Regulatory Alerts2018-01-01
GAFS Board Decision No. 66 of 2018 (Updated November 30, 2022) on Precautionary Measures Regarding Clients During Investigations for Trading Rule Violations at Egyptian Stock Exchanges
The General Authority for Financial Supervision (GAFS) issued Board Decision No. 66 of 2018 to establish precautionary suspension measures for clients under investigation at Egyptian stock exchanges who violate trading rules. The decision authorizes the Authority to halt a client's securities purchases across all market activities and mechanisms for up to three months, or six months if criminal proceedings are initiated, covering transactions conducted in any capacity. It explicitly repeals prior Board Decisions No. 40 and 123 of 2017, updates the first article via Decision No. 175 of 2022, and mandates publication in the Egyptian Gazette and official electronic platforms to ensure immediate enforceability.
1 Decision of the Board of Directors of the Authority No. (66) for the year 2018 dated 4/26/2018 Precautionary Procedures Regarding Clients During Investigations for Violations of the Rules Governing Trading at Egyptian Stock Exchanges Last amended on 2022-11-30
Board of Directors of the General Authority for Financial Supervision Having reviewed the Companies Law No. (159) of 1981 for Joint Stock, Limited Partnership by Shares, and Limited Liability Companies, along with its executive regulations; Having reviewed the Capital Market Law No. (95) of 1992, its executive regulations, and the decisions issued in implementation thereof and their amendments; Having reviewed the Central Depository and Registration of Securities Law No. (93) of 2000, along with its executive regulations; Having reviewed Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; Having reviewed Law No. (17) of 2018 amending certain provisions of Capital Market Law No. 95 of 1992; Having reviewed the Statutes of the General Authority for Financial Supervision issued by Presidential Decree No. (192) of 2009; Having reviewed Presidential Decree No. (191) of 2009 organizing the Egyptian Exchange and its financial affairs; Having reviewed the Authority's Board Decision No. (40) of 2017 regarding precautionary procedures concerning clients violating the rules governing trading at Egyptian stock exchanges and its amendments; Having reviewed the Authority's Board approval in its session dated 26/4/2018; Has decided:
(Article One) When conducting investigations into transactions at Egyptian stock exchanges that violate the trading rules stipulated in the Capital Market Law, its executive regulations, and other related decisions affecting the integrity and stability of transactions, the Authority may take – in cases requiring it – the following precautionary measure: Suspending the client under investigation from purchasing securities at the Egyptian Exchange through specialized activities and/or mechanisms (margin buying – same-day trading – borrowing securities for sale – trading via the Internet – dealing in depositary receipts) or in the market generally, whether in their own name, for their own account, on behalf of, or for the benefit of another beneficiary in any capacity (principal, agent, attorney-in-fact, guardian, trustee, or using accounts of other natural or legal persons), for a period not exceeding three months from the commencement of the Authority's investigations.
1 Paragraph one of Article One was replaced by Board Decision No. 175 of 2022 dated 30/11/2022.
In the event that the Authority requests the initiation of criminal proceedings, the suspension of the client shall continue as specified in the preceding paragraph until referral to trial and issuance of a judgment on the merits, or public prosecution's dismissal or settlement of the case, whichever occurs first, not exceeding six months in all cases, unless the Appeals Committee, competent judicial authorities, or the Authority's Board decides otherwise based on submitted justifications.
(Article Two) Decision No. 40 of 2017 and Decision No. 123 of 2017 issued by the Authority's Board are hereby repealed.
(Article Three) This decision shall be published in the Egyptian Gazette and on the electronic websites of the Authority and the Egyptian Exchange, and shall take effect from its date of issuance.