Board of Directors Secretariat

Decision No. (69) of 2014 of the Authority's Board of Directors

Dated 18/5/2014

Regarding the Rules and Procedures for Trading by Persons Specified

in Article (173) of the Executive Regulations of the Capital Market Law on the Documents of the Associated Funds

The Board of Directors of the General Authority for Financial Supervision

Having reviewed the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations and the decisions issued in implementation thereof; And the Central Deposit and Registration of Securities Law issued by Law No. (93) of 2000 and its Executive Regulations; And Law No. (10) of 2009 regarding the regulation of supervision over non-banking financial markets and instruments; And Presidential Decree No. (191) of 2009 on the regulations governing the Egyptian Exchange and its financial affairs; And Presidential Decree No. (192) of 2009 on issuing the Statute of the General Authority for Financial Supervision; And the approval of the Authority's Board of Directors at its meeting held on 18/5/2014;

DECIDED

(Article One)

Without prejudice to the provision of Article (183) bis ((21)) of the Executive Regulations of the Capital Market Law, persons referred to in Article (173) of the Executive Regulations of the Capital Market Law shall not be permitted to trade on the documents of the associated funds unless the information memorandum or prospectus includes permission to trade and to obtain the approval of the document holders' assembly, and to apply to the Authority for its approval in accordance with the rules and procedures set forth in this Decision. The persons referred to in Article (173) of the Executive Regulations are defined as follows:

• The investment management company, its directors, and employees.
• The management services company, its directors, and employees.

(Article Two)

Persons referred to in the preceding article are obligated to obtain the Authority's approval to trade in the documents of the associated funds by avoiding any conflict of interest when trading these documents, and refraining from trading documents for which they have acquired undisclosed information or data in the market that could materially affect the prices of these documents.

(Article Three)

An application to obtain the Authority's approval to trade in the fund's documents shall be submitted via a written request signed by the Managing Director of the companies referred to in Article One wishing to trade on behalf of themselves or on behalf of their directors and employees, accompanied by the following documents:

1. A statement clarifying the nature of the relationship between the fund, the entity, and the person wishing to trade.
2. The Authority-approved copy of the information memorandum or prospectus containing permission to trade in the fund's documents for the persons on whose behalf trading is requested from the persons referred to in Article (173) of the Executive Regulations.
3. A copy of the minutes of the document holders' assembly meeting containing the assembly's approval for the trading by the referred persons on the fund's documents, the maximum trading limit permitted for each of these persons during the following year, and the limits and rules for selling or purchasing these documents. The validity of the assembly's decision to approve the trading by the referred persons requires the attendance of document holders representing at least two-thirds of the total number of outstanding fund documents on the date of the meeting notice, and approval of at least 51% of the total number of fund documents after excluding documents owned by any of the referred persons from voting.
4. A declaration by the company's Managing Director – as well as the Internal Auditor in the case of an investment manager – to notify the Authority of any violation of trading rules, as well as to notify the Authority immediately upon any change in the submitted data or information.

(Article Four)

The Authority shall issue its decision to approve or reject within ten days from the date of completing all documents referred to in the preceding article. The approval shall be valid for one year from the date of issuance, and its renewal for a similar period shall be requested before its expiration by at least fifteen days, provided that the persons referred to comply with the trading rules set forth in the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations and the decisions

(Article Five)

issued in implementation thereof, and the submission of the document holders' assembly's approval of the maximum trading limit permitted for each of these persons during the following year. The persons referred to are prohibited from trading in the fund's documents during the period prescribed for deciding on the application if the previous approval period has expired and until the new approval is issued.

1. The investment manager and the management services company, as applicable, shall maintain a special register for their trading or for the trading of their directors and employees in implementation of the approvals issued to them, including the value of each person's trades on the fund's documents and the dates of these trades, subject to this register being periodically reviewed by the internal control officer and signed to confirm the review.
2. The company's internal auditor, in the case of an investment manager, shall establish internal control and periodic review rules to ensure verification of compliance with all rules and procedures governing and organizing these trades.
3. The company shall prepare a periodic report at least every three months clarifying what it discloses to the Managing Director — as well as the Internal Auditor in the case of an investment manager — regarding observations related to compliance with these rules, including the extent of compliance with notifying the document holders' assembly and the Authority thereof in a timely manner, the measures taken by the company to rectify violations, the steps taken to prevent their recurrence in the future, and its availability with the Authority within fifteen days of its preparation.
4. The company shall be obligated to submit an annual report presented to the document holders' assembly, detailing the value of trades executed by each of the referred persons on the fund's documents and the dates of these trades, subject to this report being presented before the document holders' assembly considers the renewal of approval requests for these persons.
5. Documents owned by the persons referred to in Article One shall be excluded from voting at the document holders' assembly meetings.

(Article Six)

The Authority may revoke the approval issued to the persons referred to in Article One if it is established that they violated any of the trading rules set forth in the Capital Market Law and its Executive Regulations or set forth in this Decision, without prejudice to any other measures or penalties.

(Article Seven)

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 day following its publication in the Egyptian Gazette.

Chairman of the Board of Directors Sherif Samy