Regulatory Alerts2018-01-01
Decision of the Board of Directors of the General Authority for Financial Regulation No. 85 of 2018 Regarding Board of Directors Membership Conditions for Supervised Companies (as amended)
The General Authority for Financial Regulation (GAFR) issued Decision No. 85 of 2018 to mandate strict eligibility criteria for board of directors members at companies under its supervision. The regulation disqualifies individuals with felony convictions, misdemeanor crimes involving moral turpitude or breach of trust, or repeated serious regulatory violations within the preceding three to five years from board membership, unless their reputation has been legally restored. Supervised entities must immediately disclose any disqualifying conditions and replace non-compliant directors within a regulatory timeframe, with the decision becoming effective the day after its official publication.
Decision of the Board of Directors of the General Authority for Financial Regulation No. (85) of 2018 dated 2018/5/28 regarding the conditions to be met for membership in the board of directors of companies subject to the Authority's supervision and according to the last amendment dated 2019/1/20
Board of Directors of the General Authority for Financial Regulation, Having reviewed Law No. (10) of 1981 concerning supervision and regulation of insurance in Egypt and its Executive Regulations; Law No. (159) of 1981 concerning joint stock companies, commandite companies, limited liability companies, and single-shareholder companies, and its Executive Regulations; Law No. (10) of 1981 concerning supervision and regulation of insurance in Egypt, its Executive Regulations, and their amendments; Capital Market Law No. (95) of 1992, its amendment, Executive Regulations, and implementing decisions; Financial Leasing Law No. (95) of 1995 and its Executive Regulations; Real Estate Financing Law No. (148) of 2001 and its Executive Regulations; Anti-Money Laundering Law No. (80) of 2002 and its Executive Regulations; Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; Law No. (141) of 2014 regulating microfinance activities; Presidential Decree No. (191) of 2009 organizing the Egyptian Exchange and its financial affairs; The Basic Statute of the General Authority for Financial Regulation issued by Presidential Decree No. (192) of 2009; Board of Directors Decision No. (72) of 2013 concerning regulatory and supervisory controls for factoring activities and its amendment; Approval of the Authority's Board of Directors in its meeting held on 28/5/2018.
This decision was amended by the Authority's Board of Directors Decision No. 10 dated 2019/1/20.
DECIDES
(Article 1) No person shall be eligible for membership in the board of directors of any company subject to the supervision and regulation of the Authority if, within the five years preceding or concurrent with their membership, any judgment has been issued against them imposing a felony penalty, or a misdemeanor penalty for a crime involving moral turpitude or breach of trust, or any of the crimes stipulated in the laws governing non-banking financial activities – unless their reputation has been restored – or they have lost the good repute condition according to the prescribed legal controls, or if it is repeatedly proven that any of them is accused of committing serious violations of the laws governing their activity within the last three years without a verdict of acquittal. The company undertakes to disclose to the Authority upon the occurrence of any of the cases stipulated in the preceding paragraph and replace the person meeting such condition within the timeframe specified by the Authority with another person who meets the prescribed conditions.
(Article 2) This decision shall be published in the Egyptian Gazette and on the electronic websites of the Authority and the Egyptian Exchange, and shall take effect from the day following its publication in the Egyptian Gazette.
The phrase at the end of the first paragraph of Article 1 ("or the penalty was served and three years have passed since its execution") was replaced by the phrase ("or they have lost the good repute condition according to the prescribed legal controls") pursuant to the Authority's Board of Directors Decision No. 10 dated 2019/1/20.