Chairman of the Board

Decision No. (105) of 2011 of the Board of Directors of the Authority

Date: 18/12/2011

Regarding the Rules and Procedures Governing the Transfer of More Than One Securitization Portfolio to a Securitization Company and the Issuance by Non-Securitization Joint Stock Companies of More Than One Securitization Bond Issuance

The Board of Directors of the General Authority for Financial Supervision

Having reviewed Law No. 159 of 1981 on Joint Stock Companies, Companies Limited by Shares, and Limited Liability Companies and the decisions issued to implement it;

And Law No. 95 of 1992 on the Capital Market, its executive regulations, and the decisions issued to implement them;

And Law No. 93 of 2000 on Central Deposit and Registration of Securities, and its executive regulations;

And Law No. 10 of 2009 on Regulating Supervision over Markets and Non-Banking Financial Instruments;

And Presidential Decision No. 192 of 2009 Issuing the Statutes of the General Authority for Financial Supervision;

And Decision No. (87) of 2006 of the Board of Directors of the General Authority for the Capital Market;

And the approval of the Board of Directors of the General Authority for Financial Supervision in its session held on 18/12/2011;

Decided

Article One

The following conditions are required to license a securitization company to be transferred more than one securitization portfolio:

1. The issued capital of the securitization company must be fully paid and not less than five million Egyptian pounds.
2. The net assets of the securitization company must not be less than the value of the issued and paid-up capital.
3. The trustee managing the securitization bond issuances must not breach any obligations towards holders of previously issued securitization bonds.
4. The securitization company must have a commitment from the owner of the financial rights portfolio to transfer those rights to the securitization company, guaranteeing the estimated value of the intended portfolio. This commitment must be binding and valid for at least six months.
5. The securitization company must have a plan for the new issuance detailing the offering method (public, private), yield type (fixed, variable), total issuance value, duration, whether the issuance is divided into tranches or not, and the expected duration of each tranche if applicable.
6. Fulfill its disclosure obligations in accordance with the laws and regulations issued by the Board of Directors of the Authority.
7. The securitization company must fulfill all its obligations towards the Authority and pay the prescribed fees according to Article (134) of the Executive Regulations of Law No. 95 of 1992.
8. Pay the insurance value required to be deposited with the Authority to license the company to transfer a new securitization portfolio, in accordance with Board Decision No. (102) of 2008.

Additionally, the securitization company must attach the following to its application for a license to issue securitization bonds against a new securitization portfolio:

1. A declaration from the trustee of the existing securitization portfolio and a certificate from Egypt for Clearing, Depository and Central Registry (ECDR) confirming the fulfillment of all the company's financial obligations and disclosure commitments within their prescribed deadlines according to the terms of the existing bond issuance.
2. A commitment from the company, signed by the Managing Member and the Financial Director, submitted to the General Authority for Financial Supervision, stating that the company will maintain separate accounts for each securitization transaction (bond value, yield rate, issuance date, maturity date, trustee name, collection company name).
3. A commitment from the collection company, signed by the Managing Member and the Financial Director, and submitted to the General Authority for Financial Supervision, stating that the company will segregate the collected amounts for each existing securitization portfolio it collects from the intended securitization portfolio (portfolio value, date of the collection service contract signed with the bond-issuing company, name of the portfolio owner, name of the trustee to whom collections are remitted), and committing not to commingle these amounts with each other or with its own funds.
4. A commitment from the trustee, signed by the legal representative and submitted to the General Authority for Financial Supervision, stating that the trustee will maintain separate accounts for each securitization portfolio deposited with it and segregate the funds for each existing securitization portfolio and the intended securitization portfolio (portfolio value, bond par value, yield rate, issuance date, maturity date, trustee name with the issuing company, name of the portfolio transferor, name of the collection company), and committing not to commingle these funds with each other or with the trustee's funds and assets.
5. Commitment to provide a credit rating certificate for the securitization portfolio against which the bonds are issued, not lower than the level indicating the ability to meet obligations, in accordance with regulations issued by the Board of Directors of the Authority.
6. Disclosure in the subscription circular or information memorandum for the intended bonds regarding the status of existing bonds, including the name of the portfolio transferor, trustee, collection company, bond par value, current bond balance, latest credit rating, and status of interest and principal repayment.

Article Two

The following must be submitted with the application for licensing non-securitization joint stock companies to undertake more than one securitization bond issuance:

1. A commitment from the company, signed by the Managing Member and the Financial Director, to maintain independent accounts for each securitization bond issuance against independent financial rights portfolios owned by the company, including at least the following:
   • Assets of each financial rights portfolio and obligations arising from the bond issuance.
   • Value of each bond issuance, number of bonds, par value per bond, date and duration of each securitization bond issuance, trustee name.
   • Independent accounts related to the collection of financial rights for each securitization portfolio.
2. Commitment to conduct a credit rating for each securitization bond issuance and a credit rating for the bond-issuing company, not lower than the level indicating the ability to meet obligations, in accordance with regulations issued by the Board of Directors of the Authority.
3. Commitment to fulfill the obligations stipulated in Article "12" of Capital Market Law No. 95 of 1992.
4. Declaration from the trustee and a certificate from Egypt for Clearing, Depository and Central Registry and the Managing Member of the company confirming full fulfillment of obligations arising from previous securitization bond issuances.
5. Certificate from the external auditor confirming fulfillment of disclosure obligations within the prescribed deadlines.

Article Three

Decision No. (87) of 2006 of the Board of Directors of the Authority is hereby repealed.

Article Four

This Decision shall take effect from the date of its issuance, and all companies and entities subject to it, as well as the competent administration within the Authority, shall implement it according to their respective responsibilities.

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Ashraf El-Sharawy
Chairman of the Board of the Authority