Regulatory Alerts2018-01-01
Decision No. 66 of 2018 of the Authority's Board of Directors
The Egyptian Financial Regulatory Authority (FRA) issued Decision No. 66 of 2018 to mandate precautionary trading suspensions for clients under investigation for violating Egyptian exchange trading regulations. The decision empowers the regulator to halt a client's securities purchases for an initial period of up to three months, extendable to a maximum of six months if criminal proceedings are initiated, unless overridden by judicial rulings or internal appeals. This directive formally repeals prior Board Decisions No. 40 and 123 of 2017 and becomes effective immediately upon official publication.
Egyptian Financial Regulatory Authority
Decision No. 66 of 2018 of the Authority's Board of Directors
Dated 26/4/2018
Precautionary Measures Regarding Clients Under Investigation for Violating the Rules Governing Trading on Egyptian Exchanges
The Board of Directors of the Egyptian Financial Regulatory Authority
Having reviewed Law No. 159 of 1981 on Joint Stock Companies, Companies Limited by Shares, Limited Liability Companies, and Single-Person Companies, and its executive amendments;
And the Capital Market Law No. 95 of 1992, and its executive amendments;
And the decisions issued pursuant thereto and their amendments;
And Law No. 93 of 2000 on the Central Depository and Registration of Securities, and its executive amendments;
And Law No. 10 of 2009 regulating supervision on non-Egyptian markets and financial instruments;
And the Authority's Statute issued by Presidential Decree No. 192 of 2009;
And Presidential Decree No. 191 of 2009 organizing the Egyptian Exchange and its financial affairs;
And Decision No. 40 of 2017 of the Authority's Board regarding precautionary measures concerning clients violating the rules governing trading on Egyptian exchanges, as amended by Decision No. 123 of 2017 of the Authority's Board;
And the Authority's Board approval in its session dated 26/4/2018;
Decision:
(Article One)
When the Authority determines that transactions conducted on Egyptian exchanges violate the rules governing trading under the Capital Market Law, its executive amendments, and other relevant laws, thereby affecting the safety and stability of transactions, it may, in cases requiring such action, take the following precautionary measure:
Suspending the client under investigation from purchasing securities on the Egyptian Exchange via the dedicated account (margin trading - same-group trading) or the market in general, whether in their own name, account, or for another's account or beneficiary, in any capacity (as principal, agent, proxy, guardian, or using accounts of other natural or legal persons), during the Authority's investigation period, which shall not exceed three months.
In the event the Authority requests the initiation of criminal proceedings, the suspension of that client shall continue as stated in the preceding paragraph until referral to trial, issuance of a judgment on the merits, or the Public Prosecution's decision to close the case or settle it, for a period not exceeding six months in all cases, unless the Appeals Committee, competent judicial authorities, or the Authority's Board decide otherwise based on justifications submitted in this regard.
(Article Two)
Decision No. 40 of 2017 of the Authority's Board and Decision No. 123 of 2017 of the Authority's Board are hereby repealed.
(Article Three)
This Decision shall be published in the Egyptian Gazette and on the websites of the Authority and the Egyptian Exchange, and shall take effect from the date of its issuance.
Chairman of the Authority's Board
Dr. Mohamed Omran