Decision No. 57 of 2018 of the Board of Directors of the General Authority for Financial Supervision dated 2018/4/26

Regarding the Controls for Licensed Custodian Banks to Retain Securities for Themselves

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 regulating supervision over non-banking financial markets and instruments;
and the Statute of the General Authority for Financial Supervision issued by Presidential Decision No. (192) of 2009;
and Decision No. (47) of 2014 of the Board of Directors regarding the controls for licensed custodian banks that themselves conduct investment fund activities to act as custodians for those funds;
and Decision No. (125) of 2015 dated 2015/12/16 and its amendments;
and Decision No. (107) of 2016 regarding corporate governance rules for companies operating in the securities sector;
and the memorandum prepared by the competent department of the Authority dated 2018/4/19;
and the approval of the Board of Directors in its meeting held on 2018/4/26.

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Has Decided

(Article One)

The provisions of these controls shall apply to all funds, except for funds established by banks, which are subject to the provisions of Decision No. (47) of 2014 regarding the controls for licensed custodian banks that themselves conduct investment fund activities to act as custodians for those funds.

(Article Two)

Licensed custodian banks approved by the Authority may act as custodians for investment funds subject to the following conditions:

1. The bank's and/or its related parties' ownership shall not exceed [50% of the issued capital or voting rights] of the investment management company.

Related parties for the purpose of this clause refer to any entities or companies affiliated with or under the actual control of the bank, including employee service associations or their private insurance funds, and the ownership percentage mentioned must be included in the document (prospectus/information memorandum regarding the mentioned ownership percentage).

2. The fund's investments must be segregated from the investment manager's investments with the custodian, accompanied by separate accounts, books, and records.

3. The custodian's obligation to submit to the Authority and the fund's board of directors a weekly statement covering the securities owned by the fund and held in custody, the distributions made on them during the period, the cash liquidity deposited with them, the transactions involving the investment manager and the fund, and the entity through which the transactions were executed.

(Article Three)

Any provision conflicting with the provisions of this Decision is hereby repealed, and the central departments of the Authority shall implement it according to their respective jurisdictions.

(Article Four)

This Decision shall be published in the Egyptian Gazette and on the Authority's website.

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Chairman of the Board
Dr. Mohamed Omran
87.76

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General Authority for Financial Supervision
FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

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Smart Village, Building No. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036
www.FRA.gov.eg

Smart Village, Building No. B-136, Giza, Egypt
Postal Code: 12577
Tel.: +202 35345350 - Fax.: +202 35370036
info@fra.gov.eg