Secretariat of the Board of Directors

Capital Markets Authority Board of Directors Decision No. (106) of 2015

Dated 2015/9/6

Regarding the Rules Regulating Licensing for Securities Brokerage Activity

The Capital Markets Authority Board of Directors

Having reviewed the Constitution;

And the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations;

And the Central Depository and Registration of Securities Law issued by Law No. (93) of 2000 and its Executive Regulations;

And Law No. (10) of 2009 regarding the regulation of supervision over non-banking financial markets and instruments;

And Presidential Decree No. (192) of 2009 issuing the Basic Statute of the Capital Markets Authority;

And the Capital Markets Authority Board of Directors Decision No. (1) of 2015 regarding the controls for transferring and closing branches of companies licensed to conduct securities brokerage activity;

And the Capital Markets Authority Board of Directors' approval at its meeting held on 2015/9/6;

Has decided:

(Article One)

In implementation of the provisions of Article 127 of the Executive Regulations of the Capital Market Law, the following rules shall apply regarding licensing new companies to conduct securities brokerage activity.

(Article Two)

The Authority shall examine and rule on licensing applications for new companies to conduct securities brokerage activity, based on an evaluation of the submitted study to verify the market's need for new brokerage companies, and the fulfillment of the remaining conditions required for establishing the company and licensing it to conduct the activity as stipulated in the Capital Market Law and its Executive Regulations, and the requirements set forth in Article Three of this Decision.

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(Article Three)

The securities brokerage company must meet the following requirements for the consideration of its establishment and licensing application:

1. Submit the company's business plan and its estimates regarding the volume of its activity and the number of branches intended to be licensed, based on a study of market needs and services.
2. Possess financial solvency enabling it to provide appropriate services included in its business plan, with the financial solvency elements including paid-up capital of no less than 15 million Egyptian pounds.
3. The ownership structure must include banks and/or companies whose purpose is to participate in establishing companies that issue securities or increase their capital, with paid-up capital of no less than 50 million Egyptian pounds, and at least more than 50% of their capital invested in establishing operating companies in the securities field.
4. The contribution ratio of the entities referred to in the preceding item shall not be less than two-thirds of the company's capital.
5. The activity of any of the entities contributing to the company's capital shall not have been suspended pursuant to Article 30 of the Capital Market Law, nor shall any measures stipulated in Article 31 of the same Law have been taken against them, unless the reasons for such measures have been removed and six months have elapsed since then.
6. None of the entities contributing to the company's capital or its board of directors members shall be subject to investigations conducted by the Authority, the Public Prosecution, or a party in cases being heard by a court regarding violations of the Capital Market Law, unless the investigation has been closed or a non-conviction judgment has been issued, as applicable.

(Article Four)

The transfer of the company's shares subsequently requires the continued fulfillment of the conditions stipulated in items (3, 4, 5, 6) of Article Three, and obtaining the Authority's prior approval for such transfer.

(Article Five)

This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall take effect from the day following its issuance, and the competent authorities are tasked with its implementation.

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Chairman of the Board of Directors
Sherif Samy

Capital Markets Authority
Chairman's Office
46076