Updated Executive Regulation of the Law Regulating Movable Collateral

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 1 Minister of Investment Decision No. 108 of 2016 dated 2016/12/15 Regarding the issuance of the Executive Regulation of the Law Regulating Movable Collateral issued by Law No. 115 of 2015

Article 1 Issuance The provisions of the Executive Regulation of the Law Regulating Movable Collateral issued by Law No. 115 of 2015 attached hereto shall be applied.

Article 2 Publication This Decision and the attached Regulation shall be published in the Egyptian Gazette, and shall be applied from the day following the date of publication.

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Article 1 Chapter One Definitions Without prejudice to the definitions set forth in the Law Regulating Movable Collateral issued by Law No. 115 of 2015 referred to above, the following words and phrases shall have the meanings indicated alongside each of them when applying the provisions of this Regulation and the regulatory decisions issued in implementation of the aforementioned Law, unless expressly stated otherwise:

• The Law: The Law Regulating Movable Collateral issued by Law No. 115 of 2015.
• The Competent Minister: The Minister competent for applying the provisions of Law No. 10 of 2009.
• The Authority: The General Authority for Financial Supervision, as the competent administrative authority for applying the Law and this Regulation.
• Collateral Movable: Any existing or future tangible movable property, or existing intangible movable property owned by the debtor, the grantor, or the creditor, serving as security for an obligation, debt, financing, or credit facility. The creditor must ensure the following conditions are met in the collateral movable when registering the security right in the Register:
  1. It must be among the movables legally permitted to be traded and sold in Egypt.
  2. It must be in the possession of the debtor or the grantor.
  3. It must be among those that can be executed upon independently of others, taking into account the special provisions regarding generic movables and dedicated real estate stipulated in the Law and this Regulation.
• Future Movable: Tangible movable property expected to exist in the future in the ownership of the debtor, grantor, or creditor according to the ordinary course of business. The ordinary course of business refers to situations that, according to the nature of the work or the field in which the collateral movable is used, necessitate the existence and ownership of the movable in the future. This includes, but is not limited to, purchasing, production, importation, and agricultural planting and sowing. Generic Movables: These are movables that one replaces another upon fulfillment, typically valued in transactions by count, measure, volume, or weight, while considering characteristics, type, and place of manufacture or production.
• Components of a Commercial Establishment: A collection of movable assets designated for conducting a specific trade, over which the security right may be registered in whole or in part. It includes commercial goodwill, trade name, trade dress, trademarks, patents, designs, industrial models, literary and artistic property rights, exploitation licenses, goods, furniture, machinery, equipment, and other items necessary for operating the commercial establishment.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 2

• Creditor: The secured party from banks or entities conducting financing activities, and other entities and persons granting financing or credit, including:
  1. Natural persons.
  2. Banks and financing institutions licensed to operate in Egypt.
  3. Companies and entities licensed to conduct financing lease activities in Egypt.
  4. Associations, non-governmental organizations, and companies licensed to conduct micro-financing activities in Egypt.
  5. Entities licensed to conduct activities related to or associated with providing financing or credit, or whose licensed nature of activity requires such.
  6. Legal persons and sole establishments licensed to conduct movable trading activities that may be registered as collateral according to the conditions determined by the Authority.
  7. Legal persons and natural persons granting licenses for the use of intellectual property rights.
• Debtor: The natural or legal person obligated to fulfill a secured obligation or debt.
• Grantor: The owner of the collateral movable, whether the debtor or a third party.
• Entities referred to in Article (13) of the Law: Entities granted by the Law the authority to collect the State's rights or other rights stipulated by law pursuant to provisions or decisions that establish rights on movables.
• Applicant for Registration: The person responsible for registering, amending, cancelling, objecting to, and searching in the Register, either in their own right or on behalf of the registered right holder.
• Registration: The recording of the security right on movable assets in the Register, including registration, amendment, objection, and cancellation.
• Register: The movable collateral registration register established pursuant to the provisions of the Law.
• Operator: The person responsible for maintaining and operating the movable collateral register.
• Security Right: The accessory real right that attaches to the collateral movable pursuant to the security contract concluded between the creditor and the debtor or grantor to secure the fulfillment of an obligation or debt.
• Security Contract: The contract concluded between the creditor and the debtor, or between the creditor, debtor, and grantor, and which establishes the creditor's rights on the collateral movable, guided by the model issued by the Authority that outlines the essential terms and conditions the contract must contain. Amended by Prime Minister's Decision No. 908 of 2020. Text of the Article before amendment: Without prejudice to the definitions set forth in the Law Regulating Movable Collateral issued by Law No. 115 of 2015 referred to above, the following words and phrases shall have the meanings indicated alongside each of them when applying the provisions of this Regulation and the regulatory decisions issued in implementation of the aforementioned Law, unless expressly stated otherwise: The Law: The Law Regulating Movable Collateral issued by Law No. 115 of 2015. The Competent Minister: The Minister competent for applying the provisions of Law No. 10 of 2009. The Authority: The General Authority for Financial Supervision, as the competent administrative authority for applying the Law and this Regulation.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 3 Collateral Movable: Any existing or future tangible movable property, or existing intangible movable property owned by the debtor, grantor, or creditor, serving as security for an obligation, debt, financing, or credit facility. The creditor must ensure the following conditions are met in the collateral movable when registering the security right in the Register:

1. It must be among the movables legally permitted to be traded and sold in Egypt.
2. It must be in the possession of the debtor or the grantor.
3. It must be among those that can be executed upon independently of others, taking into account the special provisions regarding generic movables and dedicated real estate stipulated in the Law and this Regulation. Future Movable: Tangible movable property expected to exist in the future in the ownership of the debtor, grantor, or creditor according to the ordinary course of business. The ordinary course of business refers to situations that, according to the nature of the work or the field in which the collateral movable is used, necessitate the existence and ownership of the movable in the future. This includes, but is not limited to, purchasing, production, importation, and agricultural planting and sowing. Generic Movables: These are movables that one replaces another upon fulfillment, typically valued in transactions by count, measure, volume, or weight, while considering characteristics, type, and place of manufacture or production. Components of a Commercial Establishment: A collection of movable assets designated for conducting a specific trade, over which the security right may be registered in whole or in part. It includes commercial goodwill, trade name, trade dress, trademarks, patents, designs, industrial models, literary and artistic property rights, exploitation licenses, goods, furniture, machinery, equipment, and other items necessary for operating the commercial establishment. Creditor: The secured party from banks or entities conducting financing activities, and other entities and persons granting financing or credit, including:
4. Banks and financing institutions licensed to operate in Egypt.
5. Companies and entities licensed to conduct financing lease activities in Egypt.
6. Associations, non-governmental organizations, and companies licensed to conduct micro-financing activities in Egypt.
7. Entities licensed to conduct activities related to or associated with providing financing or credit, or whose licensed nature of activity requires such.
8. Legal persons and sole establishments licensed to conduct movable trading activities that may be registered as collateral according to the conditions determined by the Authority.
9. Legal persons and natural persons granting licenses for the use of intellectual property rights. Debtor: The natural or legal person obligated to fulfill a secured obligation or debt. Grantor: The owner of the collateral movable, whether the debtor or a third party. Entities referred to in Article (13) of the Law: Entities granted by the Law the authority to collect the State's rights or other rights stipulated by law pursuant to provisions or decisions that establish rights on movables. Applicant for Registration: The person responsible for registering, amending, cancelling, objecting to, and searching in the Register, either in their own right or on behalf of the registered right holder. Registration: The recording of the security right on movable assets in the Register, including registration, amendment, objection, and cancellation. Register: The movable collateral registration register established pursuant to the provisions of the Law. Operator: The person responsible for maintaining and operating the movable collateral register.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 4 Security Right: The accessory real right that attaches to the collateral movable pursuant to the security contract concluded between the creditor and the debtor or grantor to secure the fulfillment of an obligation or debt. Security Contract: The contract concluded between the creditor and the debtor, or between the creditor, debtor, and grantor, and which establishes the creditor's rights on the collateral movable, guided by the model issued by the Authority that outlines the essential terms and conditions the contract must contain. Chapter Two Scope of Application Article 2 The provisions of the Law and this Regulation shall apply to rights secured by movables in the possession of the debtor or grantor, which the parties to the security contract agree to register in accordance with the provisions of this Law and Regulation, provided that the debtor or grantor has legal capacity, and has the right to create a security right on the collateral movable. The domicile or principal place of business of the debtor or grantor, or any branch of either benefiting from the financing, must be located in the Arab Republic of Egypt, including:

1. Rights arising from the sale of movables with deferred transfer of ownership until full payment of the price.
2. Rights arising from the sale of movables subject to repurchase or buy-back upon the debtor's failure to fulfill obligations.
3. Rights arising from the use or licensing of intellectual property rights. The provisions of the Law and this Regulation concerning the enforceability of the security right against third parties, priority, and execution on the collateral movable shall apply to the following rights:
4. The creditor's right in a pledge of debt.
5. The lessor's right under financing or operating lease agreements exceeding six months.
6. The seller's right to a lien on goods.
7. The creditor's right in a pledge of a commercial establishment, provided it is registered in accordance with the Law. Amended by Prime Minister's Decision No. 908 of 2020. Text of the Article before amendment: The provisions of the Law and this Regulation shall apply to rights secured by movables in the possession of the debtor or grantor, which the parties to the security contract agree to register in accordance with the provisions of this Law and Regulation, provided that the domicile or principal place of business of the debtor or grantor, or any branch of either benefiting from the financing, must be located in the Arab Republic of Egypt, including:
8. Rights arising from the sale of movables with deferred transfer of ownership until full payment of the price.
9. Rights arising from the sale of movables subject to repurchase or buy-back upon the debtor's failure to fulfill obligations.
10. Rights arising from the use or licensing of intellectual property rights. The provisions of the Law and this Regulation concerning the enforceability of the security right against third parties, priority, and execution on the collateral movable shall apply to the following rights:
11. The creditor's right in a pledge of debt.
12. The lessor's right under financing or operating lease agreements exceeding six months.
13. The seller's right to a lien on goods.
14. The creditor's right in a pledge of a commercial establishment, provided it is registered in accordance with the Law.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 5 Article 3 A security right may be created on existing or future tangible movables, as well as on existing intangible movables owned by the debtor, grantor, or creditor and located in the possession of the debtor or grantor. A security right shall not be created on the following movables:

1. Movables owned by the State, waqf entities/authorities, foreign embassies, or entities enjoying immunity.
2. Privileges and licenses granted by the State, public authorities, or public legal persons.
3. Movables owned by banks, except those necessary for their operations and for financing their purchase.
4. Movables designated for personal or domestic purposes, except for financing their purchase.
5. Co-owned movables, unless all co-owners agree to create the security right. In this case, the security contract must include the signatures of all co-owners or their legal representatives consenting to the creation of the security right. Article 4 The provisions of the Law and this Regulation shall not apply to the following:
6. Rights arising from the pledge of Egyptian or foreign financial instruments or corresponding deposit certificates, whether deposited in a central depository system or not.
7. Rights arising from future movables, which include all amounts and movables expected to be received by a person in the following cases: (a) Inheritance. (b) Wills. (c) Pensions. (d) Life insurance policies. (e) Compensation pursuant to an agreement or judgment. (f) Alimony pursuant to an agreement or judgment. (g) Wages or salaries, meaning all expected compensation for work, whether fixed or variable, in cash or kind, including commissions, percentages, bonuses regardless of cause or type, in-kind benefits, grants, allowances, and the worker's share of profits and gifts.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 6 Chapter Three Movable Collateral Register First Section Establishment of the Register Article 5 The Authority shall establish a central electronic register for registering security rights on movables. Rights shall be registered in this register, and any amendment, deletion, or cancellation of a registration shall be recorded in accordance with the conditions stipulated in the Law and this Regulation. In all cases, the service shall be provided through the Register's website 24 hours a day, seven days a week, except during maintenance, technical support periods, emergencies, or force majeure events. The Register's operator shall be committed to providing the service to the public to answer inquiries according to the schedules determined by the Authority. Second Section Delegation of Register Establishment and Management to Other Entities Article 6 If the Authority entrusts another entity or specialized company with establishing and operating the Register, the establishment and operation shall remain subject to the supervision and oversight of the Authority. The Authority shall in all cases be the owner of all data and information available in the Register. The entity entrusted by the Authority with establishing and operating the Register must meet at least the following conditions:

1. Possess experience in record-keeping or electronic systems.
2. Have experience in digital applications through technology usage.
3. Have personnel with necessary technological, legal, and administrative expertise to manage and operate the Register and interact with registration applicants.
4. Have data and information security systems in accordance with standards determined by the Authority.
5. Comply with technical specifications for establishing and managing the Register, as well as any updates and developments requested by the Authority within the specified timeframe.
6. Establish a website on the international information network, accessible for viewing registered data, in accordance with specifications and conditions determined by the Authority.
7. Possess sufficient financial solvency to fulfill contractual obligations.
8. Conclude a contract with the Authority governing the rights and obligations of the entity managing the Register. The Authority shall oversee the Register's operations, supervise it, and follow up on, examine, and adjudicate complaints and proposals from Register users. Third Section Purposes and Duties of the Register Article 7 The purpose of the Register is to record/store registered data from creditors or entities referred to in Article (13) of the Law, or those in whose favor judgments have been issued or who are liquidators, concerning rights on movables, and to make it available to the public in accordance with usage rules and search parameters under this Regulation and rules issued by the Authority. The Register and its operator shall, in particular:
9. Allow registration applicants to register notices and submit/search for requests electronically directly via the internet or direct network communication systems.
10. Provide access to Register services and explain reasons for registration rejection.
11. Announce means of obtaining Register services and the days and hours of operation of any Register offices.
12. Record information from registration requests submitted to the Register in the Register's entries, and log the date and time of each entry.
13. Assign a unique registration number for each notice.
14. Index or otherwise organize Register entry information to make it searchable.
15. Preserve the integrity of information in Register entries.
16. Provide the registration applicant with a copy of the registered notice.
17. Remove information from registered notices from Register entries upon expiration of the notice period.
18. Retain information regarding cancelled notices in the Register.
19. Develop public awareness programs, disseminate promotional and explanatory materials, organize training courses, and prepare detailed instructions on completing and submitting registration forms and searching Register entries, to ensure smooth establishment and operation of the Register and encourage its use.
20. Ensure that Register equipment and software specifications minimize the risk of data corruption, technical errors, or security breaches, and commit to keeping backup copies of all Register data in another secure location according to standards set by the Authority. Fourth Section Register Services Article 8 The Register shall provide its services while observing the following conditions:
21. Regularly enable Register users to open an account with the Register to facilitate service utilization and pay any applicable fees.
22. Maintain the security and confidentiality of the Register's database.
23. Allow registration applicants to modify data being registered.
24. Enable obtaining transaction reports allowing applicants to track their registered transactions over a specific period.
25. Enable obtaining copies of registered security rights and search results.
26. Enable obtaining statistical reports regarding Register operations, including data on registration and search volumes, operational costs, or registration/search fees over a specific period, and other data related to Register entries.
27. Enable adding other services for applicants and searchers upon request by the Authority or with its approval.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 8 Fifth Section Evidentiary Value of Register Data Article 9 Data registered in the Register concerning the time and date of registration, authenticated by the Register, shall carry the evidentiary value of official documents. Data and information registered in the Register available on any other website besides the Register's official website shall not carry any evidentiary value. Sixth Section Search Procedures in the Register Article 10 Any person may search through the database rules on the Register's website. Searches may only be conducted by entering one of the following criteria:

1. The unique registration number of the notice.
2. The national ID number of the debtor/grantor if a natural Egyptian person, or passport number and issuing country if a natural non-Egyptian person, or registration number if a legal person, as applicable. Information displayed as a search result shall be limited to:
3. Existence of active notices registered in the Register under a unique registration number or under the debtor/grantor's national ID or registration number, as applicable.
4. The unique registration number of any notice registered in the Register, along with its date and time.
5. The debtor or grantor's national ID/registration number, as applicable, and the name and address of the creditor or registered right holder.
6. Any data registered in the notice, except information used for statistical purposes. Any person conducting a search may obtain a copy of the data registered in the Register, called a "Search Report", issued with a unique registration number, indicating:
7. Time and date of the search.
8. Criterion entered by the searcher.
9. Search result. Search reports are stored in the electronic Register system, and any interested party may, with a court order, obtain certified paper copies of search results, which shall carry evidentiary value regarding the date, time, and content of the searched registration upon authentication by the Register. Seventh Section Obtaining Certified Copies of Registered Data Article 11 Any person may obtain certified copies of data registered in the Register after entering their details on the application form prepared by the Authority and paying the prescribed fee. Applications for certified copies are stored in the electronic Register system. Certified copies issued by the Authority shall carry evidentiary value regarding the date, time, and content of the search result for the certified copy request. Eighth Section User Guide Article 12 The Authority shall adopt a guide containing instructions for using the Register and data required by the Register for statistical purposes.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 9 Chapter Four Rules for Registering Security Rights in the Register First Section General Rules of Registration Article 13 Registration of a security right shall be conducted by the creditor completing the electronic form designated for this purpose, which must include all essential information contained in the security contract, particularly a general or specific description of the collateral movable, identification of the parties to the security contract and their capacities regarding the collateral movable, and the duration of the security. This is subject to the provision of Article (21) of this Regulation. Except for cancellation notices and objections, the debtor/grantor's consent to any registration in the Register must be obtained through signing the security contract or any other document indicating consent. The creditor shall be deemed in violation of the Law and this Regulation if they register any notice without obtaining the prior written consent of the debtor/grantor. As an exception to the preceding paragraph, entities referred to in Article (13) of the Law, those in whose favor judgments have been issued, and liquidators may register notices without obtaining the debtor/grantor's consent. Second Section Registration Data in the Register Article 14 Subject to the provisions of this Regulation, registration in the Register shall be recorded after verifying it contains the following data: (a) Debtor/grantor data: If a natural Egyptian person, enter national ID number; if a natural non-Egyptian person, enter passport number and issuing country; if a legal person, enter registration or registration number according to governing law. In all cases, contact details of the debtor/grantor must be entered. (b) Applicant for registration data: If a creditor, include name, registration number, and contact details; if an entity referred to in Article (13) of the Law, include entity name, legal form, and contact details; if a judgment creditor, if a natural Egyptian person, enter national ID; if a natural non-Egyptian person, enter passport number and issuing country; if a legal person, enter registration number according to governing law. In all cases, contact details must be entered. If a liquidator, enter national ID and contact details. (c) Description of the movable subject to registration, which may be general or specific as long as it identifies the item. If the collateral movable is items designated for personal or domestic use, the description must be specific. If the collateral movable is dedicated real estate, data related to the dedicated property must be entered as recorded in the real estate registration records. (d) Duration of the notice. (e) Value of the obligation secured on the collateral movable at the time of registration. (f) Other data requested by the Register for statistical purposes.

Updated Executive Regulation of the Law Regulating Movable Collateral General Authority for Financial Supervision 10 Third Section Conditions for Acceptance of Registration in the Register Article 15 No registration in the Register shall be accepted, including notices from entities referred to in Article (13), judgment creditors, and liquidators, unless it meets the conditions, data, and procedures specified in the Law and this Regulation according to the form issued by the Authority. Upon fulfilling the required data in the Register, the registration process shall be accepted, and an electronic confirmation of registration shall be issued containing the registration date, time, registration number, and all information included in the registration process. The registration applicant may print this confirmation for use in proving registration. The electronic system shall issue a sequential number upon registering each notice, to be used later to verify the notice number when entered in subsequent notices related to that notice. The Register shall determine the sufficiency of information provided for registration according to its electronic operating program. If insufficient, an electronic message shall appear specifying the reasons for rejection and what is required to complete it. The notice shall be deemed effective upon acceptance of the registration process and the appearance of the following information in the Register:

1. Date and time of registration.
2. Unique registration number issued by the Register for each notice.
3. Data registered in the notice, except data used for statistical purposes. Without prejudice to the evidentiary value of the registration date, acceptance of registration does not constitute evidence of legal sufficiency or accuracy of the included information. The court may rule that the notice is not effective if there is an error in the debtor's data or collateral movable data that prevents the notice from appearing during a search. The effect of an error in entering collateral movable data shall be limited to the effectiveness of the notice regarding that movable. The effect of an error in debtor data shall be limited to the effectiveness of the notice regarding that debtor. Fourth Section Liability for Registered Data Article 16 The creditor must open an account with the Register's operator before conducting the registration process. The registration applicant is responsible for the accuracy of the data included in the registration form. If they input information directly on the website, the Register shall not be responsible for the accuracy of the data and information in the notice or attached documents. The creditor shall be responsible for compensating damages that may be incurred by the Authority, interested parties, or third parties arising from inaccurate data and information in the notice. In the cases stipulated in Article (21) of this Regulation, the Register shall complete the registration form based on a paper form submitted and signed by the registration applicant. The registration applicant shall be responsible for the accuracy of the data included in the paper form, and the Register shall record...