Regulatory Alerts2020-01-01
Board of Directors Resolution No. (119) of 2020
The Financial Regulatory Authority (FRA) of Egypt issued Board of Directors Resolution No. (119) of 2020 to establish mandatory licensing criteria for Sukuk issuance companies seeking to manage multiple Sukuk issues. The resolution requires companies to maintain fully paid-up capital, keep strictly segregated accounts per issue, secure auditor confirmations of operational capacity, and obtain payment agent commitments for separate accounting. Additionally, it mandates performance reporting for past issues and technical summaries for new issuances targeting the same beneficiary or its affiliates to ensure asset isolation and investor protection.
Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Board of Directors Resolution No. (119) of 2020 dated 26/7/2020
Regarding the Licensing Criteria for Sukuk Issuance Companies to Deal in More Than One Sukuk Issue
The Board of Directors of the Financial Regulatory Authority
Having reviewed the Capital Market Law issued by Law No. (95) of 1992 and its executive regulations;
and on Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments;
and on Board of Directors Resolution No. (176) of 2018 regarding the establishment and licensing requirements for Sukuk issuance companies;
and upon the approval of the Authority's Board of Directors in its session held on 26/7/2020;
Resolved
(Article One)
To license a Sukuk issuance company to deal in one Sukuk issue, the following criteria must be met:
1- The company's capital for the Sukuk issuance must be fully paid up for each issue.
2- Submit a commitment to maintain separate accounts for each issue, which entails restricting the rights of holders of each Sukuk issue to the assets associated with it.
3- Submit a declaration from the company's external auditor confirming the availability of necessary capabilities to maintain separate accounts for each issue.
4- A commitment from the payment agent to maintain separate accounts for each issue, in cases where the company appoints a payment agent for more than one issue.
5- Submit a statement on the performance of previous issues, detailing the status of Sukuk return payments and amortization, to be certified by the company's auditor and the payment agent appointed for the issue.
6- Commitment, in case the company wishes to issue more than one Sukuk for the same beneficiary or one of its affiliates, to submit a technical summary of those issues for performance assessment.
(Article Two)
This Resolution shall be published in the Egyptian Gazette and on the Authority's website, and shall take effect as of the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors of the Authority
Dr. Mohamed Omran
Smart Village, Building 137, Giza, Egypt
Postal Code: 110
Tel: +2027545030
Fax: +20275470036
WWW.FRA.GOV.EG
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