Regulatory Alerts2018-01-01
Decision of the Board of Directors of the Financial Regulatory Authority No. (100) of 2018
The Financial Regulatory Authority (FRA) issued Decision No. (100) of 2018 to amend Decision No. (53) of 2018 concerning licensing and share ownership rules for non-banking financial companies. The amendment mandates that such companies must incorporate cumulative voting into their articles of association and board elections to guarantee proportional representation, and requires the Authority to consider this voting mechanism when approving share ownership transfers. The decision becomes effective the day following its publication in the Egyptian Gazette and on the official websites of the FRA and the Egyptian Exchange.
Decision of the Board of Directors of the Financial Regulatory Authority No. (100) of 2018 dated 30/9/2018
Amending Decision of the Board of Directors of the Authority No. (53) of 2018
Regarding the conditions for granting and maintaining licenses and the rules for share ownership of companies operating in non-banking financial activities
Board of Directors of the Financial Regulatory Authority
Having reviewed Law No. (54) of 1970 issuing the Law on Private Insurance Funds and its Executive Regulations; And Law No. (10) of 1981 concerning supervision and control of insurance in Egypt and its Executive Regulations; And the Law on Joint Stock Companies, Commandite Companies, Limited Liability Companies, and Single-Person Companies issued by Law No. (109) of 1981 and its Executive Regulations; And the Capital Market Law issued by Law No. (90) of 1992 and its Executive Regulations; And Law No. (93) of 2000 issuing the Law on Central Deposit and Registration of Securities and its Executive Regulations; And the Real Estate Financing Law issued by Law No. (148) of 2001 and its Executive Regulations; And the Anti-Money Laundering Law issued by Law No. (80) of 2002 and its Executive Regulations; And Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; And Law No. (141) of 2014 regulating the microfinance activity; And Law No. (176) of 2018 issuing the Law regulating the activity of financial leasing and factoring; And Presidential Decision No. (192) of 2009 issuing the Basic Statute of the Financial Regulatory Authority; And Decision of the Board of Directors of the Authority No. (53) of 2018 regarding the conditions for granting and maintaining licenses and the rules for share ownership of companies operating in non-banking financial activities; And the approval of the Board of Directors of the Authority in its session held on 30/9/2018.
Decided
(Article One) The following two paragraphs shall replace paragraphs (4, 5) of Article Four, and paragraph (5) of Article Eight of the aforementioned Decision of the Board of Directors of the Authority No. (53) of 2018, with the paragraphs of Article Four renumbered:
(Article Four) Without prejudice to the establishment or licensing requirements stipulated under the legislation governing each activity, companies seeking preliminary approval for establishment or a license to conduct any non-banking financial activity must comply with the following:
- The company's articles of association must stipulate the mandatory use of cumulative voting (1) for the election of board members, to the extent possible, to ensure proportional representation on the board.
(Article Eight) The following considerations shall be taken into account when ruling on applications for the Authority's approval of share ownership:
- Compliance with the cumulative voting system in the election of the company's board members, to the extent possible, to ensure proportional representation on the board.
(Article Two) This Decision shall be published in the Egyptian Gazette and on the websites of the Authority and the Egyptian Exchange, and shall take effect as of the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors Mohamed Omran
(1) Cumulative voting refers to granting each shareholder a number of votes equal to the number of shares they own to vote for the election of the company's board members, and the shareholder may allocate all their votes to one or more candidates, to the extent possible, to ensure proportional representation on the board.
Financial Regulatory Authority 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 35370036 - Fax: +202 35345350 info@fra.gov.eg