Board of Directors Resolution No. 120 of 2020 Regarding Registration, Renewal, and Striking Off of the Independent Party Monitoring Sukuk Issuances

Financial Regulatory Authority Chairman of the Authority

Board of Directors Resolution No. (120) for the Year 2020 dated 26/7/2020 Regarding the Conditions for Registration, Renewal of Registration, and Striking Off of the Independent Party Monitoring Sukuk Issuances by the Authority

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 Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; and Resolution No. (176) of 2018 regarding the establishment and licensing requirements for Sukuk companies, amended by Resolution No. (99) of 2020; and Resolution No. (50) of 2019 regarding the regulation of certain provisions related to Sukuk; and after the approval of the Board of Directors in its meeting held on 26/7/2020;

Resolved:

(Article One) The Authority shall establish a register for the registration of companies and entities wishing to act as an independent party in cases where financing beneficiaries issue Sukuk themselves, or in cases where the independence condition between the Sukuk company and the financing beneficiaries is not met, as outlined in the aforementioned Board of Directors Resolutions No. (50) of 2019 and No. (99) of 2020.

(Article Two) The applicant for registration in the register referred to in Article One of this Resolution must meet the following conditions:

1. Be a legal entity, one of the payment agents, or banks subject to the supervision of the Central Bank of Egypt, provided that the Central Bank approves the registration for banks and payment agents.
2. Possess at least three years of experience in the field of issuing bonds or Sukuk and monitoring related obligations.
3. Submit evidence indicating the existence of a sufficient number of persons with the necessary expertise to perform the duties assigned to the applicant.
4. Submit a declaration of independence from the Sukuk company or the financing beneficiaries receiving the proceeds of the Sukuk issuance, as applicable.
5. Submit a declaration to maintain separate accounts for each issuance if monitoring more than one issuance.
6. Have no criminal convictions against them for any of the crimes stipulated in laws regulating non-banking financial activities or the Central Bank Law within the three years preceding the submission of the registration application.
7. Have no administrative sanctions against them issued by the Authority or its supervisory authority, excluding warnings, within the six months preceding the submission of the registration application.

(Article Three) Companies and entities wishing to register in the register are obligated to submit an application to the Authority on the form prepared for this purpose, which must include at least the name of the applicant, its objective, main activities, address, and branches. The application must be accompanied by the following documents: First: Regarding companies:

1. The company's articles of association and bylaws.
2. A recent extract from the commercial register of the company.
3. A copy of the company's tax card.
4. The ownership structure indicating the shareholding percentage of shareholders amounting to 5% or more.
5. Approval from the Central Bank of Egypt if the applicant for registration is a bank or payment agent.
6. Evidence of payment of the examination and study fee for the registration application at a rate of ten thousand Egyptian pounds. Second: Other legal entities:
7. The establishment or incorporation deed.
8. Evidence of payment of the examination and study fee for the registration application at a rate of ten thousand Egyptian pounds.

(Article Four) The competent department within the Authority shall study and examine the registration application and prepare a memo with its opinion for submission to the committee established by the Authority for this purpose. The committee shall rule on the registration application within thirty days at most from the date of submission, provided that all conditions and required documents are met. The committee's decision shall be approved by the Chairman of the Authority.

(Article Five) The registration period in the register shall be three years, and may be renewed for similar periods. A request to renew the registration must be submitted before the expiration of the registration period, on the form prepared by the Authority for this purpose, accompanied by the following:

1. Evidence confirming the continued fulfillment of registration conditions.
2. A report on the performance of the independent party over the previous three years.
3. Evidence of payment of ten thousand Egyptian pounds as a service fee for renewal of registration. The same procedures outlined in Article Four of this Resolution shall apply to the study and examination of the registration renewal application.

(Article Six) The Authority shall supervise the independent party's exercise of its work and duties as outlined in the aforementioned Board of Directors Resolutions No. (50) of 2019 and No. (99) of 2020, and may request data and documents related to the exercise of these work and duties to verify compliance with the prescribed rules in this regard. The independent party is obligated to provide the Authority with a quarterly report on its work and duties as mentioned.

(Article Seven) In case the independent party violates the provisions of registration and renewal stipulated in this Resolution, or the obligations and duties assigned to it as per the prevailing rules in this regard, the Authority may take any of the following:

1. Issuing a warning to rectify the violation within the specified period and conditions stated in the warning.
2. Temporary suspension of the registration for a period not exceeding one year.
3. Striking off the registration from the register.

(Article Eight) This Resolution 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 Mohamed Omran