Regulatory Alerts2020-01-01
Board of Directors Decision No. 166 of 2020
The Financial Regulatory Authority (FRA) of Egypt issued Board of Directors Decision No. 166 of 2020 to formally define the term "Financial Institutions" across its regulatory framework. The decision expands the definition to include a comprehensive list of eighteen entities, ranging from Egyptian and foreign banks, insurance companies, and investment funds to venture capital firms, real estate financing entities, and the National Postal Authority. It further clarifies that investment fund managers and asset management companies qualify as eligible founders for investment fund companies under existing licensing conditions.
Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Board of Directors Decision No. (166) of 2020 dated 28/10/2020
Regarding the Definition of the Term "Financial Institutions" as Used in the Authority's Board of Directors Decisions
The Board of Directors of the Financial Regulatory Authority Having reviewed Law No. (10) of 2009 concerning the regulation of non-banking financial markets and instruments; and Decision No. (51) of 2014 of the Authority's Board of Directors regarding the conditions required for the founders of an investment fund; and Decision No. (23) of 2016 regarding the rules for issuing non-rated bonds and financing certificates, subscription rules, and listing controls on the Egyptian Exchange; and Decision No. (53) of 2018 regarding licensing issuance and renewal controls and rules for trading shares of companies operating in non-banking financial activities; and Decision No. (172) of 2018 regarding the rules and procedures for issuing and offering short-term bonds; and Decision No. (48) of 2019 regarding the controls and procedures for public and private offerings; and Board of Directors Decision No. (120) of 2019 regarding digital controls in combating money laundering and terrorist financing for entities operating in non-banking financial activities; and upon approval by the Authority's Board of Directors in its meeting held on 28/10/2020:
(Article One)
Without prejudice to the definition of financial institutions set forth in the aforementioned Board of Directors Decision No. (120) of 2019, the term "Financial Institutions" wherever it appears in the Authority's Board of Directors decisions refers to the following: 1- Egyptian banks and branches of foreign banks subject to the supervision of the Central Bank of Egypt. 2- Insurance or reinsurance companies. 3- Companies whose purpose is to participate in establishing companies that issue securities or increase their capital (investment banks). 4- Companies and entities engaged in stock exchange activities. 5- Bond brokerage companies and primary dealers.
(Article Two)
Without prejudice to the preceding article, investment fund management companies (investment managers) and asset management companies (companies engaged in managing investment funds and forming and managing securities portfolios) may be among the founders of an investment fund company in accordance with the Authority's Board of Directors Decision No. (51) of 2014 regarding the conditions required for the founders of an investment fund company.
(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 of Directors of the Authority Dr. Mohamed Omran
(Page Two)
6- Venture capital companies. 7- Clearing, deposit, and central registry companies. 8- Real estate financing or refinancing companies. 9- Financial leasing or factoring companies. 10- Consumer financing companies. 11- Medium, small, and/or micro-enterprise financing companies. 12- Investment funds. 13- Direct investment companies. 14- Foreign banks, and companies and entities operating in non-banking financial activities abroad, provided they are subject to the supervision and oversight of an authority exercising functions equivalent to those of the Central Bank or the Authority, as applicable. 15- Arab, regional, and international financial institutions. 16- The National Postal Authority. 17- Private insurance funds with invested assets exceeding 100 million Egyptian pounds. 18- Companies or entities of public or private legal persons issued a decision by the Authority's Board of Directors.
Signatures: (Seal of the Financial Regulatory Authority) (Signature of the Chairman of the Board of Directors of the Authority: Dr. Mohamed Omran)
Address: Smart Village, Building 137-B, Giza, Egypt Postal Code: 12577 Tel.: +202 35345350 - Fax: +202 35370036 info@fra.gov.eg
Smart Village, Building no. B-136, Giza Postal Code: 12577 Tel.: (00202) 35345350 - Fax.: (00202) 35370036 www.FRA.gov.eg