shall be done at least one week prior to the opening of the nomination period, with the closing date to be set after five working days.

(Article 8) Nomination applications shall be submitted on the form prepared for this purpose at the Egyptian Exchange, signed by the company's board chairman and stamped with the company seal, ensuring all data is complete and accompanied by supporting documents. The Egyptian Exchange administration shall announce the nomination form and required supporting documents at a prominent location at its headquarters, as well as on its electronic website and notice board.

(Article 9) Nomination applications shall be received by the Nomination Applications Review Committee, constituted by the chairmanship of a Council of State advisor, a representative of the Ministry of Investment, a representative of the General Authority for Financial Supervision, and one of the principal office holders at the Egyptian Exchange. The Committee shall review nomination applications, verify compliance with legally mandated conditions, and exclude any applicant failing to meet them. The Egyptian Exchange administration shall publish the list of candidates at a prominent location at its headquarters, as well as on its electronic website and notice board. Interested parties shall be notified thereof within five days from the date of closing the nomination application period.

(Article 10) Each company operating in the securities sector and each company listed with securities on the Exchange shall have the right to object to any names appearing on the candidate list in its respective ballot. Any applicant whose nomination was excluded shall also have the right to object to their exclusion.

(Article 11) Each company shall have one voting vote, and a company shall not be permitted to represent another company during the election.

(Article 12) The counting of voters' ballots and the announcement of election results shall be conducted by a committee constituted by the chairmanship of a Council of State advisor, a representative of the Ministry of Investment, a representative of the General Authority for Financial Supervision, and one of the principal office holders at the Egyptian Exchange. The Egyptian Exchange administration shall announce the results at a prominent location at its headquarters, as well as on its electronic website and notice board.

(Article 13) The committee specified in Article Ten shall have jurisdiction to rule on any objections to the election results or its procedures, or to the objection review committee procedures stipulated in Article Ten. Objections must be submitted within three working days from the date of result announcement, and the committee shall rule on them within the following five working days. Its decision shall be final. The decision declaring the results shall not take effect until the appeal periods have expired or a ruling has been issued thereon.

(Article 14) In the event of a vacancy on the Board of Directors due to the revocation of a company's license, loss of membership, delisting from the Egyptian Exchange, termination of the relationship between the company and its representative, change in the company's status under which it was nominated, or expiration of any condition stipulated in the first paragraph of Article Six of this Decision, the next member in the electoral group of the vacant seat shall be replaced, ranked by the number of votes received in the last election of the Board. The term of office for the new board member shall be the remainder of the predecessor's term.

(Article 15) The provisions of Minister of Investment Decision No. 34 of 2013 are hereby repealed.

(Article 16) This Decision shall be published in the Egyptian Official Gazette and shall take effect from the day following its publication. Issued on 14/5/2017 Minister of Investment and International Cooperation Prof. Dr. Sahar Nasr

Printed by the General Authority for State Printing Affairs Chairman of the Board of Directors Eng. Emad Fawzy Farag Mohamed Deposit Number at the National Library 268 of 2017 1318 - 2017/5/18 - 2016/257.2