Board Decision No. 118 of 2023

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Egyptian Gazette – Issue 122 (Continued) on June 1, 2023

3 decisions of the General Authority for Financial Supervision Board Decision No. 118 of 2023 dated May 25, 2023 Amending Board Decision No. 20 of 2019 Regarding the Articles of Association of the Egyptian Securities Union 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 the Law No. 10 of 2009 regulating supervision over non-banking financial markets and instruments; And Board Decision No. 20 of 2019 regarding the Articles of Association of the Egyptian Securities Union; And after approval by the Board of Directors in its session held on May 25, 2023; Has decided:

(Article 1)
The following texts shall replace Articles (27 and 29) of the Articles of Association of the Egyptian Securities Union referred to above:

Article (27):
The Union shall be managed by a Board of Directors consisting of up to thirteen members according to the following categories:

• 1. Three representatives from the securities brokerage activity.
• 2. Two representatives from company establishment (financial holding companies) and securities underwriting/distribution activities.
• 3. Two representatives from central depository/registration and custodians, with one representing the central depository/registration activity.
• 4. Three representatives from fund/portfolio management, direct investment, venture capital, and other remaining activities.
• 5. Up to three experienced independent members from different categories.
     An "experienced independent member" is defined as a non-executive board member of one of the Union's member companies, who does not own 10% or more of voting rights nor has actual control over any such company, whether directly or indirectly, alone or through related parties, and possesses practical experience in the securities field of at least fifteen years. In all cases, female representation on the Union's Board of Directors must not be less than two members. Voting for the categories listed in clauses (1 to 4) of this Article shall be conducted by member companies with voting rights selecting from among the candidates representing their respective category according to a prepared list, provided that all member companies with voting rights may also select from among the candidates for experienced independent board members.

Article (29):
The Union's Board of Directors shall decide to open the nomination period for board membership no later than two months before the end of its term and at least thirty days prior to the convening of the General Assembly where members will be elected, with a submission period for nomination requests of at least fifteen days. Nomination to the Union's Board of Directors shall be made via a written request stamped by the member company with voting rights, according to the form prepared by the Union and approved by the Authority. A member company may not nominate more than one member. The aforementioned request shall be submitted to the Union's Executive Management within the specified period, accompanied by documents demonstrating that the candidates for board membership meet the required conditions, as well as proof of payment by the nominating company and the nominated individual of all financial obligations to the Union up to the date the nomination period opens. The request shall be recorded in a dedicated register specifying its date and time of receipt, and the applicant shall receive confirmation of submission.

(Article 2)
A new clause numbered "5" shall be added to Article (28), and two new clauses numbered (29 bis, 29 ter) shall be added to the Articles of Association of the Egyptian Securities Union referred to above, with the following texts:

(Article 28, Clause "5"):

• 5. The member shall not be a board member of the Authority or one of the Egyptian stock exchanges, nor an executive board member of a central depository and registration company, the Investor Protection Fund against non-commercial risks, or the Settlement Guarantee Fund Committee.

Article (29 bis):
The right to vote in elections shall be restricted to the chairman of the board of the member company, who may delegate voting rights to the company's managing director or one of its senior executives via a signed delegation on the company's letterhead and stamped by the company. Such delegation may also be issued by the managing director if it states that the choice of the delegated voter was approved by the chairman of the board. A member company may not delegate other companies or persons to attend on its behalf in the Union's board elections. Secured technological systems may be used to conduct elections. The Authority shall issue a decision regulating complaints submitted by candidates whose names were excluded from the candidate lists, as well as complaints regarding election results. The Union's Board of Directors shall issue a decision regulating the examination and verification of nomination requests and required conditions/documents, as well as a decision regulating supervision over elections, with the Authority issuing these two decisions for the first election of the Union's Board. The aforementioned decisions shall include the formation of these committees, considering conflict avoidance, defining their jurisdictions and operational systems, with these committees obligated to take necessary measures to implement the provisions of this system.

Article (29 ter):
Candidate lists for the Union's Board of membership shall be prepared according to different categories, with voting conducted per list as follows:

• 1. Three representatives from the securities brokerage activity.
• 2. Two representatives from company establishment (financial holding companies) and securities underwriting/distribution activities.
• 3. Two representatives from central depository/registration and custodians, with one representing the central depository/registration activity.
• 4. Three representatives from fund/portfolio management, direct investment, venture capital, and other remaining activities.
• 5. Up to three experienced independent members from the different categories listed in clauses (1 to 4) above.
     Valid voting for each list requires selecting the number of candidates specified therein.
     Election results shall be announced after counting the votes received by each candidate for the Union's Board, according to the highest valid votes obtained by candidates in each different category, noting that the announcement begins with declaring the two female candidates who received the highest votes across all lists (if they are nominated), followed by completing the winners with the highest votes in different categories. In case of a tie between two or more candidates regarding vote count, a re-vote shall be held among these candidates to declare the winner.

(Article 3)
This decision shall be published in the Egyptian Gazette and on the Authority's electronic website, and shall take effect from the day following its publication date. Any provision contrary to its provisions is hereby repealed. Chairman of the Board of Directors General Authority for Financial Supervision Dr. Mohamed Farid Saleh