Board of Directors Secretariat

Decision of the Board of Directors of the Authority

No. (107) of 2016 dated 25/9/2016

Regarding Corporate Governance Rules for Securities Market Companies

The Board of Directors of the General Authority for Financial Supervision

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

And Law No. (95) of 1992 on the Capital Market and the decisions issued to implement it;

And Law No. (93) of 2000 on the Central Depository and Registration of Securities and its Executive Regulations;

And Law No. (10) of 2009 on regulating supervision over non-banking financial markets and instruments;

And Law No. (80) of 2002 on Combating Money Laundering and its Executive Regulations;

And the Statute of the General Authority for Financial Supervision issued by Presidential Decree No. (192) of 2009;

And Decision of the Board of Directors of the Authority No. (11) of 2014 regarding the rules for listing and delisting securities on the Egyptian Exchange and its amendments;

And Decision of the Board of Directors of the Authority No. (84) of 2016 issuing the Egyptian Corporate Governance Code;

And the approval of the Board of Directors of the Authority in its meeting held on 25/9/2016;

---

Decided:

(Article One)

Securities market companies subject to the provisions of Law No. (95) of 1992 and Law No. (93) of 2000 shall comply with the attached corporate governance rules as a requirement for the continued validity of their operating license, without prejudice to the listing and delisting rules of the Egyptian Exchange for securities market companies whose securities are listed on the Egyptian Exchange.

Companies not meeting the requirements of clauses (2-1-2), the last paragraph of (6-1-1), and (7-1-1) - regarding the reappointment of the external auditor - shall be granted a grace period until April 30, 2017, to regularize their status regarding these clauses.

---

(Article Two)

Decision No. (11) of 2007 of the Board of Directors of the General Authority for the Capital Market and Decision No. (62) of 2007 of the Chairman of the General Authority for the Capital Market are hereby repealed.

(Article Three)

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

---

Chairman of the Board
Sherif Samy

---

General Authority for Financial Supervision
Office of the Chairman
47076

---

Corporate Governance Rules for Securities Market Companies

19 September 2016

General Authority for Financial Supervision
Office of the Chairman
47076

---

Corporate Governance Rules for Securities Market Companies

Page Number	Content
3	General Provisions (1)
4	Board of Directors (2)
8	Committees Established by the Board of Directors (3)
11	Annual Report (4)
12	General Assembly Meetings (5)
13	Internal Control System and Combating Money Laundering (6)
15	External Auditor (7)
17	Insider Dealing and Confidentiality (8)
17	Treasury Shares (9)
17	Measures and Sanctions (10)

General Authority for Financial Supervision
Office of the Chairman
47076

---

(1) General Provisions

1-1 Scope of Application:

The governance rules aim to entrench governance principles in securities market entities, mitigate associated risks, and protect shareholders and counterparties dealing with the covered companies, while ensuring proportionality to each company's activity and operational scale.

These rules apply to all securities market companies subject to the provisions of Capital Market Law No. 95 of 1992 and the Central Depository and Registration of Securities Law No. 93 of 2000.

Securities market companies whose securities are listed on the Egyptian Exchange must also comply with the Egyptian Exchange's listing and delisting rules, in addition to the provisions of these rules.

1-2 Commitment to Transparency and Disclosure

1-2-1 The Company shall disclose to the Authority any material events affecting its operations or counterparties immediately upon occurrence, including in particular:

a. The company's inability or cessation to meet its debts or financial obligations to third parties.

b. Changes leading to non-compliance with any financial standards the company is required to adhere to.

c. The filing of a bankruptcy petition or administrative seizure against the company.

d. Any circumstances that may weaken the company's ability to protect its clients' rights.

1-2-2 The Company shall prepare annual and quarterly financial statements in accordance with Egyptian Accounting Standards. The external auditor must be registered with the Authority and shall comply with Egyptian Auditing Standards when reviewing financial statements, performing duties, and preparing reports.

---

2-1 The Company shall submit the external auditor's report and annual financial statements, along with the Board of Directors' report, to the Authority in a timely manner, no less than two weeks prior to their presentation to the General Assembly, and shall present them to the General Assembly within a period not exceeding 90 days from the end of the financial year.

Without prejudice to the Authority's financial solvency rules and standards, the Company shall submit the external auditor's limited review report and quarterly financial statements to the Authority within a maximum of 45 days from the end of the period.

2-2 The Company shall submit to the Authority its shareholder structure (those holding 5% or more of its shares), its Board of Directors' composition, and its employee structure (key position holders), along with a recent official extract from the Commercial Register, during January of each year. It shall notify the Authority of any amendments to these data within five working days of their occurrence. This is without prejudice to the requirement to obtain prior approval from the Authority regarding the holding of certain positions or the transfer of ownership of 5% or more of its capital.

---

(2) Board of Directors

1-2 Composition of the Board of Directors

1-2-1 The company's articles of association shall specify the number of Board of Directors members. The Board shall consist of a suitable number of members enabling it to perform its functions and duties, including forming committees.

2-1-2 Without prejudice to investment fund companies under Article (35) of Capital Market Law No. 95 of 1992, the majority of Board of Directors members shall be non-executive members, with half of the non-executive members being independent.

The independent member refers to an experienced member appointed to the Board who is non-executive and not a shareholder of the company, whose relationship with the company is limited to his membership on its Board. This member does not represent the company's owners, nor does he receive a salary, commissions, or fees from it, except for what he receives for his Board membership. He also has no special interest in the company, nor is he related by blood or marriage to any of its shareholders, Board members, executive management, employees, or their families, and he

---

is also not among the senior employees or advisors of the company, nor among its accountants during the three years preceding his appointment to the Board.

In all cases, when selecting independent members, it must be ensured that the member possesses appropriate expertise, can dedicate sufficient time and attention to the company, and has no conflict with other interests.

A member shall lose the status of independent member one year after continuous membership on the Board. He shall not be reappointed as an independent member until three years have passed since the end of his Board membership.

3-2-2 The positions of Chairman of the Board and Managing Director or Chief Executive Officer shall not be combined if there are justifications for doing so. The Company shall disclose such justifications to the Authority.

4-2-2 A Board of Directors member shall not hold membership in more than one joint stock company conducting the same activity simultaneously, unless it is a subsidiary or sister company.

5-2-2 Upon the termination of a Board of Directors member's tenure or the existence of a reason preventing him from performing his duties for an extended period, the Company shall notify the Authority thereof within a period not exceeding five working days, stating the reasons for the termination of membership.

2-2 Role and Duties of the Board of Directors

1-2-2 The Company's Board of Directors shall define its strategic objectives and approve its policies, plans, budget, organizational structure, and regulations. It is responsible for monitoring executive management performance, ensuring the effectiveness of the internal control system and risk management, verifying compliance with relevant laws, executive regulations, and regulatory decisions, and determining the optimal approach to applying its governance rules.

2-2-2 The Board of Directors shall approve quarterly and annual financial statements and the annual Board of Directors' report, and shall review the audit committee's reports and recommendations.

---

3-2-2 The Company's Board of Directors shall review the annual report prepared by the Money Laundering and Terrorist Financing Compliance Officer, discuss its contents, and take necessary measures to ensure compliance with all rules governing the combating of money laundering and terrorist financing.

4-2-2 Board of Directors members shall dedicate sufficient time to fulfilling their responsibilities, including prior preparation for Board of Directors and standing and ad hoc committee meetings, and attending such meetings.

5-2-2 When exercising their competencies, Company Board of Directors members shall consider the interests of the Company and its shareholders, and comply with legal provisions and obligations stipulated in these rules.

6-2-2 The Company's Board of Directors shall not exceed the limits of competencies stipulated in the Company's articles of association.

In all cases, the Board shall not undertake any actions outside the scope of the purpose for which the Company was established.

3-2 Board of Directors Working System

1-3-2 The Company's Board of Directors shall meet at least twice every four months upon invitation by the Chairman of the Board.

2-3-2 The Chairman of the Board shall send the agenda, accompanied by documents and memoranda, to members sufficiently in advance of the meeting. The Board of Directors shall approve the agenda upon convening.

In case any member objects to the agenda, this shall be recorded in the meeting minutes along with the reasons for the objection.

3-3-2 A minutes document shall be prepared for each Board of Directors meeting, containing the topics presented, a summary of discussions and decisions made thereon, including voting procedures. These minutes and decisions shall be preserved in a manner facilitating future reference.

4-3-2 The Company's Board of Directors shall establish a system for preserving and documenting the decisions taken and their contents.

General Authority for Financial Supervision
Office of the Chairman
47076